- Joined
- Oct 12, 2009
- Messages
- 23,909
- Reaction score
- 11,003
- Location
- New Jersey
- Gender
- Male
- Political Leaning
- Libertarian - Right
Reuters said:June 14 (Reuters) - A Democratic plan to extend benefits for the jobless that would also more than double the tax rate for investment fund managers will likely get its first test on Wednesday in the U.S. Senate.
Majority Leader Harry Reid on Monday moved toward an initial vote on a $126 billion bill to extend unemployment insurance that ran out last month for hundreds of thousands of out-of-work Americans and renew a set of popular business tax breaks.
Under Senate rules, the vote on whether to limit debate on the legislation will likely occur Wednesday. Sixty votes are needed out of the 100-member Senate.
...
Over the next 10 years, the Senate proposal would increase direct spending by $126 billion and add $22 billion in funding to prevent a 21 percent payment cut to doctors in the Medicare program, the Congressional Budget Office estimated.
The total package adds about $80 billion to the deficit over that period, according to CBO.
...
The Senate version would tax 65 percent of fund managers' income at the higher rate. A tougher House version would tax 75 percent at ordinary income rates.
Currently, they only pay a 15 percent capital gains tax rate on this income, while ordinary income is taxed at a maximum of 35 percent. The top tax rate is set to rise to 39.6 percent in 2011, the year this legislation would take effect.
Republicans have offered a stripped-down alternative that would extend unemployment insurance for 30 days, but excludes the controversial tax-raising provisions. It also excludes a provision extending tax-exempt Build America Bonds, created in the stimulus plan last year.
Questions:
- Is extending benefits the answer or is creating "jobs" what's being lost in this bill?
- Is this plan of "taxing the rich" going to further jobless rates or make the unemployed even more dependent on government?
- What is the exit strategy for the Federal budget, the unsustainable deficit and how does this bill help stop the U.S. from fiscally driving off the cliff?
Are we losing sight of the trees through the forest?
Overall, this legislation would override a very modest cost-saving mechanism that exists within Medicare. In doing so, it would establish yet another precedent against prospects for fiscal discipline, both as it relates to the recently-enacted health care law (and its limited cost-saving provisions) and, much more importantly, the far larger fiscal challenges facing the U.S.
In terms of the fund managers' situation, I favor consistency in tax treatment. If the legislation treats capital gains on fund holdings as ordinary income, that would be deeply disturbing. If, however, the legislation would treat wages and salaries paid to fund managers as ordinary income, that would merely make the tax treatment of their wages and salaries consistent with that of others' wages and salaries. There is no compelling reason that, for example, wages and salaries earned by, let's say auto workers should constitute ordinary income while those earned by IT programmers should be treated in a preferential fashion. Salaries and wages are compensation for services rendered. Tax treatment for such compensation should be consistent across industries and professions.
In short, capital appreciation on fund assets should be treated as capital gains income. If fund managers invested their own capital into the funds, the returns on that invested capital should also be treated as capital gains. If, however, fund managers are merely receiving wages and salaries for their services, those wages and salaries should be taxed in a fashion consistent with wages and salaries for all other professions.
What?!...you work for the Administration?!!
All I can say is, "FINALLY!! Another solution to once-and-for-all save our economy. You go, Dems!!!"
Seriously though, does anyone really believe this economy is so bad off now that a little sensible and moderate supply-side style policy won't help it along far better? Jeesh...this is really getting ridiculous.
FYI, I do not favor the bill. It is not budget neutral. Worse, it would establish a bad precedent that undermines the credibility of even limited mechanisms for containing costs. Such a precedent would not be helpful when it comes time for the more demanding task of fiscal consolidation that should, IMO, begin to be implemented starting in 2011 and then expanded to include mandatory spending reforms, among other provisions.
Funny how the Bush administration establishes tax cuts that have an expiration date, but people claim that it's the Obama administration "raising" taxes.
Funny how the Bush administration establishes tax cuts that have an expiration date, but people claim that it's the Obama administration "raising" taxes.
And as for capital gains, it's just a way for the wealthy to decrease their tax burden. A wealthy person can invest a much higher percentage of income, and have that income only subject to the 15% tax instead of the usual income tax level. The end result is the top-top-mega earners actually have their total tax liability as % of income go down. Our tax system becomes regressive at the top!
FYI, I do not favor the bill. It is not budget neutral. Worse, it would establish a bad precedent that undermines the credibility of even limited mechanisms for containing costs. Such a precedent would not be helpful when it comes time for the more demanding task of fiscal consolidation that should, IMO, begin to be implemented starting in 2011 and then expanded to include mandatory spending reforms, among other provisions.
Funny how the Bush administration establishes tax cuts that have an expiration date, but people claim that it's the Obama administration "raising" taxes.
And as for capital gains, it's just a way for the wealthy to decrease their tax burden. A wealthy person can invest a much higher percentage of income, and have that income only subject to the 15% tax instead of the usual income tax level. The end result is the top-top-mega earners actually have their total tax liability as % of income go down. Our tax system becomes regressive at the top!
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?