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Why? When you are investing your money in stocks, etc you are putting your investment at risk.
Not to mention - the money one has to invest came from earned income at one time so was taxed at least once already. Most people with successful investments tend to rollover their funds in that particular fund or bond invested in so the money is taxed year after year. Why tax the same money year after year?
Don't mos people have a 401K? Anything earned there is capital gains. I took full advantage of my 401K as my employers offered matched contributions. That is free money especially when you are contributing more than your employer matches.
The real problem is people don't save and don't have holdings in the form of investments. there is no sense in being envious of those who can save money; even those who earn the same amount as you.
Not to mention - the money one has to invest came from earned income at one time so was taxed at least once already. Most people with successful investments tend to rollover their funds in that particular fund or bond invested in so the money is taxed year after year. Why tax the same money year after year?
It isn't. You only show your ignorance by continuing this argument when it has been addressed hundreds of time. Only the new profits are taxed each year.
If you invest $500 and at the end of the year you have $550, only the $50 is taxed. If you leave the after tax $545 and have $610 the next year you are only taxed on the $65 gain.
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Don't mos people have a 401K? Anything earned there is capital gains. I took full advantage of my 401K as my employers offered matched contributions. That is free money especially when you are contributing more than your employer matches.
The real problem is people don't save and don't have holdings in the form of investments. there is no sense in being envious of those who can save money; even those who earn the same amount as you.
Factual arguments have nothing to do with envy. They simply are.
I love the flip-flopping from right-wingers. Completely enamored with the wealthy and their ever-growing share of the economic pie, yet they BLAME Obama for it! Pick a lane, please.
Our president wants to raises taxes on the wealthy, raise the minimum wage, and cut taxes on the middle class. Policies# that could, maybe just maybe, close the wealth gap a bit in this country? The GOP predictably, wants nothing to do with any of it.
Predictable response. Right-wingers get screwed by the rich as much as any group, and they love it. Are they secretly masochistic?
right, the president wants to raise taxes on the rich, but then he will turn around and let them write the tax code again so they can offset any tax increase. nice try, but the reality is that the rich are not going to pay more in taxes if they can avoid it. raise the tax rate too much, and the rich pull their money out of circulation at favorable tax rates, and then sit back and wait until the favorable tax rates return. or they leave their investments alone and dont take any profits, and again avoid paying taxes.
or they continue to administer their tax free foundations, and trust funds, and again avoid paying taxes because they dont make any money, the foundation or trust fund does, and since they are either tax free or tax deferred, they again avoid taxes legally.
right, the president wants to raise taxes on the rich, but then he will turn around and let them write the tax code again so they can offset any tax increase. nice try, but the reality is that the rich are not going to pay more in taxes if they can avoid it. raise the tax rate too much, and the rich pull their money out of circulation at favorable tax rates, and then sit back and wait until the favorable tax rates return. or they leave their investments alone and dont take any profits, and again avoid paying taxes.
or they continue to administer their tax free foundations, and trust funds, and again avoid paying taxes because they dont make any money, the foundation or trust fund does, and since they are either tax free or tax deferred, they again avoid taxes legally.
As a wealthy person, I just want to point out that this isn't possible.
You either play ball, throw dollars into the game with risk and pay your taxes, or you sit on your hands and get eaten away by inflation.
There is no (legal) alternative.
I'm contemplating this very issue right now.
Obama didn't touch the real loop holes, which are mostly in tax-free schemes via 1 year trusts which avoid all gift taxes.
Obama didn't do much to touch the loop holes for the ultra rich he did raise long term from 15 to 20 now he wants to go to 28 but that isn't going to happen with congress opposing him. I actually think it should be 15 on the first 1 million $. You guys that keep talking about tax brackets have no idea what your talking about this tax has nothing to do with income tax it's capital gains tax. You probably never filled out a tax return other then a 1040EZ. This is why loop holes exist because the american voter is too uneducated to know what capital gains is.
Obama didn't do much to touch the loop holes for the ultra rich he did raise long term from 15 to 20 now he wants to go to 28 but that isn't going to happen with congress opposing him. I actually think it should be 15 on the first 1 million $. You guys that keep talking about tax brackets have no idea what your talking about this tax has nothing to do with income tax it's capital gains tax. You probably never filled out a tax return other then a 1040EZ. This is why loop holes exist because the american voter is too uneducated to know what capital gains is.
Capital gains are discussed here all the time and why income should be counted as income, period.
Between 1979 and 2011 the average after tax income for the bottom 20 percent rose by only about 48 percent. The top 1 percent saw their after tax incomes rise by 200 percent during that same time frame.
There are 2 reasons for that.
Reason 1: The bottom 20% is over-reproducing, thereby forcing downward pressure on their wages. It's a supply and demand thing:
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Originally Posted by InformedConsent
...the no/low-income no/low-skill labor class in the U.S. is over-reproducing, forcing downward pressure on wages.
How is that sustainable going forward? What's the plan for paying to support all those additional people, 70% of which are likely to need some or several forms of public assistance for life?
Let's take a look at the enormity of the problem using a numerical example...
Because we now have nearly 50% Medicaid births, we'll do a 1 to 1 comparison: 1 million receiving public assistance, 1 million not receiving such, the latest published birth rate numbers for each group (halved because the rates were reported for women only), and the formula for predicting future population: future value = present value x (e)^kt, where e equals the constant 2.71828, k equals the rate of increase (expressed as a decimal, rate taken from the U.S. Census data), and t is the number of years.
After 20 years, the population of those not receiving public assistance will have grown from 1 million to 1.75 million.
After 20 years, the population of those very likely needing public assistance will have grown from 1 million to 4.953 million, 3.467 million of which will never rise above poverty.
1.75 million paying taxes to support social programs for 3.467million after just 20 years. The poverty class is growing at twice the rate of everyone else.
And that's not even counting the millions of poor illegal immigrants to which Obama's EO will give work permits.
All of that keeps wages down for all but the most accomplished, who are therefore relatively rare. Supply and demand. Very basic concept.
Reason 2: The U.S.'s progressive tax system (European countries actually have regressive tax systems) creates a perverse incentive for our government to promote maximum income inequality:
Quote:
Originally Posted by InformedConsent
There's a reason for that... The problem is the progressive federal tax system in the U.S. Because of our highly progressive tax system, the government is overly dependent on making sure the income gap is as wide as possible, and that they don't discourage the revenue producers too much by taxing them at rates that are too high therefore either driving them and/or their capital available for investment out of the country, or causing them to scale back on their productivity and income because there's a tipping point at which they decide they have enough for now and don't need to earn as much thereby significantly lowering their effective tax rate and dramatically reducing federal tax revenue.
I'll let this economist explain it:
Quote:
"[Economist Anatole] Kaletsky argues that over-reliance on progressive taxes creates "a perverse incentive for governments to promote income inequality. Ifthe solvency of the stateand the ability to fund basic services for the poorest people in society depends on the rich getting even richer, it is tempting for even the most progressive politicians to support widening inequalities."
For example, in the U.S., the top 1% earns 18.7% of the income, but pays 35.1% of the federal income tax revenue, roughly twice their fair share which is 4 times what the middle class pays (the middle class pays only about half of their fair share of the federal income tax compared to their share of the income). The problem with our country's progressive tax system is that it creates a perverse incentive for the federal government to enact policies that promote as wide of an income gap as possible in order to maximize tax revenue.
As long as the U.S. has a progressive tax system, the incentive remains to keep the income gap as wide as possible, and this is why: When the top 1% loses income share, the federal government loses twice that much in tax revenue. But when the top 1% gains income share, the federal government consequently gains twice that much in tax revenue. Another way to look at it is that the federal government receives 4 times more income tax revenue per dollar earned from the top 1% than they do from the middle class, so guess whose income they're going to favor and protect.
Furthermore, the countries with more income equality have regressive tax systems, mostly based on VAT, consumption, etc., instead of one's income. Pay close attention to the charts:
Think very carefully about that... It's counterintuitive, and some people get angry when this is pointed out to them, but it actually turns out to be true.
And true to form, Mr. 'tax the rich's' presidency has resulted in EXACTLY what was predicted by the liberal economist quoted above.
Furthermore, in regards to the 2nd reason, Federal Government politicians seek to maximize tax revenue to spend to buy votes. It's simple math. Which group has more votes?
50 people earning $20,000 each and receiving taxpayer-funded public assistance?
Or
2 people earning $500,000 each?
Extrapolate that onto the U.S. population in which 47% pay no federal income tax whatsoever yet receive the same government services and benefits that everyone else does, with the added benefits of one or more forms of taxpayer-funded public assistance for most of the bottom 25%.
It's all about buying votes. Under our current progressive federal tax system, the only way to maximize tax revenue to do that is to maximize the income of those who are taxed the most: the top 1%.
The key is to make sure we stay focused on the lower income people, which is where the problem lies.
Well to do people have typically earned every penny and deserve to be left alone. They are more than carrying their own weight.
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