Video: Obama’s redistributionism on capital gains taxes

posted at 1:40 pm on April 17, 2008 by Ed Morrissey

Critics of last night’s debate complain that the first half focused on irrelevancies. Unfortunately for Barack Obama, he didn’t do much better on the relevancies, either. Take for instance this portion of the debate when Charles Gibson asked him about the capital-gains tax rate and his plans to almost double it. Gibson makes it clear that raising tax rates reduce their revenue, but Obama assumes a greater revenue anyway — and that’s not even the most clueless part of the exchange:

SENATOR OBAMA: Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness. We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year — $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair.

And what I want is not oppressive taxation. I want businesses to thrive and I want people to be rewarded for their success. But what I also want to make sure is 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, and you can’t take out a credit card from the Bank of China in the name of our children and our grandchildren and then say that you’re cutting taxes, which is essentially what John McCain has been talking about. And that is irresponsible.

You know, I believe in the principle that you pay as you go, and you don’t propose tax cuts unless you are closing other tax breaks for individuals. And you don’t increase spending unless you’re eliminating some spending or you’re finding some new revenue. That’s how we got an additional $4 trillion worth of debt under George Bush. That is helping to undermine our economy, and it’s going to change when I’m president of the United States.

MR. GIBSON: But history shows that when you drop the capital gains tax, the revenues go up.

SENATOR OBAMA: Well, that might happen or it might not. It depends on what’s happening on Wall Street and how business is going. I think the biggest problem that we’ve got on Wall Street right now is the fact that we’ve got a housing crisis that this president has not been attentive to and that it took John McCain three tries before he got it right.

And if we can stabilize that market and we can get credit flowing again, then I think we’ll see stocks do well, and once again I think we can generate the revenue that we need to run this government and hopefully to pay down some of this debt.

Read and listen very carefully to this. The higher priority for Obama isn’t to raise revenue; it’s to ensure fairness. In order to do that, he will have the government take a bigger share of the gains and redistribute them through social programs to others. The pretense of having more money acts as a veneer for good, old-fashioned redistributionism

And his example shows his bias. He talks about billionaires paying a different rate than secretaries on income, but that’s purposeful. The idea behind a lower capital gains tax is to encourage risk-taking. The secretary in this parable garners an income at much lower risk because investors have taken a risk in creating her job. When the risk succeeds, it generates much more taxable income across the board. When it doesn’t, the investors lose a lot of money.

If the risk carries a heavier tax burden, less money will go towards investment. People will instead put their money into safer, less risk-intense areas, such as savings or low-yield bonds and commodities such as gold. That will create fewer opportunities for employment, which translates across the board into less revenue for the government as well as a stalled economy. The surest way to start an economic disaster is to increase penalties for investment.

Obama’s blindness on capital gains reveals a hard-Left mindset. He sees investors always profiting and never losing, while the people who work at jobs created by successful investment as victims of this exchange rather than the beneficiaries of it. Obama wants to use the heavy hand of government to take away the rewards of risk from those who invested, and instead redistribute it to those who took no risk to create economic growth. In doing so, he will kill the engine that drives the American economy.

Obama either fails to understand how a free-market economy grows, or simply doesn’t care. Either way, it makes him a dangerous choice for the Presidency.


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And if we can stabilize that market and we can get credit flowing again

Yeah, get credit flowing instead of hard cash investments…brilliant!

James on April 17, 2008 at 1:45 PM

Brilliant! The Magic continues!!!!!!!

Dread Pirate Roberts VI on April 17, 2008 at 1:49 PM

If Obama gets into office, I’m going back to school to get a Masters in economics, just so I can get on television and basically tell the country that our president is knowingly reducing government revenue by overtaxing the primary movers of our economy.

…but I get the sinking feeling that they would vote him in again anyway, because HE SPEAKS SO WELL!

MadisonConservative on April 17, 2008 at 1:51 PM

Great post. I can’t imagine, Ed, why you lay it all out for the messiah. He may actually get a clue, as I’m sure his staffers must be perusing HA… heh.

Califemme on April 17, 2008 at 1:51 PM

Well, that might happen or it might not

Beautiful! what a freakin lightweight.

there it is on April 17, 2008 at 1:52 PM

Yeah, credit.

Didn’t he in this same debate rail about the housing crisis?

What caused that crisis?

Too many morons using CREDIT they couldn’t pay for when the time came.

Brilliant, Obamamessiah.

Brilliant.

catmman on April 17, 2008 at 1:53 PM

If Obama is representative of Harvard graduates, then I am going to assume that a Harvard education is severely overrated.

thirteen28 on April 17, 2008 at 1:54 PM

Barry got pwn’d by Chuck Gibson. It was sweet.

Dr.Cwac.Cwac on April 17, 2008 at 1:57 PM

So make sure people have less money so they can borrow more money to get credit flowing again?

Chuck Schick on April 17, 2008 at 1:58 PM

Obama is revealing his lack of understanding concerning key economic insights gleaned from this excellent book.

The “broken window” fallacy is still applicable today.

ColtsFan on April 17, 2008 at 1:58 PM

If Obama is representative of Harvard graduates, then I am going to assume that a Harvard education is severely overrated.

thirteen28 on April 17, 2008 at 1:54 PM

It teaches liberalism by liberals. What did Obama get wrong?

JiangxiDad on April 17, 2008 at 2:01 PM

Spot-on analysis Ed.

awake on April 17, 2008 at 2:02 PM

IT just feels good to raise taxes.

jukin on April 17, 2008 at 2:02 PM

Of course, we can not, absolutely must not ever lower the tax rate for the secretary, just to make it fair!

rockhauler on April 17, 2008 at 2:02 PM

Hey, we all knew Obama is an empty suit. Don’t let Ben Stein get ahold of him or he will fold like a lawn chair.

It gets much more interesting from here on out.

saiga on April 17, 2008 at 2:02 PM

I’m glad Charlie Gibson didn’t let Obama dodge the point. Lowering the Cap Gains Tax produces MORE REVENUE. This proves that Obama isn’t concerned about the more $ flow for the gov’t that he thinks comes w/ higher taxes, but rather that special feeling he gets from taking other people’s money.

malan89 on April 17, 2008 at 2:04 PM

The only thing the average American would take away from that exchange is, “take the money from those greedy billionaire bastards.” Mission accomplished.
Whenever these Dems throw around these big numbers and tie them back to their favorite evil campaign contributor, er corporation they are just preying upon the wealth envy in our country. Hell I would to have that kind of money, but on the other hand I realize I posses neither the skills or knowledge to accomplish such a thing. I don’t want anybody forcing somebody to give me something that somebody else has worked hard to get. I would rather just do an honest assessment of my abilities and desire and if I decide I want to move to that group then I would do what is necessary to accomplish that.
You know that whole personal responsibility thing.

Just A Grunt on April 17, 2008 at 2:05 PM

Great idea by Obama! Isn’t the American savings rate about zero percent as it is?

By the way, I would argue that the best way to redistribute income is to have a zero percent tax rate on capital gains and let the poor save. But they do have to save for this scheme to work! Sadly, the bulk of our population acts like spoiled children with their money and don’t save. Then they want the government to provide for them.

My saving hint of the day: you don’t need a cell phone; you don’t need a television screen larger than the trunk of a car; you don’t need a whole lot of things.

thuja on April 17, 2008 at 2:06 PM

And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair.

Will someone remind this overweening paragon of Justice, Hope and Change that life isn’t fair. It’s hardly ever equitable, and that’s a heck of a lot more applicable than “fair”. What a tool.

Flyover Country on April 17, 2008 at 2:08 PM

He is audacious with his payroll tax increase on income exceeding 97K as well. He ignores cost of living based on demographics. Under his plan, major cities and surrounding suburbs would be vacated in short-order withthe majority of the upwardly mobile middle-class getting hammered.

awake on April 17, 2008 at 2:09 PM

Individual work hard + Individual prosper + State want prosperity + State need excuse for taking prosperity + State claim “fairness” + State take prosperity + Individual become chagrin + Individual not want State to take prosperity next time + Individual not work as hard + State take more, anyway + Individual really chagrined, now + Individual really not work as hard + Economy not do so well + State take more, anyway = Bolshevism.

Barack Obama is a Bolshevist. He’s a collectivist. He is the beginning of the end for our Country.

OhEssYouCowboys on April 17, 2008 at 2:10 PM

Combine a Liberal Harvard education with Alinskyite agiprop and you get Barack Obama.

Please note,

We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year — $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair.

Thus, anyone who achieves an ‘unfair’ amount of money is now ‘The Enemy’. What is the limit to what is ‘unfair’? As the old saying goes ‘We both know what we’re going to do, we’re just negotiating the cost’

SeniorD on April 17, 2008 at 2:10 PM

I would like to dedicate a song to my fellow Americans in the Democratic party re: Obama:

“It must have been love, but it’s over now. It must have been good, but you lost it somehow. It must have been love, BUT IT”S OVER NOW!!!”

JayHaw Phrenzie on April 17, 2008 at 2:11 PM

Pure Socialism period!

libhater on April 17, 2008 at 2:11 PM

I’m sorry but, we’re a free market society still right?

xler8bmw on April 17, 2008 at 2:11 PM

Neither Democrat candidate knows the first thing about how free market economies work, they are both Communists, or a derivation thereof.

tarpon on April 17, 2008 at 2:12 PM

This primary next week reminds me of the Texas primary. Hillary will probably close the delegate gap somewhat, but the status quo will remain all the way to the convention.

There, Hillary won’t give up and Obama can’t because he has the black race on his shoulders. Things are setting up to get real ugly bacause I think Obama will tank before the convention. The convention could make a Detroit City council Meeting look like the brookings Institute by comparison. Think about Jesse and Al and all the other race pimps in full victim mode, and Bill, Lanny, and the Ragin Cajun all in high and mighty mode. Sweeeeeet..

saiga on April 17, 2008 at 2:12 PM

All of Barak Obama’s debates can be distilled into one sound bite.

Obama: Please don’t confuse me with the facts…

SPCOlympics on April 17, 2008 at 2:12 PM

Yeah, credit.

Didn’t he in this same debate rail about the housing crisis?

What caused that crisis?

Too many morons using CREDIT they couldn’t pay for when the time came.

Brilliant, Obamamessiah.

Brilliant.

catmman on April 17, 2008 at 1:53 PM

Not a problem. He’s also got a fix for that. He’ll take my tax money and use it to pay off the loan for the imprudent borrower. Of course there will be less of my tax dollars to draw from when he increases capital gains tax rates, but he doesn’t understand that part. The most important thing here is to relieve unfairness.

a capella on April 17, 2008 at 2:14 PM

Maybe Obama secretly wants to bankrupt the country.

/Tin foil hat.

Buy Danish on April 17, 2008 at 2:15 PM

BTW if you don’t think you would be affected by a reversal in the capital gains tax you have either not had an immediate family member pass away or are not a farmer.
It is amazing how much my mother was worth when she passed away in nursing home last year. It took almost all of the money my parents had managed to save along with money from SS and Medicare to pay the bills to keep her in the assisted living, she had Alzheimers, along with us kids paying other bills. When she passed away the government came in and put a price on everything she possessed from a car she hadn’t driven in 5 years to a trailer that she lived in briefly, but which my parents never sold and us kids didn’t know about.
Pretty hefty capital gains tax we had to pay for her dying.. We were just glad she didn’t own any property.

Just A Grunt on April 17, 2008 at 2:17 PM

Affirmative action at work…

This is what happens when people have their bu7ts kissed and cloaked in swaddling clothing.

I can hear the coddling that Barry and his loudmouth wife got in their life in the things they say.

benrand on April 17, 2008 at 2:19 PM

Thats why I wish Rudy could have debated Obama…

OMG, Brains vs. no clue.

Chakra Hammer on April 17, 2008 at 2:19 PM

Bob Beckel, Susan Estrich, Donna Brazil, James Carvel, Terry McCaulif, and Lanny Davis nose to nose with Ted Kennedy, Al Sharpton, Jesse Jackson, Julian Bond, Spike Lee, Tim Robbins, and Sean Pen.

Picture the Shoutdowns at the convention like the ones with Mayor Daily in 1968. Picture the burning cars and neighborhoods when the victims find out they have been victimized yet again. Picture the disgust of the silent mojority. Thank God Hillary and Bill will be there to ment the wounds and restore unity.

NOT

saiga on April 17, 2008 at 2:19 PM

The idea behind a lower capital gains tax is to encourage risk-taking. The secretary in this parable garners an income at much lower risk because investors have taken a risk in creating her job. When the risk succeeds, it generates much more taxable income across the board. When it doesn’t, the investors lose a lot of money.

Not only that, but this whole line of argument completely ignores the fact that also part of the difference is that the secretary’s paying FICA tax. The Dems beat this drum pretty regularly in all areas and always can be counted on to say that’s our most “regressive” tax.

I wish someone would point blank ask Barry when he does this whether he has any illusions at all that Social Security is a supposed retirement investment. Or is it strictly welfare.

If they want to maintain the myth it’s a retirement account, then maybe they could explain that they expect anyone who has the cap removed is ever going to get that money back.

Otherwise then just call it what it is.

Typhoon on April 17, 2008 at 2:20 PM

We don’t need a good economy, we need a fair one.

NeoconNews.com on April 17, 2008 at 2:20 PM

The Fair Tax would take take of this whole debate and make it a moot point. Let’s be fair.

Vanquisher on April 17, 2008 at 2:20 PM

Spot-on analysis Ed.

awake on April 17, 2008 at 2:02 PM

I will second that. Damn socialist empty suit.

txsurveyor on April 17, 2008 at 2:23 PM

This would all be a moot point if we had the FairTax. Lets be fair afterall. Somehow his idea of fair doesn’t seem fair I am fairly certain.

Vanquisher on April 17, 2008 at 2:26 PM

SENATOR OBAMA: Well, that might happen or it might not. It depends on what’s happening on Wall Street and how business is going.

DUH! Well.. throw a skunk on the floor of the stock market by raising capitol gains taxes and see what happens on Wall Street.

Chakra Hammer on April 17, 2008 at 2:26 PM

The PC tax entitlement is strong with this one.
I would love to hear Barack explain the fairness of affirmative action.

Speakup on April 17, 2008 at 2:28 PM

I used to think Obama was simply naive.
I’ve since added pompous, arrogant, dishonest, seedy, thickheaded, racist, thin-skinned, socialist, and anti-American to the list.
My, he does grow on you, doesn’t he?

Sugar Land on April 17, 2008 at 2:29 PM

Obama wants to use the heavy hand of government to take away the rewards of risk from those who invested, and instead redistribute it to those who took no risk to create economic growth.

So does Hillary with her “windfall profits” tax on oil companies.

The lack of knowledge on the dynamics of a free market economy shown by these two is stunning.

Both Hillary and Obama have declared the oil companies evil due to nothing more than their “record profits”. In dollar terms, the profits are quite impressive. However, by typical measures used to compare companies – gross and net margins – a different picture emerges.

Take a couple of the left wing darlings, Starbucks and Google vs. Exxon for fiscal 2007:

Gross Profit margin – Google 59.9%, Starbucks 57.5% and Exxon 42.3%

Operating Margin – Google 30.6%, Starbucks 10%, Exxon 17%

So far, there ought to be a windfall tax on Google.

The most telling thing is the effective tax rates paid by each company (taxes paid on Income before taxes):

Exxon 42.4%
Starbucks 36.3%
Google 25.9%

So, by Hillary and Barak’s logic, they’re going to put a windfall profits tax on a company that has lower margins and already pays more taxes than Google or Starbucks?

It’d be funny if it weren’t so idiotic.

BacaDog on April 17, 2008 at 2:29 PM

Charlie Gibson, you magnificent bastard!

sleepy-beans on April 17, 2008 at 2:31 PM

BTW if you don’t think you would be affected by a reversal in the capital gains tax you have either not had an immediate family member pass away or are not a farmer.
Just A Grunt on April 17, 2008 at 2:17 PM

The death tax is terrible. I see it all the time in my business. A few years ago, I met a guy whose father had recently passed away. His father was a very successful pediatrician who bought a 7500 acre ranch in central Texas, and paid the land off during the course of his medical career. The son was being forced to sell 4000 acres off to pay the estate tax to the IRS. Just disgusting that the federal government can reach into your pocketbook even after you are in the grave.

txsurveyor on April 17, 2008 at 2:32 PM

The Fair Tax would take take of this whole debate and make it a moot point. Let’s be fair.

Vanquisher on April 17, 2008 at 2:20 PM

I keep telling “environmentalists”, let’s just tax consumption. It seems both environmentally and economically the right thing to do. Sadly, the “environmentalists” have some issue with the rich, like Obama does. I don’t get it.

I mean do get it, but I’m going to continue to tell “environmenatlists” that they should be concerned with the environment for the amusement value, if nothing else.

thuja on April 17, 2008 at 2:32 PM

Not only capitol Gains Tax what about the corporate tax does Obama want to raise that also?

Chakra Hammer on April 17, 2008 at 2:34 PM

This is the article Obama refers to when he says how unfair it is that 29 billion was earned by 50 hedge fund managers, yet they payed a lower tax rate then their secretaries.

Guess who is #2 on the list? Tick Tock Tick Tock. Yep, George Soros, big donor to Barry’s campaign.

Maybe Barry they should take that tainted money Soros and others donated to his campaign and give it to the secretaries in the interest of fairness.

Buy Danish on April 17, 2008 at 2:35 PM

If we are in the start of a recession and Obama is promising a raise in Capitol gains taxes and Corporate Tax(that is already, the highest in the world), why the hell would companies invest here?

Chakra Hammer on April 17, 2008 at 2:44 PM

Well he’s also not following the Christian teaching about the rich either.

Ecclesiastes 10:20

Do not curse the rich, even in your bedroom.

Vorian on April 17, 2008 at 2:44 PM

The higher priority for Obama isn’t to raise revenue; it’s to ensure fairness.

Ed: This is the Democratic Primary. Obama’s position is effective within the Democratic Primary.

Also, Obama’s team of fund raising wizards are, well, Hedge Fund gurus.

The cuts in the capital gains tax and the dividend tax rate were just as beneficial to individual investors as they were to institutional investors such as pension and retirements funds. You know, those pension and retirement funds dominated by right wing capitalist Republicans like Ron Burkle, Phil Angelides, and Joseph Cari.

Obama’s saying one thing to voters and another thing to the left of center individuals that dominate the distribution of capital gains from conducting the transactions for pension and retirement funds.

gabriel sutherland on April 17, 2008 at 2:46 PM

What the hell does a secretary’s tax rate have to do with federal policy on capital gains taxation in the first place??

Cicero43 on April 17, 2008 at 2:47 PM

If we are in the start of a recession and Obama is promising a raise in Capitol gains taxes and Corporate Tax(that is already, the highest in the world), why the hell would companies invest here?

Generally low direct tax rates in comparison to other markets on the people mainly. Companies still know how to diversify their capital spending so it connects to the political capital formulation plans of elected representatives.

You could cut the tax rates even further, but there is too much regulation standing in the way to keep those capital gains in the United States. Those that do see gains will just take their capital to more favorable markets such as China, Singapore, or Chile.

gabriel sutherland on April 17, 2008 at 2:51 PM

“Giuliani’s tax cut plan will encourage capital formation, and capital is the key driver of productivity, higher wages, and a better standard of living for all Americans,” Mr. Toomey continued. “He does that by not only lowering the capital gains and dividends rates, but also by indexing capital gains to inflation. Also, the Mayor’s plan dramatically lowers marginal tax rates at the personal and corporate level, which will encourage a significant burst of economic activity and growth.

“The current U.S. tax code is a monstrosity of inefficiency and deterrence, with some of the highest corporate tax rates in the developed world and a tax code that totals more than 66,000 pages. Mayor Giuliani’s tax cut proposal today would dramatically move the American tax code and economy in the right direction. This is exactly the kind of plan economic conservatives should embrace.

http://www.clubforgrowth.org/2008/01/rudys_bold_tax_cut_plan.php

Chakra Hammer on April 17, 2008 at 2:55 PM

The Man with the Plan. >:}

Chakra Hammer on April 17, 2008 at 2:57 PM

What the hell does a secretary’s tax rate have to do with federal policy on capital gains taxation in the first place??

Cicero43 on April 17, 2008 at 2:47 PM

Don’t expect it to make sense since this is a Marxist we’re talking about, but his argument is her tax rate (income tax) is higher than someone who makes their money off of investment profits (capital gains).

But if Barry the Bungler has his way he will raise her taxes too since secretaries are among the 100 million who own stocks and pay capital gains taxes (if she even has a job at the end after he’s wrecked the economy).

Buy Danish on April 17, 2008 at 2:59 PM

BHO needs to go to the ATM, make a small withdrawal, head to the clue store…

…and buy one.

Corky on April 17, 2008 at 2:59 PM

How about this proposal…no Government elected official can do any banking off-shore (all of their money has to come back to the U.S.), no Government elected official can set up any tax reducing scheme, no trust funds, no shelters. That way, they can be assured of paying more taxes then their secretaries…

right2bright on April 17, 2008 at 2:59 PM

I know this is talking about Rudy, but this is Steve Forbes talking that is now on John McCain’s team..

http://www.youtube.com/watch?v=UofPYL6HhPQ

Chakra Hammer on April 17, 2008 at 3:01 PM

I wonder who told Barry to take this position.

Nah, strike that, I don’t really wonder.

TheUnrepentantGeek on April 17, 2008 at 3:02 PM

What the hell does a secretary’s tax rate have to do with federal policy on capital gains taxation in the first place??

Cicero43 on April 17, 2008 at 2:47 PM

Nothing. But it makes a damn good talking point.

The thing neither of them has realized (and which Charlie missed a hell of an opportunity last night) is the effect on seniors. Many retirees live off of their social security and dividend and capital gains checks from 401k’s.

If they raise the capital gains and divident taxes, it equates to a direct and material tax increase that will impact retirement cash flow negatively.

When Barack told Charlie “It depends on what’s happening on Wall Street and how business is going” Charlie should have pointed out that it didn’t matter if a retiree made $500 or $50,000 in income from dividends, he was going to raise the rate on which they pay taxes on the gains, whatever the gains are.

McCain should make a big scary ad showing how Hillary and Obama are gonna hit them in the pocketbook big time.

BacaDog on April 17, 2008 at 3:02 PM

I`m still trying to wrap my head around this idea liberals have: Take away investment capital and take more money out of the economy through other higher taxes, that`ll grow the economy.

ThePrez on April 17, 2008 at 3:06 PM

The thing neither of them has realized (and which Charlie missed a hell of an opportunity last night) is the effect on seniors. Many retirees live off of their social security and dividend and capital gains checks from 401k’s.

If they raise the capital gains and divident taxes, it equates to a direct and material tax increase that will impact retirement cash flow negatively.

BacaDog on April 17, 2008 at 3:02 PM

.
Baca, unfortunately that is not completely true. Returns on money invested in IRAs and in 401Ks will be taxed as income, not as capital gains. Money invested in after-tax instruments are taxed at capital gains rates. Those of us who are waiting for means-testing of social security, and the white paper on IRAs and are heavily investing after tax would be the most hard hit.

Think_b4_speaking on April 17, 2008 at 3:13 PM

I`m still trying to wrap my head around this idea liberals have: Take away investment capital and take more money out of the economy through other higher taxes, that`ll grow the economy.

ThePrez on April 17, 2008 at 3:06 PM

In Michigan we call that ‘taxing ourselves into prosperity.’

James on April 17, 2008 at 3:14 PM

Geez, and McCain says he has problems understanding the economy. I hope he isn’t as bad this.

cjs1943 on April 17, 2008 at 3:14 PM

The kosmonauts all are upset because ABC spent all that time on values and not on their pet issues. But when you boil it down, Obama doesn’t care if raising the capital gains rate increases revenue or not, otherwise he could have answered the question. He just wants to raise the tax rates because thats what leftism is all about. Raising capital gains rates to the left is what flag burning is to the right. It’s a value into itself. The leftist cling to raising taxes out of frustration when they don’t get what they want from God.

pedestrian on April 17, 2008 at 3:16 PM

Baca, unfortunately that is not completely true. Returns on money invested in IRAs and in 401Ks will be taxed as income, not as capital gains. Money invested in after-tax instruments are taxed at capital gains rates. Those of us who are waiting for means-testing of social security, and the white paper on IRAs and are heavily investing after tax would be the most hard hit.

One wonders if it’s really good to save all this capital for the future to lower your tax footprint today if there are little to no signs that capital investment in the United States today are worth it.

We’re regulating our markets to the point where it’s lucrative even on a weak dollar for wealthy Americans to buy English Premiere League clubs. Really.

gabriel sutherland on April 17, 2008 at 3:27 PM

Think_b4_speaking on April 17, 2008 at 3:13 PM

Thanks. I learn something new every day here at HA!

BacaDog on April 17, 2008 at 3:30 PM

Maybe he should go back and review the effects of the Holle-Smoot Tariff Act of 1929…..

Bueller….Bueller

PappaMac on April 17, 2008 at 3:33 PM

This man is a die-hard Marxist – make no mistake about it. Hitlery isn’t any better and McCain only marginally so in some areas. We’re skrood, folks, no matter who wins.

jdawg on April 17, 2008 at 3:36 PM

You can tell by the way he speaks that he doesn’t have a clue about economics. He will start off in one area and then before he is done pontificating, he is speaking against what he started out as being in favor of.

Clueless.

PappaMac on April 17, 2008 at 3:49 PM

I just had a revelation…Obama’s proposal to raise capital gains tax is PUNITIVE, and he ADMITS it…he said that even though it will cause revenue to decrease, it’s what’s FAIR, so follow me on this, even if it’s BAD for the common good by decreasing revenue, that fairness must meet a compelling state interest which is punishing people who do well in the stock market. doesn’t that mean that he truly believes that successful people should be PUNISHED for doing well?

Am I slow for just now getting this? Has everybody else understood this all along…or maybe I’m wrong…let me know what you think…

JustTruth101 on April 17, 2008 at 3:50 PM

In the interests of fairness the Obama’s should give my family a percentage of their earnings until our two families are even. Sounds good to me but I doubt Barack and the Mrs. will go along with it.

TooTall on April 17, 2008 at 3:58 PM

Am I slow for just now getting this? Has everybody else understood this all along…or maybe I’m wrong…let me know what you think…

It’s a Democratic Primary. This is acceptable thinking in the party. Talk to Democrats. They’ll tell you that Republicans hate big government because they don’t know how to run one. It’s one their jokes.

gabriel sutherland on April 17, 2008 at 3:59 PM

Typical leftist cant. Keeping what you earned just because you earned it “isn’t fair.” Your government can only allow you to keep so much of it because other people, mostly bureaucrats, have a greater need. People like Obama need power like the people he criticizes need money. It’s a craving that can’t be satisfied. The trouble is, the entrepeneurs and capitalists actually engage in voluntary transactions that satisfy both parties. Bureaucrats and politicians just rob you, then tell you what to do. That’s the power of implied violence.

NNtrancer on April 17, 2008 at 4:03 PM

Captain Ed, thank you for an absolutely brilliant post. You do a superb job of explaining the difference between Capitalism and Socialism/Communism.

You are a Capitalist.
Obama is a Socialist/Communist.

My favorite example of the contrast (and its effect on a country) was a picture taken when the Berlin wall came down…

On the Capitalist West Berlin side, you had prosperity. On the Communist East Berlin side, you had near poverty.

On the Capitalist West Berlin side, you had new buildings and new cars. On the Communist East Berlin side, you had old, rundown buildings and old, rundown cars.

On the Capitalist West Berlin side, you had an abundance of food. On the Communist East Berlin side, you had a shortage of food.

On the Capitalist West Berlin side, you had good healthcare. On the Communist East Berlin side, you had poor healthcare.

It’s amazing to me that we have so many professors teaching Socialism/Communism on college campuses.

I repeat that Obama is a Socialist/Communist. Unfortunately, so are Clinton and McCain, but they disguise it better.

George Soros gives money to all three.

Wake up, Neo…

Red Pill on April 17, 2008 at 4:11 PM

This is bizarre. Not only does he want to punish people for legally making money, he’s actually willing to decrease the revenues that fund his beloved social welfare programs in order to do it. After which, I guess he’ll just have to raise taxes on everyone else to make up for the shortfall. Taxation for taxation’s sake. Why would anyone do that?

morganfrost on April 17, 2008 at 4:13 PM

A president, I forget which one, said that taxing the people for more than the cost of administering the government is just plain theft. That was before income redistribution, of course.

NNtrancer on April 17, 2008 at 4:22 PM

I just had a revelation…Obama’s proposal to raise capital gains tax is PUNITIVE, and he ADMITS it…he said that even though it will cause revenue to decrease, it’s what’s FAIR, so follow me on this, even if it’s BAD for the common good by decreasing revenue, that fairness must meet a compelling state interest which is punishing people who do well in the stock market. doesn’t that mean that he truly believes that successful people should be PUNISHED for doing well?

Am I slow for just now getting this? Has everybody else understood this all along…or maybe I’m wrong…let me know what you think…

JustTruth101 on April 17, 2008 at 3:50 PM

yes, its very scary.

Chakra Hammer on April 17, 2008 at 4:29 PM

Sen. Obama: “…the top 50 hedge fund managers made $29 billion last year — $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair.”

The ‘fairness’ argument only works if, in Obama’s opinion, the secretaries of these fund managers would have made the same kind of ‘killer gains’ in the reversed role.

In his (and most lefties) views, the individual person DON’T MATTER! We can put Jane Schmoe in any position, the wealth made will be the same in a FAIR world. The knowledge and insight the fund managers have to have to make the right decision don’t come into play.

I’ll give you another example of EXTREME unfairness – Lottery!
Why should Joe Schmoe in Missouri win the jackpot, when I put in the same amount of 5 bucks? It is UNFAIR! I want the Senator to investigate the system, because it is ONLY FAIR that I demand to win the big one this time.

Sir Napsalot on April 17, 2008 at 4:29 PM

Hey Red Pill, my father worked in East Germany in 95 and he told me stories of how bad East Germany was compared with West Germany. What you said about rundown buildings is true. He was amazed at the difference.

BroncosRock on April 17, 2008 at 4:29 PM

Obama, we will Punish success, reward failure and the lazy.

Chakra Hammer on April 17, 2008 at 4:30 PM

Am I slow for just now getting this? Has everybody else understood this all along…or maybe I’m wrong…let me know what you think…

JustTruth101 on April 17, 2008 at 3:50 PM

You have just taken the Red Pill.
(At least in terms of government taxation)

Neo: Why do my eyes hurt?
Morpheus: You’ve never used them before.

You get it now…you understand how the Socialist taxation system is more about redistribution of wealth than it is about revenue generation.

Democratic Socialists have the “Robin Hood” mentality of take from the rich to give to the poor. That’s why they always want to “tax the rich”. They either don’t understand (or do understand and are very sinister) that raising taxes on the rich hurts everyone – rich, middle class, and poor. Rather than “Robin Hood”, I think “Robbing Hoodlum” is a more appropriate term for them.

We need to pass the Fair Tax. It will be great for our economy, and it will get the government out of your personal business (like having to tell them what charities you donate to).

Oh, and don’t feel bad that it took you a while to understand this…it took me a while, too. I was born and raised in a blue-state Democrat family. I went to college in a red state (NC) and had to associate with successful Christian businessmen before I took the red pill and understood the Matrix. I guess these men are what Hillary was referring to as the “Vast Right-Wing Conspiracy”…

If so, count me in. Proud card-carrying member of the VRWC.

[Red Pill waves to Hillary :-) ]

Red Pill on April 17, 2008 at 4:31 PM

This dolt lucked out and got himself into an Ivy League college but he failed to pay attention in class. Nevertheless, he is a good little Marxist.

rplat on April 17, 2008 at 4:34 PM

IF he wanted to help “working people” that work hard, why not get rid of Federal income tax on “overtime wages”(except for SS and Medicare)? (Overtime over 40hours a week)

for someone that works 15-20 hours of overtime a week that would give him/her lots of extra money in his pocket pay-check
to pay-check.

Give people an incentive for working hard, and also reward them for doing so.

Chakra Hammer on April 17, 2008 at 4:39 PM

Democratic Socialists have the “Robin Hood” mentality of take from the rich to give to the poor. That’s why they always want to “tax the rich”.

Yes, it never was about who has the money to tax. It’s about envy.

NNtrancer on April 17, 2008 at 4:41 PM

NNtrancer on April 17, 2008 at 4:41 PM

…and power. They want to control the power by taking money away from those they don’t like and giving it to people that they control. When voters are dependent on Democrat hand-outs, they will continue to vote for Democrats. It’s the plantation mentality. I’ve said it before and I’ll say it again…It’s OK to Leave the Plantation.

Red Pill on April 17, 2008 at 4:51 PM

Democratic Socialists have the “Robin Hood” mentality of take from the rich to give to the poor. That’s why they always want to “tax the rich”.

Yes, it never was about who has the money to tax. It’s about envy.
NNtrancer on April 17, 2008 at 4:41 PM

You’re exactly right. In my neighborhood is a car with a “Robin Hood Was Right” sticker right next to one for the Big O.

mikeyboss on April 17, 2008 at 5:06 PM

The audacity of stupidity!

David in ATL on April 17, 2008 at 5:13 PM

To achieve “fairness”, we must all become poorer.

Marx’s Folly, and I don’t mean Zeppo.

Obaminable.

profitsbeard on April 17, 2008 at 7:14 PM

This dolt lucked out and got himself into an Ivy League college but he failed to pay attention in class. Nevertheless, he is a good little Marxist.

rplat on April 17, 2008 at 4:34 PM
He did pay attention in class.

JiangxiDad on April 17, 2008 at 8:06 PM

Obama is basically socialism in a silk suit. He knows as much about Wall Street as a pig knows about algebra. The top 20% of households pays 80% of all income tax. That top 20% starts at $132,000, which means if you have a working couple in their 30s making a decent salary, they are part of the evil rich the Democrats hate. The bottom 60% pays about 6% of all income taxes. Who’s getting the free ride here?

Tantor on April 17, 2008 at 11:45 PM

Dude! did you see Hillary smile when he responded? It’s at 2:29!

That’s not good!

Darnell Clayton on April 17, 2008 at 11:47 PM

What’s with the audience shots showing the square-jawed men all sitting together? Were they supposed to be the fabled hedge fund managers Obama was complaining about?

I can just see the bubble over the heads, “Yeah, baby, $29 billion, and you just made sure you ain’t getting a penny of it.”

PattyJ on April 17, 2008 at 11:54 PM

That is the most stunningly vapid batch of bullshit I have ever heard. There wasn’t a single phrase in that entire mess that made any sense at all.

This knucklehead has got to be kidding me.

Jaibones on April 18, 2008 at 12:40 AM

Jaibones on April 18, 2008 at 12:40 AM

Well, he’s not kidding us, but he’s kidding a lot of Dems…

Red Pill on April 18, 2008 at 1:11 AM

Face it: Most of our legislators are lawyers by education. They may not have even taken a basic Econ 101 class. That they wield so much power over our nation’s prosperity or lack thereof is frightening.

onlineanalyst on April 18, 2008 at 1:20 AM

Doug from upland, a freeper, posted an article about Bill Ayers, who has his own self-justifying blog.

Domestic Terrorist Ayers concludes:
“Capitalism … played its role historically and is exhausted as a force for progress: built on exploitation, theft, conquest, war, and racism, capitalism and imperialism must be defeated and a world revolution — a revolution against war and racism and materialism, a revolution based on human solidarity and love, cooperation and the common good — must win.

nuff said

onlineanalyst on April 18, 2008 at 1:54 AM

Marxist-socialist. That’s it.

adamsmith on April 18, 2008 at 7:34 AM

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