Can you explain what benefit raising the capital gains tax would have for the country?

So lowering the rate led to a frenzy of investment in shaky securities that eventually collapsed, and that is a good thing?

More of something is not necessarily a good thing. Personally, I'll take slow, dependable growth over rapid, unstable growth. I should add that no empirical evidence exists validating a lower capital gains tax as a means of job growth, so even if investment was up it wouldn't mean there would be more jobs. If the economy is only better for a few thousand investors instead of millions of middle-class Americans, what good is it in the first place?

Edit*

Believe what you want, I'm not going to twist myself into a knot trying to convince you. Tell me this, though: What good was all that growth if we lose it all every 5 years or so? Shouldn't we discourage bad, risky investment and support the kind that doesn't force the FDIC to shell out trillions of dollars to insure some banker's stupid decision?

.com boom

2002, 2004, 2008

The writing is on the wall.

final edit*

you missed a few steps, the most crucial being the part where the banks began selling these loans back and forth through bundles that weren't regulated or even monitored. As this progressed, often securities would be made to insure the originals - making million-dollar investments appear out of thin air. investment companies did little to regulate themselves or to make sure their products were of any real value before passing them off as gold to their customers (sometimes knowing they were a bad bet). If you honestly believe that the entire crisis was spurred by the loans Fannie and Freddie and Fannie and Freddie alone then you are deluding yourself. Just research Mortgage backed securities and learn how they are traded - 99% of the time these securities were private investments made by private companies, although some of their 'toxic assets' were indeed from bad government inspired loans the heart of the problem still rests in how we allow our federally insured banks to operate.

We would have not needed a bailout if we had barred the banks WE insure from betting on risky investments. Any bank that takes deposits should not be allowed to risk their entire holdings.

You or Charlie have your facts mixed up.

You collect capital gains taxes when when the capital is *sold,* not when it is *bought.* So lowering the rate actually made people sell their investments and take money OUT of the economy. They did that to lock in the low rates which they expected would rise.

If you raise rates, some people would do the same thing (sell) to get the current rate of taxation. But raising the capital gains tax would raise revenue in the very near future, and it would accomplish that by taxing the people most able to afford a tax hike. And except for a brief sell off, it would not affect the overall level of investment.

We should simply eliminate the distinction between short term and long term capital gains so that they are all taxed as ordinary income.

Update; Then I think the point you are making is very wrong. Investors will invest in whatever they think is profitable whether you tax their profits at 15% or 30%. No investor in his right mind would pass up $100,000 in profit because he had to pay $30,000 of it to the government. That doesn't make sense. And capital gains revenue does *not* increase as a result of the rates being lowered. It increased under Bush and Clinton because that was during a historic upswing in stock valuation that ended with the dot com bubble. That should be obvious.

higher gains taxes gives america lower income in the long run. investors will find something else to do with there money, its killed Canada's home market for toronto, ontario simple because its not worth buying anymore. why risk money in stocks when the returns are low for the average investor, that would cause stocks to fall as investors flee. high gains tax causes negative effects, raising income tax is a different matter.

edit: they are also ways out of some of these gains taxes

You are not taxed on money you invest so your premise is false, any money put back into a business or used to buy stocks is not taxed

Edit: I know exactly what they are you premise is a higher tax will stop investment, the tax does not effect you when you invest, know what you speak. Even with a higher rate you will still make more then just putting it in savings

The intended benefit would be to discourage short-term investments and encourage long-term investment...