Cretin or Crook?: Obama on capital gains taxes

This guy is really an over-achiever, he’s made this list several times already! ;-)

Does Sen. Obama not understand Gibson’s question (cretin) or does he just ignore the facts for his own political gain and socialist agenda (crook)? Somewhere, at the very moment this dialog was taking place, Dr. Laffer was grinding his teeth in frustration. (pic from the WSJ)

This quote from the column nails it: 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.

Obama’s Tax Evasion – WSJ.com: “Time and again, the rookie Senator has said he would not raise taxes on middle-class earners, whom he describes as people with annual income lower than between $200,000 and $250,000. On Wednesday night, he repeated the vow. ‘I not only have pledged not to raise their taxes,’ said the Senator, ‘I’ve been the first candidate in this race to specifically say I would cut their taxes.’

But Mr. Obama has also said he’s open to raising – indeed, nearly doubling to 28% – the current top capital gains tax rate of 15%, which would in fact be a tax hike on some 100 million Americans who own stock, including millions of people who fit Mr. Obama’s definition of middle class.

Mr. Gibson dared to point out this inconsistency, which regularly goes unmentioned in Mr. Obama’s fawning press coverage. But Mr. Gibson also probed a little deeper, asking the candidate why he wants to increase the capital gains tax when history shows that a higher rate brings in less revenue.

‘Bill Clinton in 1997 signed legislation that dropped the capital gains tax to 20%,’ said Mr. Gibson. ‘And George Bush has taken it down to 15%. And in each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28%, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?’

Mr. Obama answered by citing rich hedge fund managers. Raising the capital gains tax is necessary, he said, “to make sure . . . 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 Mr. Gibson had noted that higher rates yield less revenue. So the news anchor tried again: ‘But history shows that when you drop the capital gains tax, the revenues go up?’ Mr. Obama responded that this ‘might happen or it might not. It depends on what’s happening on Wall Street and how business is going.’ And then he went on a riff about John McCain and the housing market.

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.

  • B Davis

    In fact, “Obama’s Tax Evasion” had a number of flaws in it. For example, in support of the claim that when the “tax rate has risen over the past half century, capital gains realizations have fallen”, the article states that the “most recent such episode was in the early 1990s”. However, the included chart clearly shows that realizations ROSE in every year from 1991 to 2000 except for a small drop (as a percentage of GDP) in 1994. More importantly, I think that the editorial’s analysis is far too simplistic. I have posted a discussion of this point in the April 28th post at http://usbudget.blogspot.com/.