Trump

[erfalf]

Seems like you learned something by their failure to teach you as you perceived they should.

If you go to Metro Christian University, wouldn't you expect that their might be some Christian politicking going on in that institution? ORU? Texas Christian? When you have a professor who came from an ivy league background you could expect that there may be some progressive thinking going on and taught. Yet you came out ok. You saw it, you learned another perspective and now you don't want others to have that privilege. Your conservative beliefs remained intact and you became employed.

Of course now, you assert it was all bunk. I don't think so.

Hate is bunk no matter what banner it flied under.

[cannon_fodder]

VERY Broadly speeking the risk is loosing your investment. That is a very real risk in each and every investment ever made, EVER!

You are conflating investment with inheritance. The two are NOT linked outside the fact that inherited wealth can be invested. It can also be hid under a mattress, or spent on chocolate bars. Ain't free markets great?

Starting a company is more risky, but in many cases impossible without investors. Which would you rather have.

Sure, you *could* lose your investment. Just like an employee could lose his job or the company could go bankrupt without paying him. The business owner could go under. There's risk everywhere. The risk of an investment is rewarded by the return on investment, the ebb and flow of the expected return is proportional to the perceived risk. The capital gains tax structure is not.

And no, I am not confusing investment and inheritance. I was using inheritance as an example only.  The same example survives any scenario.

And yes, the money could be spent on other things. The return on investment is what drives the desire to invest the funds. Preferential tax treatment is a small part of that, but it is unlikley Warren Buffet would decide to spend $30,000,000,000 on chocolate bars instead of a railroad. It is unlikely that I would choose to spend $50k on a Mercedes instead of a downpayment on an investment property.

So yes, we need investors. I'm not taking away from that. But we also need laborers. We need them both, but our tax code prefers one over the other.

[AquaMan]

Hate is bunk no matter what banner it flied under.

There's your bumper sticker. Go with that.

[erfalf]

Sure, you *could* lose your investment. Just like an employee could lose his job or the company could go bankrupt without paying him. The business owner could go under. There's risk everywhere. The risk of an investment is rewarded by the return on investment, the ebb and flow of the expected return is proportional to the perceived risk. The capital gains tax structure is not.

And no, I am not confusing investment and inheritance. I was using inheritance as an example only.  The same example survives any scenario.

And yes, the money could be spent on other things. The return on investment is what drives the desire to invest the funds. Preferential tax treatment is a small part of that, but it is unlikley Warren Buffet would decide to spend $30,000,000,000 on chocolate bars instead of a railroad. It is unlikely that I would choose to spend $50k on a Mercedes instead of a downpayment on an investment property.

So yes, we need investors. I'm not taking away from that. But we also need laborers. We need them both, but our tax code prefers one over the other.

There's no way really to "weight" capital gains based on risk. So that's beside the point.

You keep bringing up inheritance because it is a hot button tabloid type issue that a lot of people will be drawn to. But it's really a diversion from the topic at hand.

I would contend you would have less laborers if your plan is to increase the capital gains taxes in order to be more "fair". Never mind the double taxation effect that is already taking place (Corporate/Individual).

Let's start over. What is your objective? Maximize the economy? or maximize government collections? Either way, generally speaking (as there are rare exceptions) the answer to both is to try to maintain lower capital gains tax rates. The US has one of the highest total corporate tax rates (cap gains included in this), and everyone acts surprised that all these companies are parking money off shore. Think how many jobs that could create. You all say it doesn't sway people opinions, but it in FACT does. Hence the billiions and BILLIONS of dollars that owners refuse to repatriate. So while you may be right that Buffet doesn't buy chocolate bars (coincidentally he baught Cadbury years ago), people like him will decide to figuratively stuff it in their mattress so no one benefits instead of investing it. Which would create jobs.

Now if you want to get into it about carried interest being taxes at the cap gains rate, then you will get no push back from me...AT ALL.

[cannon_fodder]

There absolutely is a way to weight risk... bond ratings do it all the time. I never suggested that doing so for the purpose of capital gains makes any sense.

My goal on tax policy would be three fold, and by priority: 1) economic prosperity, 2) governmental revenue, and 3) fairness.  I think it has to be set that way. If revenue is the #1 goal, it can neglect long term impacts. If fairness is totally ignored, you end up with tax cheats and a lack of motivation. But if you are encouraging economic prosperity, the other two goals are more likely to be met. Just like every video game ever that involved taxes... you have to keep a balance to obtain any goal.

Again, I bring up inheritance because it makes a good example. A stark comparison.  I had no idea the tabloids were interested in the capital gains taxation of inherited multi-generational wealth. I missed that article in the Inquirer.

Double taxation was established long ago in exchange for perpetual life and limited liability. That was the trade off. Now that "corporations are people too" and have the right to freedom of speech, political dissent, they commit crimes and are punished, and every thing else - it is even harder to argue that they shouldn't be taxed. They are separate and distinct legal entities that benefit from our schools, roads, and military influence.

Yes, the US corporate tax rate is higher than most. Even the effective corporate tax rate is fairly high (but well short of the "list" price). But our capital gains tax is lower, our income tax is lower, our property taxes are lower, our inheritance taxes are lower.  If you look at the percent of GDP that is collected by all levels of government in the form of taxes, the US is far down the list at 27%. Most of our peers are in the 32% range.  There are few countries that would be considered industrialized nations below the USA on the tax scale. And, it should be noted, our taxes don't cover our expenses.

Running a first world country with a global military is expensive. Someone has to pay for it.

And I stand by my position that less favorable treatment of capital gains would cause Buffet to stuff a mattress with billions of dollars. Currently, he risks $1 Billion expecting a 20% return with a 20% effective tax rate, leaving him with a $160mil realized gain. If we modified the capital gains to 30% (a number similar to income tax), he has a realized gain of $140mil.  As a result Buffet is going to stuff the $1 Bil in a mattress instead of grabbing the $140mil (Ayn Rand warning).  Ergo, raising the capital gains tax is unlikely to dissuade most investing activity (you'll note we didn't see a huge influx of new investor activity in 2003 when we slashed capital gain rates).

In that a marginal increase in the capital gains rate is unlikely to significantly influence the flow of capital, it would be unlikely to change the labor market significantly. Historically, the labor market doesn't track the capital gains rate in any way. And it has a negative correlation to the highest income tax bracket.  In fact, some economist have argued that a high tax rate increases investment (thus encouraging employment) since the value added from profits are reduced.

I also acknowledge that foreign investment is important. Its good to be the host country where people park their assets. And tax rate does play a role in those decisions, but so does stability, rate of return, etc. etc. etc. I don't thing the way to win that game is to race to the bottom and have the lowest possible taxes. It eliminates a key benefit of hosting the wealth to begin with.

I point out again, that same logic applies to the workforce. At 30% it isn't worth going to college and earning lots of money. So I will just stuff my talent in the mattress and not work because taxes are too high.

My basic statement is this: our current tax policy favors passive investor income over earned income.

Interesting statement. Good discussion. Sorry to disrupt the Trump thread with an intelligent conversation.   

[erfalf]

Interesting statement. Good discussion. Sorry to disrupt the Trump thread with an intelligent conversation.   

I know, right?

Trump fantasizes about fondling young girls.

Continue...

[heironymouspasparagus]

I know, right?

Trump fantasizes about fondling young girls.

Continue...

And walks in on them naked so he can do his Pedophile in Chief thingy....

[swake]

I know, right?

Trump fantasizes about fondling young girls.

Continue...

You don't take that seriously?

[erfalf]

And walks in on them naked so he can do his Pedophile in Chief thingy....

Either that or the First Philanderer.

"Where are all the white women interns at?"

[dbacksfan 2.0]

I know, right?

Trump fantasizes about fondling young girls.

Continue...

[swake]

Either that or the First Philanderer.

"Where are all the white women interns at?"

Good for you.

[erfalf]

Good for you.

[heironymouspasparagus]

You don't take that seriously?

Still Trumping??

Sadly, while most of the world is just now starting to become aware of his depravity, Trump has taken it seriously for decades.  Even buying a beauty pageant as his enabling mechanism.  So far eclipsing anything any previously knows perpetrators - you know, like Newt Gingrich with his decades long ongoing activities with his h00kers/wife - has done.

These guys make Billy Bob look like a 7th grade bumbling amateur in the pursuit of females arena!  




Had to edit;  "away" should be "aware"....  I sincerely hope and do believe erfalf takes it seriously....if not, would be counter to every impression I have gotten from him.

[Red Arrow]

For the worker, the rate is actually 10% up to 9k, 15% up to 37, etc. etc. up to 28% on the top of his bracket. FICA is 6.2% for the employer and 6.2% for the employee, plus Medicare 1.45% for each.  So if the guy is 1099 on the job, his rate would be higher than 40%. If a W2 employee, it would be less.

Assuming $100K taxable income to avoid complications:

A single guy would pay $21036 in income tax plus either 7.65% or 15.3% FICA for 28.% if he worked for someone else or 36.3% if he was on his own.  Where do you get a rate higher than 40%?  I agree 36% is getting close but it is still several percentage points less and not just round off error.

A married guy would pay $16542 + 7.65 or 15.3% for 24.2% or 31.8% (with some round-off/up).  Now well less than 40%.

I get your point but I agree with other posts about rewarding risk.  True, Warren Buffett won't care. I have the option to participate in the Employee Stock Purchase Plan at work.  I am glad I didn't need to sell any stock during the latest recession as I would have lost about 1/2 of my money.  Fortunately the stock has rebounded and I made a bit of profit.  I sold all my long term shares to avoid the possibility of losing my butt.  I kept the short term shares exactly to avoid the tax as I didn't need the cash right now. 

As a point of discussion,  I believe the reduced married tax rates should be eliminated  for the reason you dislike the capital gains tax rates.  We are rewarding someone for having a spouse that doesn't work.  Then we make life even more miserable for a couple who both work (the so called marriage penalty) although being single I don't have the math on that and don't feel like investigating it.  On top of that, we allow deductions for children.  Why?  In most cases children are wanted.  If "you" want to spend your money having children that's OK but it's bad enough I have to help educate them.  Feed and clothe them on your own dime please.  Either that or allow me do deduct my airplane costs.

My point is that we all have our favorite hot spots on other people's tax breaks. Try to think of the guy living on family inheritance money as being rewarded for keeping a job available for someone who really needs it.

[Red Arrow]

If you go to Metro Christian University, wouldn't you expect that their might be some Christian politicking going on in that institution? ORU? Texas Christian?

Which is exactly why I would not go to those, or similar, Universities.  It is also why I am opposed to vouchers to take Public School dollars and send them to private elementary and high schools.  At the University Level,  I can accept scholarship money going to religiously oriented schools.