Would you favor increasing capital gains taxes even if it reduces govt revenue?

[Torie]

Michael Barone claims that Obama said he would favor increasing capital gains tax rates even if it reduces government revenues as has been the case in the past (the higher the rate, the more the incentive not to recognize the gain, and either borrow against the asset to raise cash, and/or wait until you die when the gain goes away due to a step up in cost basis), for reasons of fairness.

Assuming the above is Obama's opinion, do you share it? Assuming that raising capital gains rates reduces government revenues, would you nevertheless still favor such rate increases?  Are you one of those "liberals" Barone is hypothesizing exist?

As an aside, Barone's opinion as to why "liberals" tend to want to tax the wealthy more is a bit paranoid perhaps (increase government power, and reduce other power centers, for reasons relating to power for the sake of power itself), but whatever. I find my poll question more interesting.

[© tweed]

yes, out of malice.

[greenforest32]

You all speak as if it's a fact taxing earned and unearned income (capital gains) at the same rates will decrease revenue. Why don't we try it and find out?

[Torie]

You all speak as if it's a fact taxing earned and unearned income (capital gains) at the same rates will decrease revenue. Why don't we try it and find out?

We have in the past. Anyway, the poll asks you to make an assumption. You are not stipulating that you agree with that assumption.

[greenforest32]

You all speak as if it's a fact taxing earned and unearned income (capital gains) at the same rates will decrease revenue. Why don't we try it and find out?

We have in the past.

When and where is the evidence?

[Torie]

You all speak as if it's a fact taxing earned and unearned income (capital gains) at the same rates will decrease revenue. Why don't we try it and find out?

We have in the past.

When and where is the evidence?

I believe the cap gains rates were cut in the late 1970's, and again under Reagan, and the revenue from capital gains recognition went up, because even though the rate was lower, that was more than counter-balanced by more recognition. And that is what Barone claims. However, again that is not the purpose of this poll, even though it would be a worthy endeavor to research and document what actually happened "by the numbers."

[krazen1211]

You all speak as if it's a fact taxing earned and unearned income (capital gains) at the same rates will decrease revenue. Why don't we try it and find out?

We have in the past.

When and where is the evidence?

Capital gains revenues, 1985, 86, 87, 88.

http://rsc.jordan.house.gov/UploadedFiles/pb_070208_capitalgainsrevenue.pdf

People executed their gains under the old tax rates and then revenues dropped for a decade.

[greenforest32]

You all speak as if it's a fact taxing earned and unearned income (capital gains) at the same rates will decrease revenue. Why don't we try it and find out?

We have in the past.

When and where is the evidence?

Capital gains revenues, 1985, 86, 87, 88.

http://rsc.jordan.house.gov/UploadedFiles/pb_070208_capitalgainsrevenue.pdf

People executed their gains under the old tax rates and then revenues dropped for a decade.

That's not even what your chart shows? It shows capital gains tax revenue increasing from 1977 to 1987 with the lower rate (with a one year spike and drop in 1986/87) and increasing from 1987 to 1997 with a higher rate (with a dip in the mid 90s).

And those figures don't even seem to be adjusted for inflation...

[greenforest32]

http://rsc.jordan.house.gov/UploadedFiles/pb_070208_capitalgainsrevenue.pdf

lol @ the CRS report they cite at the end refuting their claim.

http://www.fas.org/sgp/crs/misc/R40411.pdf

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[opebo]

yes, out of malice.

It isn't malice if it is a desire for revenge, Tweed.  Capital gains taxation is only a taking back of that which was taken by violence from the workers in the first place.

Ideally we would remove the offender from the stolen money completely, preferably by guillotine.

[Torie]

yes, out of malice.

It isn't malice if it is a desire for revenge, Tweed.  Capital gains taxation is only a taking back of that which was taken by violence from the workers in the first place.

Ideally we would remove the offender from the stolen money completely, preferably by guillotine.

Do you get to join me in the trumbel for the trip to the hanging knife and a final exit opebo when you inherit your parents' money?  We could have a nice chat on the way about the nuances of Thai sex professionals.

[Marokai Backbeat]

Assuming that was the case, then no. I don't personally view that as true, but for the sake of the question, no.

[Torie]

Assuming that was the case, then no. I don't personally view that as true, but for the sake of the question, no.

Most excellent. You sir, understand text, and are willing to answer the friggin question! 

[Marokai Backbeat]

Assuming that was the case, then no. I don't personally view that as true, but for the sake of the question, no.

Most excellent. You sir, understand text, and are willing to answer the friggin question! 

Thank you.

[opebo]

Do you get to join me in the trumbel for the trip to the hanging knife and a final exit opebo when you inherit your parents' money?  We could have a nice chat on the way...

You speak of dreams.. alas not yet, and who knows perhaps never realized..  the myths and literature of many a culture are full of the disappointed anticipator of inheritance.

[krazen1211]

That's not even what your chart shows? It shows capital gains tax revenue increasing from 1977 to 1987 with the lower rate (with a one year spike and drop in 1986/87) and increasing from 1987 to 1997 with a higher rate (with a dip in the mid 90s).

And those figures don't even seem to be adjusted for inflation...

Uh, you just restated what I said. After the 1986 tax increase, capital gains revenues fell to a lower level and stayed there for an entire decade. Inflation only hurts your argument.

[memphis]

A bit like asking if one favored eating fast food cheeseburgers daily if that were a healthy choice.

[greenforest32]

That's not even what your chart shows? It shows capital gains tax revenue increasing from 1977 to 1987 with the lower rate (with a one year spike and drop in 1986/87) and increasing from 1987 to 1997 with a higher rate (with a dip in the mid 90s).

And those figures don't even seem to be adjusted for inflation...

Uh, you just restated what I said. After the 1986 tax increase, capital gains revenues fell to a lower level and stayed there for an entire decade. Inflation only hurts your argument.

No I didn't, my point was that the 10 year average revenues for 1987-1996 were higher than the 10 year average for 1977-1986 despite a higher rate. You keep focusing on the one year peaks which the CRS article I posted before explained was not the whole picture. And you always seem to have a problem accounting for population differences (220.2 million in 1977 to 301.3 million in 2007 = 81.1 million difference/~37% increase) and inflation.

[Small Business Owner of Any Repute]

I do and I would. A reduction in government revenue would be a short-term pain, but it would be followed by long-term good.

[Yelnoc]

No, but I don't know which poll option to choose, as I am not sure where I stand in relation to the center

[Torie]

I do and I would. A reduction in government revenue would be a short-term pain, but it would be followed by long-term good.

Would you care to further elaborate? I mean, not recognizing gains for tax reasons almost by definition leads to more economic inefficiency.

[Jacobtm]

Reducing capital investment as a proportion of the economy in itself is a worthy goal. Our whole system has been skewed towards the financial sector by preferential government treatment for years. We ought to correct that.

[Sbane]

I don't think capital gains need to be raised for everyone. Why not just make sure that those who make above a certain amount pay a certain percentage in taxes on their overall income including capital gains?

[Torie]

I don't think capital gains need to be raised for everyone. Why not just make sure that those who make above a certain amount pay a certain percentage in taxes on their overall income including capital gains?

To the extent the math translates per that rule into an effectively higher capital gains rate, you still have the same issue to some degree, regarding recognition avoidance. That is one reason why it is wise public policy to first try to generate more revenue (which of course we need), from slashing deductions first, rather than upping rates. It is just more economically efficient in a host of ways.

[All Along The Watchtower]

Reducing capital investment as a proportion of the economy in itself is a worthy goal. Our whole system has been skewed towards the financial sector by preferential government treatment for years. We ought to correct that.

Though to be fair, it's not really productive capital investment that is being rewarded under the current system. Increasingly, the economy has become a debt economy where the servicing of debt is what greases the wheels. so to speak.

There is a strong relationship between higher wages, a strong manufacturing base, and a stronger, more stable economy.