On Tue, 06 Mar 2012 14:52:45 -0600, jim
wrote:

Ed Huntress wrote:


Sorry I have no idea how that relates to what
David Stockman wrote about capital gains.

Hmmm...I've lost track of it, but I don't think that was responding to
Stockman. Whoever first said "scaring away" was it.


I took the claim that it would scare away capital was an answer given
in response to
Stockman's question "Why not"


Stockman: Let the Bush tax cuts expire. Let the capital gains go back to
the same rate as ordinary income. (Capital gains are taxed at 15
percent,
while ordinary income is taxed at marginal rates up to 35 percent.)

Condon: Why?

Stockman: Why not? I mean, is return on capital any more virtuous than
some guy who's driving a bus all day and working hard and trying to
support his family? You know, with capital gains, they give you this
mythology. You're going to encourage a bunch of more jobs to appear. No,
most of capital gains goes to speculators in real estate and other
assets
who basically lever up companies, lever up buildings, use the current
income to pay the interest and after a holding period then sell the
residual, the equity, and get it taxed at 15 percent. What's so
brilliant
about that?

Well, I agree with Stockman in terms of fairness. I don't recall
seeing any analysis of the effects of letting capital gains taxes rise
to the same level that for regular employment income, but, absent
that, I think he's right.

--
Ed Huntress