Obamanomics: Still Flawed

Recent posts on this blog have commended the Obama administration for actions related to immigration, Cuba, and asset forfeiture.

President Obama’s pending State of the Union address marks the end of the streak.

Of particular note, he plans to propose raising the capital gains tax as a way of paying for various spending proposals. The justification for raising taxes on “folks like me who don’t need them” is that you create a rising tide lifting all boats.

Allegedly, the tide is lifting, as we’re in an economic “recovery” and unemployment is low. Yet median income has fallen 4% and labor force participation has also tumbled during President Obama’s tenure. This despite the fact that all of the major economic policy initiatives Obama ran on in 2008 became law.

With that track record, can President Obama’s proposal for increasing capital gains taxes really be trusted to deliver the intended effect? Or would the economy be better served if the government cut capital gains taxes?

The good news is that a capital gains tax hike will be DOA with Republicans in charge of Congress.



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