The vector will be capital-gains taxation, which is booming in the current recession, contrary to all economic logic. Surging capital-gains revenue helps explain why blue states such as California aren’t currently in the red. Minnesota’s and Washington’s governors are proposing higher capital-gains tax rates, the Journal reported this week, as are Democratic lawmakers in Connecticut. Capital-gains tax revenue should be highly pro-cyclical, rising when the economy booms and sagging during downturns. This was a practical incentive, although not always a strong or effective one, for lawmakers to care about the Main Street economy.

Source: Mint February 25, 2021 18:45 UTC