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Lowering capital gains tax does absolutely nothing to "encourage investment." The capital gains tax was already lowered under Bush, and look where we are today. I'm sorry, but I'm not buying it. Lowering capital gains tax=tax relief for the wealthy. And they take their money offshore--they don't invest it in this country! Please. If it hasn't worked the last 8 years, it's certainly not going to work now. Even Reagan, in his second term, conceded that "trickle down" economics didn't pan out.
Over the long run, your're right. But in the sort term, it does help to increase revenues with people trying to turn a quick buck. Bush's tax cut plan did increase revenues when it was issued. We're at the point now where it's costing more than it's bringing in. Not to mention there's no capital investment because the credit markets have frozen.
I can think of a boatload of people I'd like to add to the list for jail time right now. Real jail, not the federal ones either. Because as much as I blame American citizens I blame the banks a heck of a lot more.
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Over the long run, your're right. But in the sort term, it does help to increase revenues with people trying to turn a quick buck. Bush's tax cut plan did increase revenues when it was issued. We're at the point now where it's costing more than it's bringing in. Not to mention there's no capital investment because the credit markets have frozen.
Exactly my issue with lowering it. What is there to invest in right now? Even the biggest gamblers have the sense to go whoaaaaa maybe its not time to play this hand when the cards are on fire.
And who are they going to hold accountable for this nightmare? Will anybody go to jail?
The FBI is investigating to see if there was any fraud committed. I highly doubt anyone at any company will go to jail. If it were my call, I'd hang Ben Bernanke on national television for what he's done in just a few short years. Honestly, he didn't have much choice. The Federal Reserve only has one lever. They can either pull it or push it. Not really what you want when you're trying to fix prices.
For the nancy that gave me a point for saying Obama could be assassinated, how about that? old white guy dead too. Suck it, Nancy.
I can think of a boatload of people I'd like to add to the list for jail time right now. Real jail, not the federal ones either. Because as much as I blame American citizens I blame the banks a heck of a lot more.
Exactly my issue with lowering it. What is there to invest in right now? Even the biggest gamblers have the sense to go whoaaaaa maybe its not time to play this hand when the cards are on fire.
The only thing to invest in is debt. So how about we lower it for those that invest in real industry rather than financial services?
Why are you so obsessed with ACORN? You need to learn to read BOTH sides of a story.
Why don't you care that our taxpayer money is going to fund this corrupt organization AND that they have a lengthy record of election fraud? This group should not have ANY part to play. The fact that the Dems continually funnel them millions of dollars means that the Dems REALLY don't get it. Barney Frank needs to be removed. Immediately.
How about a lowered capital gains tax for 5 years--and NO extension?
I'd say two years. And return it to where it was when Clinton was in office. Cut all other non entitlement government spending. Tell Iraq to get themselves together cause we're leaving. Stop trying to police the world. Bring home all our troops from countries where they aren't required by treaties so that their wages can be returned to our economy. They need housing too, right?
There's a lot of other approaches to this problem that Congress and the President aren't even thinking about. It's the issue with rushing to solve a problem in an election year.
Because Nancy Pelosi, the Speaker of the House (a democrat), will not bring a bill to the floor that doesn't have bipartisan backing.
If Barack Obama was the agent of change and the leader with the sense of direction and fiscal sense he claims to be, he'd act like a leader and drive a bill through. However, it's not there... and for all the ***** the Dems are talking right now, they don't have what it takes either. McCain is the only one in the room who isn't suffering analysis paralysis.
Dems have the numbers. They're cowards who could take a million billion dollar bill to Bush and it'd get signed... but they're terrified to take action without having scapegoats available.
That's what I think is happening.
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Originally Posted by SGrey
You cannot simply bail out the financial sector and not give any relief to the people that are actually paying the mortgages. Whether or not they made bad decisions is irrelevant to the solution. So did the banks. The basics are, if you bailout the banks but the people still cannot pay then how long are the banks going to be bailed out? You're just putting a temporary band-aid on the problem.
My understanding is the government is going to buy the suspicious paper. The banks will no longer be at risk by bad borrowers. So, I think it's accurate to say that the idea behind the bail-out is that the dirtbags will continue to have jobs so they can pay their foolishly assumed mortgages.
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Originally Posted by MovingForward
Lowering capital gains tax does absolutely nothing to "encourage investment."
Didn't Barack Obama acknowledge at a debate against Hillary Clinton that raising cap gains has the result of reducing revenue? As I recall, his response was quite similar to the stumbling you'd expect to see by a one-legged man in an a$$ kicking contest.
If investment didn't fall off, raising cap gains tax would result in a commensurate tax revenue increase. However, it does, and that's why the tax revenue falls.
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Even Reagan, in his second term, conceded that "trickle down" economics didn't pan out.
As late as 1988 while Bush Sr was campaigning, Reagan never made that claim. In fact, he was pushing for lowered tax rates because in his experience, it meant more revenue.
Reagan to Seek Reduction on Capital Gains Tax - New York Times (http://query.nytimes.com/gst/fullpage.html?res=940DE3DB173DF937A15752C0A96E9482 60 - broken link)
Since then, many economist have agreed that in the sort term, it does increase revenue, but it's a curve. Eventually you reach the point of diminishing returns. This guy claims it happens after 1 year and that it probably has more to do with shifting money around rather than the tax rate. So, causality versus causation.
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There's an easily observable one-year effect: Revenue almost always goes up the year after a capital gains rate cut because people can time the realization of their capital gains--and when a cut is coming they'll delay those realizations en masse until after it becomes law. But that's not really evidence that capital gains tax cuts increase revenue; it's just evidence that they shift revenue from one year to another.
"Serious" economists and capital gains taxes - The Curious Capitalist - Justin Fox - Economy - Markets - Business - TIME (http://time-blog.com/curious_capitalist/2008/04/commenter_common_sense_writes.html - broken link)
My understanding is the government is going to buy the suspicious paper. The banks will no longer be at risk by bad borrowers. So, I think it's accurate to say that the idea behind the bail-out is that the dirtbags will continue to have jobs so they can pay their foolishly assumed mortgages.
I've heard dissenting reports on this though. Maybe they will, maybe they won't. It's not as if any of us has seen the bill. Regardless that then does nothing for all the rest of the people that are going to be in trouble or already are but aren't quite over the edge yet.
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