Friday, September 26, 2008

Suspend Capital Gains Tax to Help in Bailout?

So today I came across some rather shocking news, to say the least. Apparently, John McCain, who can't be bothered with a presidential debate while the economy is in "turmoil" (because we all know we want a president who will not multi-task), spoke up, mentioning a counter-proposal that had been offered up by some conservative House Republicans that would "suspend capital gains tax for two years and provide tax incentives to encourage firms that buy up bad debt," but McCain would not discuss specifics of the plan.

Excuse me? Suspend capital gains tax? For those of you that fail to understand what the capital gains tax is, let me spell this out for you - Warren Buffett (widely regarded as one of the premier investors of the world) bought up $5 BILLION worth of Goldman Sachs earlier this week - well, with the suspension of any kind of capital gains tax, if that Goldman Sachs stock goes up - say to a net of $6 Billion for Mr. Buffett - he could sell all his stock in the firm and earn ONE BILLION DOLLARS - TAX FREE! So basically, anything earned through investments (and keep in mind that, under current conditions, losses in investments can be offset with capital gains as well anyway - essentially, those gambling in the stock market can offset their losses and have the government pay for their losses in the markets, so long as they have capital gains to cover this loss) in the stock market will be FREE of government charge - completely TAX FREE! The absurdity of this concept cannot be understated.

So I'll say it again, excuse me? How is suspending the capital gains tax going to help ANYONE in America that is middle class and losing their homes? So is this yet another case of the rich getting richer? I cannot imagine the rationale behind this concept as incentive to help the economy - you know, all the little people that are struggling to just get by.

And it leads me back, again, to what I feel the absolute best scenario is - suspend taxes for ALL - suspend the taxes on the homes that people are fighting to continue to afford (thanks to the increases in property taxes due to the over-inflation of home values). This way, everyone benefits, not just the corporate fat cats of Wall Street. (see my earlier blog on the subject here:

If the government truly desires to help, they certainly need to do something that will benefit everyone - not just those that created this mess. No sense in letting them continue to lead extravagant lifestyles while the rest of us suffer. Some things just aren't fair - and if the government passes a bill suspending capital gains tax, then we have seriously been let down by our government - doing nothing for the people.

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