Reduced capital-gains taxes are not discriminatory – increased ones can be

Did you know that the Biden administration considers cutting the capital gains tax or the death tax to be “racist”?

That’s the latest claim by the Biden administration, which seems to view every policy issue from the perspective of race and victimhood rather than what’s best for the American economy.

In a new report titled “Advancing Equity through Tax Reform,” the Biden Treasury Department analyzed stock and home ownership in America by race.

The study asserts that lower tax rates on capital gains income disproportionately benefited White families compared to Black, Hispanic, and other racial/ethnic groups.

It found that over 90% of the benefits went to whites.

Why does the government need to know the race or ethnicity of stock, business, or homeowners?

The Biden administration is evidently using a race-baiting argument to justify raising wealth and capital gains taxes in the name of “equity.”

However, there are two significant reasons why lower tax rates on investment have been traditionally kept.

Firstly, every time capital gains or corporate taxes have been reduced, there has been an increase in investment, benefiting everyone.

For instance, John F. Kennedy supported a preferential tax rate on capital gains by stating that it directly affects investment decisions and the economy’s growth potential.

Secondly, a lower tax on capital gains is not a giveaway to the rich, as investment income is taxed multiple times through various channels.

The Treasury study revealed ownership disparities, suggesting that lowering capital gains taxes mostly benefits whites, but there are ways to expand minority ownership.

One approach could be reducing taxes on investment and savings, while another could involve allowing young Americans of all races to invest a portion of their paychecks into personal retirement accounts.

This could lead to increased stock ownership, thus narrowing ownership disparities.

However, the Biden administration’s proposal to nearly double the capital gains rate and introduce new taxes on unrealized capital gains would likely deter blacks and Hispanics from becoming owners, concentrating wealth in the hands of the already rich.

This plan could potentially make most Americans, especially blacks and Hispanics, poorer and more reliant on government, which appears to be discriminatory.

Stephen Moore, a visiting fellow with the Heritage Foundation and a cofounder of the Committee to Unleash Prosperity.