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During the Presidential campaign in 2008 Barack Obama said “ I would look at raising the capital gains tax for purposes of fairness.” Considering the uproar now over Mitt Romney’s tax returns and the fact that he pays capital gains taxes at this 15% rate, it is only a matter of time before we hear cries to increase the capital gains tax. But there is one small problem with that idea, history shows that raising the capital gains rate actually lowers government revenues, while decreasing the capital gains rate increases government revenues.
Here are just a few examples …
•Between 1968 and 1972 rates increased by 10 percentage points and revenues fell 21%.
•In 1978 the rate fell by 15 points from 35% to 20% and revenues increased by 46%.
•In 1986 the rate was raised by 8 points to 28% and by 1991 15% less revenue was being raised.
•In 1996 the rate was reduced by 8 points to 20% again and by 2000 revenues had grown by some 50%
•In 2003 the rate was cut to 15% and revenues grew by 45% over the following three years.
When presented with the specific example from the Clinton administration, Barack Obama replied with the quote from above. .
Right now we need to be encouraging investments to get the economy back on track. Start up small businesses are responsible for most new jobs in America, at least they were for a long stretch of our history. US experts agree that increasing capital gains taxes ‘significantly damages the economy.” and there isn't anything fair about that!
6 comments:
In the interest of "fairness",
John Corzine should have his assets frozen and be imprisoned based on accusations (sorta like Megaupload)
with all of his relations (including Joe bloe and dingelbarry) investigated by Joe Arpiao
unitl the "missing" billions are found.
http://www.reuters.com/article/2012/01/12/us-mfglobal-customers-idUSTRE80B1CV20120112
I agree that we all should pay a fair share. Flat tax, no deductions, not loopholes, no double taxing (pay income tax and then capital gains on the income you might invest). One rate, one time, for everybody.
America has spent the last 70+ years trying to variously outrun or wish-away the tsunami of government entitlements. Politicians of both parties, always eager to be reelected, have promised the moon and lots of people who should have known better bought what they were selling. Obama is not stupid. He’s here because he loves the tsunami. Obama has embraced its destructive power to destroy what he can then rebuild to his liking. The Republicans are too busy arguing over lists of rules about what we can and can’t do inside our own homes to pay much attention to the wall of water which is about to crash down and sweep our homes away.
Have you heard the ideas floating around to impose a fee for anyone who renounces their citizenship? It's like a death tax for your citizenship. Sooner or later, they are going to put an end to people being able to get away with their wealth and property intact.
They can't raise taxes out of "fairness". Taxation is only for the purpose of raising revenuesand it is explicit in the body of the document. In Article 1, Section 8, clause 1, states that: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.
Because of the specificity of the 10th Amendment, since the Constitution in no way anywhere states that the Federal government has the power to manipulate social behavior or tax based on what is arbitrarily "fair", the ONLY taxing authorities that can engage in this behavior are at the state level and below.
But Democrats don't care. They love taxing only the rich.
The late Norman Ture, from the Institute for Research on the Economics of Taxation had a favorite saying: “People aren’t taxed. Activities are.”
It is this proposition, that taxation of any kind always has the effect of penalizing some activities relative to others, that lies at the heart of the economic analysis of taxation."
"Taxing Investment"
http://www.thefreemanonline.org/headline/taxing-investment/
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