This is the most descriptive way I have to show you. Skip to 3:13 in the video.
Basically, the person asking the questions at the debate asks Obama if he would raise the capital gains tax. Obama has said before that he would, but not beyond the 28% that existed under Bill Clinton. However, the questioner goes on to say that Bill Clinton dropped the rate to 20% in 1997, and then that Bush dropped it to 15% (where it currently stands), and
in each instance, the government revenue from the tax increased, the government made more money by lowering the tax.
And, when the tax was originally increased in the 1980's, government revenue went down. In addition, 100,000,000 (1/3 of the population) people in our country own stock in these companies and would lose money.
How does this work exactly? I'll tell you. Capital gains are profit made by the exchange of capital, the means of production. The exchange of this ensures that the economy is running as efficiently as possible because those who are inefficient will be bought out of the market by the laws of competition. It also provides the means for entrepreneurs to get into the market and make a difference by either being productive and contributing to the economy, or by failing and getting bought out.
And when the economy is good, the government makes more money from the taxes that it does implement. And when the economy is bad, they make less money, even if they take a higher percent.
So basically, the economy is hurt to the point where
the government makes less money from a higher tax.
What does this mean to Obama? Well, he says he wants to finance healthcare and invest in education and infrastructure. Well, do you see something not making sense here? If the government made more money, there would be more to invest in healthcare, education, and infrastructure.
Maybe you're thinking "Hey, Obama's a smart guy (he was the editor of the
Harvard Law Review after all), why would he support doing this? The answer that Obama gives us is "
for the purpose of fairness." You've probably heard his line about how Warren Buffet's secretary pays a higher tax than he does, and that doesn't sound very fair. However, Buffet spends a smaller percent of his income on himself, and he invests more of it in the economy and it benefits everyone that way by stimulating economic growth. Does it make more sense now?
The real reason why he's supporting this? He's really supporting this because he wants votes. He wants white, working class votes that would otherwise go to Hilary, and by saying he wants to tax rich people he gets their favor. But do you really think that they would rather have everything be fair, as opposed to having a better life style. I think not. "Socialism is misery shared by all," said Churchill, and
this is socialism in its egalitarian essence. In the end, Obama is just a populist pandering for votes so that he can run the country for the next 4 years, and the worst thing is, he'll probably carry out this plan in hopes that he'll get 8 years instead. You might think we're in a recession now (even though we are not), but just wait, and watch what will happen if this guy gets elected. Everyone will lose. The government, the taxpayers, the rich, and the poor. All of them. This is what we have to hope for.