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Posted By: Jeff Lichtman

Al, the fact is that raising capital gains does not lead to greater revenue for the government. Obama was told this during one of the Democratic debates and simply ignored it. And taking from the rich through much higher tax rates in order to help the poor and middle class has seldom worked in practice. Reducing rates, on the other hand, does increase the share of taxes paid by the highest income-earning group. For example, in 1981, when the highest tax rate on the rich was 70% and the top capital gains tax rate was close to 45%, the richest 1% of Americans paid 17% of total income taxes. In 2005, with a top income tax rate of 35% and capital gains at 15%, the richest 1% of Americans paid 39%.