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Long term capital gains taxes are not an increased tax rate or an additional tax upon capital gains. It is a discounted tax rate upon profits due from the sale of something held by the seller for a year or more.
What? How is an additional tax not an additional tax?
I'm not a conservative, but I'm just defending investment from the harsh treatment it's getting.
And yes, I agree with you about the income tax. It's too convoluted and we waste resources just trying to figure the thing out. We need a simpler tax. I'd like to see a flat sales tax. Income taxes, capital gains taxes, and corporate taxes should all be at 0 (including payroll taxes, social security, etc., get all the other ones to 0).
It's the demonization that I'm fighting. You act as though just because you invest and make money that it's not earned. The fact that you put up money as a risk means that it is earned. And it even ignores the fact that this money is very useful to the company for their expansion. More production is a good thing, right?
Phattonez, I do not (as you wrote), “demonize” investment or investors.
Most of the profits that are granted the capital gains income tax discount are not due to “investment” as the word is more narrowly defined by economists.
Economists define a nation’s annual gross domestic product, (GDP) as the value of all goods and service products produced that year within the nation. “Investment” is included but “transfers of wealth” are excluded from the calculation of GDP.
Economists’ define “Investing” as the dedication of efforts and/or resources dedicated to (hopefully) produce additional goods and service products. Deposits into a bank, the purchase of stocks, bonds or real-estate do not in themselves produce additional new products. It is only when wealth is spent for goods and service products that are then “invested”. has any investment occurred.
I do not demonize speculators or financial profits themselves. The markets that promote the liquidity and enable trading the items of wealth are of economic benefit to the nation.
I’m opposed to our tax laws determination that some entrepreneurs’ decisions to sell their enterprises are of greater national benefit than others that dedicate their wealth and effort to improve their enterprises and possibly the leave more than wealth as a legacy. I’m opposed to government’s determining what sources of incomes are more preferred. I’m opposed to intervention of our markets to replace Adam Smith’s great clever invisible hand with government’s clumsy claw.
If you, (as I am) a proponent of free enterprise, you should also be opposed to government’s granting special strokes for special folks; you should be opposed to the unjustified capital gains tax discount.
Respectfully, Supposn
...... Besides, we can't just compare capital gains tax rate with an income tax rate because of the plethora of deductions that you can claim for your income tax.
Phattonez, I would have posted sooner but I first had to look up the definition of “plethora”.
People that avail themselves of the capital gains tax discount also generally take advantages of many other tax loop holes that are not available to wage earners. That itself isn;t reason to eliminate the capital gains tax discount but it’s certainly not a reason to retain it,
Respectfully, Supposn
Phattonez, I do not (as you wrote), “demonize” investment or investors.
Most of the profits that are granted the capital gains income tax discount are not due to “investment” as the word is more narrowly defined by economists.
Economists define a nation’s annual gross domestic product, (GDP) as the value of all goods and service products produced that year within the nation. “Investment” is included but “transfers of wealth” are excluded from the calculation of GDP.
Economists’ define “Investing” as the dedication of efforts and/or resources dedicated to (hopefully) produce additional goods and service products. Deposits into a bank, the purchase of stocks, bonds or real-estate do not in themselves produce additional new products. It is only when wealth is spent for goods and service products that are then “invested”. has any investment occurred.
I do not demonize speculators or financial profits themselves.
The markets that promote the liquidity and enable trading the items of wealth are of economic benefit to the nation.
I’m opposed to our tax laws determination that some entrepreneurs’ decisions to sell their enterprises are of greater national benefit than others that dedicate their wealth and effort to improve their enterprises and possibly the leave more than wealth as a legacy. I’m opposed to government’s determining what sources of incomes are more preferred. I’m opposed to intervention of our markets to replace Adam Smith’s great clever invisible hand with government’s clumsy claw.
Tax preference for capital gain is government’s attempt to counteract normal open market behavior. The U.S. Congress has determined that Adam Smith’s “great invisible hand” is shaky and inferior to the opinion of campaign contributors.
I am not opposed to tax reduction but I abhor tax inequity. It is politically unfeasible to eliminate tax reduction for home sale’s capital gains. Revenue retained due to the elimination of all other capital gain tax reductions should be applied to reducing federal debt. (I doubt if there’s sufficient revenue to reduce tax rates for regular incomes).
Somehow his suggestion has actually came true. We have accepted this inequity to be OK because that is just the way it is and we cant do anything about it - or is it that the rich dude has actually convinced us that he is better than us and is entitled to paying a lower tax rate.
The "rich people sitting around getting richer" chant that starts when we suggest eliminating the capital gains tax is a logical fallacy. The rich getting richer is a result, not a cause. The fact of the matter is: Smart people use money to create value in the securities market. Not so smart people (to be politically correct) waste money in the consumption market.
What? How is an additional tax not an additional tax?
Income is income. My income gets taxed at a high rate, good or bad. But some people have been able to call their income something else (such as capital gains), and thus by doing so have decreased their tax obligation. It's essentially a perk to the rich, the aristocracy, who can be so widely invested that much of their income can be qualified as "capital gains". Everyone is equal, no one is special. You tax my income at X percent, then your income is taxed at X percent. The very very rich in this country end up paying less in taxes due to things like this. It's why Warren Buffett's tax rate is lower than his secretary's
I agree with the premise that there should be no difference between income from labor productivity and investment returns. But, long-term (low liquidity) capital investment is preferred over short-term investments (high liquidity). This is exemplified in higher bonds and CD interest rates, the longer the commitment. I think it is beneficial to encourage (by absence of taxation) long-term investments because it promotes stability. In the case of capital gains, the low taxation is consistent with the normal market forces.Respectfully, HTTP
A response, which I posted on another thread but addresses the fallacy:
Smart decisions generate wealth and a lower tax rate makes that decision an even more profitable, being rich has nothing to do with making that decision.
Respectfully, HTTP
income is income. My income gets taxed at a high rate, good or bad. But some people have been able to call their income something else (such as capital gains), and thus by doing so have decreased their tax obligation. It's essentially a perk to the rich, the aristocracy, who can be so widely invested that much of their income can be qualified as "capital gains". Everyone is equal, no one is special. You tax my income at x percent, then your income is taxed at x percent. The very very rich in this country end up paying less in taxes due to things like this. It's why warren buffett's tax rate is lower than his secretary's
I disagree. The GDP calculation, although widely used, is not a valuable measurement of economic performance. For example, government spending in terms of value is a net loss investment; therefore is not economically productive. The spending is included in the GDP calculation, even though it qualifies as a transfer of wealth. This results in the government ramping up spending and saying, "look the GDP says its okay," but in reality we just committed more money in a bad investment.
With respect to market investments, the initial investment is a wealth transfer, but the return on investment is the economic value created. These returns should receive preferential treatment because are beneficial to the economy. By advocating an increase capital gains taxes, you are deterring investment.
Respectfully, HTTP
Not sure what you understand about the cost of capital. People look at the after tax return when deciding to make a decision. So by increasing the capital gains tax you are again adding another anchor to the recovery of the U.S. economy. That is capital costs more so there is less investment leading to lower economic growth. This is compounded by the fact that the U.S. competes with the rest of the world for capital. So this would only serve to long term, exaserbate the problems for workers in the U.S. lowering tax rolls.
HTTP, concerning the capital gains tax discount, you began by stating “I agree with the premise that there should be no difference between income from labor productivity and investment returns. “. Then you follow with a “But” and arguments that are absolutely contradictory to your first sentence.
When capital gains tax discounts are the determining factors to sell, then the aggregate net benefit of those sales to our nation’s economy is questionable. On the other hand if the capital gains tax discount was not the determining factor to sell, why are we granting a tax discount for what would have occurred with no loss of government revenue?
It is not unfeasible to eliminate the long term capital gains income tax discount. It is not unfeasible for the government not to interfere with entrepreneurs’ choices of selling their enterprises or nurturing them to further flower. The capital gains tax discount is government’s clumsy thumb tilting the scale.
I’m not advocating that in spite of what’s unfeasible, our government fanatically cling to the “pure” ideology of individuals’ exercising their own judgments within a free enterprise system.
I understand conservatives that are opposed to government welfare except when those welfare benefits fall into their own hands.
Refer to the first message of this topic thread.
Respectfully, Supposn
sounds like Envy to me
you probably think people who work hard and save ought to have half their estate confiscated too because you won't have that sort of money when you die?
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