From: kgirodias@azcc.arizona.edu
Newsgroups: alt.rush-limbaugh,alt.politics.clinton,alt.politics.bush
Subject: Re: Reasonable men may differ: Capital Gains Tax
Date: 15 Oct 92 16:51:28 GMT
Distribution: usa
Organization: University of Arizona UNIX Users Group

In article <1992Oct15.023521.22821@constellation.ecn.uoknor.edu>, greg@gallifrey.ucs.uoknor.edu (Greg Trotter) writes:
> I'm curious as to the Democrats opposing a cut in the capital gains tax.
> Being conservative, I support the cut. I have *never* received a substantive
> answer why it shouldn't be cut. Here's what I know of both sides:
> 
> CONSERVATIVE
> ------------
> Republicans support cutting the capital gains tax. They claim it will
> help the economy because:
> At this time, the capital gains tax and the top bracket for personal
> income tax are at about the same level. In order to have a strong
> economy, we need to stimulate investment. The capital gains tax is
> what investors pay on their dividends. If this is at the same level the
> personal income tax is at, potential investors are more likely to invest
> in government bonds and other safe places rather than put their money
> at risk.
> 
> But if the capital gains tax is cut to around 15%, the rich will invest
> more -- even though there is higher risk, they'll pay *less* in taxes,
> and that makes it worth it.
> 
> The capital gains tax is raised when the economy gets overheated -- this is
> a Good Thing. But democrats are often resistant to lowering it when it has
> an excellent track record of doing exactly what the Republicans are
> claiming it will do.
> 
> 
> LIBERAL
> -------
> 
> We can't lower the capital gains tax, because that would help the rich.
> 
> That is the *only* argument I've heard. Come on, Demos, is there a
> *better* reason?
> 
> I wrote my Congressman, Dave McCurdy (D-OK), encouraging him to support
> the bill to lower the tax. He promptly wrote me back, telling me he would
> vote against the move. Here is the main paragraph from his letter:
> 
> 	   I voted against the capital gains cut proposed by the Bush
> 	Administration during the last Congress, primarily because it
> 	would have increased the federal deficit over five years by
> 	$21 billion. While some middle income taxpayers might have
> 	benefited, by far the greatest benefits would have gone to the
> 	wealthiest among us. At a time when the deficit is threatening
> 	to undermine our whole economic system, not only for us but for
> 	our children, I did not believe it was appropriate to cut taxes
> 	in this way.
> 
> He then goes on about supporting tax cuts for middle income Americans,
> and talks some more about the deficit.
> 
> I wrote him back, asking him to explain why he opposed the cut if that
> has a good track record of stimulating the economy. I invited him to
> supply me with figures of his own.
> 
> I never heard back.
> 
> So... are there any *good* explanations?


At the very least the capital gains tax should be indexed for inflation!!!!

The second and more inportant point is while this may help rich people it
would also help all of us. The best example I've heard was at a town hall
meeting of Jim Kolbe, my congressman. He gave the example of a mom-pop type
business. They buy a store 30 years ago and make a living off it. When it
comes time to retire and the want to sell it would not a capital gains
cut help them, the extra money would certainly provide them with a bigger
nest egg.

Ken