If you are an investor of any level, you must be aware that one of the taxes that Barack Obama plans to raise if he is elected is the capital gains tax. Currently the capital gains tax is set at 15%. Obama plans to almost double this tax to 28% despite historical data which shows that when you drop capital gains tax, revenues actually go up. This is one of the many things Obama plans to do to supposedly raise revenue to pay for all his additional socialistic government programs. When this historical fact was pointed out to him during the Philadelphia primary debate this year, he responded with,” Well, that might happen or it might not.”
Well, it happened when Bill Clinton lowered the rate from 28% to 20% in the 1990′s during a booming market, and it happened again when President Bush lowered it to 15% during an ok market. When Reagan raised the rate in the 80′s, revenue dropped. I don’t think this is a maybe it will, maybe it won’t situation. Revenue drops when you raise capital gain taxes and the reason is this. All those evil rich people (who pay the majority of the taxes in this country in the first place) move their money to alternative investments to avoid the capital gains tax you have raised. They didn’t get to the point they are today by being stupid. If Obama is elected, you will see a significant sell off of securities to avoid the tax.
But do not be fooled by Obama’s push that he will punish the wealthy and successful for being successful and wealthy; this tax affects everyone. Building wealth through habitual investments in the stock market is a proven way to move up the food chain. The majority of millionaires got to be millionaires by doing this very thing. Raising the capital gains tax significantly slows the progress of people like me, your average middle class guy. I have spent the last 6 years of my life putting money away in the stock market and just now have begun to see the benefits of capital gains from these investments. Now I will be punished for my saving and have to give 30% of these gains each year back to the government so they can misuse it??
Now that he has realized that raising this tax will not create revenue, Barack Obama says he will do it not for revenue, but because it is unfair. Maybe Obama has a different definition of fair than I do. I tend to believe that it is unfair to take away from those who work hard and give it to those who are unwilling to work. Maybe Obama feels guilty because of his wealth or maybe how he got it, but not me. I am proud of how hard I have worked and how diligently I have saved. I refuse to punish the hard workers and successful in this country by voting for Obama. Will you?
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