Tax Cuts May Prove Better for Politicians Than for Economy

[boedicca]

I am a true believer - you just don't grok regarding what.

Hardly surprising considering.

 

[Howard Roark]

Oh how democrats changed their tune. It was Democrats who bashed Bush-I with those "read my lips" ads for saying he wanted to raise taxes. Raising taxes when coming out of a recession to pay for stimulus spending in a recession is what Bush-I & Bill Clinton did & should be done according to Keynesian Economics. Taxes or interest rates were not raised enough which caused the dot com bubble that burst sending us into another recession. Then 9/11 happened so lower taxes & deficit spending were required. Low taxes & interest are still required until we recover from the housing bubble in 2013.

If democrats really wanted to raise taxes, they would have done so by now just like they did health-care. These stupid raise taxes ploy is nothing but political grandstanding for the idiot rabid Democrat voters who repeat their idiocy.

Of course, Kennedy never lived long enough to see his tax cuts enacted. He didn't believe in tax cuts, rather, he wanted to spend money to stimulate the economy.

Eventually, he did craft a plan, but at the time, the top marginal tax rate was 91% for earnings over $400,000.00.

He did knock that down to 70%,...as opposed to 30 something today...but more importantly, he cut withholding taxes, and implemented credits for lower income earners.


He beleived that if he put money into the pockets of the consumers, they would invigorate the economy through spending.



Of course, today's corporations don't employ Americans, so a supply side tax break is silly.

If we're going to slash taxes, we should drastically slash withholding for anyone earning under some arbitraty number...say, $100,000.00.

If you put a large chunk of money into the hands of the middle class, they will use it to buy those things they deprive themselves of now.


Money always makes its way to the top....let's start at the bottom this time...for a change.

The millionaires will end up with it anyway.

 

[loosecannon]

I am a true believer - you just don't grok regarding what.

Hardly surprising considering.

infidel!

 

[Toro]

Baloney.

Debt problems come as a product of spending beyond one's means....Period.

And a leftist would say that deficit problems come from not taxing enough. That statement, like yours, is a political opinion irrelevant to finance.

If you cut taxes and don't cut spending, the tax cuts caused the deficit. If you raise spending and don't raise taxes, then the spending caused the deficit.

A right-winger always says there is too much spending. A leftist always says there is not enough spending. Its ideology and its all the same.

Ideology doesn't change the economic fact that if you don't spend too much, you don't have any problems with debt.

The deficit has exploded far and away outside the puny Bush tax cuts, which added up to <1% of total GDP over their effective time frame.

The Bush tax cuts added $1.5 to $2 trillion to the debt, which is much greater than 1% of the $14 trillion economy.

 

[Oddball]

Over what time frame and by whose math?

How much did federal spending increase over the same time period?

BTW, you are aware that Ross Perot had noted numerous times during the 1992 campaign, that the debt was going to start an explosive upward climb after 2002, aren't you?

 

[KissMy]

After the economic boom started mid 1992. During the 1992 Presidential campaign Ross Perot proposed raising taxes. His complaints about Washington's chronic overspending struck a chord with the public. A few months before the election, he was leading both incumbent George H.W. Bush and challenger Bill Clinton in the polls. All 3 candidates were for raising taxes.

There is a time for raising taxes & a time for cutting taxes. Currently this recession requires low taxes. In 2013 we will need to raise taxes and cut spending.

 

[edthecynic]

While I don't agree with just tax cuts to stimulate the economy the facts have shown an increase in govt revenues from 2003 to 2006 (Bush tax cuts enacted). This refutes the left's claim that revenues decrease.
"Growth In Federal Tax Revenues From 2003 To 2006(Lower Tax Rates Increase Tax Revenues Collected)"
Growth In Federal Tax Revenues From 2003 To 2006(Lower Tax Rates Increase Tax Revenues Collected)

First of all, revenue fell after both Reagan's and Kennedy's tax cuts. And the increased revenue after Bush's capital gains tax cuts was from Speculators dumping their capital assets like real estate, flooding the market which eventually burst the real estate bubble, not from economic growth.

Total Federal Tax Collections (billions)

Year Constant (87 dollars)
---------------------------------------
1980 $728.1
1981 766.6 < Reagan tax cut passed in August
1982 738.2 < drop in total revenue
1983 684.3 < drop in total revenue
1984 730.4 < Reagan raises taxes
1985 776.6 < Reagan raises taxes again, 81 level recovered
1986 790.0 < Reagan raises taxes yet again
1987 854.1 < Reagan raises taxes some more
1988 877.3

Source - Internal Revenue Service.

Kennedy tax cuts

Federal Income Tax Collections (Constant dollars, CPI-U)

Year Receipts Percent change from previous year
--------------------------------------------------
1961 $138,069 ---
1962 150,567 + 9.0%
1963 155,375 + 3.2
1964 156,804 + 0.9 < tax cut takes effect
1965 154,475 - 1.5 < drop in revenue

Source - U.S. Office of Management and Budget, Historical Tables, Budget of the US Government, FY 1996. Dollar conversions made from CPI-U.

A little bit of economic literacy and understanding of history wouldn't hurt you.

Inflation was over 13% and the prime rate was over 20% when Reagan took office. The Volcker contraction of the money supply sent the country into recession to tame inflation. The drop in GDP reduced tax receipts far more than the beginning of the Reagan Tax cuts.

The subsequent increase in revenues is due to GDP growth fueled by the cumulative effect of tax cuts.

CON$ will never admit the truth. They just make up crap.

GDP did NOT drop, therefore the loss of revenue was 100% due to St Ronnie's tax cut and the increase in revenue that followed the Reagan Recession was due to Reagan's record increase in taxes.


US Gross Domestic Product GDP History
Fiscal Years 1950 to 2010
Year
GDP-US
$ billion

1979
2562.2

1980
2788.1

1981
3126.8

1982
3253.2

1983
3534.6

1984
3930.9

1985
4217.5

1986
4460.1

1987
4736.4

1988
5100.4

Here is a list of Reagan's tax increases after his tax cut in 1981.

First term

1. Tax Equity and Fiscal Responsibility Act of 1982

2. Highway Revenue Act of 1982

3. Social Security Amendments of 1983

4. Interest and Dividend Tax Compliance Act of 1983

5. Deficit Reduction Act of 1984

Second term

6. Omnibus Budget Reconciliation Act of 1985

7. Tax Reform Act of 1986

8. Omnibus Budget Reconciliation Act of 1987

 

[loosecannon]

Over what time frame and by whose math?


BTW, you are aware that Ross Perot had noted numerous times during the 1992 campaign, that the debt was going to start an explosive upward climb after 2002, aren't you?

http://graphics8.nytimes.com/images/2008/02/06/opinion/07chart.533.gif

 

[Oddball]

Yeah....WITHOUT OFFSETS.

Once again, we can see that the real problem is profligate spending.

 

[loosecannon]

After the economic boom started mid 1992. During the 1992 Presidential campaign Ross Perot proposed raising taxes. His complaints about Washington's chronic overspending struck a chord with the public. A few months before the election, he was leading both incumbent George H.W. Bush and challenger Bill Clinton in the polls. All 3 candidates were for raising taxes.

There is a time for raising taxes & a time for cutting taxes. Currently this recession requires low taxes. In 2013 we will need to raise taxes and cut spending.

But cutting taxes and maintaining spending won't do anything real for the economy.

WE

ARE

OVER

OUR

CREDIT

LIMIT

Our economy relies exclusively on ever larger volumes of debt in order to fuel our growth. That isn't a metaphor, it is a cold hard fact, the very nuts and bolts of how our monetary system operates.

If debt doesn't increase the economy goes deflationary.

And neither spending or tax cuts is gonna change that.

In times past we allowed recessions to take their toll in reduced wages and inflation and then recovery was a natural event. Like recovery from a cold.

We are gonna have to make due with a contracting economy and high unemployment until most of the baby boomers exit the work force and their entitlements and pensions are downsized.

It's like Greece only closer.

 

[loosecannon]

Yeah....WITHOUT OFFSETS.

Once again, we can see that the real problem is profligate spending.

I wish you could be sensible for once and start railing incessantly about how we wouldn't even have a national debt to service or repay were it not for the Federal Reserve.

That would be so cool. And even tend toward a solution.

Because the congress and the president are NEVER gonna pay down the debt, ever, unless they are bound and gagged and forced to. It just isn't ever gonna happen of their own volition. NEVER!

It makes almost no diff if a repub or a dem is in power, they will all spend as much as they can possibly get away with.

 

[Oddball]

When did I say anything about the Fed?

Fact remains that spending is the problem.

Another fact remains that the debt cannot ever be paid off.

 

[loosecannon]

When did I say anything about the Fed?

Fact remains that spending is the problem.

Another fact remains that the debt cannot ever be paid off.

Of course it can be. Abolish the Fed.

Every nation has the full authority to print new money without borrowing anything from anybody.

Hence the term "fiat" currency.

But unfortunately we were conned into allowing the Fed to issue debt to us whenever we printed money because they promised to eliminate the boom and bust cycles of the past. That was in 1913. I am sure you have heard of it.

No fed: no national debt, no debt service, nothing to repay.

Far more meaningful than arguing over taxes.

 

[Oddball]

And how do you propose that the $50+ trillion of unfunded federal promises to pay its own citizens be covered, professor?

 

[Toro]

Over what time frame and by whose math?

How much did federal spending increase over the same time period?

BTW, you are aware that Ross Perot had noted numerous times during the 1992 campaign, that the debt was going to start an explosive upward climb after 2002, aren't you?

There have been several estimates of the cost of the Bush tax cuts. The base level is about $2 trillion. The $1.5 trillion came from an interview I read with a guy from the Cato Institute. The time frame is over 10 years, the duration of the cuts.

Perot's 1992 graphs were incorrect. The budget was in surplus in 2000. But very few 10 year forecasts are right.

 

[jeffrockit]

First of all, revenue fell after both Reagan's and Kennedy's tax cuts. And the increased revenue after Bush's capital gains tax cuts was from Speculators dumping their capital assets like real estate, flooding the market which eventually burst the real estate bubble, not from economic growth.

Total Federal Tax Collections (billions)

Year Constant (87 dollars)
---------------------------------------
1980 $728.1
1981 766.6 < Reagan tax cut passed in August
1982 738.2 < drop in total revenue
1983 684.3 < drop in total revenue
1984 730.4 < Reagan raises taxes
1985 776.6 < Reagan raises taxes again, 81 level recovered
1986 790.0 < Reagan raises taxes yet again
1987 854.1 < Reagan raises taxes some more
1988 877.3

Source - Internal Revenue Service.

Kennedy tax cuts

Federal Income Tax Collections (Constant dollars, CPI-U)

Year Receipts Percent change from previous year
--------------------------------------------------
1961 $138,069 ---
1962 150,567 + 9.0%
1963 155,375 + 3.2
1964 156,804 + 0.9 < tax cut takes effect
1965 154,475 - 1.5 < drop in revenue

Source - U.S. Office of Management and Budget, Historical Tables, Budget of the US Government, FY 1996. Dollar conversions made from CPI-U.

A little bit of economic literacy and understanding of history wouldn't hurt you.

Inflation was over 13% and the prime rate was over 20% when Reagan took office. The Volcker contraction of the money supply sent the country into recession to tame inflation. The drop in GDP reduced tax receipts far more than the beginning of the Reagan Tax cuts.

The subsequent increase in revenues is due to GDP growth fueled by the cumulative effect of tax cuts.

CON$ will never admit the truth. They just make up crap.

GDP did NOT drop, therefore the loss of revenue was 100% due to St Ronnie's tax cut and the increase in revenue that followed the Reagan Recession was due to Reagan's record increase in taxes.


US Gross Domestic Product GDP History
Fiscal Years 1950 to 2010
Year
GDP-US
$ billion

1979
2562.2

1980
2788.1

1981
3126.8

1982
3253.2

1983
3534.6

1984
3930.9

1985
4217.5

1986
4460.1

1987
4736.4

1988
5100.4

Here is a list of Reagan's tax increases after his tax cut in 1981.

First term

1. Tax Equity and Fiscal Responsibility Act of 1982

2. Highway Revenue Act of 1982

3. Social Security Amendments of 1983

4. Interest and Dividend Tax Compliance Act of 1983

5. Deficit Reduction Act of 1984

Second term

6. Omnibus Budget Reconciliation Act of 1985

7. Tax Reform Act of 1986

8. Omnibus Budget Reconciliation Act of 1987

I see that neither one of you refuted any of the data during the dates I gave as fact. Where in the world did Reagan come in to my post. I linked to date fro 03 to 07. You gave no links to any of the garbage data you stated. Being blinded by partisan hatred is no excuse to make up numbers. My facts came directly from the govt you seem to hold in such high regard.

 

[edthecynic]

http://www.nytimes.com/2010/09/11/business/economy/11tax.html?src=busln

Amen.

But don't listen to me, I merely predicted nearly everything that would happen to our economy since 2007.

Listen to yourself, your politicos and your economists who were almost all wrong, wrong wrong!

And BTW, if you embrace the tax cuts you forfeit your rights to complain about the deficit!

Capiche?

While I don't agree with just tax cuts to stimulate the economy the facts have shown an increase in govt revenues from 2003 to 2006 (Bush tax cuts enacted). This refutes the left's claim that revenues decrease.
"Growth In Federal Tax Revenues From 2003 To 2006(Lower Tax Rates Increase Tax Revenues Collected)"
Growth In Federal Tax Revenues From 2003 To 2006(Lower Tax Rates Increase Tax Revenues Collected)

First of all, revenue fell after both Reagan's and Kennedy's tax cuts. And the increased revenue after Bush's capital gains tax cuts was from Speculators dumping their capital assets like real estate, flooding the market which eventually burst the real estate bubble, not from economic growth.

Total Federal Tax Collections (billions)

Year Constant (87 dollars)
---------------------------------------
1980 $728.1
1981 766.6 < Reagan tax cut passed in August
1982 738.2 < drop in total revenue
1983 684.3 < drop in total revenue
1984 730.4 < Reagan raises taxes
1985 776.6 < Reagan raises taxes again, 81 level recovered
1986 790.0 < Reagan raises taxes yet again
1987 854.1 < Reagan raises taxes some more
1988 877.3

Source - Internal Revenue Service.

Kennedy tax cuts

Federal Income Tax Collections (Constant dollars, CPI-U)

Year Receipts Percent change from previous year
--------------------------------------------------
1961 $138,069 ---
1962 150,567 + 9.0%
1963 155,375 + 3.2
1964 156,804 + 0.9 < tax cut takes effect
1965 154,475 - 1.5 < drop in revenue

Source - U.S. Office of Management and Budget, Historical Tables, Budget of the US Government, FY 1996. Dollar conversions made from CPI-U.

A little bit of economic literacy and understanding of history wouldn't hurt you.

Inflation was over 13% and the prime rate was over 20% when Reagan took office. The Volcker contraction of the money supply sent the country into recession to tame inflation. The drop in GDP reduced tax receipts far more than the beginning of the Reagan Tax cuts.

The subsequent increase in revenues is due to GDP growth fueled by the cumulative effect of tax cuts.

CON$ will never admit the truth. They just make up crap.

GDP did NOT drop, therefore the loss of revenue was 100% due to St Ronnie's tax cut and the increase in revenue that followed the Reagan Recession was due to Reagan's record increase in taxes.


US Gross Domestic Product GDP History
Fiscal Years 1950 to 2010
Year
GDP-US
$ billion

1979
2562.2

1980
2788.1

1981
3126.8

1982
3253.2

1983
3534.6

1984
3930.9

1985
4217.5

1986
4460.1

1987
4736.4

1988
5100.4

Here is a list of Reagan's tax increases after his tax cut in 1981.

First term

1. Tax Equity and Fiscal Responsibility Act of 1982

2. Highway Revenue Act of 1982

3. Social Security Amendments of 1983

4. Interest and Dividend Tax Compliance Act of 1983

5. Deficit Reduction Act of 1984

Second term

6. Omnibus Budget Reconciliation Act of 1985

7. Tax Reform Act of 1986

8. Omnibus Budget Reconciliation Act of 1987

I see that neither one of you refuted any of the data during the dates I gave as fact. Where in the world did Reagan come in to my post. I linked to date fro 03 to 07. You gave no links to any of the garbage data you stated. Being blinded by partisan hatred is no excuse to make up numbers. My facts came directly from the govt you seem to hold in such high regard.

Your HALF "facts" came from freerepublic who cited the CBO, so the CBO should be an equally good source if I use it also, so I don't want to see you saying the CBO is a bunch of Libs.

First of all, I did refute your "data" and Reagan came in when your fellow CON$ervative tried to salvage your argument with some typical made up crap.

And secondly, CON$ervative sources typically never give the whole truth. Your freepers left out what the CBO said about the increase in revenue up to 2007 and what would happen after 2007 and why. It happens to confirm exactly what I said in rebuttal to your HALF "facts."

No matter how many times I have shown the techniques the CON$ervative GOP think tanks use to deceive the gullible, you CON$ still swallow without question their cooked half truths every time.

Policy Points: Experts Agree That Capital Gains Tax Cuts Lose Revenue &mdash; Center on Budget and Policy Priorities

Cutting capital gains rates reduces revenues over the long run. That’s the conclusion of the federal government’s official revenue-estimating agencies, as well as outside experts and the Bush Administration’s own Treasury Department.

The non-partisan Congressional Budget Office (CBO) and the Joint Committee on Taxation have estimated that extending the capital gains tax cut enacted in 2003 would cost $100 billion over the next decade. The Administration’s Office of Management and Budget included a similar estimate in the President’s budget.

After reviewing numerous studies of how investors respond to capital gains tax cuts, CBO commented that “the best estimates of taxpayers’ response to changes in the capital gains rate do not suggest a large revenue increase from additional realizations of capital gains — and certainly not an increase large enough to offset the losses from a lower rate.”

The Bush Administration Treasury Department examined the economic effects of extending the capital gains and dividend tax cuts. Even under the Treasury’s most optimistic scenario about the economic effects of these tax cuts, the tax cuts would not generate anywhere close to enough added economic growth to pay for themselves — and would thus lose money.

While a capital gains tax cut can lead investors to rush to “cash in” their capital gains when the lower rate first takes effect, it does not raise revenue over the long run.
Especially when a capital gains cut is temporary, like the 2003 tax cut that Gibson cited, investors have a strong incentive to sell stocks and other assets in order to realize their capital gains before the capital gains tax rate increases. This can cause a short-term increase in capital gains tax revenues, as happened after the 2003 tax cut.

Capital gains revenues also increased after 2003 because the stock market went up. But the stock market increase was not a result of the 2003 tax cut, as a study by Federal Reserve economists found. European stocks, which did not benefit from the U.S. capital gains tax cut, performed as well as stocks in the U.S. market in the period following the tax cut.

To raise revenue over the long run, capital gains tax cuts would need to have extraordinary huge, positive effects on saving, investment, and economic growth that virtually no respected expert or institution believes they have. In fact, experts are not even sure that the long-term economic effects of these capital gains tax cuts are positive rather then negative.

One reason is that preferential tax rates for capital gains encourage tax sheltering, by creating incentives for taxpayers to take often-convoluted steps to reclassify ordinary income as capital gains. This is economically unproductive and wastes resources. The Urban-Brookings Tax Policy Center’s director Leonard Burman, one of the nation’s leading tax experts, has explained, “shelter investments are invariably lousy, unproductive ventures that would never exist but for tax benefits.” Burman has concluded that, “capital gains tax cuts are as likely to depress the economy as to stimulate it.”

 

[Oddball]

Over what time frame and by whose math?

How much did federal spending increase over the same time period?

BTW, you are aware that Ross Perot had noted numerous times during the 1992 campaign, that the debt was going to start an explosive upward climb after 2002, aren't you?

There have been several estimates of the cost of the Bush tax cuts. The base level is about $2 trillion. The $1.5 trillion came from an interview I read with a guy from the Cato Institute. The time frame is over 10 years, the duration of the cuts.

Perot's 1992 graphs were incorrect. The budget was in surplus in 2000. But very few 10 year forecasts are right.

Only because Perot's growth numbers were lower than what actually occurred, and the feds used accounting gimmicks that would've landed people operating out in The World under serious investigation, if not behind bars.

In any case, the only thing that costs anything is spending...Tax cuts are only "spending" if you presume the money belongs to you to begin with....It doesn't "cost" me anything to only empty only the teller drawers when I rob the bank, rather than hiting the vault, too.

 

[Dick Tuck]

Obama: If You Think We Can Cut Taxes For The Rich You Can't Add

[ame=http://www.youtube.com/watch?v=KZOoGo5u0FY&feature=player_embedded]YouTube - President Obama: Math Isn't There To Give Tax Cuts To The Rich[/ame]

 

[jeffrockit]

While I don't agree with just tax cuts to stimulate the economy the facts have shown an increase in govt revenues from 2003 to 2006 (Bush tax cuts enacted). This refutes the left's claim that revenues decrease.
"Growth In Federal Tax Revenues From 2003 To 2006(Lower Tax Rates Increase Tax Revenues Collected)"
Growth In Federal Tax Revenues From 2003 To 2006(Lower Tax Rates Increase Tax Revenues Collected)

First of all, revenue fell after both Reagan's and Kennedy's tax cuts. And the increased revenue after Bush's capital gains tax cuts was from Speculators dumping their capital assets like real estate, flooding the market which eventually burst the real estate bubble, not from economic growth.

Total Federal Tax Collections (billions)

Year Constant (87 dollars)
---------------------------------------
1980 $728.1
1981 766.6 < Reagan tax cut passed in August
1982 738.2 < drop in total revenue
1983 684.3 < drop in total revenue
1984 730.4 < Reagan raises taxes
1985 776.6 < Reagan raises taxes again, 81 level recovered
1986 790.0 < Reagan raises taxes yet again
1987 854.1 < Reagan raises taxes some more
1988 877.3

Source - Internal Revenue Service.

Kennedy tax cuts

Federal Income Tax Collections (Constant dollars, CPI-U)

Year Receipts Percent change from previous year
--------------------------------------------------
1961 $138,069 ---
1962 150,567 + 9.0%
1963 155,375 + 3.2
1964 156,804 + 0.9 < tax cut takes effect
1965 154,475 - 1.5 < drop in revenue

Source - U.S. Office of Management and Budget, Historical Tables, Budget of the US Government, FY 1996. Dollar conversions made from CPI-U.

CON$ will never admit the truth. They just make up crap.

GDP did NOT drop, therefore the loss of revenue was 100% due to St Ronnie's tax cut and the increase in revenue that followed the Reagan Recession was due to Reagan's record increase in taxes.


US Gross Domestic Product GDP History
Fiscal Years 1950 to 2010
Year
GDP-US
$ billion

1979
2562.2

1980
2788.1

1981
3126.8

1982
3253.2

1983
3534.6

1984
3930.9

1985
4217.5

1986
4460.1

1987
4736.4

1988
5100.4

Here is a list of Reagan's tax increases after his tax cut in 1981.

First term

1. Tax Equity and Fiscal Responsibility Act of 1982

2. Highway Revenue Act of 1982

3. Social Security Amendments of 1983

4. Interest and Dividend Tax Compliance Act of 1983

5. Deficit Reduction Act of 1984

Second term

6. Omnibus Budget Reconciliation Act of 1985

7. Tax Reform Act of 1986

8. Omnibus Budget Reconciliation Act of 1987

I see that neither one of you refuted any of the data during the dates I gave as fact. Where in the world did Reagan come in to my post. I linked to date fro 03 to 07. You gave no links to any of the garbage data you stated. Being blinded by partisan hatred is no excuse to make up numbers. My facts came directly from the govt you seem to hold in such high regard.

Your HALF "facts" came from freerepublic who cited the CBO, so the CBO should be an equally good source if I use it also, so I don't want to see you saying the CBO is a bunch of Libs.

First of all, I did refute your "data" and Reagan came in when your fellow CON$ervative tried to salvage your argument with some typical made up crap.

And secondly, CON$ervative sources typically never give the whole truth. Your freepers left out what the CBO said about the increase in revenue up to 2007 and what would happen after 2007 and why. It happens to confirm exactly what I said in rebuttal to your HALF "facts."

No matter how many times I have shown the techniques the CON$ervative GOP think tanks use to deceive the gullible, you CON$ still swallow without question their cooked half truths every time.

Policy Points: Experts Agree That Capital Gains Tax Cuts Lose Revenue &mdash; Center on Budget and Policy Priorities

Cutting capital gains rates reduces revenues over the long run. That’s the conclusion of the federal government’s official revenue-estimating agencies, as well as outside experts and the Bush Administration’s own Treasury Department.

The non-partisan Congressional Budget Office (CBO) and the Joint Committee on Taxation have estimated that extending the capital gains tax cut enacted in 2003 would cost $100 billion over the next decade. The Administration’s Office of Management and Budget included a similar estimate in the President’s budget.

After reviewing numerous studies of how investors respond to capital gains tax cuts, CBO commented that “the best estimates of taxpayers’ response to changes in the capital gains rate do not suggest a large revenue increase from additional realizations of capital gains — and certainly not an increase large enough to offset the losses from a lower rate.”

The Bush Administration Treasury Department examined the economic effects of extending the capital gains and dividend tax cuts. Even under the Treasury’s most optimistic scenario about the economic effects of these tax cuts, the tax cuts would not generate anywhere close to enough added economic growth to pay for themselves — and would thus lose money.

While a capital gains tax cut can lead investors to rush to “cash in” their capital gains when the lower rate first takes effect, it does not raise revenue over the long run.
Especially when a capital gains cut is temporary, like the 2003 tax cut that Gibson cited, investors have a strong incentive to sell stocks and other assets in order to realize their capital gains before the capital gains tax rate increases. This can cause a short-term increase in capital gains tax revenues, as happened after the 2003 tax cut.

Capital gains revenues also increased after 2003 because the stock market went up. But the stock market increase was not a result of the 2003 tax cut, as a study by Federal Reserve economists found. European stocks, which did not benefit from the U.S. capital gains tax cut, performed as well as stocks in the U.S. market in the period following the tax cut.

To raise revenue over the long run, capital gains tax cuts would need to have extraordinary huge, positive effects on saving, investment, and economic growth that virtually no respected expert or institution believes they have. In fact, experts are not even sure that the long-term economic effects of these capital gains tax cuts are positive rather then negative.

One reason is that preferential tax rates for capital gains encourage tax sheltering, by creating incentives for taxpayers to take often-convoluted steps to reclassify ordinary income as capital gains. This is economically unproductive and wastes resources. The Urban-Brookings Tax Policy Center’s director Leonard Burman, one of the nation’s leading tax experts, has explained, “shelter investments are invariably lousy, unproductive ventures that would never exist but for tax benefits.” Burman has concluded that, “capital gains tax cuts are as likely to depress the economy as to stimulate it.”

Blah, Blah Blah....nothing more than left wing "facts and figures". I guess you are one of those Libs that believe the recession is over. Face it, your guy Obama, (Big, Big Lib) simply does not know what he is doing. He is making a bad situation that Bush left us with much, much worse. You can't spend your way out of a recession but Obama's ego will not allow him to change his policies. He is a complete idealogue and governs that way. The economy is not recovering as his policies continue to destroy small business. You do realize that the "rich" the left hates and wants to "pay their fair share" are mostly small businesses which report their business income on their personal tax statements. If you believe that someone making $250,000 a year is "rich" and want to increase their taxes, you truly are misguided. Blindly following partisan politics is ignorant and not reality.