by Josh Barro | New York Times
When Steve Forbes ran for president in 1996 on a plan that called for no taxes on dividends and capital gains, Mitt Romney, then a private citizen, took out a full-page ad in The Boston Globe attacking his proposal as plutocratic.
“The Forbes tax isn’t a flat tax at all — it’s a tax cut for fat cats!” Mr. Romney’s ad declared, noting that “Kennedys, Rockefellers and Forbes” could end up with a tax rate of zero, while ordinary people would be left paying 17 percent on their wage and salary income under Mr. Forbes’s plan.
The mainstream Republican position on capital gains has long been that they should be taxed at a low rate, but not zero. In 1996, Mr. Romney was supporting Bob Dole, the eventual nominee, whose campaign platform called for a 14 percent tax rate on capital gains. In 2003, President George W. Bush signed a law setting the rate at 15 percent, a policy that John McCain proposed to continue if elected in 2008. (The current maximum rate on capital gains is 23.8 percent, after tax increases that took effect in 2013.)
Comment from Rose Law Group estate planning attorney Tim Heileman:
With the estate tax lifetime exemption so high ($5.45Mil for an individual, or possibly $10.90Mil for a married couple as of 2016), the focus of effective estate planning for most American families has shifted to managing capital gains taxes. Changes to the capital gains rates may prove to be most impactful on taxes imposed following a death. If you want to plan ahead and learn more how an estate plan can minimize the impact of capital gains taxes, contact us and arrange a consultation with one of our estate planning and asset protection attorneys.
