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I'd be fine with raising the capital gains rate some as long as the cost basis is indexed to inflation. If I own something for 25 years, the cost basis should be multiplied by 1.762 (using the BLS inflation calculator) to account for 25 years of inflation. You can't increase the rate too much or nobody would ever risk their money investing since the reward would all be taxed into oblivion. As a matter of public policy, I think you'd want to make the rate variable depending on the class of investment. You tax things lower that produce economic growth. Buying 1,000 shares of an S&P 500 index fund on the open market isn't helping anything grow. Investing the same amount of money as private equity in a fledgling company that needs the capital to grow is a heck of a lot more risk and benefits the economy far more.
As for high risk investments, that’s difficult to hold down. A start up could be high risk, but that is different from a fledgling family company.
The problem is if the investment is successful, that company will become just like other corporate institutions that value profit over the workers or traditional values/community benefits of said business.
Using cooperative investment (which is not motivated by financial profit) in a community atmosphere is a better way to sustain local businesses without having them become a corporate entity.
As for high risk investments, that’s difficult to hold down. A start up could be high risk, but that is different from a fledgling family company.
Actually, it's not different at all. I'm a career metro Boston tech startup guy. I've been part of founding teams for companies that eventually employed hundreds. Plenty of people have family businesses that create a ton of jobs.
Quote:
Originally Posted by Winterfall8324
The problem is if the investment is successful, that company will become just like other corporate institutions that value profit over the workers or traditional values/community benefits of said business.
Right. And once it's publicly traded, you tax gains differently than when it's small, private, and PE/VC funded.
Quote:
Originally Posted by Winterfall8324
Using cooperative investment (which is not motivated by financial profit) in a community atmosphere is a better way to sustain local businesses without having them become a corporate entity.
Investment is always motivated by financial profit.
The purpose of establishing a corporation is to limit the liability of the owners of the corporation. If I'm GeoffD doing business as XYZZY Company and someone sues XYZZY Company, I'm the one getting sued and every asset I have is at risk. My house. My savings. I can get 100% wiped out. If I incorporate XYZZY Company and I own 100% of the stock, the only thing at risk is my equity in XYZZY Company. You'd never get anyone to invest a dime in any business venture if they were liable in a lawsuit. The only business I can think of that operates like that is Lloyds of London. If they have a gigantic loss, the investors have to cough up more money. It doesn't happen very often but it's happened.
Actually, it's not different at all. I'm a career metro Boston tech startup guy. I've been part of founding teams for companies that eventually employed hundreds. Plenty of people have family businesses that create a ton of jobs.
Right. And once it's publicly traded, you tax gains differently than when it's small, private, and PE/VC funded.
Investment is always motivated by financial profit.
The purpose of establishing a corporation is to limit the liability of the owners of the corporation. If I'm GeoffD doing business as XYZZY Company and someone sues XYZZY Company, I'm the one getting sued and every asset I have is at risk. My house. My savings. I can get 100% wiped out. If I incorporate XYZZY Company and I own 100% of the stock, the only thing at risk is my equity in XYZZY Company. You'd never get anyone to invest a dime in any business venture if they were liable in a lawsuit. The only business I can think of that operates like that is Lloyds of London. If they have a gigantic loss, the investors have to cough up more money. It doesn't happen very often but it's happened.
1. I was speaking more from a sense of where they are in the industry.
A start-up usually want to grow and become a corporate body one day. A family owned business that has been open for decades may not want to grow and prefers to provide for their community and hire locally.
The latter may accept investment to stay open financially, but lose its purpose and character in exchange.
Cooperative investment is different and does not have the same liability threat. The workers and community owns the production center and democratically decide investment by local needs (demand).
It’s like a public venture that is not affiliated with any government (local or otherwise) authority.
Edit: and if you lower CGT for these small local businesses investments will come (as there is more of a motive when larger companies have a higher tax on profits) to them, and once they grow to the point where the CGT rises on their investments, it will be too late to turn back to a none corporate entity.
Libertarians, as you know them, tend to misunderstand the existence of freedom.
Freedom exists in the absence of power,But you want more Govt control/power??? since you can't eliminate power, you have to restrict ownership to what people can naturally consume/store.
That would force people to work together for larger projects and not pursue more control or wealth. The market system of consumerism makes us less free and less happy. So , dont take part in consumerism? Thats a choice that we have as Americans
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So what im hearing you say, is that not as smart or handy people, or people who just want to free load should get the same benefits or money as those who are smarter, work harder? Sort of like reward the grasshopper and punish the ants?
(I didn't bother to read all the posts responding to your original thought)
What do you invest in? Do you have savings and what do you do with it? Are you debt free? Do you receive any weekly or monthly benefits from the government? Do you work or are you retired?
Just trying to ascertain your profile and where you might be coming from.
There is no way this person "invests" in anything but blaming others for having more. "Wah, I chose not to try harder/work harder/ (fill in the blank) and now I feel those who have succeeded should pay my way.
It is only a tax on profits (so not total sale value).
It is a tax on profits AND on inflation! It is crazy that you can buy a house, for instance, which does not increase in real value (i.e., its value only goes up with inflation), but when you sell it you have to pay for that inflation!
So, the inflation part should be 0% tax.
Now, about the other part - I put MY money up, so I am taking risk. I am rewarded for that risk with a profit. I think I should pay some tax on that, but 90% is absurd, you would strangle our economy. I think current 15% for low amounts is fair.
It is only a tax on profits (so not total sale value).
I'm not supporting it from a tax revenue stand point, I don't care about that, but it would lower economic activity in the corporate sector and dissuade people from investing (and inflating) the stock market.
The materialistic profit motive that has driven our economy has built an authoritarian state where money buys you freedom, and the more money you have, the more freedom you have as well.
To create a freer society it must be more egalitarian and not based on increasing economic activity.
Also in the long run it will lower government revenues and slow imperialistic ambitions abroad.
Furthermore people will be happier not trying to become millionaires and building a life rather than making a living.
Why can’t I do both? Or all three? I mean imagine being able to make a living, building a life and making money. I’m putting my money up and taking a risk I want the reward.
Christ I’m glad you’re not running the country.
Feel free to move to oh....Cuba, any of the Africa countries, South America, if you don’t like what we do here.
You might want to work a bit more on your sales pitch. I don’t think too many people would sign up to living like a Neanderthal.
Read the previous posts, it's related to that.
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