Donald Lambro

In the political world we live in, this kind of rhetoric is known as class warfare, pitting one income class against another. It is also sheer demagoguery.

Obama loves playing this attack game and you can bet he will use it to the fullest extent against Mitt Romney if he wins the Republican presidential nomination.

But the history of capital gains taxes in recent decades reveals that presidents in both parties have cut its tax rate to increase capital investments in the economy and boost growth.

In 1997, President Clinton signed a Republican tax cut bill that slashed the capital gains tax rate from 28 percent to 20 percent. His critics in his party's extreme left wing said it would benefit the wealthy and the lost tax revenue would drive up the deficit.

On the contrary, Clinton's capital gains tax cut fueled an investment boom in the technology sector and the rest of the economy, taxable capital gains nearly doubled over the next three years that led to a budget surplus. Notably, as a result of an explosion in new jobs, unemployment fell below 4 percent

Clinton never mentions his capital gains tax cut in his speeches about his stewardship of the economy, or in his latest book about how to grow the Obama economy and create jobs.

President Bush, too, cut the capital gains tax in his 2003 tax reform, reducing it to 15 percent. Between 2002 and 2005, capital gains reported as income shot up by 154 percent.

"Capital gains tax receipts also far outpaced the [tax] revenues that the government's static models predicted. Between 2003 and 2007, actual tax receipts exceeded expectations as income," writes Stephen Moore, a tax cut crusader on the Wall Street Journal's editorial board.

Despite all the evidence that a low capital gains tax rate boosts economic growth and raises tax revenue, Obama is stubbornly sticking to his failed class warfare economics and wants the capital gains rate raised to 20 percent or higher.

Newt Gingrich is proposing that the tax on dividends and interest be eliminated -- a good idea, but its stands no chance of passing Congress.

Romney is playing it safer. He wants to make the Bush individual tax cuts permanent, reduce the corporate rate to 25 percent, but eliminate the capital gains tax for people making less than $200,000 a year.

Wealthier people in the upper six and seven figure tax brackets are doing okay in this economy, he says, but those in the middle class brackets need to be encouraged to save and invest more.

In one stroke of his agenda pen, Romney robs Obama of the issue he craves most: to attack him as being out of touch with lower income Americans, favoring the rich over the middle class.

It's going to be politically difficult for the president to say Romney favors the rich when he calls for cutting taxes on Americans earning below $200,000, the very middle class income bracket that Obama says he wants to protect from higher taxes.

Donald Lambro

Donald Lambro is chief political correspondent for The Washington Times.