- Obama not worried about Ebola at upcoming African summit in D.C.
- Obama: ‘We tortured some folks’ after 9/11
- Obama administration asked whole D.C. Circuit to take on major Obamacare case
- Mark Levin: Topple GOP leadership or country will ‘unravel’
- Massachusetts to let police chief deny gun buys to those deemed unfit
- John Kerry condemns attack on Israeli soldiers, kidnapping
- U.S. starts to evacuate American Ebola patients from West Africa: Report
- Geraldo slammed as ‘dummy’ for backing Clinton’s bin Laden claim
- Israeli spokesman: No need to debate who broke the cease-fire
- 35 Palestinians killed; Israeli officer missing
LAMBRO: Remedial economics for Democrats
Raising taxes lowers federal revenue
Question of the Day
It wasn’t long before the Democratic tax-hikers heard from angry, unemployed boat builders who weren’t wealthy, and the taxes were repealed a few years later.
The Obama Democrats are hooked on their need for even more taxes to feed their growing addiction to ever-higher spending. Earlier this year, with strong Democratic support, Congress approved higher income and capital-gains taxes on Americans with incomes of more than $400,000.
The record shows, however, that whenever capital-gains taxes are raised, it brings in less revenue, not more, as investors tend to hold on to stocks and their other assets in order to avoid the larger tax bite. When the rate is cut, they tend to take advantage of the reduction and sell, boosting capital-gains tax revenues.
When President Clinton signed a GOP-passed capital-gains tax cut in 1997, lowering the tax from 28 percent to 20 percent, revenues grew by 18 percent.
“One of the worst things you can tax is capital formation,” says Will McBride, chief economist at the nonpartisan Tax Foundation. “When you increase the capital-gains rate, you increase the tax on using equities to finance investing.”
Raising taxes takes money out of the economy, which, in turn, means slower economic growth that results in higher deficits and more debt.
Mr. Obama and the Democrats are still selling their snake-oil tax remedies, but there are signs that the president is losing the public’s trust on the economy, a Washington Post poll found this week.
He had held a large, 18-percentage point advantage over congressional Republicans on whom Americans trusted more to handle the economy. Now, it’s a nearly even split — 44 percent for the president and 40 percent for the GOP.
The debate over the budget is in its early stages, but the battle lines are tightly drawn on taxes. Mr. Obama has got all the new tax revenue he’s going to get, say House GOP leaders. Any new money must come from tax reform that lowers tax rates to spur stronger economic growth.
Donald Lambro is a syndicated columnist and contributor to The Washington Times.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
TWT Video Picks
By Orrin G. Hatch
Procedural changes impede the chamber's traditional deliberative function
Get Breaking Alerts
- Border agents cleared of civil rights complaints from illegal immigrant children
- Ben Carson takes major step toward presidential campaign
- U.N. condemns Israel, U.S. for not sharing Iron Dome with Hamas
- Obama military strategy too weak for future security, panel reports
- Porn-surfing feds blame boredom, lack of work for misbehavior
- House GOP resurrects border bill, predicts successful Friday vote
- Feds raid S.C. home to seize Land Rover in EPA emission-control crackdown
- Ted Nugent slams 'lying freaks' at liberal media: I'm 'doing God's work'
- CRUZ: A tale of two hospitals: One in Israel, one in Gaza
- Pentagon wants extra $19M to equip, train Ukrainian troops