Obama. wants to increase capital gains taxes...

Question

in the time of a recession - or at least a business slowdown? really? isn't that exactly what you don't want to be doing?

Answer 1

The only way I could see it as justifiable is as a supplemental short-term solution to mounting government debt.  I think in the interest of the entire economy, we need to tackle the debt issue, or else our dollar is going to be degraded more and more (an issue leading to higher gas prices, and therefore, lower stock prices).  

Higher capital gains taxation would only be a small part of the issue though, along with repealing Bush's tax cuts, and cutting federal spending and pork.  No one wants to hear that.  Everyone wants a tax break,  stock price growth, and an American empire with bases on every continent and a fleet in every ocean.

I just wonder how long we can keep up our ever growing consumption before we start to face the effects.  I am not an advocate of higher taxes, in fact I am a libertarian, but something needs to be done very quickly to pay for the war in Iraq, and to tackle our debt here.

Obama's plan to put a windfall tax on energy companies and start subsidizing energy costs to the poor however is just going to far, and my libertarianism will not stomach it.  Fiscal conservativism, or in other words, taking in more than you spend and paying off debt, to me is a good thing.  Unjust taxes that punish success and government allocation of resources in the private sector, very slippery slope.

I am a novice at economics though and would be happy to hear other opinions.

Answer 2

well the idea is to get taxes on unearned income--capital gains

the tax rate on unearned income--capital gains--is at a low rate, lower often than the rate on ordinary earned income

Is it right that rich deadbeats get a lower tax rate than hardworking folks?

The great majority of Americans have no capital gains