Capital Gains Tax Bullsh$# Deconstructed

Well, it appears that at the debates, Charlie Gibson echoed the latest right wing talking point/lie, that recent cuts in the capital gains tax rate have increased revenues, and that tax increases cut revenues. (I must have missed this because I found the debates too painful to watch).

This, along with the assertion that people making $200,000/year (the top 3%) are somehow middle class show why one should not put innumerate idiots in positions of authority in journalism.

Saying that tax cuts in capital gains increase revenue is like saying that running a year long sale in a store will increase profits.

What does happen is that one the eve of a change in the capital gains tax, you have accelerated (in the case of a future tax increase) or deferred (in the case of a future tax cut) profit taking. This is a one time per tax change effect.

It's exactly like a store sale. It produces a temporary effect, and any attempt to use it to guide long term fiscal policy is dishonest.