Rep. Kevin Brady says a higher capital gains tax rate for the very rich would stop economic growth.
Texas Rep. Kevin Brady, the top Republican on the House Ways and Means Committee, claimed Thursday that making the richest Americans pay their fair share in taxes would really just "hurt working people." His argument: If they pay more taxes, they might invest less in the stock market.
Appearing on Fox News Radio, after the release of a report by ProPublica that said the very richest Americans evade income taxes almost entirely, Brady was asked about President Joe Biden's proposal to raise taxes on the wealthiest Americans to pay for his American Families Plan.
Brady said he opposed these and any other tax increases because they would discourage economic growth.
He said Biden's proposed capital gains tax increase would hurt working people because "when you and I earn a dollar, after taxes, there's only about three things we can do with it": spend it, save it, or invest it. Investment has the greater impact on the broader economy, Brady said.
Investment, he said, is "the riskiest thing you can do," but also the best for the economy:
You have a chance of losing that money, but it's the most pro-growth because those dollars go into expanding the business, the stocks, and so a company can compete — you're actually growing the economy in a big way. And when you target our best investors, those who are most likely to risk that money back into the local economy, when you punish them for doing that, you actually hurt working families in that community.
Biden ran for president in 2020 on a promise to raise taxes, but only on those making $400,000 or more each year.
In keeping with that pledge, he has proposed raising tax rates and closing loopholes for the richest Americans, including an increase in the capital gains tax for those earning $1 million or more.
That new revenue would fund his plan to invest $1.8 trillion in affordable health and child care, free community college, and paid family leave.
The proposed hikes would partially reverse the 2017 Tax Cuts and Jobs Act, which slashed tax rates for the wealthiest Americans and corporations, while raising them for 10 million families. Though the legislation is identified with Donald Trump, Brady — who was Ways and Means chair at the time — was its principal author.
A Brady spokesperson did not respond immediately to an inquiry for this story.
The report released by ProPublica on Tuesday is based on Internal Revenue Service data from thousands of the richest people in America. "The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year," it concluded.
The nonprofit news organization found that the richest 25 Americans paid a true tax rate of just 3.4% — and that many paid a lower income tax rate than an average worker making $45,000.
Brady said in the interview with Fox Radio that he has not seen any tax increase that Republicans would back because "no one has made the argument that this is good for the U.S. economy."
Most Americans disagree.
A late April Monmouth University poll found 65% support for raising taxes on the rich. Just 33% opposed the idea.
Published with permission of The American Independent Foundation.