Obama and the capital gains tax

I don't talk politics on this blog, that's simply not its intent. I do, however, speak about economics on occasion, and even tax policy, and that's what I'll do here. Although I won't share my preference for the presidential race, this post will point you to a commentary referencing Barack Obama's stated views on taxation from the most recent Democratic presidential debate, from yesterday's WSJ: http://online.wsj.com/article/SB120847505709424727.html.

Although Barack (and Hillary) have both indicated that they will not raise taxes on households that make under $200 - $250k a year, both are talking about raising the capital gains tax, which does indeed raise taxes, and impacts over 100 million households directly (including mine). In addition a higher tax rate, the real kick in the pants is the fact that an increase in this tax actually reduces overall tax revenue, which directly undermines the overall goal of the tax in the first place. As the commentary reveals:

• Lower capital gains taxes actually increase tax revenues considerably (this is because lower rates stimulate liquidity throughout various asset classes).
• 79% of all tax returns reporting capital gains came from households with incomes below $100k.

These are facts gleaned from actual results of former tax policy and '05 tax returns (most recent data available?). The commentary closes with an explanation of Obama's additional desire to raise the cap on wages subject to payroll tax beyond the most recent '07 cap of $102k .

Unfortunately, as WSJ suggests, "Either the young Illinois senator is ignorant of capital gains data, or he just doesn't care..." Here's to hoping he refines this policy before the presidential election takes place.