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Posts Tagged ‘2008 presidential election

Obama’s Proposed 87% Increase to Capital Gains Tax Exactly What the Economy Doesn’t Need…

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Senator Barack Obama has proposed moving the Capital Gains Tax from its current 15% rate to 28%, an increase in the tax rate totalling a shocking 86.6%. It couldn’t come at a worse time.

While trillions of dollars in capital has disappeared from the markets, adding a dis-incentive for investors to return to the markets is a sure-fire strategy for lengthening the current downturn. And when companies cannot readily access capital, they can’t build new plants, take on R&D expenditures or do all those other things that lead to the people on “Main Street” gaining access to new jobs.

What’s worse is that Mr Obama does not seem to understand the fundamental difference between a tax rate and tax revenue: changes in tax rates lead to changes in the way people behave. For example, Presidents Ronald Reagan, Bill Clinton and George W. Bush all cut the Capital Gains Tax. Under Clinton, it was 28%. Under George W. Bush it sits at 15%. After each of these tax cuts, tax REVENUE actually increased.

The kind of increase Mr Obama proposes therefore has a dual negative effective with no discernible upside: investment capital stays out of the market and government revenues from the Capital Gains Tax shrink.

So why would Senator Obama consider such an ill-fated move? He thinks it’s “fair”.

You can see Mr Obama’s explanation in the video below – note Jim Lehrer, the moderator, attempt three times to explain to Senator Obama that tax revenue decreases as the Capital Gains Tax increases.

Written by westcoastsuccess

October 31, 2008 at 9:24 am

Obama’s Fundraising: “Of The People”? Not Quite…

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Barack Obama, perhaps giving a shout-out to law firms with lobbying ties, among his biggest contributors?

Barack Obama, perhaps giving a shout-out to law firms with lobbying ties, who are among his biggest contributors?

The New York Times has an interesting article on the source of much of Barack Obama’s campaign funds, and while the candidate likes to portray his record campaign fund raising as originating from individual contributors via the internet, that’s not quite the case. In fact, one-third of Mr. Obama’s campaign money comes in the form of big-money donations. That trumps Mr. McCain’s haul from similar sources.

As is common in political fund raising, people with useful and broad connections are used to “bundle” contributions from individual sources. The individuals, in turn, are granted significant access to the candidate. Mr. Obama, the Times reports, has been courting these influential big-money fundraisers since at least 2004, travelling the country to make contact and schmooze the right people. This is a man who has been meticulously planning his ascension for a very long time.

So what’s the real source of Mr. Obama’s record funds? According to the New York Times’ investigation, two-thirds of the big-money contributions come from the following special interests: law firms (many of which have ties to influential lobbying groups), securities and investment firms, entertainment interests and real estate interest groups.

It’s not surprising to see law firms ponying up for a Democratic candidate: the vast majority of political contributions from law firms goes to Democrats, who oppose tort reform and caps on punitive damages, etc.

Big-money, of course, always tries to back the winning horse: it’s less about political philosophy than it is about having influence with the decision maker, regardless of political stripe.

It does, however, make for an interesting discussion as to who is the more “independent” of the two candidates…

You can access the New York Times’ article here.

Written by westcoastsuccess

August 5, 2008 at 3:17 pm