Saturday, July 4, 2015

Willis Hart Idiotic Capital Gains Tax Trickle Down Stoogery

The wealthy-worshiping stooge Willis Hart, in a recent commentary on his Libertarian blog, claimed (in regards to the economic conditions under President Bill Clinton), that "The economy was poised for a recovery in 1993 and if anything the tax hikes retarded it". Then he adds that that "the economy didn't really start to explode until the President and Congress passed the capital gains tax cut in 1996".

And, if you dare disagree with Willis? Well, that's likely because "simple minds have a tendency to seek out simple explanations (those that buttress their narrative)".

So... Willis is arguing in favor of the debunked trickle down (AKA Supply side) economic theory [1]? A theory that Reagan's Director of the Office of Management and Budget, David Stockman, admited was "a Trojan horse to bring down the top rate" (total bullshit used as an excuse to lower taxes on the wealthy, in other words).

That Willis is making this argument is strange, given the fact that he's spoken in FAVOR of increasing the capital gains tax in the past.

Willis Hart: Under my tax proposal [there would be] a 40% top tax rate of everything over $400,000 a year [and] a doing away of the special consideration for capital gains... (1/22/2012 AT 7:01pm).

Why the hell was Willis arguing for doing away with the special consideration for capital gains, if, when it was cut - by Newt Gingrich and Erskine Bowles (Bill Clinton's White House Chief of Staff at the time) - the result was economic prosperity?

The economy "exploded" when this tax was cut Willis sez. Still he wished to raise it (and by quite a bit) back in 2012?

And, no, Willis has NEVER authored a commentary proclaiming that he has rethought his previous position. Not a single post exists on his blog that says he changed his mind in regards to the capital gains tax. Not one that says it should stay the same nor one that says it should be lowered.

Talk about a "simple mind".

In any case, the fact is that the cutting of the capital gains tax rate has been the largest single contributor to income inequality [2]. The rich did very well as a result of this tax cut, and (as a result) the stock market did well. But when the stock market does well that does not mean the economy is doing well, given the fact the wealthiest 5% of US households own 70% of the stock, while 47% of Americans do not own any stock at all [3].

When the stock market is doing well we know the rich are doing well - but that's about it. Cutting the capital gains tax rate is actually BAD for the rest of us (as it increases inequality). And the inequality thing also destroys the "trickle down" argument, I think. When the rich do better the rich do better. The wealth does NOT trickle down - inequality increases.

But Willis, given the fact that he is a wealthy worshiping stooge, almost certainly views a stock market that is doing well as indicative of how the economy is doing for average Americans. And now he has apparently reversed his previous position.

That, or the simple-minded stooge just doesn't realize that saying "the economy didn't really start to explode until the President and Congress passed the capital gains tax cut in 1996" is a pro-trickle down argument.

[1] The 1 percent are parasites: Debunking the lies about free enterprise, trickle-down, capitalism and celebrity entrepreneurs (excerpt) The rich don't generate jobs. Rising tides do not lift all boats. And they probably built that with government help. (4/11/2015 Salon article by Andrew Sayer).
[2] Capital Gains Tax Cuts "By Far" The Biggest Contributor To Growth In Income Inequality, Study Finds (article excerpt) Capital gains and other investment income was taxed as regular wage income from 1986 until 1996, when the capital gains rate was reduced. It was further reduced as part of the Bush tax cuts, and over the last decade, it has reversed the equalizing effects of taxes and allowed for massive income gains for the wealthy that translated directly into increased income inequality... (2/20/2013 ThinkProgress article by Travis Waldron).
[3] That "the wealthiest 5% of US households own 70% of the stock" is an estimate based on 2010 figures (the Salon article this info comes from quotes economist Edward N. Wolff at New York University and says the estimate is based on "recent market developments").(Stock ownership: Who benefits? by Stephan Richter of The Globalist. 9/13/2013).

OST #54

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