Tag: capital gains tax

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national politics & policies tax policy

Kill the Stock Market!

Kamala Harris, Tim Walz, Marxism, socialism, equity, stock, capital gains tax

Taxing capital gains is a form of income taxation that Democrats love. 

And it’s not just a matter of increasing revenue. Remember that President Obama thought that increasing the capital gains rate was a good idea even if it decreased government revenue. Democrats are playing to a soak-​the-​rich sentiment among their base, even when the most important supporters are billionaires.

Take Mark Cuban. He’s a billionaire. And he supports Kamala Harris for president. 

Weeks ago, the Democrat standard-​bearer came out with a wild proposal to tax unrealized capital gains. And Cuban, for all his faults, is not an idiot; he knows just how incredibly corrosive that tax on capital would be.

“It would kill the stock market,” he points out. 

In a chat with Fox Business, Cuban explained how he told Democratic insiders that taxing unrealized capital gains (as when stocks you hold gain value, but you haven’t sold them so you have no income from them), would become “the ultimate employment plan for private equity, because companies are not going to go public because you can get whipsawed, right?” 

By this he means that a stock owner might have to borrow money to cover taxes, only to have the stocks go down later and enjoy neither rebate from the government nor any income from the investment to cover the debt.

Cuban insists that Democratic insiders are pragmatic and will not push this tax.

Yet, with both members (comrades?) of the presidential ticket spouting Marxist talking points, how do we know that they are stable (corrupt?) enough to save public capitalism from their malign agenda?

How can we be sure they’re just lying?

This is Common Sense. I’m Paul Jacob.

Note: Since unrealized capital gains aren’t income, I don’t know how taxing them could be constitutional. Perhaps someone can explain this to me.

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national politics & policies tax policy too much government

Avoid the Big Gov Trap

We do not face just one problem, but our many problems tend to come down to one thing: trying to do too much through government.

Last weekend, at Townhall, I noted that the most wildly popular economic policy doctrine of the last hundred years, Keynesianism, has not — its proponents say — been properly given a chance during the two biggest financial contractions of our time, the Great Depression and the recent mortgage-​backed securities implosion. In both cases, more money was needed for proper “stimulus.”

Ironic, perhaps, since Keynesianism has been used as an excuse to run deficits and increase debt for scores of years.

Yes, even a doctrine designed to play into the hands of politicians gets abused by politicians.

The lesson: Excuses to grow government are not revolutionary insights, they’re traps.

Yesterday I talked about how the “Laffer Curve” point where raising the tax rate actually reduces revenue is lower for capital gains than for general income. But one consequence of a revenue-​maximizing capital gains rate is that there would then be rich investors who wind up paying a smaller percentage of their incomes in taxes than do common laborers.

Tax fairness is an issue that should not be ceded to those caught in the clichés of the age. Think of tax fairness, instead, as a rationale for a limit. Not as an excuse to raise tax rates punitively, hatefully, foolishly (like the current president wants).

Bring all tax rates down to the level of the tax with the lowest revenue-​maximizing rate. Don’t raise capital gains taxes, lower the income tax. 

Taxes would then be fair. And government would have to be reduced to accommodate the fairness, and thus more limited.

Less of a trap.

This is Common Sense. I’m Paul Jacob.