From: greg@gallifrey.ucs.uoknor.edu (Greg Trotter)
Subject: Re: Reasonable men may differ: Capital Gains Tax
Originator: news@midway.ecn.uoknor.edu
Date: Thu, 15 Oct 1992 21:37:56 GMT
Distribution: usa
Organization: Gallifrey - Home of the Timelords

In article <Bw65F0.8JI@unix.amherst.edu> pdchapin@unix.amherst.edu (PAUL D CHAPIN) writes:
>: 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.
>: 
>Nice assumption, but a lot of us aren't convinced that the amount of 
>increased investment will be that great.  As long as the general economy
>is being dragged down by the effect of massive national debt, there is
>little incentive to invest in new factories to make something nobody can
>afford to buy.

It's a chicken and egg deal, Paul. When the rich invest, jobs are created.
When jobs are created, people have money. When people have money, goods
are sold.

>: We can't lower the capital gains tax, because that would help the rich.
>: 
>After years of Republican economics driving us to ruin, we don't trust the
>argument that if we make a lot of rich people even richer, eventually it 
>will get to the rest of us.  The increased concentration of wealth in the
>last decade would argue against this.  The best comment on trickle down
>economics came from Gary Hart in 1984.  "Do you feel trickled on?"

Remember 1984? The American people answered Gary with a resounding "YES!"
when they elected Reagan by a landslide.

Paul, Trickle Down/Supply Side *works*. The 80s proved that. The 80s were
properous for most of the USA. What doesn't work is tax and spend -- the
late 70s proved that, as did Congress when they pressured Bush to sign
the 1990 tax bill. Things were a lot better before that.

>It should be noted that most of the Democratic candidates for President
>including Clinton, but most notably Tsongas, have some form of investment
>tax program.  The programs are much more narrowly defined to eliminate
>tax breaks for non-productive capita gains.

Wait... if you make an investment, and the company does well, you get
a good return -- a gain. If the company does well, that help the economy.

If the company goes under (as most do), there *is* no gain.

So, what the hell is a "non-productive capita gain?"

>I'm not sure of the current Bush proposal, but the original was for
>only a limited time and covered all capital gains.

Go back and reread the text of this year's state of the union address.

> The result is that
>it rewarded and encouraged speculation rather than real investment.

Whoa.... where did you pull that out of? What results would you like
to point to?

>The time limit had the odd result of encouraging a lot of turn over of
>assets to lock in the tax savings.  This would, of course, make the
>budget look better in the short run, but would cause bigger debts
>later when the assets would normally have been sold and taxed.

Look, I'm pretty sure the President's proposal was not a temporary one...
if someone can point me to a good reference to the contrary, I'd appreciate
that.

>If anybody knows the details of the current Bush proposal, please jump in.
>Unlike the republicans, I don't want to misrepresent the opposition.

Unlike a few Democrats, I don't cringe when the truth is told.

						- greg