Raising taxes on capital gains decreases government revenues
Gibson repeatedly hammered away at the folly of increasing taxes on capital gains:
GIBSON (to Obama): You have, however, said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, "I certainly would not go above what existed under Bill Clinton," which was 28 percent. It's now 15 percent. That's almost a doubling, if you went to 28 percent…But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent.... And George Bush has taken it down to 15 percent…. 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 percent, the revenues went down…. So why raise it at all? …. But history shows that when you drop the capital gains tax, the revenues go up.Ok, I realize that the effect of capital gains taxes on the economy is somewhat controversial – and I’m no economist. But Gibson presented this as if it’s established fact, and it isn’t at all. Here is what Justin Fox, TIME’s business and economic analyst, had to say about the subject, in an article titled “So, uh, when did Charlie Gibson turn into a supply side nut job?”
Yes, capital gains tax cuts invariably result in a revenue increase the next year, because investors aren't idiots: If they see a cut coming, they're likely to delay capital-gains-generating transactions until after the tax rate drops. But I don't know of any serious economist who thinks that cutting the capital gains tax rate increases revenue over time.I would add to that discussion the fact that trying to make the case that George Bush has done anything to boost our economy is suspect indeed. There are many different economic indicators, and short-term government revenue is just one. Decreasing taxes on capital gains well below the income tax rate facilitates a widening income gap, which has already reached record levels under George Bush’s economic policies. That is undoubtedly good for some people, but many believe that it has toxic effects on society as a whole, through such mechanisms as shifting political power to a narrow wealthy elite. This is what Obama had to say about it:
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. I also want 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.
Obama defines his positions
To prove that they were capable of asking at least one question that neither attacked a Democratic candidate nor introduced right wing talking points, Gibson asked as the last question, “What are you going to do about the price of gas”, and he gave each candidate one minute to answer.
One might think that, with such a concerted effort by the debate moderators to attack Obama (and Clinton too, to a lesser extent) and to introduce their right wing talking points, that Obama would have had little or no chance to discuss issues of importance to the American people. But he still managed to define, in general terms, what his campaign is about, despite all the obstacles. I’ve noted some of that above, in Obama’s responses to the attacks on him and the moderators’ pushing of right wing ideas. Here are some more examples of issues that Obama managed to force into the conversation:
Obama on fairness
OBAMA: And we're seeing greater income inequality now than any time since the 1920s. I’m talking about how we need to restore a sense of economic fairness to this country, because that's what this country has always been about, is providing upward mobility and ladders to opportunity for all Americans…. One of the centerpieces of my economic plan would be to say that we are going to offset the payroll tax, the most regressive of our taxes, so that families who are earning – who are middle-income, individuals making $75,000 a year or less, that they would get a tax break so that families would see up to a thousand dollars' worth of relief. Senior citizens who have earnings of less than $50,000 wouldn't have to pay income tax on their Social Security. And middle-class homeowners who currently don't itemize on their tax filings, they would be able to get a deduction the same way that wealthy individuals do.Obama on regulation of special interests
OBAMA: Special interests have come to dominate Washington… We're now seeing a deteriorating housing market. That also is a consequence of the lack of oversight and regulation of these banks and financial institutions that gave loans that they shouldn't have. And part of it has to do with the fact that you had $185 million by mortgage lenders spent on lobbyists and special interests who were writing these laws. The tax code has been written on behalf of the well-connected. Our trade laws have – the same thing has happened….Obama on health care
And most importantly, I believe that change does not happen from the top down. It happens from the bottom up. And that's why we decided we weren't going to take PAC money or money from federal registered lobbyists, that we were not going to be subject to special interest influence but, instead, we're going to enlist the American people in the project of changing this country. It's going to be absolutely vital we form a new political coalition in this country. That's what we've been doing
OBAMA: What the American people want are not distractions. They want to figure out, how are we going to actually deliver on health care? … That means health care for everyone, no exceptions. Nobody left out.Obama on fiscal responsibility
OBAMA: 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. I believe in the principle that you pay as you go.Obama on education
OBAMA: I'm against No Child Left Behind as it is currently operating, and I would end it, because we can do so much better to have an education system that really focuses in on kids who need extra help. Let's make college affordable again. I think our job should be to try to create the conditions that enable people to live up to their god-given potential.Obama on foreign policy
OBAMA: John McCain wants to continue…George Bush's foreign policy… Our foreign policy is in a shambles. We are involved in two wars. I'm speaking forcefully about how we need to bring this war in Iraq to a close, because I think it is not serving our national security.Obama on energy policy
OBAMA: We've got to investigate potential price gouging or market manipulation. I have strongly called for a windfall profits tax that can provide both consumers relief and also invest in renewable energies. I think that long-term, we are going to have to raise fuel efficiency standards on cars because the only way that we're going to be able to reduce gas prices if we reduce demand.
Some final words about our corporate news media
Our national corporate news media have been screwing the Democrats and our country for years. They receive free licenses from the federal government and in return they have the responsibility to provide news in “the public interest”. Yet they don’t care at all about that sacred responsibility. Instead, they use their privilege to provide slanted news that ensures that pro-corporate Republicans will stay in power and in return will enact legislation that ensures ever more accumulation of wealth and power to themselves.
ABC “News” in particular has been doing this sort of thing for quite some time: When the “Swift Boat Veterans for Truth” (SBVFT) came out with their transparently phony allegations against John Kerry, right before the 2004 Presidential election, they posted nearly a hundred links to the story during one 17 day stretch. They mocked the Downing Street Memo (“The left is unappeasable on the issue of the Downing Street Memo”) and Cindy Sheehan. They dismissed stories of Ken Starr’s conflict of interest during his investigation of Bill Clinton. They ignored the Jeff Gannon story and the news of Karl Rove’s role in the CIA leak investigation. They put positive spin on Bush’s handling of the Katrina disaster. Right before the 2006 elections they aired a so-called “docudrama” that blamed Bill Clinton for the 9-11 attacks. And as the story of Tom DeLay’s corrupt activities began to emerge, they had this to say:
There is an iron triangle of liberal interest groups, Democratic congressional staffers, and media jackals… who have never identified with or liked Tom DeLay (and what he stands for) and are enjoying every minute of their conspiring to bring him down. Almost every accusation swirling around DeLay involves actions by him that have exact analogues among other members of Congress of both parties.The list goes on and on. The main difference between ABC and FOX News would appear to be that ABC does a better job of pretending to be a real news organization, rather than a propaganda machine for the Republican Party.
The Democrats have undergone the torture of a thousand cuts by the corporate media over the last several years. They are in a terrible dilemma because, given the great power of our corporate news media, attacking them poses great risks. Yet, Democrats may have no reasonable alternative choice other than to come out swinging against the corporate media. The Republicans are the Party of the corporations, the wealthy and the powerful. A great deal of their power rests with the slanted news of the corporate news media, without which they would either have to begin to adopt a pro-people agenda or they could not win another election.
It may be that Democrats now have an opportunity to go over the heads of those who provide biased news to our country, directly to the people, to expose our corporate media for what they are. Barack Obama may have an opportunity to do that like no other politician in recent memory, given his record setting campaign funding, comprised disproportionately of small donations. If his recent performances, including Thursday’s debate, are any indication, he’s not going to take this lying down.
1 | 2
