Capital Gains

Apparently after the debate in PA, not a single one of Obama’s advisers had the guts to teach him a few things or have him memorize a few quotes that might make sense as it concerns the capital gains tax.

OBAMA: Well, but what I’ve said is, I certainly would not raise it higher than it was under Ronald Reagan. But the fact is, is that I’m mindful that we’ve got to keep our capital gains tax to a point where we can actually get more revenue.

But that’s not something that’s going to affect the average person with a 401(k). When people start talking about how, well, there are millions of Americans who own stock, most of them own stock in 401(k)s that — where their taxes are deferred and they pay ordinary income taxes when they finally cash out.

He certainly is not the guy to be telling us how Mr. McCain is no economist!!

uhoh. JK thinks the interview went smoothly for Obama.

4 thoughts on “Capital Gains

  1. That is just frightening – can he be THAT out of touch with the “common man”????!!!!

  2. I do think Senator Obama did very well in that interview. That doesn’t mean that there were not a few places I winced — and this was one.

    Larry Kudlow has stats on the amount of cap gains taxes paid by sub-100K filers, and the facts do not line up with Obama’s assertions.

  3. The WSJ Ed Page takes him to task on his comments today:

    It is true that withdrawals from 401(k)s are taxed at ordinary income rates. That does not mean that the stock holdings in tax-deferred mutual funds are somehow fenced off from rising and falling values in the market. If investors see an increase in capital gains taxes in the offing, even to 20% from 15%, many will cash out before the new rate goes into effect. Unless Senator Obama can guarantee that the economy will be in a strong growth spurt when he imposes a higher capital gains tax rate, it’s likely that share prices will fall, causing a decline in the value of the 401(k)s held by average Americans.

    Indeed, Mr. Obama should reconsider his belief that capital gains are mostly the province of the wealthy. Millions of middle-class Americans do in fact realize investment gains annually. In 2005, according to IRS data, 47% of all tax returns reporting capital gains were from households with incomes below $50,000, and 79% came from households with incomes below $100,000.

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