It was eerily awkward to hear President Obama’s promise at the State of the Union address earlier this year to eliminate all capital gains taxes on investment in small business – and then see virtually no reporting of this commitment. After all, he had never promised to lower any taxes on those making more than $250,000; indeed, all he had promised was to reverse the Bush 41 tax cuts and increase taxes on the rich.
Maybe the liberal media did not want to support such a tax cut by reporting it so that specifically the general public and small business employees could hold the President to his promise. Who knows, the liberal media could be frightened that the public might like what they see and start demanding business friendly policy. And maybe, by contrast, the conservative media did not report it because they did not believe what he was saying. They must have no way to navigate through the fog from empty speech after empty speech.
Well, both sides would be right, because in his budget released less than a week later, the President committed to RAISING capital gains taxes on those making more than $250,000 from 15% to 20%, with no hint of any reduction of the existing rate on those making less. Of course, doing anything to the capital gains tax for those under $250,000 is more or less irrelevant, since most venture capital investing is done by wealthy individuals.
The question should be: how much is this going to slow the economy down? One can only remember the effects of the luxury tax in the early 1990s that was levied on items that our government thought only the rich would buy. In other words, if you were wealthy enough to buy it, Uncle Sam wanted to figure out a way to capitalize on it as well. However, many companies in the luxury markets were hit extremely hard. Uncle Sam had to realize that this tax was doing more harm than good and repeal this tax. What is happening now isn’t much different. Doesn’t this administration realize that we need high growth business investment? I don’t see anybody else doing it.