Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
So 2 bipartisan groups have concluded if all Bush tax cuts are reversed as demanded by the debt ceiling "deal" the country is certain to run itself into a recession. The conclusion might well be true, but I just have to ask why what were supposed to be temporary tax cuts made at a level which would endanger economic growth? Was this not sort of a too big to fail concept? And if we agree it would have harsh consequences on immediate growth prospects, why havent the cuts been phased out over time instead of finally being dealt with 12 years later?
Which ones would you nix? Capital gains tax rates, if ratcheted back up, would quell investment and economic activity. Don't take my word for it. Look at the consequences of lowering or increasing capital gains tax rates in the past. When rates have been lowered, the government wound up seeing more in terms of capital gains tax revenue than they would have at the previous, higher rate.
Which ones would you nix? Capital gains tax rates, if ratcheted back up, would quell investment and economic activity. Don't take my word for it. Look at the consequences of lowering or increasing capital gains tax rates in the past. When rates have been lowered, the government wound up seeing more in terms of capital gains tax revenue than they would have at the previous, higher rate.
Do you think shifting taxes on labor is going to increase employment? Can't invest in something that has no market.
Without differentiating venture capital vs wealth preservation , it really doesn't matter either way because its as bad as it is good. Driving up asset values necessary for production isn't going to help. If they lower capital gains taxes and they can't find a market, they'll just plow it into rent seeking like lobbying.
Until asset prices fall relative to wages its just going to be a slow grinding decades long affair. 4 years and we are just getting started if we continue to do everything we told Japan not to do then. Reducing capital gains bloats asset prices which has obviously had the same effect as the stagflation oil embargo(rising asset price where American labor cannot add supply, kinda like farm land these days) . Throwing money at something that cannot be produced quickly or at all just drives up the price of production and destroys industry.
So until separate tax treatment is given to venture capital, which employs people while the rent seeking gains tosses them out of work, its not going to help and may make it worse.
...
... why havent the cuts been phased out over time instead of finally being dealt with 12 years later?
That is a tax increase... there is no strategy that makes sense to confiscate more resources from citizens to expand an incompetent wasteful government.
Lets see a real plan, entitlement reform, and tax reform before we even talk about any need to increase rates on anyone.
Do you think shifting taxes on labor is going to increase employment? Can't invest in something that has no market.
Without differentiating venture capital vs wealth preservation , it really doesn't matter either way because its as bad as it is good. Driving up asset values necessary for production isn't going to help. If they lower capital gains taxes and they can't find a market, they'll just plow it into rent seeking like lobbying.
Until asset prices fall relative to wages its just going to be a slow grinding decades long affair. 4 years and we are just getting started if we continue to do everything we told Japan not to do then. Reducing capital gains bloats asset prices which has obviously had the same effect as the stagflation oil embargo(rising asset price where American labor cannot add supply, kinda like farm land these days) . Throwing money at something that cannot be produced quickly or at all just drives up the price of production and destroys industry.
So until separate tax treatment is given to venture capital, which employs people while the rent seeking gains tosses them out of work, its not going to help and may make it worse.
Easier for capital flight than labor flight to occur. And are you talking about real assets (real estate, physical factors of production) or financial assets? On the consumer end, America already has some of, if not the, cheapest real estate/rent prices to wage ratios. Even NYC and doesn't rank particularly high globally.
Easier for capital flight than labor flight to occur. And are you talking about real assets (real estate, physical factors of production) or financial assets? On the consumer end, America already has some of, if not the, cheapest real estate/rent prices to wage ratios. Even NYC and doesn't rank particularly high globally.
I am talking about splitting them (real estate, physical factors of production) vs labor produced capital. All lowering taxes does is essentially increase credit. You can print as much money as you like but you will never make more total physical factors of production. A rock is a rock at any price. All it will do is price it higher and increase unemployment oil embargo style.
Taxing industrial capital created by labor is a dead weight tax and should never be taxed. Printing money for that will either increase employment in venture industry or create wealth and efficiency in mature industry.
The later point is why we are not in a complete hell hole yet.
Do you think shifting taxes on labor is going to increase employment? Can't invest in something that has no market.
Without differentiating venture capital vs wealth preservation , it really doesn't matter either way because its as bad as it is good. Driving up asset values necessary for production isn't going to help. If they lower capital gains taxes and they can't find a market, they'll just plow it into rent seeking like lobbying.
Until asset prices fall relative to wages its just going to be a slow grinding decades long affair. 4 years and we are just getting started if we continue to do everything we told Japan not to do then. Reducing capital gains bloats asset prices which has obviously had the same effect as the stagflation oil embargo(rising asset price where American labor cannot add supply, kinda like farm land these days) . Throwing money at something that cannot be produced quickly or at all just drives up the price of production and destroys industry.
So until separate tax treatment is given to venture capital, which employs people while the rent seeking gains tosses them out of work, its not going to help and may make it worse.
You know, that was a lot of smoke and noise you just wrote that, ultimately, is simply irrelevant gibberish. You might as well be talking about raising basset hounds.
A lowered capital gains tax yields higher capital gains tax collections. Meanwhile, higher capital gains tax rates yield lower overall collections.
So if the Federal government wants to maximize its revenues while incentivizing investment, then it has to keep the capital gains tax rates low. To state otherwise is to simply look upon government as an agent to confiscate money from those who are better off than you, or to limit the ability of people to make money. And neither, to be perfectly frank about matters, are the business of the Federal government at all.
Lower taxes means more money in the private sector. It means more money in the hands of consumers and it means more profits in the books of companies. That does not directly increase credit. Companies may use some of that money they have now to expand (on credit, ibanks like to see cash on hand when issuing bonds) to meet the additional demand. And yes, that spending increases the physical factors of production be it borrowing (bonds) or investing retained earnings. That's what turns a rock into factory machinery. A rock isn't much of a factor of production. Smelt it down and use it to build factory machinery, however, and it becomes much more able to produce things. The increased demand for processed rocks might drive the price of rocks up and leave you with a higher price for rocks but it also means a lot of jobs to process the rocks, design and build the factory machinery, operate the factory machinery, market and sell the products produced on the factory machinery. You've done a lot more than just raise the price of rocks.
Of course, just because they have more money doesn't mean they'll use it, at least not right way just as consumers won't necessarily run out and spend it.
A lowered capital gains tax yields higher capital gains tax collections. Meanwhile, higher capital gains tax rates yield lower overall collections.
This has never been proven to be true unless the rates were truly confiscatory. If cap gains were raised somewhat or even were matched to income rates there wouldn't be a whole lot of change in the economy unless there was an expectation of rates being reduced in the future. Those who have attempted to prove this concept to be true were just cherry picking situations to try to make a very flimsy point. For example if the tax law was changed and the rate would go to 25% on Jan 1st, there would be a lot of attempts at selling before the end of the year to lock in the lower rate. A biased economist trying to prove lower rates get more collections would try to imply this temporary situation proved collections go up, but its just common sense which balances out after a short period of adjustment.
The concept capital gains should be taxed differently has some merit, but I'm not about to agree if it changed it would cause people to act completely differently. There is plenty of incentive to create capital gains if they are taxed at 25% versus 15%.
So 2 bipartisan groups have concluded if all Bush tax cuts are reversed as demanded by the debt ceiling "deal" the country is certain to run itself into a recession. The conclusion might well be true, but I just have to ask why what were supposed to be temporary tax cuts made at a level which would endanger economic growth? Was this not sort of a too big to fail concept? And if we agree it would have harsh consequences on immediate growth prospects, why havent the cuts been phased out over time instead of finally being dealt with 12 years later?
Its been a democrtatic siisue where th3e4y have chnaged stances time agian. they amde the issue first that the tax cuts were only a upper end tax cut;no cut for middle class. then they said they wanted to preserve the middle class cuts as it would ahrm the middle class.That came about as they had compelte control of both houses and presidency. they could have let them just disappear. But the truth is even if we let them expire its not going to do much for the fdeficit and it wil contimue to graow.There are three big prgrams that are growing at unsustainable rates;that is SS;medicare and mediacid.The new healthcare bill will even raise the revenues needed by states sr=tartig in 2017 for medicaid caost. that si the reaqson nelesen(d) got a exemptio for his state of the increased cost starti ng i 2017 for states. There really is no way to pahse out the Bush tax cuts ansd no party has proposed a new bill that would do that. Its either reauthorise or let them expire. That along with huge cuts will ahppen if the we go over the cliff which seems more like as time goes by or just postone the cliff by kickig the can down the road like most fiscal issues as Europe has done for deacdes except for Germnay.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
