Foundation: John Edwards' Proposed Capital Gains Tax Increase Would Harm the Middle Class

The Americans for Prosperity Foundation released a statement on Thursday in which it said that Democratic Presidential candidate John Edwards would harm the American middle class, and not help the federal government one bit, if his proposed 28% capital gains tax bill were signed into law.

The current capital gains tax is 15%.

APF reported that in the last 26 years, it is shown that every increase in the capital gains tax has resulted in lost revenues for the federal government because they are taxing less money at a higher rate. When the capital gains tax gets raised, many people pull out of the stock market as a result. The last time the capital gains tax was increased, which was during the Reagan administration, the federal government's revenues from the tax declined by 44% over the next three years.

The APF also warns that nearly doubling that tax would devastate pension plans and personal investment portfolios that are intended to provide for their owners in their years of retirement.

The APF is a group that advocates smaller government and less government spending.

"John Edwards likes to talk a lot about how much he cares about the middle class, but the reality is that increasing the capital gains tax rate by 87% would smash the retirement nest eggs of millions of middle-income Americans, while simultaneously blowing a gaping hole in the federal budget," said Americans for Prosperity Executive Vice President Michelle Korsmo.

Edwards' proposed tax increase comes as the Democrat-led Senate is proposing the largest tax increase in America's history.

Critics of the Democrats' proposed taxes say that it seems to them that the party is more interested in posturing and making itself look like it's trying to reduce the privileges of the wealthy than it is in actually observing what works to the benefit of all Americans. They wonder why the Democrats, who call themselves in so many words the champion of the working and middle classes, are so ready to raise taxes when that only reduces the take-home pay of people in those classes while the wealthy just move their money to keep it tax-sheltered.

Political commentators have said recently that the Congressional Democrats are attacking Republican programs in almost every way as a means of removing Republican power. Tax cuts and tax breaks, including for the wealthy and big business, are standard Republican platforms. Democrats want to uphold their image as the "Robin Hood" party.

Democrats insist that there need to be tax raises to balance the federal budget, especially after the Iraq war, and that the increased revenues would go to benefit the middle class and the poor.

Source:
American Prosperity Foundation (PR Newswire), "Americans for Prosperity Says Edwards' Plan to Hike Capital Gains Taxes 87% Would Smash Middle-Income Retirement Nest Eggs, Bring in Less Money Than Current Lower Rate"