I have sent the following email three times since the election to Representative Elect Tim Walberg who represent my district in Michigan and as of yet have not received a response. Because of this I have decided that Tim Walberg doesn't have the balls to support his own ideas. If he ever sends a response I will happily print a retraction.
Dear Representative elect Walberg;
I did not vote for you and as a Democrat and small business owner I find your policies troublesome. While viewing your web site recently I noticed in your section on Jobs and Economic Growth under the On the issues heading you would like to eliminate capital gains tax. I fail to understand how this promotes Jobs or Economic Growth. The current recession is hitting middle and lower class Americans hardest yet only 2% of stocks are owned by Americans making under $100,000 per year. Conversely 66% of the wealth earned by people making over $1 million per year already comes from the stock market. By advocating for an elimination of capital gains tax you are suggesting that either you have not done your research on this particular topic or you are for a redistribution of wealth to the richest Americans from the middle class. I hope for your sake it is the former rather than the latter.
The standard claims seem to be that either the rich create jobs or that taxes on capital gains stifles investment. If the first claim was true then the unemployment rate would be dropping like a rock right now since the rich have never been richer, taxes have never been lower, and business has never had more cash lying around. If the rich truly created jobs these three factors would be the legs which this claim stands on and yet unemployment remains at 9.6%. Unfortunately the trickledown theory which I assume you subscribe to only works when consumer confidence his high and unemployment is low. On the second point, history suggests otherwise. The government subsidies any loss I might incur as a stockholder and the rate of return in the stock market is higher on average than you can get from a bank so unless the taxable rate on capital gains surpasses that of the standard income tax the rich will continue to invest. The current capital gains tax rate of 15% is one of the biggest reason that the top 400 wage earners in American pay an average tax rate of 16.6% as reported by the IRS in a 2007 report. This is also why when Bill Ford Jr. recently started taking a salary again from Ford he only took a $4 million salary and $12 million in stock options. For every $100,000 he takes in stocks he cuts his taxable income by $20,000. If you got your way he would get 75% of his earnings tax free.
I would be very interested in understanding why you think eliminating capital gains tax fits with job creation or economic growth. My guess is you will produce nothing more than the standard Republican talking points and spin doctored slogans which are meant to rally the simple minded to fight against their own interests and support those of the big un-named donors that helped you win election this November. Perhaps I’m wrong and you actually have some substance behind your policy but I’m guessing you won’t even respond to this email because it would expose the lack of knowledge you and your staff posses on your own agenda.
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