Back in 2008 when Obama was debating Hillary Clinton on national TV, Obama discussed with the moderator how raising the capital gains rate would likely reduce federal revenue collections, but he insisted it was good policy anyway — because it was a policy of “fairness”.
Why would raising the capital gains tax be a revenue loss? The effect of higher taxes slows the economy because those paying the higher capital gains have less money to invest. Unfortunately, such a policy was implemented in 2013 when capital gains went from 15-20% and was coupled with the new 3.8% surtax on investment income to pay for Obamacare, making the rate 23.8%.
Now he wants to tax, yet again, the very type of taxpayers who have money to create jobs and/or invest, by raising the capital gains rate up to 28%. This is essentially about an 18% tax hike on high income earners — two years after the last capital gains rate increase. That’s practically doubling the rate in just a few short years. And during this time, the economy has remained sluggish.
It’s a shame that Obama continues to push for policies that would have a negative effect on jobs and the economy in an effort to promote “fairness through taxation” and pay for his pet projects (such as free community college!). The concept of an American President continuing to go after people making a lot of money it is particularly loathsome; it also displays an absolute lack of familiarity with and respect for how people get wealthy — he just wants their hard-earned money.
Back in 2008 during that same debate, Obama claimed, “What I want is not oppressive taxation. I want businesses to thrive, and I want people to be rewarded for their success. But what I also want to make sure is that our tax system is fair and that we are able to finance health care for Americans who currently don’t have it and that we’re able to invest in our infrastructure and invest in our schools. And you can’t do that for free.”
But with Obama, you can do it by wealth transfer.
First off whenever Obama opens his mouth and moves his lips lies come out. He is a liar lacking any credibility whose objective is to use our tax system for social engineering. By this I mean redistributing income from the job creators by means of obsessive and onerous increases in taxes. He uses these revenues to pay for his boondoggle spending addiction. The fallacy of his “Fairness Doctrine” is that it cannot be sustained. The risk takers supplying investment capital which can lead to the next Apple or Google and countless jobs will be loathsome to do so when the risk/reward is not appealing. The increase in the capital gains tax will act as a disincentive for investment as a larger share of the potential profit will be taxed away. On the other hand, losses resulting from the failure of the capital investment are limited to a paltry write off of 3000 per year. History has proven that when the capital gains tax rate was reduced there was a windfall in revenues for the government and when the capital gains tax was raised government revenue from this source was reduced. What more proof is necessary to show that to the Progressives their idea of “fairness” is more important then growing the economy and creating new and higher paying jobs. If this isn’t an indictment of Progressive ideology then I don’t know what is.
Agreed! I further opined on the topic today. There seems to be a lack of basic understanding of what “capital gains” is, and why it is important to the economy. https://taxpolitix.com/obamanomics-capital-gains-economy/
My next one will be covering what true tax reform is — and how Obama’s proposals are anything but “reform”.