April 27, 2008

Obama on Fox News Sunday

Unimpressive, particularly in his shaky grasp of basic economics. He justified his plan to raise the capital gains rate as saying it would not affect those with retirement plans because the gains in the accounts are tax-deferred. The problem is, of course that raising the capital gains rate from the current 15 percent to 28 percent will hit every American right in his 401(k)/403(b)/IRA/pension plan by raising the cost of capital, depressing the market, and degrading the performance of everyone's portfolio.

Want to raise more revenue from capital gains? Cut the rate--works every time. Want to have "the rich" pay even more taxes? Cut the rate which will encourage more economic activities of the sort covered by capital gains, thus more taxable events. Ooops, can't do that--why that would be a tax cut for "the rich!" BTW, "the rich" seem to be everyone making more than $75,000 per year.

Posted by LMC at April 27, 2008 05:22 PM | TrackBack