Rattner and Morning Joe Wrong on Capital Gains Taxes
It was disappointing to see MSNBC’s Uncle Morning Joe Scarborough reject the mantra of JFK and other bipartisan leaders on the benefits of lower capital gains tax rates to investment and the economy. Analyst Steve Rattner pulled no punches in alleging that capital gains are the culprit behind the nation’s income gap.
Here’s my take.
Indeed, the growing income inequality is a legitimate concern. The issue is why? Many respected economists attribute it to global labor markets, the U.S. is no longer the dominant economic power, education is in decline, and our government’s fiscal policies are a train wreck and the real culprit in our income divide–not capital gains tax rates. Can anyone say with a straight face really say that an unemployed Detroit auto worker lost his job because of capital gains tax rates. Rattner, for one should know better than all as President Obama’s former automobile czar.
Economic growth is the cure to income inequality. All economists agree that the US is suffering from a tremendous lack of saving and investment. Our global competitors are smart in taxing tax saving and investment less harshly. Let’s generate economic growth first and then debate how that wealth should be distributed. Rattner should explain to the unemployed or less fortunate how a higher capital gains tax rate is going to generate a job for them.
As Uncle Joe said there is a long history of strong bipartisan support for lower capital gains tax rates. If Joe wants to throw them overboard and go with Rattner’s point of view then fine, I will stick with JKF and Reagan.