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.
Ok, so it sounds like the prevailing wisdom from those who defend this is that the really rich should pay a lower percentage in taxes because they derive their income from capital gains, which enjoys a long-term rate of 15% - before whatever other legal tax-evasive moves are employed. I knew this would come up.
So I still don't buy it as justification. Investment income tax in this country is pretty arbitrary and stupid. What is so sacred about the distinction between long-term vs. short-term capital gains? It's absurd to treat long-term gains as "better" than short-term. The point of investing in securities is because we think they are undervalued relative to their future potential. Why is it considered "better" if their price rises slowly rather than quickly? My capital would be best served to freely move to the best investment opportunities in a playing field that is simple, clear, and rational. That's market efficiency.
And while I'm on that, why do we treat debt and equity differently for companies and investors? If I get stock dividends, they are taxed at 15% or less, but my bond income is taxed at 35%. I can only lower my rate on my bond if I sell that bond after a year - but if I keep it and get the coupon rates, then I get screwed with higher taxes. And if I buy a zero-coupon bond, I get taxed on it as income just because it rose in value - even if I didn't sell it or actually get any income. Why doesn't this same principle apply to my Apple stock?
My point is that many of the things that many people hold as "sacred" in the tax code are not really economically justified; they exist because someone influential at some point leaned on connections to get them in there...and now no one can muster the support to get it out. That would be how our tax code has tripled in a decade.
Ok, so it sounds like the prevailing wisdom from those who defend this is that the really rich should pay a lower percentage in taxes because they derive their income from capital gains, which enjoys a long-term rate of 15% - before whatever other legal tax-evasive moves are employed. I knew this would come up.
So I still don't buy it as justification. Investment income tax in this country is pretty arbitrary and stupid. What is so sacred about the distinction between long-term vs. short-term capital gains? It's absurd to treat long-term gains as "better" than short-term. The point of investing in securities is because we think they are undervalued relative to their future potential. Why is it considered "better" if their price rises slowly rather than quickly? My capital would be best served to freely move to the best investment opportunities in a playing field that is simple, clear, and rational. That's market efficiency.
And while I'm on that, why do we treat debt and equity differently for companies and investors? If I get stock dividends, they are taxed at 15% or less, but my bond income is taxed at 35%. I can only lower my rate on my bond if I sell that bond after a year - but if I keep it and get the coupon rates, then I get screwed with higher taxes. And if I buy a zero-coupon bond, I get taxed on it as income just because it rose in value - even if I didn't sell it or actually get any income. Why doesn't this same principle apply to my Apple stock?
My point is that many of the things that many people hold as "sacred" in the tax code are not really economically justified; they exist because someone influential at some point leaned on connections to get them in there...and now no one can muster the support to get it out. That would be how our tax code has tripled in a decade.
What you want is a FAIR TAX. Last I heard, the politicians in Washington, be it Democrat or Republican are strictly against this plan. SO VOTE THEM OUT! ALL of them.
The "Fair Tax" is a flat tax. The "Fair Tax" is supported by groups like Freedom Works, who are funded by the richest families in the nation.
Do you think that these families support this type of tax because they think it will make their taxes rise? Think again.
The effect of flat-taxation is to decrease the taxes that wealthy people pay and increase the taxes that everyone else pays.
the tax burden on Americans would change drastically. For example, George, whose income is $10,000 and Jerry, whose income is $100,000, would pay the same tax rate. If the tax rate was 15 percent, George would pay $1,500 in taxes and Jerry would pay $15,000. Under the current system, both would pay 10 percent for their income from $0-$8,500, 15 percent for their income from $8,501-$34,500, etc. So under the current progressive tax code, George would pay $1,075 (compared to $1,500 under a flat tax) and Jerry would pay $21,615 (compared to $10,000 under a flat tax). What this analysis does not include are the tax expenditures Jerry and George could claim, which would probably lower both's tax liabilities. As one can see, the main benefit of the flat tax is its simplicity. But that is no match for the negative consequences a flat tax would bring.
The first negative consequence of a flat tax is the tax burden would be greatly shifted from richer Americans to poorer Americans. Due to the progressivity of the tax code, bad economy and ability for lower and middle class Americans to take advantage of tax expenditures, roughly 50 percent of Americans do not have an income tax liability. (Note: this is for federal income tax only; poor and middle class Americans still pay federal payroll taxes, and state and local taxes.) Implementing a flat tax that ended many popular tax expenditures would mean most, if not all, Americans would pay some income tax, effectively raising the taxes on the poorest 50 percent of Americans. Simultaneously, a flat tax would give a huge tax break for the highest income earners. According to an analysis done by the non-partisan Tax Policy Center, a 15 percent flat tax would lead to an 11 percent tax break for those making between $500,000-1,000,000 and a 19 percent tax break for those making over $1,000,000. Raising taxes on the poor and middle class while drastically lowering taxes on the rich during a weak economy does not reflect America's compassionate values.
This year, we hit the 33% marginal tax bracket - alternative minimum tax and all of that. We don't own a home or have kids, so we don't really get to deduct anything.
I'm grateful for our income, and I'm not fundamentally complaining about having to work hard for it and pay my fair share. I know that we're very fortunate.
But why is it fair for my personal share to be up to TWICE the rate of the fair share of people with gargantuan incomes like Romney and Buffett who will never have real financial worries again in their lives? We're doing well, but unlike those guys, we do depend heavily on our cash flow to generate our critical savings for future needs as well as to cover our day-to-day expenses. We get hurt by the loss of that marginal dollar A LOT more than the multi-millionaires and billionaires ever would be.
And why is it "class warfare" whenever I point this out? How is it not "class warfare" for me to be reamed porportionally so much more than the super rich - many of whose enterprises I also have to pay to bail out of their bad business decisions?
I'm not saying that the Buffett rule is the way to go, but why can't we have a tax system that institutes some sense of consistent fairness relative to income all the way across the income spectrum? Why is this concept so fundamentally controversial and anti-American for conservatives?
oh lets just start with the thousands of middle and high income jobs guys like Romney and Buffett create with the money they dont pay to the federal government.
How many people make a full middle to high income from your efforts?
oh lets just start with the thousands of middle and high income jobs guys like Romney and Buffett create with the money they dont pay to the federal government.
How many people make a full middle to high income from your efforts?
Where is the evidence that lowering taxes on the rich or lowering capital gains rates creates jobs?
I buy a stock for $50 and it rises to $100. How many jobs were created?
Excellent point, except I'm still a national sales tax/repeal the IRS person
*some of that investment isn't so much risky, as they can afford to just invest, regardless...
The risk of an investment is what it is. It exists on its own and isn't dependent on, or related to, the ability of any particular investor to recover from a loss. There is no nexus whatsoever between the two
The tax code must be replaced with a new code that is simple, low, flat, fair, and honest in order to promote economic growth while at the same time removing disparities in the tax code.
ambient - the primary reason our tax code subsidizes Capital Gains is to support the privilege and exclusivity of the very top 1%. Another reason is they own the country and the government and can have you and I pay for it. The system is NOT set up to be FAIR. It is set up to prevent fairness of any form or function.
As I have said elsewhere I think all income from all sources from tag sales to drug profits to capital gains should be subject to income tax after a deductable set at the 90th percentile. That would make the owners of the country pay for their privilege.
the make-believe world you have delusionally created in your "mind" doesn't exist in the real world, and wouldn't survive one quarter, if it did. It would collapse into its own malaise.
Seriously, it is time for a complete and total re-evaluation of the world. Take another look, but pay attention - especially to what works, and what doesn't. You're heavily invested, dare I say completely invested, on the "doesn't work" side of the ledger.
AFAIAC - All increases in wealth are INCOME and should be taxed as INCOME! The entire idea of Capital Gains is just a way rich people avoid paying their fair share.
If people move their accounts "offshore" they would still be taxed on the profits. If they moved off shore they would lose their citizenship and have all their US assets confiscated. Try and cheat by hiding their money offshore and I would hunt down their money. Move themselves away and I would hunt them down. Either would cost them more than staying here and paying their fair share.
It doesn't show up on any map or chart, but some people live there - Delusion.
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.
