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Double Taxation Working Group For Immediate Release Senator DeMint Praised for Leading the Fight Against (Washington, DC, Thursday, July 1, 2010) The Double Taxation Working Group unveiled today a letter sent to United States Senator Jim DeMint thanking him for his leadership in the battle to block higher tax rates on capital gains and dividends. Concerned that higher tax rates on saving and investment automatically will occur on December 31, 2010, Senator DeMint moved to make permanent the 15 percent rates established as part of the 2003 pro-growth tax bill. Link to PDF Version of Letter: Signed by 16 members of the Double Taxation Working Group, which consists of representatives from the country's most influential free-market and taxpayer groups, the letter recognizes Senator DeMint's efforts to prevent tax increases that would impede economic growth and undermine competitiveness. List of signers below with text of letter. The letter says, in part, "A higher capital gains rate discourages risk-taking and productive capital formation, which would mean less economic growth and job creation. Moreover, it is quite likely that a higher rate actually reduces tax revenue - especially in the long run. Taxes on capital gains also violate basic principles of fairness. It is a form of double taxation since people buy assets with income that already has been taxed. This is why every pro-growth tax reform plan eliminates the tax. Moreover, since the capital gains tax is not indexed to inflation, it often amounts to a tax on imaginary gains." Text of complete letter below. Comments on the letter from Working Group members: Andrew Quinlan, President of the Center for Freedom & Prosperity Foundation: "Although his legislation failed to pass, Senator DeMint has demonstrated that he is willing to lead on this crucial issue." Dan Mitchell, Senior Fellow, Cato Institute: "Many of America's major trading partners have no capital gains tax because policy makers in those jurisdictions understand the importance of saving and investment. Unfortunately, class-warfare concerns trump growth for many American politicians." Duane Parde, President of the National Taxpayers Union: "Washington already sent the wrong signal to a fragile economy by enacting a health-care law that will eventually raise the top tax rate on desperately needed investment activity. This is just one more reason why Senator DeMint's efforts to keep capital gains taxes from rising further are so vital to a sustainable recovery." Grover Norquist ~ President, Americans for Tax Reform: "The capital gains tax should be 'zero'. There should not be any redundant layers of tax on savings. But at the very least, the 15 percent rate should not go up. Unfortunately, that's exactly what Obama and Congressional Democrats propose to do in January." Karen Kerrigan, President & CEO, Small Business and Entrepreneurship Council: "Senator DeMint's leadership on this issue is greatly needed. Taxes on capital and savings harm small businesses, which rely heavily on investments to create jobs." John Berlau, Director, Center for Investors and Entrepreneurs, Competitive Enterprise Institute: "A capital gains tax hike will especially hurt small entrepreneurs with innovative ideas. Investors are much less likely to risk their money on the startup that could be the next Google or Facebook if the government takes more of their return should the venture be successful. " James L. Martin, Chairman, 60 Plus Association: "Dividends are an important source of income for seniors. Senator DeMint agrees with 60-Plus, as we are both committed to preventing seniors from being hit with an unnecessary tax increase on a key part of their livelihood." Larry Hart, Director of Government Relations, American Conservative Union: "The failure of the economic policies of this Congress and the Obama Administration is now becoming evident in the pathetic private sector employment figures. As the American public becomes aware of this coming body blow to the economy in the form of higher taxes, the grass roots revolt we have seen so far will pale by comparison."
Dear Senator DeMint, We are writing to express our appreciation for your efforts to protect Americans from tax increases that would take effect at the end of the year. In particular, we applaud your work to keep the capital gains tax rate at 15 percent. Allowing the rate to climb to 20 percent, as the President proposes, would negatively impact the economy, national competitiveness, and the well-being of all Americans. A higher capital gains rate discourages risk-taking and productive capital formation, which would mean less economic growth and job creation. Moreover, it is quite likely that a higher rate actually reduces tax revenue - especially in the long run. Taxes on capital gains also violate basic principles of fairness. It is a form of double taxation since people buy assets with income that already has been taxed. This is why every pro-growth tax reform plan eliminates the tax. Moreover, since the capital gains tax is not indexed to inflation, it often amounts to a tax on imaginary gains. For many reasons, the capital gains tax should be abolished. The perfect should not be the enemy of the good, however, so we also recognize that a lower rate is better than a higher one. And we certainly do not want to see American competitiveness undermined by a higher tax rate. Thankfully, we can count on your leadership on this issue. The undersigned applaud and support your efforts. Sincerely, Andrew F. Quinlan ~ President, Center for Freedom and Prosperity Foundation
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