On Tue, 06 Mar 2012 10:34:08 -0500, Spehro Pefhany
wrote:

On Tue, 06 Mar 2012 09:06:17 -0600, jim "sjedgingN0Sp"@m@mwt,net
wrote:



Stormin Mormon wrote:

Q: What is your view of the Reagan presidency?
Lib: That damn good for nothign cut taxes for the weathy while the rest of
the nation was out of work! Old people were eating dog food while the rich
took vacations in private jets.
Con: I thought the cut in capital gains tax was good. The economy picked up,
and government revenues increased.

David Stockman, Reagan's budget manager, strongly disagrees with you.
He now believes low capital gains tax is what has destroyed the
economy.

Stockman is not a liberal - he engineered the reagan tax cuts.

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?

http://www.cbsnews.com/8301-505125_1...snt-buying-it/

Because capital is a flightly and delicate bird and we don't want to
scare it away. I can shift a few years' worth of wages around from
Thailand to Toronto to Toledo with a few clicks of the mouse- think of
the effort and cost to move myself to a full time job in another
country- not going to go through all that cost and hassle just to get
20 or 30% better conditions..


Capital wants to be in the control seat, and we let it, with blind
faith that it will always acrue its benefits to us. In the long run,
perhaps. In the short run, sometimes not.

Meantime, we live in fear of "scaring it away" and race to the bottom,
allowing $1.00/hour wage-rate countries to dictate the world wide
patterns of manufacturing and capital flows, with undertermined
effects.

That's not to say that we need to block capital flows or limit trade.
In terms of experience-based policy, it remains an open question. But
it IS to say that we've forfeited a large part of our
self-determination because we're afraid of what capital will do. There
is a lot of disagreement about how much "policy" to impose on these
huge economic questions, and what policies are good or bad. But fear
seems like an unlikely virtue and an unlikely answer.

--
Ed Huntress