(CNSNews.com) - Among the proposals advanced by President Obama in his State of the Union address, one "destructive concept" should overshadow all others, Newt Gingrich said.
"There's a disastrous idea buried in the speech to double the capital gains tax on everybody who invests and creates jobs," the Republican presidential hopeful told Fox News on Wednesday. "It would literally lead to the largest bear market in American history. It would destroy the value of investments. It would drive people to create jobs outside the United States.
"I don't even think he understands it," Gingrich added.
"What you don't know about Obama is whether he has a clue what it meant when he said it. But he said he wants a 30 percent minimum tax on people with a million dollars' income. If you have capital gains (on investment income), that would double your capital gains tax." (Capital gains on stocks and other investments are now taxed at 15 percent.)
"I think literally the president probably didn't have a clue last night what he was saying," Gingrich repeated.
Here's what the president said about changing the tax code so everyone pays their "fair share":
"Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes. And my Republican friend (Sen.) Tom Coburn is right: Washington should stop subsidizing millionaires. In fact, if you're earning a million dollars a year, you shouldn't get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn't go up. You're the ones struggling with rising costs and stagnant wages. You're the ones who need relief.
"Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense."
Billionaire Warren Buffet has said he pays more in taxes than his secretary does because his investment income is taxed at 15 percent, whereas wages (ordinary income--what a secretary brings home) is subject to higher rates.
In an Aug. 14, 2011 New York Times op-ed, Buffett wrote: "Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent."
Gingrich also favors tax reform, but he is calling for lower taxes to boost capital investment and job creation.