OPINION:
Now that focus groups have assured President Obama that use of the words “fair” and “fairness” endear him to the American people, we can expect to hear those words during the 2012 campaign almost as often as we heard “hope and change” during the campaign of 2008.
In case you missed it, Mr. Obama in his State of the Union address last month suggested that “fairness” should compel Congress to raise the tax rate on capital gains from 15 percent to 30 percent. Economists have assailed this as ridiculous because historical evidence overwhelmingly shows higher capital-gains taxes reduce government revenues, while reductions in the capital-gains tax generally have been followed by increases in government revenues.
During the 2008 campaign, Mr. Obama was confronted by the fact that higher capital-gains taxes generally do not increase government revenue. His response was that he knew that but would prefer fairness rather than revenue.
The president and his wealth-redistribution cohorts depend on uninformed constituents responding emotionally to their call for fairness. They know that many common folks are not able to differentiate between taxes on earned income and those on capital gains, nor do those same folks understand the importance of investment to the overall economy.
Raising capital-gains taxes helps no one and hurts everyone. The wealthy invest less because the reward for successful investment is reduced, stock values decline because of lower investment, retirement plans shrink in value because of the devaluation of stocks, less equity capital is available for new companies to start, fewer companies means fewer jobs and, finally, fewer jobs means lower taxes paid to the government.
More than Obamacare and the stimulus programs, raising taxes on investments is an assault on capitalism, which relies on capital investment to fuel the economy.
Once again, our president asks for legislation that would cripple our economy - all in the spirit of fairness and social justice. Just say no.
MIKE FERREER
Ponte Vedra Beach, Fla.
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