Senator McCain is right
John McCain is proposing to cut the federal capital gains rate to 7.5% from 15%. Mr. Obama responds that no one has capital gains to tax. There are millions of California homes that could be for sale early if California would eliminate or reduce the capital gains rate of 9.3% to serve as an incentive to sell. Senator McCain is right that lowering the after tax return on capital still makes sense in a down market. Increased sales in upper middle to upper class neighborhoods would structurally increase property taxes. The current political focus is on the stock market meltdown. Upper-middle class homes are affected but not seriously by the subprime debacle. These are under-performing revenue assets. The combined state 9.3% and federal 15% capital gains need to be reduced to create a structural increase in property tax revenue here in California.