Dumas:Lowering Capital Gains Tax Bad Idea

HALT:HaltingArkansasLiberalswithTruth.com


This video clip gives 6 reasons why the Capital Gains Tax should be abolished

Ernest Dumas in his article “Tax work not wealth,” (Arkansas Times, Nov 25, 2010) asserts, “The (capital gains) tax rate was raised in 1976 under President Gerald Ford and economic growth accelerated. President Jimmy Carter cut the top rate from 39 percent to 28 percent in 1978 and economic growth slowed. President Reagan’s sweeping tax cuts in 1981 lowered the top capital gains rate again to 20 percent, which was followed by the deepest recession since the 1930s. Needing to rein in the growing deficit, Reagan restored the 28 percent rate on capital gains in the tax reform act of 1986 and the economy and hiring sharply expanded over the next two years.”

Sounds like disaster occurred after Bush lowered the capital gains tax. Let’s look at the facts.

I am responding to these liberal assertions with a portion from an article published January 29, 2007 called, “Ten Myths About the Bush Tax Cuts” by Brian Riedl. Riedl is the Grover Hermann Fellow in Federal Budgetary Affairs at the Heritage Foundation and Riedl’s budget research has been featured in front-page stories and editorials in The New York Times, The Wall Street Journal, The Washington Post and The Los Angeles Times.

Myth #4: Capital gains tax cuts do not pay for themselves.
Fact: Capital gains tax revenues doubled following the 2003 tax cut.

As previously stated, whether a tax cut pays for itself depends on how much people alter their behavior in response to the policy. Investors have been shown to be the most sensitive to tax policy, because capital gains tax cuts encourage enough new investment to more than offset the lower tax rate.

In 2003, capital gains tax rates were reduced from 20 percent and 10 percent (depending on income) to 15 percent and 5 percent. Rather than expand by 36 percent from the current $50 billion level to $68 billion in 2006 as the CBO projected before the tax cut, capital gains revenues more than doubled to $103 billion. Past capital gains tax cuts have shown similar results.

By encouraging investment, lower capital gains taxes increase funding for the technologies, businesses, ideas, and projects that make workers and the economy more productive. Such investment is vital for long-term economic growth.

Because investors are tax-sensitive, high capital gains tax rates are not only bad economic policy, but also bad budget policy.

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I have been profiling State Lawmakers and today is David Meeks. [16680_low.jpg]

About David Meeks

David has a rich Arkansas heritage. He is proud of the fact his mom, grandfather, and great grandmother were all born right here in Arkansas. David himself grew up near Springhill and attended school in Greenbrier. During his junior year in high school, his dad got a job which moved them to Florida. Even though he moved away, he never forgot his Arkansas upbringing and always considered Greenbrier to be his hometown.

Shortly after graduation from high school in 1990, David joined the Army and for the next 5 years proudly served his country. He spent a year in South Korea in 1991. After the year-long deployment in South Korea, he went to Ft. Drum, NY. During his time at Ft. Drum, NY, David took part in the Hurricane Andrew, Somalia, and Haiti Humanitarian Relief efforts.

After David received an honorable discharge from the Army in 1995, he attended college where he earned a Bachelor�s degree in Pastoral Ministries. While attending college, he taught and mentored children which is something he continues to do to this day.

After college, David took a position as an associate pastor and then worked for an inner-city charter school in Jacksonville, FL. During his time at the school, he worked with middle school children to overcome a myriad of problems and become successful high school students.

In 2003, David took a job working as a Customer Service agent with Blue Cross and Blue Shield of Florida. It was there he got an insight to the problems that our healthcare industry faced. Because of his hard work and leadership skills, David was promoted to work as a project manger. As a project manager, he was able to help improve business processes saving the company time and money.

Even during this time away from Arkansas, David would come back and visit often with his grandparents and relatives who lived in Faulkner County.

He eventually had the opportunity to return to Arkansas in 2008. It was a great decision as shortly after he moved back, he met his future wife, Naomi. They were married at Bible Baptist Church on February 14th, 2009. They currently reside in Conway and attend Bible Baptist Church. They are both active in the Children�s ministry.

CONSERVATIVE VALUES. CONSERVATIVE VISION.

The Better Arkansas Plan

1) Create Jobs by Cutting Taxes

2) Curb Spending and Government Growth

3) Protect States Rights

For more details and to see where David stands on the issues please visit the issues page.

Endorsements:

  • Arkansas Right to Life
  • NRA
  • Police Benevolent Association
  • State Senator Gilbert Baker
  • Dr Chuck Harding, Fmr Deputy Commander for Diplomatic Security Service, US State Department
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