Categorical Aperitif

WOW. My instincts tell me it could win the Democrats votes if they had the b*lls to embrace it in the face of the screams of "Marxism!!!" that get flung at any attempt to realign tax policy to favor workers rather than owners. But hey, maybe they could shield themselves with the mantle of St. Reagan:

The Tax Reform Act of 1986 was President Ronald Reagan's last fiscal legacy. It showcased his deep belief in trickle-down economics, cutting the top rate on personal income nearly in half.

But Reagan also signed off on a longtime liberal goal: equal taxes on income from work and income from wealth. The bill raised the tax on long-term capital gains from 20 percent to 28 percent, the same top rate that applied to ordinary income. No longer would gains made on Wall Street be taxed at a lower rate than wages on Main Street.

Reagan hailed the bill as "a sweeping victory for fairness." A generation later, with the fierce urgency of now, President Barack Obama should bring back Reagan's liberal breakthrough.

The president knows we've been falling away for the longest time. Listen to this from the Tax Fairness Plan posted on Obama's web site during the 2008 campaign: "For decades, America has been victim to an anti-tax sentiment that has led to tax cuts that favor wealth, not work."

Nothing favors wealth, not work, more neatly than the tax break on capital gains. The first break came from President Clinton, who lowered the tax on long-term gains to 20 percent. President Bush cut it again, to 15 percent, little more than half the rate paid by middle-class Americans on their wages. Bush's action pushed the rate to a 70-year low; it's now at 77 years and counting, going back to 1933.

The Bush tax cuts are due to expire at the end of the year, which would return the capital gains rate to 20 percent. Timid, Mr. President, turn it up a notch, and lead us to the Reagan path.

// posted by nash @ 12:52 PM