October 15, 2008 12:39 PM | | Bookmark and Share

Americans are in no mood to subsidize the well-off or Wall Street. Presidential candidate John McCain has proposed expanding a massive tax loophole that does both.

The tax loophole for capital gains subsidizes people whose income comes from investments rather than wages, as well as the Wall Street brokers who depend on their business. Senator McCain proposes to increase this loophole by lowering the top income tax rate on capital gains for 2009 and 2010 to a super-low 7.5 percent. Over three fourths of the benefits would go to the richest one percent of taxpayers in 2009, as illustrated in the nearby table.

McCain also proposes to allow taxpayers to count $15,000 worth of capital losses against their other income to lower their income tax liability for 2008 and 2009. (The current limit is $3,000.)

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