    What do Senator Edwards and Congressmen Rangell, Wyden and Emanuel all have in common? They have all talked about increasing capital gain taxes on investment gains to as much as 35%!  Bloomberg news examines this issue, and makes an interesting point that the Democrats need, a “Rubin Reality Check”. Former Treausury Secretary Robert Rubin, with his Wall Street background, must have provided quite a balance to the “tax and spend” mentality of many Democrats in the 1990’s.  And Robert Novak takes a close look at Charles Rangel’s looming tax proposals in Rangel’s Tax-the-Rich Reform.
       In 2003 President Bush signed tax cuts into law that lowered the top tax rates on long-term capital gains and dividends from 20% to 15%, with several modifications over the years, even lower for the lower tax brackets. And in 2008, for taxpayers in the lower tax brackets, zero taxes may be due on long-term capital gains and dividends!  Those provisions are set to expire in 2010, and tax rates will increase once again. Many people speculate that taxes will be increasing starting in 2008 based on political rhetoric.  When I think of the years ahead and the topics of investing, capital gains and taxes, about the only thing I’m sure of under the Democrats leadership is that our taxes are going up.   Hopefully the Roth IRA will be protected from any tax law changes, as well as 529 plans for college savings. But for plain old capital gains and dividends, i.e. the profits we take on our taxable investments in stocks, mutual funds, etc. we are going to be paying a lot more taxes than the 15% or lower that we pay now.Â
    That just doesn’t sit well with me. I would much rather keep more of my investment gains, and decide personally where I’m going to spend my money, grow my business, and for what charitable cause or other programs I believe is appropriate.  With less money in my pocket, that is less to spend on my business, education needs, and charitable causes. Some people believe we should “tax the rich” to help those less fortunate. But I’m certainly not rich… neither are many other Americans who invest and make annual capital gains and dividends. Besides, the “rich” already pay the most taxes of anyone. I know there’s a balance we can achieve, but I think we must be careful to always cherish the spirit and constructive creativity of our citizens. Too much taxation and bureaucratic involvement is oppressive, rather than supportive.
When taxes are too high,
people go hungry.
When the government is too intrusive,
people lose their spirit.
Act for the people’s benefit.
Trust them; leave them alone.
                                   Lao-tzu
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