Will You Be Better Off In Four More Years?

Now that President Clinton has won a second term, B.E.'s economists assess whether African Americans will cross the bridge to a more prosperous 21st century or get taken for a ride

dream at times seems very much within reach. “I think we’re doing OK, but you can never be totally financially prepared,” she says cautiously.

Compared with his wife, David feels “very optimistic” about the future. Although a registered Republican, he believes the country as a whole has prospered over the last several years, and that blacks have enjoyed some of that prosperity. “The question that’s always asked is, ‘Are you better off now than you were four years ago?’ I’m happier.”

So what would David like to see from a second Clinton administration? For starters, he’d like to see the economy continue to grow while interest rates remain low. But more specifically, he thinks an adjustment in the capital gains tax, which now stands at 28%, would do a great deal to help small business growth.

Dole campaigned on a platform that would have cut this tax in half, while Clinton has kept mum on the issue, so far. David says that most of his clients are small start-ups that rely heavily on capital from private investors. Investors would be more willing to risk their money if there was a lower capital gains tax because they would have less tax liability when cashing out.

“Even if it was cut to 20%, that would help. But right now, a lot of people are holding on to their funds because the tax liability is so great,” he says.

Also, as their family grows, so does the Fears’ concern about the quality of public education. “If we had confidence in the school down the block, we could send our children there instead of exploring other options,” says David. “Clinton needs to concentrate on fixing all schools, instead of focusing on just a few under a school choice banner.” He is excited about Clinton’s proposed ed
ucation tax break, giving families a $1,500 tuition tax credit to send their children to college. He also likes Clinton’s proposed $10,000 yearly tax deduction that would ease the cost of four-year colleges and universities. “I would love a $10,000 tax credit for my wife because she wants to go back and get a graduate degree. I think the credit to send my kids to college would be great, but will it still be around when my kids are ready?” David says a lot of African Americans could take advantage of the tax credit because, to some degree, it would reduce college costs.

Opinions on the education tax credit varied among Board of Economists members, but the consensus was that it potentially works in favor of African Americans. “If you look at the education tax credit issue in isolation, then it looks very attractive. But we have to consider what’s happening to other funds for financing education, which may be more targeted at low-income families,” says Cecilia Conrad.

Small business development was one of the themes Clinton touted during his reelection campaign. Perhaps the only real tangible effort on his part was to sign the Empowerment Zones Act, which is intended to spur small

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