In an era of profound inequality, few issues illustrate such stark differences in economic priorities as capital gains taxes. Capital gains accrue overwhelmingly to the wealthy and receive favorable tax treatment in several ways.
Cutting capital gains taxes would confer another windfall on the wealthy, exacerbate the tax preference for income from wealth over income from work, increase inequality, and drain revenue.
By contrast, raising capital gains taxes and closing loopholes would make the wealthy pay more of their fair share, lessen tax code disparities, reduce inequality, and raise substantial revenue for the country.
Capital gains and dividends accrue overwhelmingly to the wealthy and are taxed at preferential rates
A capital gain is the profit from selling an asset such as a stock or other financial instrument, an interest in a business, or real estate. The gains from the sale of such assets held more than one year are considered long-term gains and taxed at special low rates.
While ordinary income such as wages and salaries is taxed at rates ranging from 0 percent for low levels of income to 37 percent for the highest levels of income, long-term capital gains are taxed at 0 percent, 15 percent, and 20 percent.
Most corporate dividends that are paid to shareholders are also taxed at these favorable rates. There is also a 3.8 percent Medicare tax on high-income taxpayers’ net investment income, including capital gains and dividends.
The 3.8 percent net investment income tax (NIIT) was enacted in companion legislation to the Affordable Care Act in 2010 and essentially parallels the Medicare tax on wages.1
Capital Gains Tax Preference Should Be Ended, Not Expanded
https://www.americanprogress.org › article › capital-gai...
Sep 28, 2020 — Congress should close—not expand—capital gains loopholes and tax income from wealth the same as income from work.
For the most part, I'd say many got wealthy because they had a singular focus and things like this are not on their radar.I am 101% ignorant about income taxes.
But the Dems do seem right when they call for tax reform.
It's fine to be rich -- even super rich -- but with massive wealth, surely there is a social responsibility that comes along with it.
For example, when I see TV commercials begging ordinary people to donate to worthy causes (for example, medical procedures to help deformed children in developing nations), I immediately think: Some billionaires in many countries could instantly pick up the tab without any sweat. Chump change for them.
Why don't they?
How do billionaires avoid taxes?
Billionaires have avoided taxation by paying themselves very low salaries while amassing fortunes in stocks and other assets. They then borrow off those assets to finance their lifestyles, rather than selling the assets and paying capital gains taxes.
Oct 30, 2021
Do all billionaires do this? If not do you have the percent of billionaires that do and can you name them?
Cause they'd rather build rocket ships and make unnecessary trips into the wild blue yonder and crowned an astronaut.I am 101% ignorant about income taxes.
But the Dems do seem right when they call for tax reform.
It's fine to be rich -- even super rich -- but with massive wealth, surely there is a social responsibility that comes along with it.
For example, when I see TV commercials begging ordinary people to donate to worthy causes (for example, medical procedures to help deformed children in developing nations), I immediately think: Some billionaires in many countries could instantly pick up the tab without any sweat. Chump change for them.
Why don't they?
I favor a fairly broad-based net wealth tax with few exclusions, and progressive with no caps. That's definitely apple pie and blue sky. Right now, the Trump/Rep/con tax giveaway to the rich and large corps is easily fending off even minor changes. The Rep/cons want to tax lower income levels and do away with SS and Medicare. Rick Scott of FL showed the true colors of the Rep party with his 11-point plan. His Republican plan would make even more wealth available to the rich and large corps and away from less than rich Americans.
Agreed.I am 101% ignorant about income taxes.
But the Dems do seem right when they call for tax reform.
It's fine to be rich -- even super rich -- but with massive wealth, surely there is a social responsibility that comes along with it.
For example, when I see TV commercials begging ordinary people to donate to worthy causes (for example, medical procedures to help deformed children in developing nations), I immediately think: Some billionaires in many countries could instantly pick up the tab without any sweat. Chump change for them.
Why don't they?
Agreed.
I'm 100% capitalist, but I am also 100% human being.
"Spreading the wealth" may or may not be capitalist, but it is most certainly human. Holding oneself responsible for the disadvantaged is not capitalist at all, but it is entirely human.
Such are the problems when an economic system pits our individual self against our social nature. (All hominids are social animals, extant and extinct.)
I think we've handled this conflict well, but the concentration of wealth has gotten to a dangerous level. I have nothing against Elon Musk - Tesla employs upwards of 7000 here - but let's get some perspective.
Musk net worth: $300 billion
El Salvador GDP (2020) $25 billion (Haiti was $13b)
Musk could not only feed either country, he could afford to move the entire population of El Salvador (6.5 million), minus the warring political and gang factions, to the United States and leave that shithole country to the shit stirrers.
In other words, Musk has wealth that potentially carries geopolitical consequences. That can be beneficial or not, and the unknown to us is risky to the point of danger.
Before modern democracies and capitalism, wealth was legally held by royalty, and distributed by kings. These governments were challenged by the only other concentration of wealth, the various temples and ultimately the Vatican. The "power of the priesthood" goes back thousands of years to Egypt - some periods saw the temples successfully challenge weak pharaohs - there was a slight pause during Greek and early Roman conquest, but the creation of the Vatican changed all that.
That was then. Now, we have private citizens with the acquired wealth of popes. I'm not so sure it's healthy from a societal viewpoint. If anything, I think what we've learned is that we are people first, capitalists second.
One of the problems, for many years, is the fact that the rich have bought off the "Correct politicians" in order to rewrite the tax codes
to the advantage of the rich/corporations. Naturally as the rich get even wealthier, they keep the trough full in order to make sure
that the bucks keep flowing. It's going to be the proverbial uphill task to change that scenario.
It was, is and remains ridiculous to tax (long term) capital gain (LTCG) income at a special (generally lower) rate than ‘earned’ income.
I thought about including that. Don't have any solutions. I'm just the guy in the tower with the binoculars.OK, that’s a fair observation, so what (if anything) are you proposing as a solution (to the bolded above)?
Republicans don't do social responsibility and will scoff at you for even suggesting the idea.I am 101% ignorant about income taxes.
But the Dems do seem right when they call for tax reform.
It's fine to be rich -- even super rich -- but with massive wealth, surely there is a social responsibility that comes along with it.
For example, when I see TV commercials begging ordinary people to donate to worthy causes (for example, medical procedures to help deformed children in developing nations), I immediately think: Some billionaires in many countries could instantly pick up the tab without any sweat. Chump change for them.
Why don't they?
And they get attacked by the right for it.For the most part, I'd say many got wealthy because they had a singular focus and things like this are not on their radar.
Not suggesting that makes them bad people, but simply not something most think about or care about.
Then again, there are quite a few of the uber rich who are doing exactly what you suggest. Jeff Bezo's ex, McKenzie, is giving away billions to charity and otherwise worthy non profit causes.
I think there's plenty of evidence that it's not.I'm not so sure it's healthy from a societal viewpoint.
One reason why capital gains taxes should be eliminated completely is because you are taxed on gains you never received.
Suppose you bought an investment property for 50k twenty years ago and sell it for 200k today, for a 150k gain. Where I live the capital gains tax would be about 20% (state and federal) or 30k. The gain is not adjusted for inflation, so you will be taxed on "gains" that you never received. Even at just 2 or 3 percent inflation, over 20 years, about half of that 150k gain is due to inflation. Your real gain is closer to 75k, but you have to pay tax on the other 75k "gain" that you never got. In reality, you paid 30k in taxes for a 75k gain, which is 40%.
I'd say the preponderance of evidence says it's not. We of course do have examples of great philanthropists throughout history.I think there's plenty of evidence that it's not.
How do billionaires avoid taxes?
Billionaires have avoided taxation by paying themselves very low salaries while amassing fortunes in stocks and other assets. They then borrow off those assets to finance their lifestyles, rather than selling the assets and paying capital gains taxes.
Oct 30, 2021
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