Newsgroups: alt.activism,misc.headlines,sci.econ,talk.politics.misc
Subject: Re: Derailing the Reagan Revolution, part 2: Seven more years?
From: demon@desire.wright.edu (Stupendous Man)
Date: 25 Aug 92 22:53:23 EST
Organization: Demonic Possesions, Inc.

In article <1992Aug25.143607.27167@hemlock.cray.com>, rja@redwood26.cray.com (Russ Anderson) writes:
> 
> In article <1992Aug25.173645.16913@oakhill.sps.mot.com>, pjm@anegada.sps.mot.com (Patrick J. McGuinness) writes:
>> demon@desire.wright.edu (Stupendous Man) writes:
>> >rja@redwood26.cray.com (Russ Anderson) writes:
>> >>> ...      
>> >>> >> 	Another thing people conveniently forget is what that 1986 tax raise
>> >>> >> was supposed to do.  It was supposed to be used to take a bite out of the debt. 
>> >>> >> Hmmm.  I wonder where those dollars went?
>> >>> > 
>> >>> > Are you saying that Ronald Reagan was *wrong* for raising the capital gains tax?
>> >>> 	(And yes, he was wrong to go along with it.)
>> >
>> >	^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>> >> 
>> >> So now, was  Ronald Reagan was *wrong* for raising (proposing, with the congress 
>> >> going along with him) the capital gains tax?
>> 
>> The implication that Reagan proposed the cap gains tax increase is wrong.
> 
> Huh?  The proposal came out of the Reagan Administration (specificly the Treasury 
> Dept, championed by Donald Regan).  Remember Reagan talking about trying
> to simplify the tax code so that people could file on a postcard?

	Tax simplification, yes.  But the end result (which embodied
"simplification") was the Rostenkowski-Darmon Tax Reform Act.

> 
>> As explained by Beryl Sprinkl last night on McNeil-Lehrer,  they agreed
>> to cap gains increase only because the Congressional Democrats insisted on it,
>> as part of the need for "revenue neutrality".  In other words, a real tax cut
>> without countervailing increases wasn't acceptable to the Democrats.
> 
> Interesting.  I was an econ undergrad when the original proposal was 
> announced and remember spending quite a bit of time discussing the
> implications on the economy.  There were changes made at the request of
> congress (such as mortgage interest remaining deductable) but taxing cap
> gains at the same rate as all other income was part of the original
> proposal.  I suspect that the election year has clouded Beryl Sprinkl's
> memory.

	Well, yeah.  But all Reagan wanted to do was simply the tax process.  I
doubt whether he was the guy to say "let's raise Cap Gains while we're at it".

>> Well, a funny thing happened on the way to the IRS.  As noted by Brett
>> in various posts, the cap gains tax increase failed to raise significant
>> new revenue. In fact, because of its negative impact on the creation
>> of new jobs, and its *disasterous* effect on housing investment,
>> this "increase" cost our economy, and our Government, a lot of wealth
>> and revenue.
>> 
>> Meanwhile, the income tax cuts *did* pretty much pay for themselves.
>> 
>> So yes, increasing the cap gains tax was a mistake.
>> 
>> It was also a mistake in 1989 for George Mitchell to refuse to pass Bush's
>> request to cut it. It was a mistake in 1992 for Congress to rebuff
>> Bush's request (again) to cut the capital gains tax, and it is a mistake
>> today for Clinton to propose income tax increases and no broad-based long-term
>> capital gains tax cut.
> 
> GOVERNOR BILL CLINTON at the ECONOMIC CLUB OF DETROIT
> 
> DETROIT, MI, AUGUST 21, 1992
> [...]
>   Please understand me, I want to create more millionaires.  But I
> want to do it the old fashioned way: by investing in America, and by
> having people reap a reward in return for their investment in
> American jobs and American goods and American services.
> 
>   That's why I recommended that we go beyond what the Congress
> did last time and pass not a temporary, but a permanent investment
> tax credit to encourage continuous reinvestment in new plant and
> productive equipment here at home so that we can always be
> competitive in the global economy.
> 
>   I also propose a 50 percent tax break for those who take risks in
> making five-year long-term investments in new business enterprises.
> A permanent research and development tax credit to reward
> companies which invest in ground-breaking technologies, from high
> definition TV to high speed computing.  I don't think we should
> subsidize the export of American jobs with tax breaks.  And I favor
> getting rid of tax breaks for companies that shut down their plants
> here and move them overseas.

	Why tie down who gets a break by industry?  Carter, if he had done this
plan, would have given them to "alternative energy" companies, subsidizing them
at the expense of other industry.  Hoo boy.

	Government is not an efficient allocator of resources.

	If you want to reward economic success in our country, lower corporate
tax rates.  You'll attract more companies here and they'll be encouraged (or
simply not discouraged) from making money.

	Let the companies themselves decide whether job training, new
factories, etc. is the way to go.  Those that do it right will succede and the
others will immitate them.

Brett                                                      
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Newsgroups: alt.activism,soc.college,talk.politics.misc