Ed Morrisey at Captain’s Quarters has a post up about the Congressional Democrats and their determination to raise taxes any way they can, even if it brings our economy to a screeching halt. Here’s a link: http://www.captainsquartersblog.com/mt/archives/010322.php
The new tax attacks the engine of American economic growth: capital investment. These funds provide the funds that start businesses and create jobs. The lower tax on gains allows more money to stay in the economy, as investors can pursue greater risk when they keep more of the gains they earn. Reduce the earnings, and not only is there less to reinvest, it creates more hesitancy to risk what there is left.
Of course, the Democrats don't see that. They see an opportunity to raise revenue in the short term without considering the long term effects. The expansion of the last four years has taught them nothing. They want to start passing new top-down programs, and they need to start passing more confiscatory tax policies to fund them.
This is why elections matter. The Republicans certainly didn't cover themselves in glory on spending issues the past six years, but we're about to see Congress go sharply in the wrong direction. They will claim fiscal responsibility by passing more taxes to pay for their spending, which will make even more money available for earmarks, lobbyists, and the like. That's the real trap of government expansion -- it feeds on itself, and the money always runs short.
We have sixteen months of a Democratic Congress to endure. Hopefully they will leave a few dollars in our pocket by then, but at the rate they're going, it's looking grim.
There's a link to the Washington post article at the Captain's Quarters blog. Notice in the article the positive spin they give the new tax--that we're taxing CEOs at the same rate as other American workers.