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Obama wants to double your capital gains taxes

Obama wants to double your capital gains taxes

Savings is overrated when the government is here to help

President Obama will lay out an official policy of picking winners and losers in this Tuesday’s State of the Union address. We already know that the Administration’s new messaging tactic involves a lot less policy and a lot more emotional manipulation, but its latest announcement regarding a plan to penalize the nation’s top earners takes populist sentiment to a new level.

Via Bloomberg (emphasis mine):

The president’s address is intended to lay out an agenda for his final two years in office and help the Democratic Party retain the White House in the 2016 election with a legacy of policies that appeal to middle- and lower-income voters, who continued to lose ground as the economy rebounded from the recession.

He would increase the top tax rate on capital gains and dividends to 28 percent from 23.8 percent. The rate was 15 percent when Obama took office in 2009, meaning that he’s proposing to almost double it over his two terms in office.

He would also impose capital-gains taxes on asset transfers at death, ending what the White House calls “the largest capital gains loophole.” Under current law, assets held until death aren’t subject to those levies, creating an incentive for wealthy people to hold onto them. Heirs only have to pay capital-gains taxes when they sell and only on the value above what the assets were worth at death.

These changes will stash away $320 billion over the next to years and make it possible for the President to carve out new tax credits for higher education, child care, and dual-income households. It’s vintage Obama, and not unexpected from a President who has made a name for himself by advocating against the interests of those who create jobs and drive the economy.

Progressives are touting this as “tax relief” for a struggling middle class, but what it really is is income redistribution at its most blatant. Republican leadership knows this, and are taking every opportunity to remind the President that elections have consequences:

Obama’s call for higher taxes on the wealthy is likely to further antagonize Republicans who are already angry with the president over his vows to veto several of the party’s priorities, including legislation to approve construction of the Keystone XL oil pipeline, make changes to the president’s signature health care legislation and block his executive actions on immigration.

Republicans say Obama’s veto threats are a sign of a president who didn’t get the message from voters who relegated his party to minority status in the November election. New Senate Majority Leader Mitch McConnell, R-Ky., said the president still has a chance to change his tone.

“Tuesday can be a new day,” McConnell said. “This can be the moment the president pivots to a positive posture. This can be a day when he promotes serious realistic reforms that focus on economic growth and don’t just spend more money we don’t have. We’re eager for him to do so.”

McConnell’s trolling aside, I think we all know what this is—an attempt by a failed president to throw everything he can against the wall in hopes that something might stick. He’s lost his majority; the only thing left to do is attempt to salvage whatever chance remains of his “legacy.”

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Comments

Yeah right, dying is a “loophole” in Obamaworld. What a maroon.

Ain’t.

Happening.

    snopercod in reply to Ragspierre. | January 18, 2015 at 6:06 pm

    You forget John Boehner and Mitch McConnel. They’ll probably “compromise” and raise taxes half of what Obama wanted.

    Estragon in reply to Ragspierre. | January 18, 2015 at 11:50 pm

    Of course not. Obama knows that, he’s just sucking up to his far left base with that one.

    Naturally that doesn’t stop the slow-witted among us from taking false swipes at our leadership.

      snopercod in reply to Estragon. | January 19, 2015 at 7:21 am

      You’re using “leadership” in the theoretical sense, I presume. McConnell and Boehner have a long history of giving Obama everything he asks for and failing to oppose the man’s usurpation of power. When those two clowns actually stand up for constitutional, fiscally-responsible government, I’ll stop being so “slow-witted”.

This totally kills the middle class. Wealth building in the middle class happens with asset appreciation. I personally build wealth in stock investments. This just makes it harder for me to get out of the lower middle class (aka poverty) and build enough wealth so that I can switch to the method that the rich really use to maintain wealth i.e. dividends. Thanks Obama, between this and Obamacare I can feel the love and it feels like a cylinder coated with sand.

Midwest Rhino | January 18, 2015 at 5:14 pm

Obama says after all his destruction, he will “go on the offense”.

Maybe Republicans can go on the offense, and show that destroying capitalism, destroying America, in favor of Obama’s flexibility to communist nations, or terrorist entities, may seem good for those that feel “God Damn America” is good policy.

But all those that seek America as the shining city on the hill, Damn well better stop him. Obama says if you put capital at risk, and you lose, too bad for your hard earned capital that paid for the effort. But if you win, profits all belong to him, because “you didn’t build that”.

So let’s see the core of what we have here. The destruction of the family farm/business when the administration has already dumped tons of economic and environmental regulations on them. Yeah, that’ll boost the economy.

Loot, pillage, then burn. Our Government at work.

Increase the capital gains tax and lose an entire generation of young voters who are hoping their parents can support/help them finacially them past 26 years of age.

Zelsdorf Ragshaft III | January 18, 2015 at 6:02 pm

Shit for brains can wish for whatever. Congress will never pass a bill with a Captial gains tax increase on it.

Doubling taxes on money workers have saved for their retirements is not “populist”. It is simply Communist – The Democrat Party today exists for the purpose of extracting ever higher taxes from workers paychecks (and retirement income) for the sole purpose of redistributing it to people that don’t work at all (their constituents).

    creeper in reply to Aarradin. | January 19, 2015 at 10:53 am

    There is an “out” with retirement savings. It’s called a Roth IRA. Pay the taxes up front and you never have to pay another cent on the income or the principal.

      randian in reply to creeper. | January 19, 2015 at 1:39 pm

      Yeah, so long as somebody evil like Obama doesn’t convince Congress that Roth accounts are “unfair” and either (a) their tax-free withdrawal benefit should be partially or wholly removed, (b) cap account size as he’s suggested before, or (c) institute a wealth tax on retirement accounts.

Taxing capital gains upon death has already been tried (I believe it was the Tax Reform Act of 1976). It was a record keeping nightmare and total disaster. Obama continually displays his ignorance of history and economics.

A “failing” president can be very successful when supported by the Establishment GOP. The Far Left wants everything you earned and saved when you die. Everything. That is after they play Hollande and put the tax rate to 70+ percent until you croak (literally and figuratively). Remember… you didn’t earn it and your family shouldn’t win “life’s (death’s) lottery.

Don’t forget the 2008 Democrat candidate debate, where the question was what should the capital gains tax rate be. The country had seen three rates. The highest rate produced the lowest revenues. The middle rate [under the Bill Clinton Administration] produced the middle revenues. And the lowest rate produced the highest revenues. Hillary said the best rate was the rate in effect during her husband’s administration [making no sense from any perspective]. Obama said the best rate was the highest rate. The questioner, I believe Charlie Gibson, followed up with Obama, noting that the highest rate produced the lowest revenues. What was important, Obama said in reply, was “fairness”.

So, you see, punishing the “rich”, and simultaneously generating the least revenues, arguably punishing everyone else, was “fairness” in the Obama dictionary.

And “the people” went on to elect him…twice.

His eyes are a bit bloodshot in this picture. Was he smoking marijuana before this was taken?

The problem in our economy is lack of capital formation. Oh, the publicly-traded firms are doing fine, equities benefit when bonds no longer have any appreciable return. But they aren’t investing in expansion, they’re buying back shares and paying dividends.

Real expansion comes from private capital formation, which is dependent, like bonds, on returns – but no one wants to offer real returns in this economy, so private capital is still under its 2007 level.

Raising capital gains taxes actually made this worse. Taxes are collected when the investment is sold, so higher rates makes it seem more profitable to just hold onto them. That’s the real stimulus effect of cutting capital gains taxes: while the government does get a windfall of revenue from newly-sold assets, the economy is more efficient when decisions are made more on the merits without the artificial effect of taxes. And it doesn’t hurt to have billions of suddenly available capital for investment.

From an economic POV, the ideal cap-gains taxs is none. It’s all after-tax money already, just let it be and watch it grow – and the economy with it.

    creeper in reply to Estragon. | January 19, 2015 at 10:57 am

    We own a small business. The money is there, believe me. Not a day goes by that we don’t get a call offering investment capital.

    The reality is that no one wants to take on any more debt in this miserable economy, no matter how low the interest.

nordic_prince | January 19, 2015 at 9:46 am

There’s a reason why “thou shalt not covet” is one of the Ten Commandments – envy and covetousness are soul-destroying characteristics. That’s probably also why Zero is so accustomed to them, and incorporates them into his policies at every turn ~

He really is a malevolent, EVIL son of a bitch, isn’t he?

Freed from having to personally face another election by the two term amendment, Obama is free to do and say what he really feels and the true Obama is coming out. In the process, he will destroy much of the current Democrat Party in 2016, as the public rams home the message he doesn’t get in the next election. For now, the best thing might be to treat Obama as a lame duck joke as far as agenda or legislation is concerned. His agenda, budget, and legislative proposals are dead on arrival in Congress. The only way he can rule is by the pen and the phone, executive memos and orders, by being a dictator who assumes unconstitutional authority. The bad news for Obama on this is what he does with the pen today can be reversed by the next President with the stroke of a pen. Meanwhile, the country will suffer through two more bad economic years while becoming a joke itself in foreign affairs.

    randian in reply to Cicero. | January 19, 2015 at 1:45 pm

    “The bad news for Obama on this is what he does with the pen today can be reversed by the next President with the stroke of a pen.”

    True in theory but rarely actually happens. What major progressive initiative, legitimate or not, has ever been reversed? Presidents don’t reign in out of control agencies like EPA and DoJ either, who increasingly see their enforcement actions and rulings as those of sovereigns rather than subordinates.

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