Thursday, February 11, 2010

Obama != pro-business

Obama's claim that he is "pro-business" is ridiculous. Pro-business means being good to investors, bankers, and small businesses alike.

With regard to Investors, Obama has done nothing to reduce the taxes that are imposed on investors in the form of Capital Gains tax. Most economists would agree that a capital gains tax is bad for the economy. Investment is what spurs economic growth, and taxing the money received from investment reduces growth by reducing the incentive to invest.

Banks are vital to the economy and are hurting right now due to bad investments they made in mortgages. Mortgages are important to every home owner in America, and these banks were providing a service by securitizing them and selling them to investors. To make up for this bad investment, they must now replenish their capital stock any way they can. One way they are attempting to do so is by proprietary trading and market making. It is a more reliable source of profit right now than loans. As private companies banks have a duty to their shareholders to maximize profit.

Small businesses are hurting right now due to immense taxes that must be paid for each employee, such as social security, insurance, and other taxes. Small businesses employ more than half of the private sector workforce. To truly be "pro-business" and create jobs in this economy, Obama must reduce this burden.

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