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This has never been proven to be true unless the rates were truly confiscatory. If cap gains were raised somewhat or even were matched to income rates there wouldn't be a whole lot of change in the economy unless there was an expectation of rates being reduced in the future. Those who have attempted to prove this concept to be true were just cherry picking situations to try to make a very flimsy point. For example if the tax law was changed and the rate would go to 25% on Jan 1st, there would be a lot of attempts at selling before the end of the year to lock in the lower rate. A biased economist trying to prove lower rates get more collections would try to imply this temporary situation proved collections go up, but its just common sense which balances out after a short period of adjustment.
The concept capital gains should be taxed differently has some merit, but I'm not about to agree if it changed it would cause people to act completely differently. There is plenty of incentive to create capital gains if they are taxed at 25% versus 15%.
Actually, your argument is incorrect. Witness this set of numbers:
When the Maximum Tax Rate on long-term gains is reduced, there is always a distinct bump in collections. For example, look at the effect of lowering maximum tax rates in the late 70s and early 80s. And the same result happened in the 90s and the early part of the previous decade.
That is a tax increase... there is no strategy that makes sense to confiscate more resources from citizens to expand an incompetent wasteful government.
Lets see a real plan, entitlement reform, and tax reform before we even talk about any need to increase rates on anyone.
No, that is not a tax increase. The tax cut was always set as a TEMPORARY one- it was supposed to expire in 10 years. The Bush admin even admitted that letting it go longer than that would hurt the economy since it creates a large deficit- so it was never intended to go longer than 10 years.
So before looking at too many other reforms or cuts we need to let these tax cuts EXPIRE as they were always intended to when put in place. Then we look at the budget and see where we are, and how much more may need to be cut.
The increasing problem with tax cuts is that the Banks/Big Business pounce on the windfall before the citizenry has a chance to benefit/be productive with it. The Bush era/Obama tax cuts were incorporated to help BUSINESS by keeping consumer demand steady—counteract deflation.
Let’s take the Bush $600/person tax credit: The out in the open talk was the worry of the consumer saving &/or paying down debt with the rebate, instead of spending it—remember!
I truly feel that ending the Bush era/Obama tax cuts would be a wake up call to Big Business; a stipulation that they better stop gobbling up every last cent the citizenry get your hands on.
No, that is not a tax increase. The tax cut was always set as a TEMPORARY one- it was supposed to expire in 10 years. The Bush admin even admitted that letting it go longer than that would hurt the economy since it creates a large deficit- so it was never intended to go longer than 10 years.
So before looking at too many other reforms or cuts we need to let these tax cuts EXPIRE as they were always intended to when put in place. Then we look at the budget and see where we are, and how much more may need to be cut.
When the taxes in the country are raised it is a tax increase... all the talk about expiring reductions is just semantics and cheap talk... whatever was said over ten years ago really does not apply to the economy today.
No, that is not a tax increase. The tax cut was always set as a TEMPORARY one- it was supposed to expire in 10 years. The Bush admin even admitted that letting it go longer than that would hurt the economy since it creates a large deficit- so it was never intended to go longer than 10 years.
So before looking at too many other reforms or cuts we need to let these tax cuts EXPIRE as they were always intended to when put in place. Then we look at the budget and see where we are, and how much more may need to be cut.
Extended unemployment plus the SS tax cut were also supposed to be temporary, too, so per your logic, we should allow them to expire , too.
Extended unemployment plus the SS tax cut were also supposed to be temporary, too, so per your logic, we should allow them to expire , too.
Those will almost certainly be ended at some point. SS will become an even bigger black hole if the tax rate isn't fully restored in the not too distant future. Expanding and extending unemployment isn't a tax rate, its an eligibility issue, but I am sure it has a better chance of being ended than full restoration of 2001 tax rates.
When the Maximum Tax Rate on long-term gains is reduced, there is always a distinct bump in collections. For example, look at the effect of lowering maximum tax rates in the late 70s and early 80s. And the same result happened in the 90s and the early part of the previous decade.
Basically you just proved capital gains tax collection went up when the stock market was seeing its best performance. Do you really believe lower tax rates, not booming gains from stocks, was the cause?
Those will almost certainly be ended at some point. SS will become an even bigger black hole if the tax rate isn't fully restored in the not too distant future. Expanding and extending unemployment isn't a tax rate, its an eligibility issue, but I am sure it has a better chance of being ended than full restoration of 2001 tax rates.
Just like the present tax rates, ui was presented as temporary until the end of 2012.
Basically you just proved capital gains tax collection went up when the stock market was seeing its best performance. Do you really believe lower tax rates, not booming gains from stocks, was the cause?
It's kind of pointless to argue with someone like that. They're either too stupid to know better or they are intentionally lying with data.
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