JOHN LINDER: “When Jimmy Carter cut the capital gains tax in 1977 there were $50 million in venture capital pools. The revenues from…”

“When Jimmy Carter cut the capital gains tax in 1977 there were $50 million in venture capital pools. The revenues from the capital gains category increased in every succeeding year until 1986, when the venture capital pools had more than $5 billion in them. That, frankly, is what funded the increase in jobs during the Reagan revolution. When you raised the revenues in the capital gains category, immediately the revenue fell off the table because it is too expensive to transact business when the Government takes its large share out. We know there is somewhere between $6 trillion and $9 trillion in this country being held by mom and pop stores and farmers, and just people who would like to sell their assets. There are $6 to $9 trillion being held captive by the high cost of government that would become transactions that would increase revenues dramatically in the capital gains category, so the scoring system used by the CBO, the system is wrong, and we would have more revenues than we ever dreamed.”