Mirror, mirror on the wall: "Who's the fairest of them all?"

By Charles Krauthammer, Published: September 22

In a 2008 debate, Charlie Gibson asked Barack Obama about his support for raising capital gains taxes, given the historical record of government losing net revenue as a result. Obama persevered: “Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.”

A most revealing window into our president’s political core: To impose a tax that actually impoverishes our communal bank account (the U.S. Treasury) is ridiculous. It is nothing but punitive. It benefits no one — not the rich, not the poor, not the government. For Obama, however, it brings fairness, which is priceless.

Now that he’s president, Obama has actually gone and done it.

 Return of the real Obama

A new study suggests a zero cap gains rate could create millions of jobs at a fraction of the cost of the spending stimulus.

WSJ: Cap Gains Taxation: Less Means More

The job hopes of many are too important to be nailed to the cross of this economic ideology.

Things to remember (and a shocking discovery inside Obamacare):

Those who earn more than $200,000 annually are among the ones who create most of the new jobs and fund new investment—the engines of economic growth. Without these jobs and new investment, the economy will be smaller and throw off less tax revenue...

People will go to great lengths to avoid paying high tax rates, including reducing work effort and taxable savings and investments, or even finding illegal means to avoid the tax collector. But it takes time for them to do so...

The Obama administration also ignores the fact that many upper-income people obtain significant portions of their income from capital gains and dividends. The capital gains tax is going to increase to 20% from 15% in 2011 and, thanks to ObamaCare, to 23.8% in 2013. The tax on dividends is going to increase to a maximum rate of 39.6% in 2011 and once again, thanks to ObamaCare, to 43.4% by 2013.

These rates are self-defeating. The nonpartisan Institute for Research on the Economics of Taxation, headed by a former senior U.S. Treasury economist, Steve Entin, has recently published studies on the effects of the Obama administration's tax increases on capital gains. Their analyses show that increasing the capital-gains tax rate would result in lower tax revenue and higher deficits. The studies are also congruent with the historical experience of the last 40 years...

Tax Cuts and Revenue: What We Learned in the 1980s

Take some profits before The Tax Man Cometh

Excerpt from Larry Kudlow at CNBC:

...the Tax Man is coming to town on January 1, 2011. Taxes are going up across-the-board. So investors should seriously consider selling into any stock market strength ahead of the tax deadline. Doing this will enable investors to lock in a lower capital-gains tax this year and beat next year’s higher rates.

It’s a lesson investors literally cannot afford to forget: If after-tax investment returns decline, because the key capital-gains tax rate and other investment taxes go up, the future value of stocks is damaged.

In other worrisome news, despite some improvement in consumer sentiment, U.S retail sales fell on Friday for the first time in eight months. That was something of a shocker...

Read the whole thing

Easy for us to understand, impossible for President Obama apparently...

Seldom in economics does real life conform so conveniently to theory as this capital gains example does to the Laffer Curve. Lower tax rates change people's economic behavior and stimulate economic growth, which can create more--not less--tax revenues.

The Laffer Curve: Past, Present, and Future

Welcome to the Washington (D.C.) Two-Step!

Or should I say: Bait and Switch. Or, perhaps, it's a Shell Game. Oh, Hell, let's just call them all Grifters!

House Democrats keep stepping on President Obama's applause lines about innovation and job creation. On Tuesday, Mr. Obama announced that "we're proposing a complete elimination of capital gains taxes on small business investment" for one year.

Responding with rare dispatch, the House voted yesterday to change the capital gains rate for venture capitalists who invest in technology start-ups. But rather than eliminating the tax, the House more than doubled it, moving the tax rate to 35% from 15% by reclassifying such gains as ordinary income...

Knowing how popular tax increases are with unemployment at 10%, the House majority rushed the bill to the floor without a hearing or even a committee vote. Then they buried it in a package advertised as an extension of tax cuts for research and development.

Zero to 35 in 24 Hours

The Obama Flip-Flops You DON'T know about

Since winning the election, President Barack Obama has famously flip-flopped on many of the major issues that he championed on the campaign trail. But did you know he’s also flip-flopped on a myriad of less publicized issues?

Read more

Fair Tax