The Homa Files

Answer: Based on history, aggregate tax revenues go down.

If you run into President Obama, whisper in his ear, please.

* * * * *

Remember this exchange, from a 2008 primary debate, between Obama and ABC News’s Charlie Gibson:

Gibson: You have . . . said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, “I certainly would not go above what existed under Bill Clinton,” which was 28%. It’s now 15%. That’s almost a doubling, if you went to 28%. But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20%.

Obama: Right.

Gibson: And George Bush has taken it down to 15%.

Obama: Right.

Gibson: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28%, the revenues went down.

So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

Obama: Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.

WSJ : Best of the Web,  ‘The Bush Tax Increase’ , August 31,2010
http://online.wsj.com/article/SB10001424052748703467004575463772860827634.html?mod=WSJ_Opinion_MIDDLETopOpinion

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