Factcheck: "The wealthiest people in America pay a lot more taxes than the middle class'... (school, financial)
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"*Economic theory suggests that the degree of progressivity should balance the gains from mitigating economic inequality and risk-sharing against the costs in terms of disincentives created by higher tax rates. The optimal top tax rate depends on social norms and the government’s revenue needs."
That's disturbing. The optimal top tax rate should not depend on the degree to which government is profligate in spending tax dollars.
On average, the rich do pay a higher percentage tax rate. But for some reason those who make their living with dividends and capital gains do not.
In my opinion all forms of income should be treated equally by the government. It shouldn't matter if you make your money through a job or by living off of investments. We should not let professional investors pay lower taxes while requiring people with jobs to pay higher taxes.
Then where do you propose that businesses get investors if we are taxing investment at a high rate? Wanna see the economy get even worse? Let the stock market tank again, there will be a massive selloff if this goes through.
All people who invest pay cap gains taxes at the same rate, also. Why should the ones who are most successful pay a disproportionate share?
It's not so easy to say just tax it as income, what about seniors who live off this passive income?
P.S. We reward risk, hopefully, with dividends. You want to tax it more, say bye bye to investment as we know it.
In an absolute sense, yes, but not in relative terms.
If someone worth $100M were to risk $100K, he would be pretty much unfazed if he lost it. If I were to risk $1,000 I would be devastates if I lost it.
That reminds me of the Chris Rock joke about the difference in alimony for the rich and the rest of us. If a millionaire gets divorced and has to give half of his $30 million to an ex-wife it is no big deal because he can get by just fine on $15 million. If on the other hand a guy who earns $30K gets divorced and has to give $15K to his ex-wife then someone is gonna die.
The corp pays its income tax before dividends are dist.
... and they are just PAPER PROFITS until the securities are actually sold. The sale and profit taking is the taxable event, not the accumlation value.
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