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Undoubtably you have heard how the evil congress and Obama are punishing the rich for being rich. The rest of the story that people don't tell is outlined below.
If your family makes 67,000 a year you are taxed at 25%. Now I know you have heard stories that the wealthy are taxed at 35% and Obama is going to raise it some more. On the face of the statmement that is true.
However the 35% represents payroll tax. A lot of wealthy americans don't even draw a paycheck. Their income comes from capital gains. The increased value of assets. The U.S. only taxes these assets when they are sold and that percentage of gain on sale is taxed at 15%. (it is a lot more complicated but this is the jist). It used to be 20% and Bush Dropped it to 15%. Before 20% it was 28%.
Lets just say you have two school teachers in the family and together they make 100,000 their income tax will be 25% of their income. Compare that to Paris Hilton who makes in capital gains 100,000 from the sale of stock, which she did nothing to earn. Teachers pay 25,000 in taxes and Paris pays $15,000. Sound fair....not really.
One proposal in congress is to raise the percentage to 16.5% to pay for healthcare. I think this is crazy. It is still lower than the percentage school teachers pay. It should be raised at a minimum to that of what some one earning 67,000 earns. Lets make it fair. The capital gains tax should be raised to at least 25%.
These numbers are undisputed. The argument that will be made when confronted with these numbers is, well...they pay a lower percentage but the majority of the money. So what. The system should be fair and at the very least the very rich should have to pay ...at a minimum. the same amount as the middle class.
Don't be fooled by the spin doctors on taxes. These are the numbers.
Actually, the fairest thing would be that same tax rate across the board. Everybody pays the same exact percentage regardless of income, no loopholes, no exemptions, etc. The very same percentage regardless of income as I said.
Barack Obama will raise Capital Gains Taxes...even if it means less tax revenue!!
Ah, the blogosphere! All the glitz of a high quality production, but none of the content. If you'd ever read anything at all about the national income effects of increases and cuts in the capital gains taxes, you'd know more about it than Charles Gibson who portrays sheer ignorance of the topic in that clip. Would have been nice if he'd done his homework.
Like income tax cuts, the first order effect of a capital gains tax cut is to reduce revenues. And as with income taxes, there are partially offsetting secondary effects that are in fact larger than those associated with an income tax cut. On average, the secondary effects of an income tax cut will earn you back in the neighborhood of 30 cents on every dollar's worth of revenue originally lost. For a capital gains tax cut, the secondary recovery can reach 50 cents for every dollar originally lost.
The capital gains tax effect is, of course, heavily masked by the fact that investors react to what they believe might be coming. If investors suspect that the rate will increase, they rush to sell everything they reasonably can at the lower rate before it goes up. By the time the rate does go up, there are no more plans to sell anything because they were all pulled forward, so the revenues produced after the tax increase appear to go down. The same happens in reverse if a capitals gains tax cut is suspected. Everybody holds off on selling until the new rate goes into effect, then there is a flood of sales that make appear that revenues increased. Thanks to the miracle of statistics, one can tease out these anticipatory reactions by investors and see what is actually going on. Those are the results reported in the paragraph above.
Actually, the fairest thing would be that same tax rate across the board. Everybody pays the same exact percentage regardless of income, no loopholes, no exemptions, etc. The very same percentage regardless of income as I said.
It may seem fair, but there is certainly nothing equitable about a flat tax. It puts disproportionate burden on low-income people and funds a free ride for the rich. We've been doing enough of that of late already...
Actually, the fairest thing would be that same tax rate across the board. Everybody pays the same exact percentage regardless of income, no loopholes, no exemptions, etc. The very same percentage regardless of income as I said.
You have a great day.
El Amigo
"Fair" is subjective. No matter how government tries, it can never be "fair" to everyone. All government can do is treat everyone equally under the law. It may not seem "fair" to some, but it is equitable.
The 14th Amendment says the government cannot "deny to any person within its jurisdiction the equal protection of the laws". You will note that they did not make an exception for tax laws, or any other type of law. When Congress singles out a specific group of people and applies laws to them and no one else, like our progressive tax structure, they are violating the 14th Amendment of the US Constitution.
It may seem fair, but there is certainly nothing equitable about a flat tax. It puts disproportionate burden on low-income people and funds a free ride for the rich. We've been doing enough of that of late already...
So let's get this strait, paying an equal percentage in taxes for the services everybody uses is unfair to poor people, and gives the rich a free ride? I'm sorry, but that's logic so backwards it could only have come from a liberal (or academia). The most fair thing to do would be to divide the tax burden in to equal parts and have each individual/company pay a small percentage of it. That's not practical for obvious reasons, so a flat tax is the next best thing. Does that shift the tax burden down the income ladder? Yes, but that's in no way unfair. If you use government services, you should be expected to pay for them. Expecting the poor to get a free ride is like going to restaurant and not expecting to pay the bill. You ate, you drank, you pay. The American dream is opportunity, not entitlement. But let me guess, you're going to use the 'miracle of statistics' to try and demonstrate how the poor shouldn't be expected to pay their own way? Or, perhaps, some touchy-feely arguments about how paying taxes makes life harder for those who don't pay them already?
It may seem fair, but there is certainly nothing equitable about a flat tax. It puts disproportionate burden on low-income people and funds a free ride for the rich. We've been doing enough of that of late already...
How does it "seem" fair? If I earn $10 and you earn $10 million and we both pay 10%, I pay $1 and you pay $1 million. Explain that one to me how it is not fair.
Now if you want to tell me about burden on the poor and other things to help them, OK, I am willing to listen. I may even agree with you. However, call a spade a spade. In this case let us just be honest and say "It is not fair but I believe it is justifiable to take more money from richer people to give it the poor."
It is no different when politicians tell the people all kinds or reasons why we go to war, why a bridge needs to be built, why whatever when the real reason is not politically palatable. It may not be palatable but you know, often it may even the the right decision but here are these guys trying to sugar coat a decision. The same with the tax point here. Call it what it is. There may be some moral angle to justify taking money away from somebody just becuase he has more.
I will venture to say that if someone comes to your house to demand you may have to give up one of your extra cars or an extra bed in your storage areas to give it to the poor, you would not be very happy, would you? After all you have something others do not have, right?
Now, what is the burden you talk about? Who are the poor? What classifies someone to be poor here in the US? What is the percentage of the "poor" that own their homes already? What is the percentage of the "poor" that have three or more cars? What is the percentage of the "poor" that spend money on iPods, team logo outfits, etc? Have you checked on all that? If you do, you just may find out that the number of poor may not be as high as claimed.
How many "poor" knowing do not have an income to have more chidren still decide to have four or five kids? Is that not irresponsible to take money for someone that may only have a couple of kids but because he earns more money has to give it to someone else?
How many of those classified as "poor" are actually in transient economic status? What is the distribution of the poor in the quintiles, age groups, gender groups, etc? Have you checked that? Of the "poor", what is the percentage of them that will stay poor the rest of their lives and what is the percentage that they will move up out of it within the next let us say 5 to ten years?
Actually, the fairest thing would be that same tax rate across the board. Everybody pays the same exact percentage regardless of income, no loopholes, no exemptions, etc. The very same percentage regardless of income as I said.
You have a great day.
El Amigo
That would certainly be more fair than the system we have now. Everyone pays the same percentage of income. You have to include inheritance tax though.
Ah, the blogosphere! All the glitz of a high quality production, but none of the content. If you'd ever read anything at all about the national income effects of increases and cuts in the capital gains taxes, you'd know more about it than Charles Gibson who portrays sheer ignorance of the topic in that clip. Would have been nice if he'd done his homework.
Like income tax cuts, the first order effect of a capital gains tax cut is to reduce revenues. And as with income taxes, there are partially offsetting secondary effects that are in fact larger than those associated with an income tax cut. On average, the secondary effects of an income tax cut will earn you back in the neighborhood of 30 cents on every dollar's worth of revenue originally lost. For a capital gains tax cut, the secondary recovery can reach 50 cents for every dollar originally lost.
The capital gains tax effect is, of course, heavily masked by the fact that investors react to what they believe might be coming. If investors suspect that the rate will increase, they rush to sell everything they reasonably can at the lower rate before it goes up. By the time the rate does go up, there are no more plans to sell anything because they were all pulled forward, so the revenues produced after the tax increase appear to go down. The same happens in reverse if a capitals gains tax cut is suspected. Everybody holds off on selling until the new rate goes into effect, then there is a flood of sales that make appear that revenues increased. Thanks to the miracle of statistics, one can tease out these anticipatory reactions by investors and see what is actually going on. Those are the results reported in the paragraph above.
Such are distinctly in the minority in this thread...
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