To borrow a phrase from Ronald Reagan, President Biden has never found a tax hike he didn’t like. After the rollout of his recent package to increase taxes on corporate income, corporate international profits, and individuals’ income, last week he trotted out a near 100% increase on taxes for capital gains.
Talk about a growth and job killer! Even Richard Rubin, former Clinton Treasury Secretary, wrote “a significant tax increase on capital gains could pose a dilemma for Democrats.” But I don’t hear any Democrats raising objections. They like to tax anything that moves.
The most important reason to stick with low rates on capital investment is to encourage saving and investment. No less than President John F. Kennedy said, “The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital from static to more dynamic situations, the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth of the economy.”
Instead of heeding JFK, President Biden has ceded tax policy to Pelosi, Schumer, Warren and Sanders.