John Edwards has an economic plan. This sort of populism always seems to resonate with people when the general mood is pessimistic, but ultimately, it’s a terrible idea. A few of his points certainly seem like good ideas:
- Repealing the Bush tax cuts for the most fortunate families, who make more than $200,000 a year.
- Ending the abuse of foreign tax havens.
- Closing the hedge fund and private equity loopholes.
I think a substantial number of both liberals and conservatives would agree with those three points. Likewise, many economists think the economy would function much better if people saved more, so encouraging more savings wouldn’t be a bad idea, either.
The rest of the plan is not so impressive. The keystone of the plan involves doubling the rate of taxation on capital gains. If Edwards doesn’t think that would have far reaching negative implications for the economy, he doesn’t understand even the most basic principles of economics. Lower returns to investment yield less investment, resulting in less entrepreneurship and a weaker, slower economy. Likewise, caps for executive pensions would be likely to reduce tax revenue, and would also do exactly zero good for the working class. Yes, brilliant plan, Mr. Edwards. Let’s hope the other Democrats come up with something better.