Couldn’t Help But Comment (042808, Morning)

The repeated flubs by the candidate I irreverently refer to as “Mr. BOOHOO-OUCH” (Barack O-bomba Overseas Hussein “Obambi” Obama - Objectively Unfit Coddler of Haters) on the effects of the capital gains tax consistently ignore the fact that when it has been lowered, tax revenues have increased. One specific is that the 1997 cut that gave rise to almost three years of very good economic growth caused tax collections to explode, but more importantly, was a huge factor in venture capital increasing by a factor of 7:

In 1995, the first year for which these data are available, just over $8 billion in venture capital was invested. Venture capital is especially critical to a vibrant economy because high-risk/high-return investment permits promising new businesses to blossom, rapidly spreading new technologies and new ideas into the marketplace and across the economy. Such investments, when successful, generate returns to investors that are subject primarily to the tax on capital gains. By 1998, the first full year in which the lower capital gains rates were in effect, venture capital activity reached almost $28 billion, more than a three-fold increase over 1995 levels, and by 1999, it had doubled yet again.

($28 billion x 2 = $56 billion, which is seven times greater than 1995’s $8 billion. — Ed.)

The explosion in venture capital activity cannot be credited entirely to the cut in capital gains tax rates, as the cut fortuitously coincided with technological developments that gave rise to the Internet-based “New Economy.” However, the rapid development and application of these new technologies could not have occurred at such a rapid clip absent the enormous investment flows made possible largely by the reduction in the capital gains tax rate.

Obama either doesn’t get that, or believes it’s less important than an abstract concept of “fairness” — economic growth be damned.

Update: Obama is now saying — “I’m mindful that we’ve got to keep our capital gains tax to a point where we can actually get more revenue.” There’s one way that happens, pal — LOWER it.

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John Stossel, in the Orange County Register (bold is mine):

And are we really experiencing a mortgage-default “crisis”? No. The Mortgage Bankers Association’s 2007 fourth-quarter survey reports that foreclosures came to 2.04 percent of all mortgages. Many of those were speculators seeking flip profits rather than homeowners losing a dream house. During the quarter, 0.83 percent of homes entered the foreclosure process. It may get worse – in March, “foreclosure filings, default notices, auction sale notices and bank repossessions rose 5 percent,” Reuters reports. But let’s keep things in perspective: Ninety-eight percent of borrowers are not in foreclosure. Only a small percentage of them are even late in payments.

Politicians love a “crisis.” John McCain, Hillary Clinton and Barack Obama all think that the government should bail out homeowners who can’t pay their mortgages. When they say the government should do this, they mean the taxpayers, including those who are paying their mortgages. They also think the government should regulate the lending and investment industries further.

Why?

Because “crisis” justifies making big government bigger.

“The taxpayers” also including those who are paying rent.

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The presidential candidate I irreverently refer to “JS3M3″ (John Sidney the Mad Maverick McCain III) has not been pleasing the people who are supposed to be his base lately. That would be conservatives, not Old Media.

But he got this right:

The GOP nominee-in-waiting rapped his Democratic rival for opposing his idea to suspend the tax on fuel during the summer. …..

“I noticed again today that Sen. Obama repeated his opposition to giving low-income Americans a tax break, a little bit of relief so they can travel a little further and a little longer, and maybe have a little bit of money left over to enjoy some other things in their lives,” McCain said. “Obviously Sen. Obama does not understand that this would be a nice thing for Americans, and the special interests should not be dictating this policy.”

Most spending on gas is a fixed cost, at least in the short run. The people who would benefit most from a summer bas-tax holiday would be those for whom gas is a higher pecentage of their total spending.