Alan Greenspan ... told me of his belief that the correct tax on capital gains is zero. His position, which he has since made parenthetically to the banking committees of this body and the other when testifying on monetary matters, is that a tax on capital gains is a tax on the national standard of living. My epiphany was completed a few weeks later, in a conversation with Ted Forstmann, who may well be the most successful entrepreneurial financier of our time. It was Forstmann, now a man of immense wealth who began his career with nothing more than a good education at Yale and a trust fund that provided him $500 a month, who let me in on a secret. Men of wealth, he told me, are not interested in a lower capital gains tax, because their gains are behind them. The people who benefit most from a lower capital gains tax, he said, are those who have no wealth, but aspire to it. Independently of Greenspan, Forstmann told me the correct tax on capital gains is zero. What we are talking about here is the essence of capitalism, which is why this has become the defining economic issue of the Republican Party.
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