Wednesday, May 10, 2006
LIBERALS AT IT AGAIN WITH NATIONAL DEBT
The liberals would have you believe that because of President Clinton's leadership skills, that the national debt actually decreased. Well perhaps, we did collect more tax revenue durnig those treacherous eight years of Clinton's presidency. I have a few points for people to ponder:
During this time period, the Congress came up with a plan whereby traditional IRA's could be converted to Roth IRA's, and the tax could be spread out over four years. This was because of that artificial economy called the Dot Com boom, where stocks were trading at 200 times earnings. Some companies actually had no earnings, but it did not matter because the momentum investors bought these loser stocks like there was no tomorrow. So here you have it, investors retirement accounts were at such high amounts that many people were the new jet setter millionaires or they were well on their way to that status. The theory was pay your taxes now, and let your account grow to another cool million in a Roth IRA and owe no additional taxes when you retire.
Well, we all know what happened when the bust happened and stocks took a nose dive. The IRS and the states that taxed came out smelling like a rose, but here were all of the investors who had paid taxes on perhaps million dollar accounts, but their new fangled Roth IRAs were only worth maybe $200,000, if they were lucky. Now there were many people that may have converted only $100,000, but those accounts fell accordingly.
Then another fact about the booming pre Y2K years was that the mutual funds that held these same stocks in taxable accounts (not deferred) had the same explosive gains. Now these gains were distributed in mutual fund accounts in the form of capital gain distributions, and taxpayers were taxed during these years at much higher capital gain rates than we have in place today. And then, for those investors that sold their stocks in taxable accounts with gains, those gains were also taxed. Just remember that the Clinton era reaped hefty returns for the United States Treasury at the expense of investors who are now left with devalued investments, and the liberals have a lapse of memory of just who paid all of the taxes on these investments!
So when you hear that national debt debate that will take place in 2008, you will know that the liberals are spinning the facts. I will give Clinton credit because he did come up with an unusual use for cigars, but he did nothing to help my investment account nor did he solve the national debt problem.