Thursday, January 03, 2008
Message to the Wealthy: The Democrats are Coming
An article today on Marketwatch is a warning to the wealthy to buy stuff now to avoid rising consumer prices and the dangers of a Democratic presidency.
Presidential candidates see domestic wealth increases as prime pickings for tax increases, meaning that all the wealth that has come the way of the rich may be reduced some.
Obama has a “Tax Fairness for the Middle Class” plan that calls for nearly doubling the capital-gains tax rate from 15% to 28%. Clinton, getting advice from Warren Buffett, is in favor of keeping an estate tax in place; the tax is due to expire in 2010, then return the next year in a former incarnation.John Edwards, too, wants an estate tax and has aggressively proposed repealing the Bush tax cuts for the highest-income households altogether. He also wants to close “unfair” loopholes like the tax breaks for hedge funds and private-equity fund managers and unlimited executive pensions—things the other candidates, too, have attacked.
All this means, if you are rich there’s a chance that more capital restrictions could apply in the future. Republican candidates, of course, are more forgiving and tax shy.
All of this also means that if a Democrat does take office next year, we could be seeing seed money for new ventures and development drying up along with a deepened recession and tightening job market. Look for that to happen within the first two years as first year tax increases are guaranteed with any of the Democrats. While I expect Obama or Edwards increases to be the kind that shock the markets, Hillary may have learned from her husband’s first term that baby steps are better when it comes to tax increases both economically and politically.
Again, one of the reasons that I like her as the best option from the left is that she probably learned the power of moderation when it comes to her more progressive instincts. It’s funny: I think her natural political instincts would be somewhere to the left of Obama, and that she really wishes she could shove a very aggressive agenda down our throats. I also believe that her political savvy would lead her to be much more of a centrist in the same way that Bill was and entirely willing to adopt some ideas from the right (like Bill did with welfare reform).
Comments & Trackbacks
And this is why I could actually consider voting for Hillary, as much as it pains me to say so. I also think that Hillary is just as concerned about her legacy as Bill was so I would expect a Hillary presidency to be remarkably centrist and cautious. Those normally aren’t qualities that I want from a President but she could very well be the lesser of two evils of the wrong candidate gets the GOP nomination.
Absolutely. While I’m planning to vote Republican, there are a couple situations where Hillary looks like the better choice. I never imagined that I would say that--and part of me really cringes when I think of Bill Clinton in the White House again--but if the Democrats win I know who I want that Democrat to be.
As long as people are buying things in anticipation of a Democrat in the Oval Orifice, picking up a few guns, especially eeeevil assault rifles, is always a good idea. Yeah I know, the Democrats are supposedly afraid of the electoral repercussions of passing a new AWB, but I wouldn’t take anything for granted.
I have to disagree, Jerry and David. She would get her 100 days of honeymoon, and she would shove her aggressive agenda down our throats, and anything bad that happened because of it would be blamed on the mess the previous Republican Presidency. And a gullible and compliant media would support and bolster that interpretation.
Identifying recession start/end dates ALWAYS get shifted so it falls on the Republican watch. Clinton gets the credit for ending the recession that stopped 6 months before he took office, and the 1999-00 recession is blamed on George W. Bush’s policies.
Which is why the idea of “well, I might as well vote Democrat because at least they’ll take the blame for nanny-state and economic downturn...” never pans out; the current ABC, NBC, CBS, CNN, Times, Newsweek, NYT, and MSNBC cohort makes certain Democrats rarely pay the price for being Democrats.
Would more taxes bother a person who would pay $4000 for a handbag that is just big enough to put in a lipstick?
I’m middle class and pay capital gains tax when I sell investments. How, exactly, does raising the capital gains rate help me again?
I’m confused.
If other middle class people don’t have investments, it’s due to ignorance or a need for instant gratification (such as the idiot I heard on the radio today taking the $1200 in her 401k account to pay for a vacation). That’s no reason to punish those of with the good sense to invest for the future.
If you are worth more than a $1 million, watch out for your heirs arranging your demise in 2010 before the return of the estate tax.
Andy, raising the capital gains tax does not help the middle class, but it plays to the ignorant with the class warfare rhetoric.
Virginia, I’m going to try to give you an answer tomorrow if I’m not all drugged up again. The short version, though, is yes, it does matter. And the definition of wealthy includes a wider group than you might imagine. “Wealthy” still won’t include me, but that’s no surprise…