# What Would A 0% Capital Gains Tax Do To The US Economy (short and long term) **URL:** \ **Category:** Great Debates\ **Created:** [August 12, 2010, 3:06pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042 "2010-08-12T15:06:23Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [August 13, 2010, 2:08am UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/41 "2010-08-13T02:08:10Z")
> [@Dangerosa](#): > > > [@Little\_Nemo](#): > > > > Maybe you missed the part about a zero percent tax rate. It doesn’t matter how much capital gets shifted into investment - none of it will ever be government revenue. And it’ll be a double hit - zero taxation will draw capital from other areas that are taxable. > > > > As for the idea that investment equals job growth - cite? Trickle down economics (aka “voodoo economics”) doesn’t work. Plenty of businesses are increasing their profits by reducing their labor force or moving it overseas. > > The idea is that the rising stock market would increase consumer and corporate confidence. That would induce both to spend. For them to spend, their needs to be labor - that labor then becomes your tax base. > > i.e. and simplistically - Some daytrading yahoo makes $100 on Home Depot and decides to get her hair colored. That’s $100 in the pocket of the salon. That’s a colorist working for two hours. The colorist gets longer hours, she then feels like she can splurge on dinner out - that’s money in the hands of the restaurant and the waiter and the food suppliers. The profits from that money are taxed as income tax. The state gets sales tax on the transactions. The daytrading yahoo tells her friends how easy it is to make $100 in the stock market. Her friends start daytrading, the market goes up. Interesting theory. What happens when those friends start losing money in the stock market? As I asked earlier, what happens when the market goes down? Does lowering the tax rate mean the markets will continue to go up for ever? ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [August 13, 2010, 2:57am UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/42 "2010-08-13T02:57:10Z")
> [@emacknight](#): > > > [@Dangerosa](#): > > > > The idea is that the rising stock market would increase consumer and corporate confidence. That would induce both to spend. For them to spend, their needs to be labor - that labor then becomes your tax base. > > > > i.e. and simplistically - Some daytrading yahoo makes $100 on Home Depot and decides to get her hair colored. That’s $100 in the pocket of the salon. That’s a colorist working for two hours. The colorist gets longer hours, she then feels like she can splurge on dinner out - that’s money in the hands of the restaurant and the waiter and the food suppliers. The profits from that money are taxed as income tax. The state gets sales tax on the transactions. The daytrading yahoo tells her friends how easy it is to make $100 in the stock market. Her friends start daytrading, the market goes up. > > Interesting theory. What happens when those friends start losing money in the stock market? > > As I asked earlier, what happens when the market goes down? Does lowering the tax rate mean the markets will continue to go up for ever? No, the bubble bursts, we hit a recession and life sucks again…its likely to be a short term patch. Unless, as Voyager said, you could deflate slowly, which isn’t likely happen. This isn’t a GOOD idea - but its not an unlikely consequence of a 0% short term capital gains rate. BTW, this is basically the stock tech bubble of the 1990s, although that wasn’t fueled by 0% tax rates, but by hype over the “new economy.” ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [August 13, 2010, 1:59pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/43 "2010-08-13T13:59:22Z")
> [@](#): > > The idea is that the rising stock market would increase consumer and corporate confidence. That would induce both to spend. For them to spend, their needs to be labor - that labor then becomes your tax base. > > i.e. and simplistically - Some daytrading yahoo makes $100 on Home Depot and decides to get her hair colored. That’s $100 in the pocket of the salon. That’s a colorist working for two hours. The colorist gets longer hours, she then feels like she can splurge on dinner out - that’s money in the hands of the restaurant and the waiter and the food suppliers. The profits from that money are taxed as income tax. The state gets sales tax on the transactions. The daytrading yahoo tells her friends how easy it is to make $100 in the stock market. Her friends start daytrading, the market goes up. Why would they be induced to spend? Spending often incurs a sales tax. Maybe the day trader and the colorist will both just park their money in some tax haven like stocks. There’s no logical reason to tax wages and not tax investment income - both are important sectors of the economy. The reason for it is that people who live on investment income tend to have more influence on the government. That’s why investment income is already being taxed at less than half the rate of salaried income. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 13, 2010, 2:50pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/44 "2010-08-13T14:50:46Z")
> [@emacknight](#): > > I saw a video of Newt Gingrich proposing this last night on The Daily Show and it got me thinking. > > Currently short term capital gains (in the US) are taxes like income, with a lower rate for long term holdings. > > Help me work through this thought experiment: Let’s say Newt gets his way, and starting in Jan 2011 the government sets the capital gains tax to zero. What’s next in the short term, and how does that play out 5/10 years from now? > > And if the tax rate is zero, what happens to capital loses? Would/could they still be used to offset gains? The most pronounced effect is going to be a recharacterization of all sorts of ordinary income into capital gains income. Its already happening but if the rate were in fact zero, people would reorganize their lives so that as much of their income was capital gains as possible. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 13, 2010, 2:55pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/45 "2010-08-13T14:55:10Z")
> [@Dangerosa](#): > > > [@gonzomax](#): > > > > No more investment in business whatsoever. The rich are sitting on nearly 2 trillion dollars now and are not investing. Giving them more will just make them into Scrooge McDucks and they can swim in cash. > > Because “the rich” believe that Obama is going to raise capital gains on a market that is already stagnant. Why would you put your money in the market now? What incentive do “the rich” have to invest currently? If you think the value of assets are going to go down, you don’t care what the tax rate is, you hold onto cash. If you think the value of assets are going to go up, the difference between a 15% capital gains rate and the 20% capital gains rate we had under Clinton is marginal. I find it fucking mindblowing that we have close the lowest tax rates in our history and some people are STILL bitching and moaning. There is no satisfying these folks, I don’t see why we even try. Do what is good for the country (which soemtimes means cutting taxes) and ignore these guys entirely. ---
**Author:** ![Tom\_Tildrum](https://avatars.discourse-cdn.com/v4/letter/t/e95f7d/32.png) [@Tom\_Tildrum](https://boards.straightdope.com/u/Tom_Tildrum)\ **Post date:** [August 13, 2010, 3:02pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/46 "2010-08-13T15:02:42Z")
> [@Little\_Nemo](#): > > There’s no logical reason to tax wages and not tax investment income - both are important sectors of the economy. The reason for it is that people who live on investment income tend to have more influence on the government. That’s why investment income is already being taxed at less than half the rate of salaried income. It’s not unreasonable to believe that the Laffer curve would skew lower for investment income. For the well-off, investment income is more likely to be discretionary, so they can leave it locked in if the tax on capital gains goes too high, more easily than wage-earners can decide to avoid wage income. So a lower rate on capital gains may actually be revenue-maximizing (while still seeming unfair). ---
**Author:** ![DanBlather](https://avatars.discourse-cdn.com/v4/letter/d/f4b2a3/32.png) [@DanBlather](https://boards.straightdope.com/u/DanBlather)\ **Post date:** [August 13, 2010, 3:11pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/47 "2010-08-13T15:11:24Z")
> [@Dangerosa](#): > > > [@gonzomax](#): > > > > No more investment in business whatsoever. The rich are sitting on nearly 2 trillion dollars now and are not investing. Giving them more will just make them into Scrooge McDucks and they can swim in cash. > > Because “the rich” believe that Obama is going to raise capital gains on a market that is already stagnant. Why would you put your money in the market now? What incentive do “the rich” have to invest currently? Do you have any idea how silly that is? So the rich, afraid that capital gains taxes may go up, are investing their money in bonds (or something) paying normal income tax rates on it because someday capital gains tax may go back up to a level that is still lower than regular rates. **Gonzomax** got it right. We have an oversupply of capital right now, and and not enough on the demand side. Continuing to push demand side remedies is insanity. And, as other posters have noted, investors would unload all their capital gains to take advantage of not having to pay taxes on it. The resulting fire sale would cause prices to spiral downward. At least in the past, when you temporarily reduce tax rates, the frenzy of selling generates a short term burst of capital gains taxes before it settles back down. ---
**Author:** ![DanBlather](https://avatars.discourse-cdn.com/v4/letter/d/f4b2a3/32.png) [@DanBlather](https://boards.straightdope.com/u/DanBlather)\ **Post date:** [August 13, 2010, 3:14pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/48 "2010-08-13T15:14:09Z")
> [@Dangerosa](#): > > > [@Little\_Nemo](#): > > > > Maybe you missed the part about a zero percent tax rate. It doesn’t matter how much capital gets shifted into investment - none of it will ever be government revenue. And it’ll be a double hit - zero taxation will draw capital from other areas that are taxable. > > > > As for the idea that investment equals job growth - cite? Trickle down economics (aka “voodoo economics”) doesn’t work. Plenty of businesses are increasing their profits by reducing their labor force or moving it overseas. > > The idea is that the rising stock market would increase consumer and corporate confidence. That would induce both to spend. For them to spend, their needs to be labor - that labor then becomes your tax base. > > i.e. and simplistically - Some daytrading yahoo makes $100 on Home Depot and decides to get her hair colored. That’s $100 in the pocket of the salon. That’s a colorist working for two hours. The colorist gets longer hours, she then feels like she can splurge on dinner out - that’s money in the hands of the restaurant and the waiter and the food suppliers. The profits from that money are taxed as income tax. The state gets sales tax on the transactions. The daytrading yahoo tells her friends how easy it is to make $100 in the stock market. Her friends start daytrading, the market goes up. Looks like someone just got the comic book course in economics. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 13, 2010, 3:21pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/49 "2010-08-13T15:21:08Z")
> [@IdahoMauleMan](#): > > > [@gonzomax](#): > > > > No more investment in business whatsoever. The rich are sitting on nearly 2 trillion dollars now and are not investing. Giving them more will just make them into Scrooge McDucks and they can swim in cash. > > Right. Of course they are doing that. > > Because swimming in cash earning 0.5% (a negative real return, after taxes and inflation) is what they would prefer to do, rather than invest it in new growth opportunities where they could earn much, much more. > > As expected, tax policy driven by class envy combined with a total lack of understanding about how jobs and wealth are created in a free society. I suggest you apply for a staff position in the White House, for Nancy Pelosi or Barney Frank immediately. > > The vast, vast majority of early stage startup money goes to pay salaries of employees. It varies by industry, but is usually in the 50-80% range. Which is then taxed as W-2 income (as well as FICA tax). By sitting on their money, potential investors are actually denying the government revenue via different means. An early stage investor sinks 100 grand or so into a startup company with (1) a large expectation that he will lose it all and (2) a small expectation that he may make 5x, 10x or 100x his return. VC and PE firms use a portfolio approach to even out these returns over a large number of bets. The returns are generally taxed as capital gains. > > But it would actually take a basic grasp of how capital is formed, businesses are started, jobs are created and living standards are improved to understand that fact. Until then, we’ll let Marxist ideology drive the discussion, I suspect. I’m going to guess that I have a pretty firm grasp on how capital is formed, especially venture capital and I gotta tell you that taxes are generally the least of their concerns. The reason that venture capital has dried up recently has NOTHING to do with taxes, it has everything to do with the economic outlook. If this was 1998, we would still have had the Dot com boom even if capital gains were taxed at 28% instead of 20%. Sure they would like to keep more of their money but they would rather get taxed 28% on something than 28% on nothing. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 13, 2010, 3:24pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/50 "2010-08-13T15:24:08Z")
> [@xtisme](#): > > [QUOTE=BobLibDem] > Why shouldn’t they? Tax rates are lower than even in the days of Saint Ronald of Reagan. The truth is that the wealthy don’t need incentive, they need customers. Are you talking only about capital gains tax rates or overall tax rates, when you say they are lower than in the days of ‘Saint Ronald of Reagan’? -XT [/QUOTE] Probably both. I think there was one year during reagan’s term when income taxes were lower than they are today and capital gains taxes were never this low before. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 13, 2010, 3:25pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/51 "2010-08-13T15:25:48Z")
> [@IdahoMauleMan](#): > > > [@Whack-a-Mole](#): > > > > Err…if you made the Capital Gains tax 0% seems to me there would be a huge incentive to unload your investments and lock in your realized profits. > > > > There is a “lock in” effect when there is a capital gains tax. Make it go away and, if I were rich and in an uncertain economy, I’d strongly consider taking the money and run. > > Someone has to buy the investment, when you are ‘unloading’ it. They will have their own considerations re: the capital gains tax when they buy it. So if the capital gains has opposite effects on the buyer and the seller then are you saying that the effects offset each other or are you saying whatever makes tax cuts look good? ---
**Author:** ![MOIDALIZE](https://avatars.discourse-cdn.com/v4/letter/m/e274bd/32.png) [@MOIDALIZE](https://boards.straightdope.com/u/MOIDALIZE)\ **Post date:** [August 13, 2010, 3:26pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/52 "2010-08-13T15:26:56Z")
Perhaps if we lower the capital gains tax to zero and fan the wealthy with palm fronds, they will deign to invest in business and job growth at the behest of the Magical Confidence Fairies. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 13, 2010, 3:32pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/53 "2010-08-13T15:32:58Z")
> [@Sam\_Stone](#): > > If you want to know why businesses aren’t investing, why don’t you just ask them? … > It’s all about uncertainty. .So back on point for this thread: The Democrats should leave capital gains rates where they are, and promise not to raise them. They don’t need to reduce them further at this point. Just tell the market what they’re going to be, and stick to it. I didn’t think the Democrats were being that coy. I thought it was pretty damn clear that theywere going to preserve the Bush tax cuts for families making less than 250K and letting the rest of them expire. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 13, 2010, 3:44pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/54 "2010-08-13T15:44:33Z")
> [@IdahoMauleMan](#): > > 1. Keeping long-term cg taxes at 15% permanently (and getting investors to believe that) and not playing politics with ‘special cases’ like PE firms. I presume you are talking about the “carried interest” provisions taht are workign their way through congress right now? Do you even understand what the issue is? If you manage my money for me and i tell you, “hey Ida, I will pay you 2% of assets undermanagement and 20% of any gains” is the 2% compensation? Is the 20% compensation? If so then why the hell should you be able to pay capital gains on it jsut because your income derives from income that is capital gains in my hands? Oh wait, there is a technical rule (that was intended for use by oil wildcatters) that says that you should actually be treated as my partner and therefore you get flow through treatment of the income you derive from teh fund. Well there is also a technical rule that says that gifts are nto taxable and get my gift to my waittress at the end of every meal always gets taxed as ordinary income. BTW, if certainty is really all you need then why the heck do you care if there is a permanent special rule for hedge funds and private equity funds? Its not playing politics, its about tax equity. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 13, 2010, 3:45pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/55 "2010-08-13T15:45:57Z")
> [@Dangerosa](#): > > > [@Voyager](#): > > > > Only if the ROI of potential investments without a capital gains tax is above a given threshold, and with it is below that threshold. Since investments people are flocking to now, like T-bills, are way under any reasonable ROI level, I doubt this is the case. it seems to me that investors are seeing relatively low levels of return coupled with high risk, and are staying away. The capital gains tax cut wouldn’t impact risk at all. Putting the money to increase employment directly, and thus demand, would see to work much better. > > I don’t know. I think you’d get a LOT of churn from idiots daytrading. Buy 100 shares of Home Depot at $27.61. Wait for it to go up a buck, make $100 tax free. People are always looking for an easy buck - and you just gave them $100 instead of $60. That’s a significant difference in return for risk - and daytrading has a whole different risk profile than sensible investing. > That would drive the market up, the fundamentals still would be the same, but a whole lot of yahoos trade on trends. They are sheep. > > (Oh, did that sound judgmental…) > > As I said, I don’t think its a good idea, but I think you’d move money and that money would create more money. Not from sensible investors. And it would only last for as long as the shell game continued. And some people would get rich. But most of us would end the shell game worse off. You notice how daytraders buy and then sell? Their buy order drive the amrket up adn then their sell order drives it down. Daytrading doesn’t really drive markets. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 13, 2010, 3:51pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/56 "2010-08-13T15:51:35Z")
The beauty of this mess is the corporations offshored so many of the good jobs, that the wealth of the consumer has plummeted. You can not count on the consumer because he is stagnating or facing a scary future. We need to create jobs in America not China. But if short term profits are enhanced by brooming American labor, it will be done. It used to be that the buying power of the American consumer ran the products that were made. Now we look at the market in China and India for the future. We have to build cars they want. Consumer confidence is down. Hiring would change that but it is not in the cards. There is no room for favoring America in corporations. They are international and we are just another market. We better get used to it. we are on a steady downslide . ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [August 13, 2010, 3:54pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/57 "2010-08-13T15:54:38Z")
> [@Damuri\_Ajashi](#): > > You notice how daytraders buy and then sell? Their buy order drive the amrket up adn then their sell order drives it down. Daytrading doesn’t really drive markets. A lot of people who think yahoo investment strategies like daytrading (and daytrading is the simplistic side of this) contributed to the tech bubble of the 1990s would disagree with you. Sheep like behavior drives markets. Hype drives markets. Short term gain drives markets. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 13, 2010, 4:12pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/58 "2010-08-13T16:12:29Z")
> [@DanBlather](#): > > > [@Dangerosa](#): > > > > The idea is that the rising stock market would increase consumer and corporate confidence. That would induce both to spend. For them to spend, their needs to be labor - that labor then becomes your tax base. > > > > i.e. and simplistically - Some daytrading yahoo makes $100 on Home Depot and decides to get her hair colored. That’s $100 in the pocket of the salon. That’s a colorist working for two hours. The colorist gets longer hours, she then feels like she can splurge on dinner out - that’s money in the hands of the restaurant and the waiter and the food suppliers. The profits from that money are taxed as income tax. The state gets sales tax on the transactions. The daytrading yahoo tells her friends how easy it is to make $100 in the stock market. Her friends start daytrading, the market goes up. > > Looks like someone just got the comic book course in economics. I don’t know what you are being snarky about - this is exactly what happened during the bubble - in fact both bubbles. People who feel rich - either from their stock investments or real estate - spend more. It is simple psychology. When I was a theoretical millionaire during the tech bubble I did it also. The problem is when people get into debt doing this and then see their theoretical wealth vanish. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [August 13, 2010, 6:37pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/59 "2010-08-13T18:37:34Z")
> [@MOIDALIZE](#): > > Perhaps if we lower the capital gains tax to zero and fan the wealthy with palm fronds, they will deign to invest in business and job growth at the behest of the Magical Confidence Fairies. What are you - some kind of socialist? Anyone can tell you that the rich are the best stewards of capital so the smart thing to do is give them more money. Zero taxation isn’t enough - we need to give them matching funds. For every dollar they invest, the government should pay them a dollar. This must be true because all of the wealthy pundits who appear on television shows owned by multinational corporations agree that the economy benefits from policies that favor the wealthy and corporations. ---
**Author:** ![IdahoMauleMan](https://avatars.discourse-cdn.com/v4/letter/i/71c47a/32.png) [@IdahoMauleMan](https://boards.straightdope.com/u/IdahoMauleMan)\ **Post date:** [August 13, 2010, 6:55pm UTC](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042/60 "2010-08-13T18:55:26Z")
> [@Little\_Nemo](#): > > > [@MOIDALIZE](#): > > > > Perhaps if we lower the capital gains tax to zero and fan the wealthy with palm fronds, they will deign to invest in business and job growth at the behest of the Magical Confidence Fairies. > > What are you - some kind of socialist? Anyone can tell you that the rich are the best stewards of capital so the smart thing to do is give them more money. Zero taxation isn’t enough - we need to give them matching funds. For every dollar they invest, the government should pay them a dollar. > > This must be true because all of the wealthy pundits who appear on television shows owned by multinational corporations agree that the economy benefits from policies that favor the wealthy and corporations. Who is giving them what money, exactly? Please explain. [Previous page](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042.md?page=2) [Next page](https://boards.straightdope.com/t/what-would-a-0-capital-gains-tax-do-to-the-us-economy-short-and-long-term/550042.md?page=4)