Capital Gains Cut

I understand that conservatives take the view that cutting capital gains tax rates will produce substantial long-term growth benefits. Consequently, whatever the question, conservatives think the answer is cutting the capital gains tax. Still, it’s crucial to recognize what a lousy stimulus this is:


On top of being ineffective as stimulus, such a cut is, as Faiz Shakir observes, strongly regressive in its distributive impact. Basically we can choose between methods that will be effective stimulus (boosting incomes for all) and somewhat egalitarian in their impact, or else the conservative alternative which gives us less stimulus but more inequality. This is the sort of mentality that leads to the outcomes Larry Bartels has observed in which trends in growth and inequality are strongly tied to the ideological orientation of the White House.