Quote:
Originally Posted by VTHokieFan
For the middle class investors, capital gains will be lowered to 10%, the rich will have their capital gains raised to 50%. Thoughts?
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Stupid idea.
Really stupid, stupid, stupid idea.
You really think the rich got rich by being stupid?
In 1960 we had some really high tax rates
and you can see here where the total amount of all taxes (from all taxable activity) was 153 billion or 29.08% of GDP. It tax rates were 70, 80 and 90 percent on the rich why wasn't more money dumped into the treasury?
Kennedy knew the problem so he campaigned for a tax cut to spur the economy
Income Tax Cut, JFK Hopes To Spur Economy 1962/8/13 - YouTube
When he got his tax cut passed look what happened in 1965
After the tax cut a little the total amount into the treasury increased from $153 billion to 193 billion.
All that happens when you tax an activity is the activity goes away and you get nothing.
I own a piece of property I purchased 40 years ago for $15,000 and today I can sell it for $400,000 for a capital gain of $385,000.
I really don't need the money, most people in my position and age don't, but I may consider selling it if I pay a low tax rate on the gain but what do you think I will do if you get your way and raise the rate to 50%?
The answer is simple, I won't sell it and instead of getting 15% of $385,000 you'll get 50% of nothing which is nothing.
The only thing higher tax rates achieve is a change in behavior because it NEVER has achieved substantially higher revenue but it does kill economic activity.
Seriously, compare the % of the GNP to the federal treasury between 1960 when we had tax rates above 90% to today.
Tax Facts
Historical Source of Revenue as Share of GDP
In 1960 the total % to the treasury was 17.8% of GNP while today it is was 18.5% 2007 before Obama.