With the House and Senate now weighing crucial votes on whether to make permanent the 15 percent tax rates on investor dividends and capital gains, you’d think our elected officials would be considering the needs of America’s stock-owning families. But the Harry Reid and Nancy Pelosi Democrats continue to oppose these tax cuts as nothing more than sops to the rich. Are they saying that three-fifths of American families are rich? Zogby polling shows that nearly all Americans -- 93 percent -- earning $75,000 a year or more own stocks. They can’t all be rich. And how about those earning up to $75,000 a year? In this group, more than half, or 56 percent, own shares. Of those earning below $50,000 a year -- a group that in the aggregate pays very little in taxes overall -- 30 percent own stocks.
The “tax cuts for the rich” argument just gets weaker and weaker as the investment class gets larger and larger.
The Republican Congress, meanwhile, can’t seem to get the job done either. Instead of winning one for the investor class, a vital part of their base, GOP politicians in Washington are attacking oil companies (whose shares are widely owned), reneging (perhaps) on the tax-cut extenders, and coming up blank on offering a strong budget-cutting plan. This is not yet a Republican crack-up, but it’s perilously close to becoming one.
The good news for the GOP is that Democrats continue to disrespect the investor class. But the bad news is that by failing to enact higher after-tax rewards for investors and job-creating capital formation in the overall economy, Republicans may be alienating their most natural supporters. In recent elections, nearly two out of every three voters were stock owners. Where will they turn if the Republicans they put into office no longer represent them?