Admittedly, I haven't been following the US elections closely. However, this Wall Street Journal editorial (4/21/08) sums up Obama's tax stance nicely, and presents factual backup (see graph below) that raising taxes leads to lower tax revenues, while reducing taxes leads to increased tax revenues. Below are a few of Obama's key tax policy points:- He is "open" to raising capital gains taxes from the current 15% to 28%, which would affect the 100 million Americans owning stock and contradicts his campaign rhetoric, "I not only have pledged not to raise taxes, I've been the first candidate in this race to specifically say I would cut their [the middle class, who earns below 200-250K apparently] taxes."
- Lift the cap on wages subject to the payroll tax. That cap was $97,500 in 2007 and is $102,000 this year. "Those are a heck of a lot of people between $97,000 and $200[,000] and $250,000," said Mr. Gibson. "If you raise the payroll taxes, that's going to raise taxes on them."
Link to WSJ forum specific to this article
See here for historical evidence that reducing Capital Gains taxes results in higher tax income for the government as % of GDP
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3 comments:
The chart would be more persuasive if it included a line on economic growth. Capital gains revenue would constitue a greater percentage of GDP when GDP is small.
It's correct that Capital gains revenue would constitute a greater percentage of GDP if GDP was "small". But isn't the point of comparing Capital Gains revenue to GDP to show the relative performance? If GDP is growing more slowly than capital gains revenue, then isn't that a good thing - when the economy is down government can still take in tax revenues? As far as the absolute amount of Capital Gains revenue, since GDP hasn't shrunk during this time period (http://www.bea.gov/ - can't link directly), it means that Capital Gains revenue (when comparing the low 2+% to high 6+%) hasn't shrunk either.
Correction: *7+%* not 6+%
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