Unless the world of basic mathmatics has changed, increased capital gain tax increases tax revenue resulting in lower deficit spending.

Look at when the capital gain taxes were increased in the 1980s. The revenue from them decreased. As I have said before, this is because people holding the stocks are less likely to sell them and pay the higher tax because they know a President will come along eventually who will favor a reduction. When the taxes were cut to 20% from 28% in 1997 revenues from them increased significantly and again when they were cut from 20% to 15% under Bush.

Absolutely correct - and basic logic.

If Obama succeeds in his plan, we will watch the deficit explode.

I posted this in another thread, maybe its better off here ..

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__________________
No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

If Obama succeeds in increasing the tax from 15% to 28% you can believe we will see a massive sell off in the market the day before the increase takes effect which will hurt the economy in a very significant way.

Absolutely.

And that will just be the beginning. The rest of the world will see the US take a giant step backwards at a time when capital gains taxes are falling around the world.

The economic engines of commerce may be getting battered right now, but making it more difficult and less attractive to build, trade and foster wealth is not the way to go. As you said, folks who have stock, by virtue of outright buys or through funds etc. will take a real hit. We have encouraged people to invest in 401’s and/or use the long term ability of the market to return gains etc.
A family who’s combined household income is 75 or 100K, who sells a couple of hundred shares to make a capital purchase, car, home repair etc. will see an almost doubling of their tax burden, as many have said, the rich weather this more adroitly because they have more overall wealth to gain as relative to that family, so, in real dollar terms who takes the hit? The guys making 100K on a sale relinquishing 28 K in tax, or the family selling their 200 shares at 28%?

__________________
No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

Obamas answer was very telling in what he believes. He did not mention anything about trying to reduce deficits or increase revenue. He wanted it increased to make things more FAIR.

Um, I don't wanna' rain on your parade, but those numbers add up to 1,100, not 1,000.

Doesn't hurt me a bit. My 401k is for retirement, not a reward for braindead "investers" who bought up a bunch of "securities" that were in fact, crap loans made to people who shouldn't have qualified in the first place. My "lunatic idea" is to leave my 401k alone until I retire, not to hand it over to a bunch of greedy fuckups.

Not true. You need to look at tax revenues during current administration's reign. 2003 was the worst year for federal tax revenue in over 40-years:

The Revenue Outlook

Capital gain tax revenue is 10.5% of all tax receipts (you probably don't realize it, but funds managing 401k plans pay them on an annual basis for any capital gains resulting from trades), not a significant number and primarily derived from high-income individuals, certainly not the working class people seem stuck on in these political rants. If the tax reduction on capital gains is eliminated in 2011 (or before) a one-year reduction in tax revenue is expected for the following year and then the normal revenue pattern will resume.

Capital gain tax reduction was heralded as tax savings being invested in the US economy creating more jobs and higher income tax revenue. That didn't happen due to capital flight, the declining USD and high-income people putting tax savings right back into equity markets, which make negligible contribution to economic growth.

Congratulations.

However, life does not always work out as neatly for everyone. The thousands of people who are losing their homes or who need emergency funds for unexpected crises are not brain-dead scum, regardless of what you seem to assume. Life can throw curve balls that none of us can expect and are always difficult to handle. If that has not been your experience - good for you. But you are in a tiny minority.

That money is theirs, after all. Why should Washington leftists be allowed to steal large amounts of it?

But there is no point going further in addressing your comments here. I assume you are an Obama supporter. I am a conservative. Yet I do not see a great deal of ordinary compassion or human understanding in your post.

It has nothing to do with political preferences or compassion. There's an old adage that remains true to this day - never invest anything in equity market speculation you can't afford to lose. That's the reason anyone with a shred of investment knowledge carries a balanced portfolio. Most 401k contributors don't have that luxury, their contributions being the fodder big players take their 18% profits from.

Well you may want to make a few other plans....I don’t know how long you have had your 401, but if you were in it, during the dotcom. melt down and have been in it since, you’re underwater. It might be a good idea to fund other avenues for your contributions for the next couple of years if you have not already.

__________________
No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

Wise advice, the problem being a majority of 401k contributors having no control over how those contributions are invested. For equity markets to average a 5%/annum average historical return, there have to be big losers and big winners. The little guy with no control will always be the loser.