TIME Hillary Clinton

The Legal Question Over Hillary Clinton’s Secret Emails

Secretary Hillary Clinton speaks to voters at a town hall meeting in Nashua, New Hampshire, on Tuesday, July 28, 2015.
The Washington Post—The Washington Post/Getty Images Secretary Hillary Clinton speaks to voters at a town hall meeting in Nashua, New Hampshire, on Tuesday, July 28, 2015.

Two key questions: Did she know material was classified and did she act negligently handling it?

Is Hillary Clinton in trouble for having government secrets on her private email server?

Last week, the inspector general for the U.S. intelligence community concluded that some of the emails Clinton and others exchanged on her private server while she was Secretary of State contained classified information.

But the consequences of that revelation were muddied early on by erroneous reports of a request for a criminal inquiry from the Justice Department and by official disagreement over when and whether the information in the emails was actually classified.

Legally, the question is pretty clear-cut. If Clinton knowingly used her private server to handle classified information she could have a problem. But if she didn’t know the material was classified when she sent or received it she’s safe.

There are several laws that make it a criminal offense knowingly to reveal or mishandle classified information. The main one, 18 USC 1924 reads:

Whoever being an officer, employee, contractor, or consultant of the United States, and, by virtue of his office, employment, position, or contract, becomes possessed of documents or materials containing classified information of the United States, knowingly removes such documents or materials without authority and with the intent to retain such documents or materials at an unauthorized location shall be fined under this title or imprisoned for not more than one year, or both.

Clinton has explicitly and repeatedly said she didn’t knowingly send or receive any classified information. “The facts are pretty clear,” she said last weekend in Iowa, “I did not send nor receive anything that was classified at the time.” Intelligence Community Inspector General I. Charles McCullough III, disagrees, saying some of the material was in fact classified at the time it was sent. But in his letter last week to Congressional intelligence committee leaders, McCullough reported that, “None of the emails we reviewed had classification or dissemination markings.” And there has been no indication Clinton knew she was sending and receiving anything classified.

The public doesn’t yet know the content of the classified emails, and the State Department and the inspectors general have tens of thousands still to review. If evidence emerges that Clinton knew she was handling secrets on her private server, “She could have a problem,” says William Jeffress, a leading criminal trial lawyer at Baker Botts who has represented government officials in secrecy cases. Barring that, says Jeffress, “there’s no way in the world [prosecutors] could ever make a case” against her.

Clinton also has to worry about government rules for handling secrets. In December 2009, President Obama signed Executive Order 13526, which renewed the long-running rules for classifying information and the penalties for revealing it.

Under that order, agency heads like Clinton are responsible for keeping secrets safe throughout their departments. And all officers of the government can be suspended, fired or have their security clearance revoked if they “knowingly, willfully, or negligently” disclosed secrets or broke the rules in any other way.

Was Clinton negligent in setting up her private email server and communicating with State Department staff exclusively on it? Says Steven Aftergood, a secrecy expert at the Federation of American Scientists, “The material in question was not marked as classified, making it very hard or impossible to show negligence.”

With 16 months until the 2016 presidential election, Clinton’s opponents will certainly try. And with tens of thousands of emails still to be reviewed, they’ll have plenty of material to work with.

TIME White House

White House Responds to Petition Urging Obama to Pardon Edward Snowden

Edward Snowden
Uncredited—AP FILE - This file photo image made from video released by WikiLeaks on Friday, Oct. 11, 2013, shows former National Security Agency systems analyst Edward Snowden smiles during a presentation ceremony for the Sam Adams Award in Moscow, Russia.

“He should come home to the United States, and be judged by a jury of his peers"

The White House responded to a petition calling for President Obama to pardon Edward Snowden on Tuesday by calling for the former National Security Agency contractor to “come home to the United States, and be judged by a jury of his peers.”

Snowden, who released classified government documents detailing the widespread surveillance activities of the U.S. intelligence agencies, fled to Russia soon after the documents were released. The White House commissioned Lisa Monaco, the president’s advisor on homeland security and counterterrorism, to pen the official response, which was posted to the White House’s We the People website.

“If he felt his actions were consistent with civil disobedience, then he should do what those who have taken issue with their own government do: Challenge it, speak out, engage in a constructive act of protest, and — importantly — accept the consequences of his actions,” Monaco writes. “He should come home to the United States, and be judged by a jury of his peers — not hide behind the cover of an authoritarian regime. Right now, he’s running away from the consequences of his actions.”

Snowden’s Russian attorney said in March that the whistleblower would be willing to return to the United States if he was “given a guarantee of a legal and impartial trial.”

A petition to have Snowden pardoned was launched in 2013 and gained a total of 167,954 signatures—well over the 100,000 required to warrant an official response from the White House. “Edward Snowden is a national hero and should be immediately issued a full, free, and absolute pardon for any crimes he has committed or may have committed related to blowing the whistle on secret NSA surveillance programs,” the petition reads.

The White House responded to the petition on Tuesday as a part of a wider effort to clear the backlog of petitions awaiting response on We the People and alter the way the White House responds.

TIME White House

Obama: If I Ran for a Third Term, I Could Win

"But I can't"

President Obama said that if he could run for a third term he thinks he would win, while calling for African leaders to adhere to term limits during a historic speech before the African Union.

“I actually think I’m a pretty good president. I think if I ran, I could win. But I can’t,” Obama said in Ethiopia on Tuesday. ” There’s a lot that I’d like to do to keep America moving, but the law’s the law.”

President Obama addressed his third term viability while calling on African leaders to step aside when their terms end on Tuesday. During his speech, the first by an American president before the African Union, Obama said when a leader “tries to change the rules in the middle of the game” in order to stay in office it puts a nation’s stability and the future of Democratic progress across the continent at risk. Obama specifically noted recent elections in Burundi, where President Pierre Nkurunziza won a third term. The United Nations has said those elections occurred in an environment that was not “not conducive for an inclusive, free and credible electoral process,” according to the Associated Press.

” The point is, I don’t understand why people want to stay so long. Especially, when they’ve got a lot of money,” Obama said Tuesday, during the final stretch of his historic trip to two African countries. “And sometimes you’ll hear a leader say ‘I’m the only person who can hold this nation together.’ If that’s true, then that leader has failed to truly build their nation.”

Though Obama admitted he thinks he’s done a good job at the helm — something about 49% of Americans agree with, according his most recent CNN approval ratings — he didn’t hesitate to list off the freedoms he’ll gain back when he leaves office.

“I’m looking forward to life after being president,” Obama said. “I won’t have such a big security detail all the time. It means I can go take a walk, I can spend time with my family, I can find other ways to serve. I can visit Africa more often.”

TIME Malaysia

5 Reasons Why Obama Should Steer Clear of Malaysian Prime Minister Najib Razak

U.S. President Barack Obama and Malaysia's Prime Minister Najib Razak walk off 18th hole while playing a round of golf at the Clipper Golf course in Hawaii
Hugh Gentry—Reuters U.S. President Barack Obama and Malaysia's Prime Minister Najib Razak walk off 18th hole while playing a round of golf at the Clipper Golf course on Marine Corps Base Hawaii during Obama's Christmas holiday vacation in Kaneohe, Hawaii, on Dec. 24, 2014

Washington is having serious trouble finding dependable allies in Southeast Asia

The U.S.’s “rebalancing” toward Asia has two main pillars: being a counterweight to China and securing a free-trade deal called the Trans-Pacific Partnership. If Washington is to succeed on both fronts, it needs as many friends in the region as it can win. The U.S.’s newest ally is Malaysia, this year’s chair of the 10-member Association of Southeast Nation, collectively a growing market, and, on the surface, a modern, democratic, Muslim country. In April 2014 U.S. President Barack Obama paid an official visit to Malaysia, the first sitting President to do so in decades, and, later in the year, played golf with Malaysian Prime Minister Najib Razak when both were on holiday in Honolulu. This November, Kuala Lumpur will host the next East Asia Summit and Obama is due to attend.

But recently, all the news coming out of Malaysia is negative. After becoming embroiled in a corruption scandal, Najib on Tuesday sacked his deputy and Malaysia’s attorney general in an apparent purge of critics. British Prime Minister David Cameron is facing a domestic backlash for pushing forward with a visit to Kuala Lumpur this week despite the snowballing controversy. Here are five reasons why Obama might want to break from Cameron by giving Najib a wide berth.

  1. 1MDB — A Wall Street Journal report has alleged that Najib’s personal bank accounts received nearly $700 million in March 2013 from 1Malaysia Development Berhad (1MDB), a government-owned development fund. Najib has protested his innocence and threatened legal action against the Journal. “I am not a thief,” Najib told Malaysian media on July 5. “I am not a traitor and will not betray Malaysians.” The police, the local anticorruption agency, the attorney general’s office and the central bank are investigating the allegations. On July 8, the police raided 1MDB’s office in Kuala Lumpur and took away documents. Even before the latest news, 1MDB was an embarrassment for Najib, who chaired the fund’s advisory board as debts of $11.6 billion were accrued. Such are the suspicions of malfeasance that former Prime Minister Mahathir Mohamad, who ran the country from 1981 to 2003 and has long been considered Najib’s mentor, has repeatedly called for his protégé’s resignation over 1MDB’s alleged mishandling.
  1. Anwar Ibrahim — Najib’s main political rival is once again in prison for a sodomy conviction. Human Rights Watch deemed his five-year sentence handed down Feb. 10 to be “politically motivated proceedings under an abusive and archaic law.” This is the second time Anwar has been jailed for sodomy.
  1. Hudud — Stoning for adultery and amputation for theft are not the kind of punishments meted out by the progressive state that Malaysia purports to be. Yet Najib’s United Malays National Organisation (UMNO) is supporting attempts to introduce hudud Islamic law in the Pan-Malaysian Islamic Party’s (PAS) heartland state of Kelantan, where nightclubs are forbidden and men and women are designated separate public benches. Why is UMNO supportive of recognizing hudud under federal law? Largely because PAS is part of a three-party Pakatan Rakyat coalition that is UNMO’s chief challenger. The other partners — Anwar’s Keadilan, or People’s Justice Party, supported by middle-class, urban Malays, and the Chinese Malaysian–backed Democratic Action Party (DAP) — are strongly against hudud. Many analysts accuse UMNO of cynically fostering a radical Islamic bent to widen rifts in its political opponents.
  1. Shaariibuugiin Altantuyaa — In 2002, when Najib was Defense Minister, a $1.25 billion contract was signed to purchase two Scorpène submarines from French firm DCNS. Altantuyaa was a Mongolian woman who, knowing French, facilitated negotiations as a translator, and then allegedly attempted to blackmail Abdul Razak Baginda, one of Najib’s aides with whom she was also having an affair, for $500,000 over “commission” payments he had allegedly received. Two policemen posted to Najib’s bodyguard detail were convicted of murdering Altantuyaa on Oct. 18, 2006. Najib denies any involvement.
  1. Prevention of Terrorism Act — Najib campaigned on scrapping the controversial Internal Security Act (ISA) but then immediately replaced it with the equally sweeping Prevention of Terrorism Act (POTA) and Security Offences (Special Measures) Act, or SOSMA. The POTA includes practically the same powers as ISA, including two-year detention without trial, and was dubbed a “legal zombie arising from the grave of the abusive [ISA]” by Human Rights Watch. Najib also vowed to repeal the similarly maligned Sedition Act but reneged after his election in 2013. In fact, in April his government extended the maximum jail term under the Sedition Act from three to 20 years.
TIME Barack Obama

See Scenes From Obama’s Trip to Africa

President Obama spoke proudly of his Kenyan heritage on his third trip to sub-Saharan Africa, visiting Kenya before traveling to Ethiopia

TIME mike huckabee

President Obama Says GOP Criticism ‘Ridiculous’

President Barack Obama aggressively pushed back against Republican criticism of a deal his Administration helped negotiate to keep nuclear weapons out of Iran’s hands, telling reporters traveling with him to Ethiopia that the GOP presidential hopefuls who hope to succeed him were using “ridiculous” and “ad hominem” attacks to avoid a serious debate rooted in substance.

During a news conference in Addis Ababa, Obama was asked about remarks made a day earlier by Mike Huckabee, the former Arkansas Governor who compared the deal to the Holocaust. Obama used the question to level broader criticism of the jockeying happening inside the Republican Party that is still in the early days of a search for a 2016 nominee.

“I have not yet heard a factual argument on the other side that holds up to scrutiny,” Obama said of his GOP critics. “There is a reason why 99 percent of the world thinks this is a good deal. It’s because it’s a good deal.”

The Republican candidates looking to follow him into the White House do not share his analysis. For instance, Huckabee said the proposed deal gives too much trust to Iran and betrays Israel, musing to the conservative Breitbart News that Obama was ready to “take the Israelis and march them to the door of the oven.”

The oven remark was a clear reference to the Holocaust, when Nazis murdered millions of European Jews in concentration camps. Iranian leaders often use strong anti-Israel rhetoric, promising “death to Israel,” though few analysts think the country is actually preparing to engage in a genocide.

Obama, whose great uncle helped to liberate part of the Buchenwald camp in Germany, took offense to Huckabee’s rhetoric and said it matched up with other statements he has heard from Republicans. Obama said it “would be considered ridiculous if it weren’t so sad.”

“We’re creating a culture that is not conducive to good policy or good politics. The American people deserve better. Certainly, presidential debates deserve better,” Obama said, speaking broadly about a crowded Republican field that has been marked by daily oneupmanship. “In 18 months, I’m turning over the keys. I want to make sure I’m turning over the keys to somebody who is serious about the serious problems that the country faces and the world faces.”

Obama has long shown an impatience with the political showmanship, especially when it comes to foreign policy. The President said his would-be-replacements should take time to more carefully study the issues before jumping forward with criticism to motivate the party’s base.

“We have robust debates. We look at the facts. There are going to be disagreements but we just don’t fling out ad hominem attacks like that because it doesn’t help inform the American people,” Obama chided.

Speaking in Des Moines, Democratic frontrunner Hillary Clinton joined Obama in criticizing Huckabee’s rhetoric.

“Comments like these are offensive and have no place in our political dialogue,” Clinton said. “I am disappointed and I’m really offended personally.” The former Secretary of State said there is space for candidates to disagree on the details of the deal, but said Huckabee’s rhetoric “steps over the line” and deserved to be repudiated.

For his part, Huckabee was not backing off. From his campaign headquarters in Little Rock, Ark., Huckabee released a statement that doubled-down on his earlier rhetoric after hearing Obama’s criticism.

“What’s ridiculous and sad is that President Obama does not take the Iran threats seriously. For decades, Iranian leaders have pledged to ‘destroy,’ ‘annihilate,’ and ‘wipe Israel off the map’ with a ‘big Holocaust,’” Huckabee said. His statement to reporters included links to Iranian leaders’ comments using that rhetoric.

Huckabee pledged he would never allow that to happen. “I will stand with our ally Israel to prevent the terrorists in Tehran from achieving their own stated goal of another Holocaust,” he added. In a follow-up email to supporters, Huckabee asked them to sign a petition urging Congress to skip its summer break and stay in Washington to “fulfill your constitutional duty and KILL the dangerous Obama-Kerry nuclear deal with the Iranians.”

There was no real downside for Huckabee to continue his line of criticism. The former Baptist pastor is a favorite among the evangelical wing of the GOP and he is a frequent guide to the region, taking paying guests on tours of Biblical sites. Republicans—especially those voters who pick the party’s nominee—overwhelmingly support Israel and are more than willing to listen to criticism of anything Obama backs.

Republicans have been almost unified in their opposition to the deal with Iran, which was negotiated by world powers China, France, Russia, the United Kingdom, Germany and the United States.

Under the deal, Iran will get relief from sanctions and regain access to international oil markets, which will bring it a windfall of about $100 billion. In exchange, Iran must dispose of most of its low-enriched uranium, stop efforts to produce or acquire more nuclear fuel and consent to inspections. The deal is expected to block Iran from obtaining the technology needed to build a nuclear weapon for at least a decade.

With additional reporting by Sam Frizell.

TIME animals

Obama Announces Major Restrictions on Ivory Trade

When implemented, the proposed rule will result in a near total ban on the ivory trade in the U.S.

President Obama announced sweeping new measures to stem the ivory trade on Saturday, including a ban on the interstate sale of most ivory in the U.S. and new restrictions on when the material can be exported. When implemented, the rule would result in a near total ban on the ivory trade in the U.S.

“We’re proposing a new rule that bans the sale of virtually all ivory across state lines,” Obama said at a press conference in Kenya.

Existing U.S. ivory regulations mostly concern the import and export of the material from the country, while allowing some legal trade of the material between states. The new regulation, which will be finalized later this year, would restrict interstate trade to antique items that are over 100 years old or contain a minimal amount of ivory. The proposed rule also contains new restrictions on the international trade.

Prior to the Saturday’s announcement, many animal conservationists had argued that allowing some legal ivory trade provided a cover for criminals who were actually selling illegal ivory. In a 2009 investigation, U.S. Fish and Wildlife Service officials seized more than a ton of ivory from a Philadelphia art store that had been manipulated to appear old enough to meet federal standards. Ivory from that seizure was destroyed at a “ivory crush” event in Times Square last month.

“By tightening domestic controls on trade in elephant ivory and allowing only very narrow exceptions, we will close existing avenues that are exploited by traffickers and address ivory trade that poses a threat to elephants in the wild,” said Fish and Wildlife Service Director Dan Ashe in a press release. “Federal law enforcement agents will have clearer lines by which to demarcate legal from illegal trade.”

Read More: Why Elephant Advocates Crushed a Ton of Ivory in Times Square

The announcement comes as conservation groups have warned about an increase in the prevalence of elephant poaching and a subsequent decline in the number of African elephants. Fewer than 500,000 elephants roam the continent today, and more than 50,000 are killed each year. After China, the U.S. is the world’s second largest market for ivory product sales, according to some estimates.

In addition to protecting elephants, the regulations will promote economic growth in Africa in the many countries rely on wildlife-based tourism, officials said. It will also aid the fight against terrorist groups that fund their efforts with money from the ivory trade.

“This is an issue not just about protecting elephants, but alleviating poverty, spurring economic growth, and fighting off people intent on destroying governments and terrorizing communities,” said Wayne Pacelle, president and CEO of The Humane Society, in an emailed statement. “Here’s a case where protecting wildlife is bound inextricably with core concerns about economic and national security.”

TIME White House

Obama Reunites With Father’s Family in Kenya

This is Obama's first trip to Kenya as U.S. President

(NAIROBI, Kenya)—Fulfilling the hopes of millions of Kenyans, Barack Obama returned to his father’s homeland Friday for the first time as U.S. president, a long sought visit by a country that considers him a local son.

The president spent the evening reuniting with his Kenyan family, including his elderly step-grandmother who made the trip to the capital of Nairobi from her rural village. U.S. and Kenyan flags lined the main road from Nairobi’s airport, and billboards heralding Obama’s trip dotted the city.

“I don’t think that Kenyans think of Obama as African-American. They think of him as Kenyan-American,” said EJ Hogendoorn, deputy program director for Africa at the International Crisis Group.

Obama’s link to Kenya is a father he barely knew, but whose influence can nonetheless be seen in his son’s presidency.

Obama has spoken candidly about growing up without his Kenyan-born father and feeling “the weight of that absence.” A White House initiative to support young men of color who face similar circumstances has become a project dear to Obama, one he plans to continue after leaving the White House.

In Africa, Obama has used his late father’s struggle to overcome government corruption as a way to push leaders to strengthen democracies. He’s expected to make good governance and democracy-building a centerpiece of his two days of meetings and speeches in Nairobi, as well as a stop next week in Ethiopia.

“In my father’s life, it was partly tribalism and patronage and nepotism in an independent Kenya that for a long stretch derailed his career,” Obama said during a 2009 trip to Ghana, his first visit to Africa as president. “We know that this kind of corruption is still a daily fact of life for far too many.”

The president’s father, Barack Obama, Sr., left Kenya as a young man to study at the University of Hawaii. There, he met Stanley Ann Dunham, a white woman from Kansas. They would soon marry and have a son, who was named after his father.

The elder Obama left Hawaii when he son was just two years old, first to continue his studies at Harvard, then to return to Kenya. The future president and his father would see each other just once more, when the son was 10 years old. Obama’s father died in a car crash in 1982, at age 46.

“I didn’t have a dad in the house,” Obama said last year during a White House event for My Brother’s Keeper, his initiative for young men. “I was angry about it, even though I didn’t necessarily realize it at the time.”

Obama’s first trip to Kenya nearly 30 years ago was a quest to fill in the gaps in the story of his father’s life. In his memoir “Dreams From My Father,” Obama wrote that at the time of his death, “my father remained a mystery to me, both more and less than a man.”

What Obama uncovered was a portrait of a talented, but troubled man. An economist for the Kenyan government, the senior Obama clashed with then-President Jomo Kenyatta over tribal divisions and allegations of corruption. He was ultimately fired by the president, sending him into a tailspin of financial problems and heavy drinking.

The Kenyan leader Obama will meet with this weekend, Uhuru Kenyatta, is the son of the president his father confronted decades ago.

Obama met most of his Kenyan family for the first time on that initial trip to his father’s home country. As he stepped off Air Force One Friday, he was greeted by half-sister Auma Obama, pulling her into a warm embrace. The siblings then joined about three dozen family members at a restaurant at the president’s hotel for a private dinner.

Logistical constraints and security precautions prevented Obama from visiting Kogelo, the village where his father lived and is buried, on this trip. Sarah Obama, the step-grandmother he calls “Granny,” still lives in the village.

Despite the intense focus on the American leader’s local roots, the White House has cast the trip as one focused on the relationship between the U.S. and Kenya, not the president and his family. Officials say Obama’s agenda is heavily focused on trade and economic issues, as well as security and counterterrorism cooperation.

The president is traveling with nearly two dozen U.S. lawmakers, along with 200 U.S. investors attending the Global Entrepreneurship Summit. Michelle Obama and daughters Malia and Sasha did not accompany the president.

Auma Obama said she believed her late father would be proud to see his son return to Kenya as American president.

“He’d be extremely proud and say, ‘Well done,'” she said in an interview with CNN. “But then he’d add, ‘But obviously, you’re an Obama.'”

 

TIME White House

President Obama Dines With Relatives in Kenya

KENYA-US-OBAMA
Saul Loeb—AFP/Getty Images US President Barack Obama sits alongside his step-grandmother, Mama Sarah, left, and half-sister Auma Obama, right, during a gathering of family at his hotel in Nairobi on July 24, 2015.

Obama is in Kenya for the Global Entrepreneurship Summit, but made time for family on Friday

President Obama made time to meet with family on the first night of his four-day trip to Kenya and Ethiopia. About three dozen of the President’s relatives joined him for dinner on Friday, including his half sister Auma and his step-grandmother Mama Sarah.

Obama is in Kenya for the Global Entrepreneurship Summit, of which he is co-chair. His trip marks the first time a sitting U.S. president has traveled to both Kenya and Ethiopia, but the trip also has historical significance given Obama’s personal connection to the East African nation. Obama’s father, Barack Obama, Sr., was born in Kenya and later died there. Obama was born in Hawaii.

Per the White House pool report on Friday’s dinner:

Potus, still in suit and tie, was seated in the middle of two long tables filled with relatives, about three dozen in all. Seated to his right was his step-grandmother, Mama Sarah, whom he calls Granny, wearing a [gold]-colored head scarf. To his left was his half-sister, Auma Obama, wearing a white jacket and black blouse. The other relatives were all wearing suits or other appropriately dress clothes. There were a lot of smiles all around.

 

MONEY 2016 Election

What Hillary Clinton’s New Tax Proposal Would Mean

U.S. Democratic presidential candidate Hillary Clinton speaks during an event at the New York University Leonard N. Stern School of Business in New York July 24, 2015.
Shannon Stapleton—Reuters U.S. Democratic presidential candidate Hillary Clinton speaks during an event at the New York University Leonard N. Stern School of Business in New York July 24, 2015.

Here's how the plan would change capital gains tax rates.

On Friday, Democratic Presidential hopeful Hillary Clinton spelled out her new plan to raise tax rates on capital gains — the profits people reap when they sell an asset a like stock, parcel of real estate or even a business.

The capital gains tax rate has been a political football for years, not least because rich people tend to own — and sell — the most stuff. Here are a few key things you need know about capital gains tax in general, and Clinton’s proposal specifically.

How are capital gains currently taxed?

While the tax rate on capital gains has bounced around a lot over the years, the big tax deal reached in the last hours of 2012 pushed up the top rate on long-term capital gains to 20% — still far lower than the 39.6% top rate on income (although top earners also pay a health-care related 3.8% surtax on investment income). For taxpayers in lower brackets, long-term capital gains tax rates max out at 15% or less.

There is an exclusion for profits of up to $250,000 ($500,000 if you are married) on your primary residence, so many homeowners won’t have to worry about a huge tax bill when they move.

That’s all for long-term capital gains, by the way. Short-term capital gains — that is, the profit made on stocks or other assets held less than a year — get taxed at the same rate as income.

Why do capital gains get a tax break?

In the relatively recent past, both Democratic (Bill Clinton) and Republican (George W. Bush) presidents have cut the capital gains rate in hopes that doing so would spur the economy. Since the capital gains tax is really a tax on investment, economists hope that lowering the tax will prompt people to invest more of their money rather than spend it.

The idea is that if more people are looking to invest, it should be easier for start-ups or existing companies that want to develop new products to find funding.

That’s also why short-term gains get taxed as income — because short-term gains benefit people who make their living buying stuff and then quickly reselling, rather than investing for the long term.

So what’s the problem?

In addition to spurring investment, a low long-term capital gains rate also spurs inequality. It’s not hard to see who the biggest beneficiaries are: people who invest in the stock market or who sell businesses that they own.

The low capital gains rate is one reason America’s 400 biggest earners paid a tax rate of less than 17% in 2012, the latest year for which the IRS has released data. There are also questions about whether the low capital gains rate really does boost the economy.

After all, while the economy took off under Bill Clinton, the stock market has also continued to soar since the most recent increase in the long-term gains rate.

What is Hillary Clinton proposing instead?

Hillary Clinton’s proposal would require wealthy taxpayers to hold their investments much longer to get the full long-term capital gains tax benefit. Instead of a single long-term gains rate that kicks in after one year, her plan would create a series of rates ranging from 36% to 24% for those who hold investments for at least two years but less than six years.

Clinton says she isn’t doing this simply to raise taxes on the rich. Rather it’s to discourage short-termism among big investors. That’s something even many on Wall Street regard as a problem, even if higher taxes might not be their preferred solution. So it looks like good politics.

Is it a good idea?

That, of course, depends on who you ask. Many progressives would simply like to see capital gains taxed as income.

Yet it’s not even clear whether Clinton’s proposal could actually change investor behavior — even if it could pass Congress. “My general impression is deep skepticism,” Leonard Burman, director of the nonpartisan think tank the Tax Policy Center told Reuters earlier this week. “Frankly, I don’t see the logic in trying to encourage people to hold assets for longer than they want to.”

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