Tax System Seen as Unfair, in Need of Overhaul

[haymarket]

If capital gains were treated as ordinary income, they would be lumped in with a person's regular income and be subject to all of the deductions that are allowed on ordinary income.

Unless someone wants to do away with the earned income credit, child tax credit and itemized deductions. I would love for the Libbos to go after those. Now, that would be funny!

I think, ultimately, the "raise capital gains taxes" don't have a clue what capital gains really are, nor how they're earned and for damn sure are clueless about how the tax code works.

What you utterly fail to understand, or perhaps have made an intentional choice not to attempt to understand, is that the income tax law is written by Congress. If Congress decides to tax all sources of income at the same tax bracket regardless of its source, Congress also controls what deductions are permitted in that same law. Any potential problem - and that is what is being alleged here - a potential problem based on somebody's belief about what might happen - can be remedied through the same legislation that considers capital gains as regular taxable income.

 

[haymarket]

If capital gains were treated as ordinary income, then the big advantage would be that capital losses would be fully deductible from ordinary income. Right now, only $3,000 in losses over and above one's capital gains is deductible. That would make a tremendous difference in revenues, I think. Especially during down market cycles.

The difference in actual deductions wouldn't be much. There are no deductions lost because one has capital gains...one can still take them all against other ordinary income. In fact, when it comes to deductions that depend on one's income being lower, deductions would be lost...such as medical not deductible 'til over 7% of ordinary income.

To begin to again tax long-term capital gains as ordinary income would have tons of unintended consequences, I'm afraid. It's simply not as straight-forward as it seems.

No. That would be a matter for Congress to write those deductions in the new legislation. They could still keep whatever limits they want or whatever deductions they want.

Maggie - I am 62 and have been paying federal income tax for a very long time now going back to my teen aged years. I have seen lots of deductions come and go with new legislation. They are not written in stone on the side of the mountain top. They can be changed. They have been changed in the past. And knowing how government works, they most likely will be changed in the future.

 

[apdst]

What you utterly fail to understand, or perhaps have made an intentional choice not to attempt to understand, is that the income tax law is written by Congress. If Congress decides to tax all sources of income at the same tax bracket regardless of its source, Congress also controls what deductions are permitted in that same law. Any potential problem - and that is what is being alleged here - a potential problem based on somebody's belief about what might happen - can be remedied through the same legislation that considers capital gains as regular taxable income.

I do understand that and haven't claimed anything to the contrary.

The point that you're missing, is that if you start classifieing capital gains as income, it will be subject to the same deductions as all other income, unless Congress gets rid of the deductions on regular income, and there's hardly a congress critter alive that's going to vote for that bill. Even congress critters aren't so stupid that they think it's ok to force people and corporations to pay taxes on their gross incomes.

 

[haymarket]

I do understand that and haven't claimed anything to the contrary.

The point that you're missing, is that if you start classifieing capital gains as income, it will be subject to the same deductions as all other income, unless Congress gets rid of the deductions on regular income, and there's hardly a congress critter alive that's going to vote for that bill. Even congress critters aren't so stupid that they think it's ok to force people and corporations to pay taxes on their gross incomes.

It will be subject to whatever the Congress wants to write in the new law.

Congress has gotten rid of lots of deductions once considered sacred. Once upon a time you could deduct interest you paid on loans and credit cards. That was kissed good-bye. That is the way the system works and to pretend otherwise is to engage in intellectual fraud.

Once again apdst, you are engaging in the fallacy of circular reasoning. You are telling us that we cannot raise the tax on capital gains because the potential gains will be offset by higher deductions which will actually lower the returned amount. And how do you "know this"? Because you are assuming - based on your own beliefs - that a law which you oppose changing can indeed not be changed in a way that you oppose. You really are not making any logical sense or offering any defensible position on this matter.

Congress can change the capital gains tax any way they opt to and that includes allowing or not allowing for levels of deductions to take care of the theoretical potential problem that you believe might arise but cannot demonstrate would arise.

 

[apdst]

It will be subject to whatever the Congress wants to write in the new law.

Congress has gotten rid of lots of deductions once considered sacred. Once upon a time you could deduct interest you paid on loans and credit cards. That was kissed good-bye. That is the way the system works and to pretend otherwise is to engage in intellectual fraud.

Once again apdst, you are engaging in the fallacy of circular reasoning. You are telling us that we cannot raise the tax on capital gains because the potential gains will be offset by higher deductions which will actually lower the returned amount. And how do you "know this"? Because you are assuming - based on your own beliefs - that a law which you oppose changing can indeed not be changed in a way that you oppose. You really are not making any logical sense or offering any defensible position on this matter.

Congress can change the capital gains tax any way they opt to and that includes allowing or not allowing for levels of deductions to take care of the theoretical potential problem that you believe might arise but cannot demonstrate would arise.

They can, it ain't gonna happen. You're barking up the wrong tree. People aren't getting ****ed by the government. Live with it.

 

[haymarket]

They can, it ain't gonna happen. You're barking up the wrong tree. People aren't getting ****ed by the government. Live with it.

To add to your credibility to predict the future could you please give us the winning Power Ball numbers in next weeks lottery? But seriously, you are simply wrong and badly misjudge the public mood on this topic.

As to your assertion that people are not going to get........ whatever that is........ by the government, there are plenty of public opinion surveys which indicate that the American people are in support of tax increases for the wealthy in fairly large numbers. And since capital gains disproportionately discriminate in favor of the wealthy, this should be an reasonable sell to the American people.

Here is a link to an article reporting on 19 such public opinion polls

19 Different Polls Show That Americans Support Tax Increases To Cut Deficit

Despite what the GOP keeps telling us, Bruce Bartlett has compiled a list of 19 different polls taken since January that demonstrate that Americans support increasing taxes in order to reduce the deficit and inequality. Americans may not love tax increases, but they understand their necessity for deficit reduction.

In the June 9 ABC News poll 61% of Americans believe higher taxes will be necessary to reduce the deficit, and 57% of those polled said that deficit reduction should include both tax increases and spending cuts. A Pew poll found that more people blame the nation’s involvement in wars than tax cuts or spending for the deficit. The poll also found wide support for increasing taxes, as 67% said the more high earners income should be subject to being taxed for Social Security, and 66% support raising taxes on incomes over $250,000, and 62% support closing corporate tax loopholes.

and this further demonstrates wide public support

Vast Majority Of Americans Favor Buffett Rule's Millionaire Tax: Poll

Nearly three-quarters of Americans say they support President Barack Obama's proposal to tax households making $1 million or more at the same or higher rate as middle-class households, according to a recent poll from website Daily Kos.

The poll found two-thirds of Republicans also support the so-called "Buffett Rule" –- named after famed investor Warren Buffett, who proposed increasing taxes on wealthy in a recent op-ed in The New York Times. But the measure faces stiff opposition. After Obama unveiled the Buffett rule earlier this month as part of a proposal to cut the national deficit through a combination of tax increases and spending cuts, Republican leaders derided the plan as "class warfare." The report’s findings parallel the results of a Gallup poll released earlier this month, which found that two-thirds of Americans favor boosting taxes on households earning more than $200,000 per year.

as does this

Polls show longtime support for tax hikes on rich - Political Hotsheet - CBS News

The latest CBS News poll shows a two-thirds majority of Americans support raising the taxes of households with incomes of $1,000,000 or more - which President Obama and some Democrats in Congress have proposed. Support for the "millionaire's tax" rises as high as 83 percent among Democrats, and while 54 percent of Republicans oppose it, four in ten think tax increases for these upper income households are a good idea.


Even more affluent Americans support raising taxes for millionaires: 60 percent of those with incomes of $100,000 or more think that should be done.

those are very impressive numbers demonstrating the support of the American people for tax increases on the wealthy who disproportionately benefit from the capital gains discriminatory rates far more than wage earners. This is a very doable idea whose time has come.

 

[TurtleDude]

LOL!!!

Admit it...you see a cash cow in those who are taxed at only 15% and will jump through numerous mental hoops to make it sound reasonable to bleed that cow.

How about we just reduce spending so we don't need to bleed ANY Americans, eh?

Less spending means that the dem party leaders cannot use government handouts to buy votes. All of these machinations are based on the theory that the only good in America comes about when Dems win elections

the money of the rich is a tool that dem pimps in office use to gain power and wealth. there is no inconsistency in demanding more and more money as long as it helps the dems win elections

 

[TurtleDude]

I love the pathetic appeals to popularity which of course is the entire house of cards that the support for the progressive income tax is based on

poll question

DO YOU WANT TO PAY MORE TAXES OR DO YOU PREFER "THE RICH" BE TAXED MORE SO YOU WON"T HAVE TO?


and some think that is a legitimate argument for more taxes on the group that pays too much as it is

 

[Mycroft]

I do understand that and haven't claimed anything to the contrary.

The point that you're missing, is that if you start classifieing capital gains as income, it will be subject to the same deductions as all other income, unless Congress gets rid of the deductions on regular income, and there's hardly a congress critter alive that's going to vote for that bill. Even congress critters aren't so stupid that they think it's ok to force people and corporations to pay taxes on their gross incomes.

The reality is that haymarket wants to tax capital gains at 35% or more. He doesn't really want to include it in regular income. He doesn't want to allow any deductions on capital gains.

Like I said...he sees a cow to bleed.

 

[TurtleDude]

The reality is that haymarket wants to tax capital gains at 35% or more. He doesn't really want to include it in regular income. He doesn't want to allow any deductions on capital gains.

Like I said...he sees a cow to bleed.

Only for the rich.

 

[apdst]

To add to your credibility to predict the future could you please give us the winning Power Ball numbers in next weeks lottery? But seriously, you are simply wrong and badly misjudge the public mood on this topic.

As to your assertion that people are not going to get........ whatever that is........ by the government, there are plenty of public opinion surveys which indicate that the American people are in support of tax increases for the wealthy in fairly large numbers. And since capital gains disproportionately discriminate in favor of the wealthy, this should be an reasonable sell to the American people.

Here is a link to an article reporting on 19 such public opinion polls

19 Different Polls Show That Americans Support Tax Increases To Cut Deficit



and this further demonstrates wide public support

Vast Majority Of Americans Favor Buffett Rule's Millionaire Tax: Poll



as does this

Polls show longtime support for tax hikes on rich - Political Hotsheet - CBS News



those are very impressive numbers demonstrating the support of the American people for tax increases on the wealthy who disproportionately benefit from the capital gains discriminatory rates far more than wage earners. This is a very doable idea whose time has come.

Hey, man...stop trying to **** the American people. I know you work for the government and you're trying line your own pockets as much as possible, but go get a real job, instead hiding behind some politician.

 

[apdst]

The reality is that haymarket wants to tax capital gains at 35% or more. He doesn't really want to include it in regular income. He doesn't want to allow any deductions on capital gains.

Like I said...he sees a cow to bleed.

The Libbos want to bleed everyone. They believe that they can spend our money better than we can.

 

[randel]

Hey, man...stop trying to **** the American people. I know you work for the government and you're trying line your own pockets as much as possible, but go get a real job, instead hiding behind some politician.

wow...pretty serious charge there, trying to line his pockets... any evidence to back that claim up?

 

[haymarket]

I love the pathetic appeals to popularity which of course is the entire house of cards that the support for the progressive income tax is based on

poll question

DO YOU WANT TO PAY MORE TAXES OR DO YOU PREFER "THE RICH" BE TAXED MORE SO YOU WON"T HAVE TO?


and some think that is a legitimate argument for more taxes on the group that pays too much as it is

Having such abject and complete contempt for America, its institutions and it people hardly goes an inch to making any sort of coherent point.

If anyone does not approve of living in a democratic republic where the will of the people is important, there are no Berlin Walls or gestapo forcing anyone to stay.

Turtle - you claim that the rich pay too much but that is simply your opinion based on your own personal desire to pay less. It is no more and no less than that.

 

[haymarket]

wow...pretty serious charge there, trying to line his pockets... any evidence to back that claim up?

You are asking for actual evidence to support that scurrilous and irresponsible personal attack? Is it April 1 so soon?

 

[apdst]

wow...pretty serious charge there, trying to line his pockets... any evidence to back that claim up?

Why is an orange called and orange?

 

[randel]

Why is an orange called and orange?

again, have any proof? whats that? no?? you owe him an apology...

 

[haymarket]

The reality is that haymarket wants to tax capital gains at 35% or more. He doesn't really want to include it in regular income. He doesn't want to allow any deductions on capital gains.

Like I said...he sees a cow to bleed.

If it is all right with you, I will speak for myself. I do want capital gains taxed as regular income the same as wages. As for deductions on capital gains, that would be up to Congress and those writing the new legislation. I would be happy to participate in a discussion of suggestions that would be fair and applicable without destroying the idea of a 35% bracket for the top earners.

 

[haymarket]

Only for the rich.

Only the rich pay the 35% bracket. This is only what you often term as......... "common sense".

 

[digsbe]

Moderator's Warning:

Stop the personal attacks and discussing each other.

 

[iguanaman]

The Libbos want to bleed everyone. They believe that they can spend our money better than we can.

We are consumer economy if you don't like taxes then put your profits back into your factories, equiptment or employees. You will owe nothing. The fact is tying up trillions is not the way to grow this economy. Prying it out of the hands of the rich and putting it to work is good for all. Spending = growth in a consumer economy. Raising taxes on the top earners increases growth because it taxes income NOT spent. Raising taxes on the rest of us comes out of money we would have spent so it reduces consumer spending and shrinks the economy. These are the princples that gaves us the fastest growing economy and the strongest middle class in the world in the 1950's-'70's.

 

[Pointy]

Unfortunately since when have the Corrupt US Politicians EVER adopt any sensible idea.

 

[Centinel]

If it is all right with you, I will speak for myself. I do want capital gains taxed as regular income the same as wages.

Anyone who doesn’t want to live in a country where capital gains are taxed differently than other income is bound by no Berlin Wall to keep them in. Continuing to live here when you know how the system works speaks volumes.

 

[apdst]

We are consumer economy if you don't like taxes then put your profits back into your factories, equiptment or employees. You will owe nothing. The fact is tying up trillions is not the way to grow this economy. Prying it out of the hands of the rich and putting it to work is good for all. Spending = growth in a consumer economy. Raising taxes on the top earners increases growth because it taxes income NOT spent. Raising taxes on the rest of us comes out of money we would have spent so it reduces consumer spending and shrinks the economy. These are the princples that gaves us the fastest growing economy and the strongest middle class in the world in the 1950's-'70's.

Tying up trillions in government coffers is an even worse way to grow the economy. If we had a government that wasn't constantly destabilizing the private sector's cash flow, people wouldn't be holding on to their money.

Hint: It's not just rich folks who aren't spending money.

Another hint: The government can't grow the economy.

 

[cpwill]

Turtle - you claim that the rich pay too much but that is simply your opinion based on your own personal desire to pay less. It is no more and no less than that.

well, that's not entirely accurate. The US Tax Code Leans More On The Wealthy Than Any Other Industrialized Nation.



that being said, I am entirely willing (and it makes sense) for income from stock ownership to be taxed like income from labor. For example, income from labor is only taxed once, whereas income from ownership is currently taxed twice - once at the point of collection and once at the point of dispersal. It's as though your income were subject to taxation at your current bracket once when your employer paid you, and again when the check deposited to your bank account - ridiculous.

therefore, my fellow conservatives, I'm afraid I have to side with Haymarket on this one. We need to treat Capital Gains like any other kind of income - by getting rid of the corporate tax, adding gains realized to your annual income, and then taxing it at your bracket.