30% Capital Gains Tax?

The Obama Administration is pushing for a "Buffet tax" which means that everyone needs to pay at least 30% taxes on their income per year. On the surface this sounds like a good idea in fairness to everyone. However, what this actually will do is to dry up investment money throughout our nation. If you are an investor and your capital Gains tax goes from 15% to 30% what would you do? Since you are not limited as to how you invest your money, you would simply take it out of the stock market and put it into rare paintings, or property of various kinds that might go up in value, and then you would put the rest in a savings account so you had access to enough money to live on. So, as an investor you aren't going to pay that extra 15% anyhow because you have hundreds of other ways to invest your money in a way in which it won't cost you an extra 15% per year on your income from your investments.

So, what happens? The money in the stock market dries up and so do the companies, especially the Blue Chip and newer companies that might need investments to grow. Other countries that might not tax at that rate might get the investors money rather than the U.S. and many other problems for American companies will automatically result from the changes in the way  smart investors invest their money. So, even though this is a fairness issue and I agree with that, the end result likely would be a disaster for businesses in America that need investors to buy their stocks to operate.

It is also important to understand that people from all over the world invest in the U.S. stock market and so you would also be potentially driving these investors away as well.