I'm sitting here next to the fireplace in a wool shirt and long pants soaking up the ambiance and warmth of a roaring fire. That's right, we just heard a "freeze" warning on the radio. In our home in the Villages that would mean covering up the citrus trees and some plants. Up North it means, should I winterize the freshwater system on the boat and confirm our flight to Orlando. Oh well, next Sunday its back to paradise, friends and neighbors care of Continental Airlines.

Perhaps Kahuna or another poster with financial and/or economic expertise can explain to me how Obama's 33% increase in capital gains and dividend taxes is going to help the economy and markets at this point in time. I admit being strictly an amateur investor with some retirement investment cliffhangers stubbornly clinging to the edge of the abyss. It occurs to me that the implications of a hike in the capital gains and dividend tax rate could be a sinister (remember Snidely Whiplash) if not disastrous force for already strained markets.

In the past, lowering the capital gains taxes created government revenue because investors regularly cashed in profits at lower rates filling government coffers and feeding the economy with big ticket purchases. If Obama is going to raise capital gains by 33% as he has stated, I would think one of three negative scenarios or combination of the these disincentives, plays out. First, investors in the markets at all levels will consider pulling out mostly or entirely before Obama gets in to capitalize on the obvious advantage. Result....market down. Second, investors stop taking profits resulting in less revenue opportunity for taxation reducing government receivables. Result, less revenue and consumption. Third, why would people make investments into the markets knowing the usurious rate of taxation on capital gains and dividends? Result.... market down.

Can anyone tell me what the upside of raising the capital gains tax is? McCain, love him or hate him is on the record as saying he will reduce capital gains to 7.5%. Whether he will actually be able to do that is questionable. All opposing perspectives and opinions are welcome.

I thought Peter Ferrara's representation of the Obama tax plan was interesting.

Mr. Ferrara, who served in the White House Office of Policy Development under President Reagan, works for the American Civil Rights Union and the Institute for Policy Innovation explains:

-- Obama proposes to increase the top individual income tax rate by 13% and the second individual income tax rate by 10%.

-- Obama proposes to increase the capital gains tax rate by 33%.

-- Obama proposes to increase the tax rate on dividends by 33%.

-- Obama proposes to raise the top payroll tax rate by between 16%-32%.

-- Obama proposes a new payroll tax on employers to help pay for national health insurance.

-- Obama proposes to reinstate the death tax, which is being phased out under current law, with a new top marginal tax rate of 45%.

-- Obama proposes tax increases for corporations as well, such as the windfall profits tax on oil companies.

-- Obama’s protectionist trade policies even suggest higher tariff taxes.

The Tax Policy Center estimates that Obama’s tax plan would raise taxes by $627 billion over 10 years.

Herbert Hoover Obama