Sen. Obama seems to know as much about economics as he does about middle class America. Which is just about nothing.
There really is no arguing this simple fact of taxation:
When you drop the capital gains tax, revenues go up. When you raise the capital gains tax, revenue go down.
This isn’t speculative; this is what happens.
Someone who knows a little (OK, a lot) more about economics than Senator Obama — The Wall Street Journal — takes apart Mr. Obama’s idiotic plan to double the capital gains tax.
Either the young Illinois Senator is ignorant of this revenue data, or he doesn’t really care because he’s a true income redistributionist who prefers high tax rates as a matter of ideological dogma regardless of the revenue consequences. Neither one is a recommendation for President.
Um. It’s the later. He’s a socialist. Just like the dreams of his father. His tax policy is simple: You make it, I’ll take it.
Yep, just exactly like his father, who even recommended a 100% tax on the wealthy in Kenya.
There really is no arguing this simple fact of taxation:
When you drop the capital gains tax, revenues go up. When you raise the capital gains tax, revenue go down.
I guess as a proponent of small government you should be for astronomically high taxes- it’s the only way to keep the government from collecting money hand over fist.
I’m actually in favor of Americans earning more money and keeping more of the money that they earned — thus lower taxes.
The point of my comment is just to illustrate the absurdity of the editorial.
As a rule it’s a good idea to ignore people who use lies to advance their theories so I stopped reading when the WSJ piece argued that 100 million Americans would benefit from lower capital gains taxes because they are stock owners: the vast majority of those people do not pay capital gains taxes because their money is in a 401K!
Preston has a point to the extent that 401K distributions are not taxed as capital gains. They are taxed as ordinary income, generally more than the rate for capital gains. However, ordinary stock transactions are taxed as capital gains and there are probably millions of people who own stocks that are not part of their 401 k. Also, there are several other things that are taxed as capital gains, including sale of personal home (over the exclusion limit), sale of second home, personal property, etc. The WSJ probably should have provided data to back up their assertion.
That notwithstanding, Obama also proposes raising the amount on which one pays SS tax and I’m sure there will be other taxes raised as well. There isn’t a democrat who doesn’t believe in taxing the “rich” which usually equates to the middle class.
They are taxed as ordinary income, generally more than the rate for capital gains.
Dianne- the average senior income is about $23K that would put their taxes at about $3000- or 13% so currently 1/2 of seniors pay less in taxes than they would if retirement investments were taxed at the capital gains rate.
I agree that working income should be taxed at a lower rate than investment income but that is just the opposite of what the Wall Street Journal advocates.
Preston – Well, I almost fell over when reading your figures (and the source) for a number of reasons. The normal cost around here for a nursing home is about $60,000 a year, so by those figures, half the senior citizen population today must be on medicaid if they are in a nursing home, of course owning next to nothing and handing over their ss checks to the nursing home…i.e. indigent but with a bed and a roof and at the best, mediocare care. Very depressing.
Course the next generation, their children, have a different story. Almost everybody worked, I think even 70% of the women. They do have more than their parents, with 401 k’s, several with pensions, etc. and other holdings taxed at various rates and surely significantly more income than above. I’m sure, however, our glorious politicians will figure out a way to send them to the poorhouse too. Have you noticed the babyboomer backlash? I see it dang near every day on the web. It ain’t gonna be pretty.