The vast majority of middle class who own stock pay no tax on gains accrued by those stocks because they are in retirement accounts where the gains are retained and not taxed until withdrawn. Nonetheless, Republican rhetoric led those people to think they were being done a huge favor to have "capital gains taxes" reduced.
Paul Krugman has a post today that spells out just where that "Ownership Society" has led us. It deserves a lot wider audience that just a few obscure blogs. I'm going to present his post in full. The emphasis is mine.
The new Survey of Consumer Finances shows an increase in family net worth between 2004 and 2007 — but estimates, based on stock and housing prices, that all of that gain and more has been wiped out since then. Adjusted for inflation, families are poorer now than they were in 2001.
It’s worth pointing out that with this release, yet another pillar of the what-me-worry school of economics has fallen. You may remember that a few years ago there was a lot of talk about how only bubbleheads paid attention to our low, low savings rate, because the truth was that Americans were getting steadily wealthier thanks to rising asset values.
Not so much, it turns out.
This rounds out the full scope of the Bush Administration disaster.