Jerry Nadler's Radical Tax Reform
Out of the mouths of Congressmen sometimes come gems.
No one should ever be taxed twice on the same income. It’s not fair and it’s not just.
So tweeted Jerry Nadler back in April. Nadler is a Democratic member of the U.S. House of Representatives.
There’s something to what he’s saying. As I noted in my recent article on capital gains taxes, a tax on capital gains is a fourth tax on income. The first is the income tax, the second is the tax on corporate income (if you invest some of your earned income in corporate stock), the third is the tax on dividends that the corporation pays you, and the fourth is the capital gains tax when you sell the asset. There’s even a fifth tax if you die very wealthy: the estate tax.
Unfortunately, Nadler doesn’t oppose the corporate income tax, the tax on dividends, capital gains taxes, or estate taxes. So he doesn’t really mean it. What he had in mind was much more parochial: his opposition to the $10,000 limit on the deductibility of state and local taxes (the so-called SALT limit) from taxable federal income.
It’s interesting, though, that Rep. Nadler made a principled argument. Why did he make it? Presumably because he thought it would resonate with people. I agree with his argument and I think people should start making it and and, unlike Rep. Nadler, mean it.