Heck, I'll jump into this. The Democrats are wanting to raise the corporate and personal cap gains tax possibly to 25-30%, apply protectionist policies to "preserve American jobs" and potentially abandon NAFTA in order to pressure the other countries to strengthen its labor and environmental provisions.
Obama continually has said he wants everything to be fair. And the money these hedge funds and private equity groups are making is not fair to everyone else. Well, private equity firms are taking substantial risk in order to make their money. They participate in a very important facet of the economy...funding entrepreneurs. There are so many more small businesses than larger ones in America. And they employ millions of people. If you raise the taxes and make it harder to get a reward for the risk you're taking, the seed capital will dry up. As a result, less jobs will be created for new businesses. Larry Kudlow makes a great point that you cannot have capitalism without capital.
Furthermore, Charles Gibson pointed out at the April 16th Democratic debate, raising the cap gains tax has actually led to a reduction in revenues the gov't collected. And each time it has been lowered it has led to an increase. On the flip side, there is the argument that the lower cap gains tax is a only short term benefit and not a long term one. Ok...whatever. What I’m lacking is finding a solid reason in this current economic climate to raise them.
What I do think could be more damaging would be the protectionist policies Hillary and Obama are considering. Like restricting free trade agreements. In this current globalization of economies, now is not the time to put up barriers or apply tariffs. NAFTA has not hurt our economy...it's helped create more jobs than it has lost. Yes, certain sectors of the economy like manufacturing have been hit. But this was inevitable due to our inability to remain competitive.
I remember when John Kerry wanted to allocate a substantial amount of money to get back the textile jobs that were lost to China. Little did he know there was no way we could get them back. It was impossible. Chinese labor was too cheap. So cheap that India was losing its textile jobs to China as well!
It's hard to point to a good solution on that, but, our manufacturing sector is still one of the best in the world. Maybe all those recalls in China will facilitate a resurgence to go back to America pay a premium and get high quality products that are not going to be recalled b/c of lead paint, counterfeiting or worse.
In my opinion, the Democrat's economic policies are economically counter productive. Although Hillary and Obama may seem like they are "behind the American worker" and making it "fair" for everyone, the ramifications of these policies if they were passed would have a severe negative economic effects and create a worse scenario as a result.
And please everyone... prove me wrong. Am I missing anything?