Courtesy of Americans Against the Republican Party, with over 7,600 likes and 6,900 shares. It’s also been put up by Liberal America, with about 1/3 of the traffic. This meme claims the capital gains tax has been cut three times in the last six years, while the minimum wage only increased three times in the last 30 years. On both accounts, the meme is wrong.
Capital Gains Tax Rates
Going back 6 years would mean January 2010. Tax law can get quite complicated, so we’ll just take the basics of it, and the changes since 2010. There are two general types of capital gains; long-term and short-term. Short-term gains are considered investments held one year or less before being sold, while long-term are investments held longer than a year.
Short-term capital gains are taxed at the same rate as one’s normal income, and increased from 36%-39.6% in 2013 for the top tax bracket.
Long-term gains are taxed at a lower rate, depending on one’s income level. For example, an earner in the 10-15% income tax bracket would pay 0% in capital gains taxes. At the highest income levels, earners are taxed at 20% of those gains. Since this meme is focused on capital gains for the rich, we’ll look at the historic capital gains rates for the top bracket. The chart below shows the historical rates for long-term capital gains for the top income level group.
As we can see, the only change in the last 6 years was an increase in capital gains for the rich, not a decrease. This happened on January 1 2013, when Congress passed the “fiscal cliff” bill, which increased capital gains on those families making over $450,000/year to 20%, from the 15% rate in the Bush era. This rate hasn’t been altered by Congress since.
However, there is more.
Obamacare Investment Surtax
As a result of the Affordable Care Act, there was a surtax on all investment income for the wealthy (households >$250,000/year) starting in 2013. This imposed a 3.8% tax on capital gains in addition to the normal rate. This means there’s effectively a 23.8% capital gains rate for the top earners (43.4% for dividends).
Over the past 6 years, Congress has acted to change the capital gains rates, but not as this meme suggests. It’s acted twice (not 3 times) to raise (not lower) rates from 15%-23.8% for the wealthy. There is no capital gains tax cut, as it suggests.
Minimum Wage Increases
This meme also claims the minimum wage has been increased only three times in the last 30 years. That would date back to January 1986. According to the Department of Labor, the minimum wage has been increased 7 times since then; 1990, 1991, 1996, 1997, 2007, 2008 and 2009.
In 1986, the minimum wage was $3.35, in 2016 it’s $7.25. Adjusted for inflation, the 1986 minimum wage of $3.35 is equivalent to…$7.25 in January 2016.
It’s not clear where this meme got its data, as it wasn’t sourced, but both claims are completely wrong. Yet, go to the comments on either page and few seem to notice, or care. There is plenty wrong with Washington to be sure, but making up statistics doesn’t help the cause to fix it.