Andrew Yang’s Taxation Policies

It’s irrational that we privilege capital gains and investment income versus earned income. The top 20% own 92% of the stock market, and the bottom half of Americans own essentially zero. We should be encouraging and rewarding work first and foremost. An investor should not be paying a lower tax rate on gains than the person who is working hard every day. I’ve worked and invested and working is a lot harder.

As President, Andrew Yang will…

  • Propose an end to favorable tax treatment for capital gains and carried interest. Ending the carried interest treatment loophole alone would generate $18 billion per year in revenue and ending favorable treatment of capital gains would generate tens of billions more.

Investing has been transformed into speculation by computer-generated algorithms and trading platforms. The average holding time of a stock is now only 4 months. There is no real value being generated, just individual firms trying to squeeze value out of the system, often at the expense of the public.

As President, Andrew Yang will…

  • Propose a 0.1% financial transaction tax that would raise as much as $50 billion per year that will be used to help fund Universal Basic Income.

Taxing income is an increasingly ineffective and inefficient way to generate revenue over time.  Take a company like Amazon—it can do tens of billions in business and pay no income tax in a given period while storing its income overseas.  A Value-Added Tax is a much more efficient way to capture the true value of the American infrastructure and will be increasingly necessary over time as more and more work is done by software, robots and artificial intelligence. With a VAT of half the European level, we can pay for Universal Basic Income for all American adults of $1,000 per month.

As President, Andrew Yang will…

  • Implement a Value-Added Tax at 10%, half the European level.  Over time, the VAT will become more and more important to capture the value generated by automation in a way that income taxes would not.
    • This VAT would vary based on the good to which it’s applied, with staples having a lower rate or being excluded, and luxury goods having a higher rate.
  • Use the VAT revenue to pay for the Freedom Dividend of $1,000/month per adult, Universal Basic Income.