Speaking at N.Y.U.’s Stern School of Business, Mrs. Clinton announced a radical proposal to rewrite the tax code to empower “outside investors who want to build companies” and discourage “cut-and-run shareholders.”
To end what she described as “quarterly capitalism” — meaning investors’ obsessions with quarterly earnings reports — she proposed extending the definition of the long-term holding period for the lower capital gains rate to two years from one, saying one year “may count as ‘long-term’ for my baby granddaughter, but not for the American economy.”
But the real shift is a plan to introduce a “six-year sliding scale” for capital gains taxes. Individuals in the top bracket would pay ordinary income tax on the sale of investments — 39.6 percent — in the first two years and “then the rate would decrease each year” over the next four years until it returns to the current capital gains rate of 20 percent.
To some degree, she could have been channeling Laurence D. Fink, the chief executive of BlackRock, the $4 trillion asset manager, who has long lamented the short-term nature of individual shareholders and the perverse impact their buying and selling can have on boards.
This year, he wrote a letter — recounted in this column — to corporate chieftains complaining about their focus on buying back stock and paying special dividends instead of investing in their businesses for the long term, citing the same statistic as Mrs. Clinton (or was it the other way around?): $900 billion has been shoveled back to investors instead of reinvested in research or equipment or jobs. Mr. Fink, too, proposed a new tax scheme to compel investors to hold shares long-term.
Even one likely target of her proposal, the activist investor Carl C. Icahn, who has long mounted proxy contests, in part to push companies to buy back stock, said he was a fan. “Although I’ve said this before, you may be surprised by what I’m telling you: I agree with a lot of the things she has been saying,” Mr. Icahn told me. “She is onto something.”
http://www.nytimes.com/2015/07/28/b...on®ion=bottom-well&WT.nav=bottom-well&_r=0
To end what she described as “quarterly capitalism” — meaning investors’ obsessions with quarterly earnings reports — she proposed extending the definition of the long-term holding period for the lower capital gains rate to two years from one, saying one year “may count as ‘long-term’ for my baby granddaughter, but not for the American economy.”
But the real shift is a plan to introduce a “six-year sliding scale” for capital gains taxes. Individuals in the top bracket would pay ordinary income tax on the sale of investments — 39.6 percent — in the first two years and “then the rate would decrease each year” over the next four years until it returns to the current capital gains rate of 20 percent.
To some degree, she could have been channeling Laurence D. Fink, the chief executive of BlackRock, the $4 trillion asset manager, who has long lamented the short-term nature of individual shareholders and the perverse impact their buying and selling can have on boards.
This year, he wrote a letter — recounted in this column — to corporate chieftains complaining about their focus on buying back stock and paying special dividends instead of investing in their businesses for the long term, citing the same statistic as Mrs. Clinton (or was it the other way around?): $900 billion has been shoveled back to investors instead of reinvested in research or equipment or jobs. Mr. Fink, too, proposed a new tax scheme to compel investors to hold shares long-term.
Even one likely target of her proposal, the activist investor Carl C. Icahn, who has long mounted proxy contests, in part to push companies to buy back stock, said he was a fan. “Although I’ve said this before, you may be surprised by what I’m telling you: I agree with a lot of the things she has been saying,” Mr. Icahn told me. “She is onto something.”
http://www.nytimes.com/2015/07/28/b...on®ion=bottom-well&WT.nav=bottom-well&_r=0
