General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsCapital gains should be taxed HIGHER than labor.
All this repuke talk about the how the poor don't know that value of work is nothing but projection. It is the repukes who don't value work. They want to tax work income at 30%, while taxing capital gains (where you get money without lifting a finger) at ZERO. The unfairness is mind boggling.
If anything, labor should be taxed at a lower rate, because it is a diminishing asset, so to speak. We can only provide so many years of labor, then we can't work anymore. Then we die. Life is short and most people, if they could, would spend their limited time here on earth hanging out with their loved ones or seeing the world, engaging in hobbies, etc. Work, in general (particularly low wage work), sucks. So why further discourage work by taxing it many times more than other forms of income? And most people who have to work for a living need every dime they make for the basics. Therefore, they spend everything they make, which is way more stimulative to the economy (70% of the economy is based on consumer spending).
Capital gains, on the other hand, are generated by money --and money does not die. It lives forever and can continue generating capital gains forever. Plus, the rich people who get these gains just stash it away. Relatively little of it is spent on consumer goods to drive the economy. The rich already have all they need. Their spending is discretionary. Why would you tax capital gains at a lower rate if it does not boost the economy like labor income? (Rhetorical question--I know it is because the rich rule congress and are money hoarders).
hifiguy
(33,688 posts)generated by actual labor taxed so much more than income generated by sitting on one's bloated, privileged ass doing nothing all day but ordering the servants around?
SunSeeker
(51,550 posts)freshwest
(53,661 posts)russspeakeasy
(6,539 posts)SunSeeker
(51,550 posts)Live and Learn
(12,769 posts)DonRedwood
(4,359 posts)indepat
(20,899 posts)saving accounts and certificates of deposit. Yeah!
SunSeeker
(51,550 posts)Thanks for adding that.
1StrongBlackMan
(31,849 posts)from a pundit on the Left was ...
"So capital gains must be kept low because it is a disincentive for the wealthy to invest; but tax rate on W-2 earners is what?"
SunSeeker
(51,550 posts)Of course they are going to invest it--even if gains are taxed at 90%. That's still better than getting nothing if the money is sitting in a mattress.
Flatulo
(5,005 posts)90% tax on capital gains would be a disincentive to invest, since one could lose all the money.
I like 50% for capital gains. It worked for decades.
SunSeeker
(51,550 posts)It should start at close to zero for folks like an elderly couple living off a nest egg, going up progressively as investment income goes up. But whatever the rate, it should be higher than it is for that same amount of income generated by labor.
And I agree, 50% did work for decades, ushering in huge growth. When capital gains are taxed at relatively high rates, it ENCOURAGES re-investing the gains back into the business (e.g., hiring, R&D, construction) since otherwise the money would be taxed. The system the way it is now encourages taking money out of a business and stashing it in foreign accounts.
Flatulo
(5,005 posts)Long-term was much lower than short-term, which I think used to be 50%.
And I agree that retired folks need to generate income from their 401ks. That should be taxed much lower, if at all.
SunSeeker
(51,550 posts)I mean, what they call short term trading now includes those high frequency trading computer programs that hold stocks for a split second to make big amounts of money by selling/buying even bigger amounts of stock. We so desperately need a stock transaction tax, albeit tiny, to prevent this gaming of the market. But that's another topic...
http://www.dailyfinance.com/2012/08/13/who-are-the-stock-trading-robots-eating-alive/
http://www.motherjones.com/mojo/2012/06/robin-hood-tax-comes-america
BadgerKid
(4,551 posts)Not sure whether that applies to HFT or not. My guess is that it does not.
If I could. Nice quotable comment. Thanks!
coalition_unwilling
(14,180 posts)carry forward additional losses) from other income.
Capital gains and dividends, imo, should be taxed at the same rate as income from labor, but with a far steeper and thus more progessive tax table.
mbperrin
(7,672 posts)not casino plays.
You know, where you get a business going, have deductions, hire people, that sort of thing. I know - it really is so Fifties.
But I had a great time in the 50s!
Taitertots
(7,745 posts)Flatulo
(5,005 posts)it's not worth risking one's principal. One of the riskiest investments is a start-up company, exactly the kind of thing we want to attract capital to by virtue of a high rate of return.
Now a guaranteed 10% return is a wonderful thing, but there simply is no such thing these days.
1StrongBlackMan
(31,849 posts)at my daily rag's comment section.
I said, "Really? In investor is going to pass up a million dollar return because they will only realize $970,000? Really? If that's your investment strategy ... keep your day job and start buying lottery tickets."
unblock
(52,196 posts)to do otherwise just causes people to spend pointless time and effort circumventing the higher rate by recharacterizing income in favor of the lower tax rate.
if labor income were taxed at a lower rate than investment income, then suddenly ceos would stop getting most of their income in the form of options and instead they would get most of their income in the form of salary and bonus. instead of buying more shares in their company, they would buy a more aggressive bonus structure -- less salary, more bonus.
and companies would hire or contract with investors, finding some way to take their money in exchange for a bonus based on performance of the company.
there would be a whole lot of wasted effort and energy as a result of such nonsense.
i agree with the thrust of your post, that labor shouldn't be taxed at a higher rate than investment income, but i don't think it should be taxed at a lower rate, either.
what i DO like is simply having a much higher exemption, so the income tax doesn't kick in for people who really do need every penny.
SunSeeker
(51,550 posts)I mean, people will always try to game the system, that is no reason not to do something. I do like your idea about income tax not even kicking in until people don't really need every penny. What income would you suggest?
unblock
(52,196 posts)because i don't have enough of a feeling for how much revenue would be lost with each incremental increase in exemptions and/or the standard deduction.
i just think that to start taxing a single person after only $9,750 ($3,800 exemption, $5950 standard deduction) seems ridiculous when the federal poverty level for a single person household is $11,170.
i mean, at the very minimum, don't put an income tax on people below the federal poverty level! i know in many cases the earned income tax credit may help this but i don't think everyone qualifies for this and i don't know if it always prevents taxation below the poverty line.
i think something like a zero income tax on the first $25,000 of income sounds much more reasonable (for a single, more for couples, dependents, etc.), though again, someone will probably jump on that and say it would add some crazy amount to the deficit. i know it's a political non-starter, but i think it's profoundly un-american to put an income tax (beyond the payroll, sales tax, etc. they're already paying) on people making rather little.
as for the better law enforcement, it's not really a matter of law enforcement if it's LEGAL to earn money on a different basis. a ceo, for instance, almost always has both an investment and a labor contribution to the business, so it's really easy to just say, pay me on whichever basis gets the better tax treatment.
harder to do with truly passive investors, but a company could create actual jobs and hire these people. however the tax code is written, lawyers would be able to figure out some minimual something these people could do to qualify as doing "labor" and get paid accordingly. maybe they get paid to surf the web or test product at home. point is, there will always be some LEGAL way to do it, it will be figured out, and it will be done.
drmeow
(5,017 posts)I don't think it is just the tax rate which make CEOs want stock options. I think stock options potentially net them more income than equivalent pay - and then it is also taxed at a lower rate. So I wouldn't have as much problem having CEOs request more pay rather than more stock options. Plus I think the value of stock options is easier to hide from the general population. A lot of people don't necessarily know what stock options mean - if they hear so-and-so make $$$$ they understand that. Hearing so-and-so made $$$ plus $$ in stock options it isn't immediately apparent what that means in real income.
unblock
(52,196 posts)salary, being fixed and essentially risk-free, has no upside and any company would effectively reduce the ceo's overall compensation in exchange for this guaranteed income.
however, if bonus were to replace stock options, they could certainly come up with a formula based on the stock price movement and pay accordingly and call it bonus.
and on the contrary, i think stock options make things worse for ceo's in terms of image because years and years worth of "earned" options may be exercised and liquidated all at once, or at least their value may be reported as a lump sum. so especially when a ceo if forced to resign under terrible circumstances, yet you hear about how they're leaving with half a billion dollars or whatever. well, that's because the company did well for the first 25 years the guy was running the company, but you only hear about it when the company tanks and the ceo leaves. had the ceo been getting bonuses each year (and only in the years when the company did well) then you wouldn't have this problem.
when the company tanks, the ceo gets no bonus, or just the minimum guaranteed bonus and just for the one year. much less embarassing press that way.
taught_me_patience
(5,477 posts)I think capital gains and interest income should be taxed as income... the same rate as income from labor.
SunSeeker
(51,550 posts)freshwest
(53,661 posts)One of the familiar arguments for the avoidance of the taxes is that for the person who has worked, and then invested the results of their work, they are being 'taxed twice.' Do you see any justice in that claim?
Although I believe our system has been gamed by speculators to create this mess. But it has been done many times in the past, causing recessions and depressions back in the 1800's and they were called out on it every time. But it was written up to 'the business cycle,' as if it was a force of nature or an Act of God, and allowed to build up every time.
That is, until FDR expanded the role of government to regulate and prevent from happening. As that generation has passed away after learning those lessons, the Reagan generation knows nothing but the free market swill pushed out by the Koch think tanks. They don't accept the notion we should tax, regulate the markets, the banks, wages, working conditions, etc.
SunSeeker
(51,550 posts)And people are "taxed twice" all the time, e.g. via sales tax. If taxing low wage workers again on every dime they spend is not an injustice, then certainly taxing the rich on money they don't need to live on (which is why they are investing it) is fair.
But I agree with your point that there are people who don't accept the notion we should tax, regulate the markets, the banks, wages, working conditions, etc. Unfortunately, they have been dominating the conversation.
freshwest
(53,661 posts)Yes, people are taxed twice, thanks for reminding me of that.
The GOP seeks to disenfranchise based who owns land and is paying property tax, but it's a falsehood. The Teabaggers have changed voting in municipalities, saying renters don't pay property taxes, when they do.
Because it's part of the cost of being at the place they live, and property owners are not a fool who doesn't pass that cost along out of a sense of pride of ownership.
A bigger issue when we speak of the investing, is how the tax code is constructed. A worker generally must pay their tax burden upfront. Thus reducing their take home pay, lowering their standard of living all year around.
The person who is not drawing a wage is not forced to pay up front as the paperwork to prove income on a weekly or monthly basis would be huge. They hold onto, invest or use their income from the business to make more money, and have a year to find excuses not to pay taxes. In the meantime, they have that money in possession, like a bank holding money on deposit and using it for other purposes to make more money.
The only solution offered has been the flat tax, which is still the rich man's game. Some people are so reduced in income, or have none for whatever reason not of their own doing, that any tax harms their chances of survival.
Obama has been trying to frame the argument of justice in taxes for a long time, and I hope it resonates with enough voters to get things back in balance. It's a hard road ahead.
drmeow
(5,017 posts)Money is not taxed - people and transactions are taxed. The rate of taxation is determined by the monetary value of the person or transaction.
I work and invest my money in my house and pay property taxes on my house. In fact, I pay taxes on the materials used to improve my house which increases the value of my house which potentially increases my property tax but definitely increases the taxes I will pay on the income from the sale of my house.
I work and buy goods on which I pay sales tax.
I save money and pay taxes on the small amount of interest I earn on my savings.
I invest and pay taxes on the income I earn on my investments.
Even the "my parents paid taxes so taxing my inheritance from them is being taxed twice" is BS. Your PARENTS paid taxes on that income - YOU did not!
Unless I stuff my money in a mattress or get paid under the table, all "my money" is taxed multiple times. Most of the times money changes hands it is taxed.
freshwest
(53,661 posts)It is meant to be in circulation, or the entire system grinds to a halt. That is how dictatorships rose in the past.
Grover 'drown the government in a bathtub' Nordquist has a plan to take over and force us to be serfs to unaccountable, anti-democratic oligarchs. Here is his/Koch/ALEC plan to replace the government:
All we have to do is replace Obama. ... We are not auditioning for fearless leader. We don't need a president to tell us in what direction to go. We know what direction to go. We want the Ryan budget. ... We just need a president to sign this stuff. We don't need someone to think it up or design it. The leadership now for the modern conservative movement for the next 20 years will be coming out of the House and the Senate.
Pick a Republican with enough working digits to handle a pen to become president of the United States. This is a change for Republicans: the House and Senate doing the work with the president signing bills. His job is to be captain of the team, to sign the legislation that has already been prepared.
~ Grover Nordquist
http://www.thedailybeast.com/articles/2012/02/13/grover-norquist-speech-cpac.html
drmeow
(5,017 posts)i.e., drop f**king dead. It is well past the time for that [there is no curse word strong enough] to stop wasting precious air, food, water, and space by living.
SharonAnn
(13,772 posts)freshwest
(53,661 posts)HooptieWagon
(17,064 posts)is going to be pretty harsh on retirees living on a small nest egg.
SunSeeker
(51,550 posts)I think all taxation should be on a progressive scale, including income from labor. The fact that there are some folks who spend all their investment income on living expense (and who could be easily accommodated via a lower tax on low investment incomes as opposed to high investment incomes) is no reason to not tax investment income more than labor.
HooptieWagon
(17,064 posts)and pay themselves a salary from their investment income. Seems like a silly exercise to have to go through.
SunSeeker
(51,550 posts)But if they are not managing their investment, then they can't create some bullshit corporation just to avoid taxes.
Scuba
(53,475 posts)aint_no_life_nowhere
(21,925 posts)as a carrot and stick. Tax capital returns at a higher rate to encourge the rich to invest their money in new businesses that produce jobs and goods. But Republicans want all carrot, no stick.
freshwest
(53,661 posts)Nuclear Unicorn
(19,497 posts)and they eat your carrot and give you their stick?
I don't need the Sarah Palins and James Dobsons of the world having that much power over my life. No political party ever has a 100% permanent hold on the reins of power forever; espceially in a free society. You have to assume at some point the opposition will be in power and you don't want to leave them any laws that could come back to haunt you -- because they will, every time.
dkf
(37,305 posts)In a global economy how do you envision raising capital gains in the US will influence people?
aint_no_life_nowhere
(21,925 posts)up to 99.9 percent if necessary. Seize any of their money that enters a US bank account on which they live to offset any tax avoidance offshore. If they don't want to be a part of this society then so be it. Let them renounce their US citizenship and live somewhere else. But the fear of millionaires moving their money beyond the reach of the US government isn't something we should encourge by carrots such as periodic tax amnesties but with the harshest sticks that give the fat cats the choice of participating in the society in which they use so much of the commons (the court system or military protection, for example) or finding it impossible to live in the US.
dkf
(37,305 posts)those who have the wherewithal to change things. They stop their activity.
So much money that could be put to use...so little interest in doing so. It's depressing.
reformist2
(9,841 posts)SunSeeker
(51,550 posts)freshwest
(53,661 posts)This is why the so-called "fair tax" is so insidious. It promotes wealth accumulation even more than or current system. They even admit it on their website (but with a positive spin). We need to move towards a "wealth tax", not further away from one.
FiveGoodMen
(20,018 posts)HooptieWagon
(17,064 posts)Short term capital gains and dividends should be taxed at same progressive rate as labor. This differentiates between a retired couple living on a nest egg and a middle-aged venture capitalist rolling in a low taxed fortune. Long term capital gains can also be taxed progressively after an adjustment for the length of time held. For example, a long term homeowner would pay a little less capital gains tax than a house-flipper. This seems the fairest to me.
berni_mccoy
(23,018 posts)Graduating scale on length is an idea not implemented in the current tax plan, and I would like to see it employed. This would benefit many people saving for retirement without using special vehicles (401k, IRA) that could adversely cost people if they need to draw early. The fundamental rule being the longer you keep it in the market, the less tax you pay.
HooptieWagon
(17,064 posts)And I think encouraging investments to be held a bit longer will mean a more stable, less volatile, market - be it stocks, housing, or commodities.
freshwest
(53,661 posts)Last edited Thu Aug 16, 2012, 01:53 PM - Edit history (1)
Aren't they using nearly the same corporate practices as Romney did with Bain?
I was just thinking yesterday of a situation I saw developing where a combination hotel, rental, etc. property was sold off as the owners aged and retired. There was a sense of community, it was all natural and maintained beautifully, and employed some of those living there to do things in a sustainable and positive way.
The new owner immediately stripped the property of most of the landscaping, dissolved the part of the property that was generating employment, raised the rates to the point no one in the rentals could live there and worked on closing the hotel.
He then went on the cheap with everything, forcing the managers to work 72 hour shifts, lowering the quality of living while upping the price to levels that drove the long time residents out, and turned the hotel into apartments, making a turnkey operation.
His business adviser was showing him how to become very wealthy and live the high life, which he achieved, hardly working at all. He did it like Romney did, constantly borrowing against the value of the property to take money out for himself, and raising the costs of all below. And did everything he could to hide his money from the tax man.
It wasn't just Romney following that predatory business model. It's across the country.
Mosby
(16,299 posts)Are taxed at the same rate as earned income. Long term investments are taxed at the capital gains rate of 15 percent.
SunSeeker
(51,550 posts)I agree we should have progressive taxation, both for labor and capital, just that capital should still be taxed at a higher rate than labor. Certainly the retired couple living on a nest egg can be easily accommodated under that sort of system. I don't get why you think it is fairest to tax labor and capital the same.
HooptieWagon
(17,064 posts)Currently, capital is taxed lower than labor in the upper income brackets, which leads to the current scenerio of CEOs taking much of their pay in optio.s,etc. This leads to a short-term oriented business model. Taxing at the same rate as labor would lead to higher salaries, less options, for CEO pay. Not only would this generate more revenue for the govt, but also less incentive for short-term business model and more incentive for long term models.
Xipe Totec
(43,890 posts)Pun intended.
hedgehog
(36,286 posts)yesphan
(1,587 posts)Damned right they should ! Excellent post. Kicked and recc'd.
TBF
(32,047 posts)arthritisR_US
(7,287 posts)JoePhilly
(27,787 posts)I have this discussion with a few of my Republican blue collar buddies from high school. They defend taxing investment at a lower rate than the rate they pay for busting their asses all day.
I've tried to point out that if they make 80k a year, it gets taxed at about 25%. But that same 80k gets taxed at only 15% if its comes through investment income.
If you could choose to make 80k one way or the other, which would you choose?
And then I continue ... let's try this, you can make 80k, have it taxed at 25% ... would you prefer to have made that 80k busting your ass, like you do today, or while sitting at home ... which would you pick?
The idea that people won't invest if you tax that income at the same rate as income made though physical labor is just silly.
TahitiNut
(71,611 posts)Income one receives from one's own labor is taxed at the federal level up to 35%.
Income one receives from the labor of others is taxed at the federal level at less than 15%.
Income one receives from the death of another is usually taxed at the federal level at ZERO%.
Interestingly, much of the value of an estate is usually from unrealized (untaxed!) capital gains.
Why should the tax be less on income for which NO WORK was performed?
It seems backwards to me.
At the same time, I can see different "brackets" for each category. It seems to me that any income below the poverty level shouldn't be taxed, at either the federal, state, or local levels.
A "tax" is NOT a penalty! It should be a payment for the government system within which the benefits (security, titles, services, rights, economics, etc.) were received. Those benefiting the MOST should pay the MOST. Those barely surviving should pay the very least. (That obviously does not include Exxon.)
Since it's a payment into a system from which one benefits, shouldn't veterans (with combat experience?) receive a lifetime deduction from their federal taxes?? How much is the value of 2-3 years of one's LIFE? One's health?
SunSeeker
(51,550 posts)Egalitarian Thug
(12,448 posts)is constantly recycled through the system rather than horded into unproductive sinkholes as they are now.
Warpy
(111,245 posts)who get screwed when they try to cash things in to survive on. An exemption of some sort has to be made, possibly a progressive tax on capital gains.
Yes, Republicans scream at this notion but that's because they want all moneys to go to a very small class of very rich men.
Let them scream.
Couple a progressive capital gains tax (indexed to inflation) with a transaction tax and you'd have something.
And yes, the sweat of one's brow should be taxed far less heavily than clipping coupons and trading stocks.
SunSeeker
(51,550 posts)We're in total agreement.
As I've stated up the thread, low income old folks can be easily accommodated with a close to zero rate if they are living off a nest egg.
mbperrin
(7,672 posts)taste like sweet, sweet sugar.
Egalitarian Thug
(12,448 posts)increases incrementally will not effect 90+% of old folks.
Courtesy Flush
(4,558 posts)Funny how that term has disappeared.
SunSeeker
(51,550 posts)badtoworse
(5,957 posts)Egalitarian Thug
(12,448 posts)The whole idea behind investing, the purpose of the wall for which the street is named, was to find a worthy company/project in which to risk one's money. Limiting the risk encourages reckless investing which leads to outright gambling as we see today.
DocMac
(1,628 posts)Politicians will work this into the formula, should they ever have the balls to address this at all.
gtar100
(4,192 posts)Once again, what keeps us from sane, rational public policies and regulations is the self-interest of a few people manipulating our system.
OKNancy
(41,832 posts)If gains were not levied until say, anything over $10,000 a year, I could say that would be okay for short term profits.
People who save and sacrifice things to build toward retirement shouldn't be punished.
Canuckistanian
(42,290 posts)Just because your money is wisely invested doesn't mean that it's sustainably wise.
I mean, an investment portfolio that includes Walmart, Exxon and Monsanto MAY be financially prudent, but in terms of ethical investing, they're not exactly beneficial to the future of humanity, considering the harm they do.
We really need to think about the long time consequences of our actions.
SunSeeker
(51,550 posts)In other words, much like how it is now. Most people who live off their 401k's or IRA's should see little to no tax. But people should not be able to game IRA's like Romney did to sock away hundreds of millions of dollars.
Kalidurga
(14,177 posts)progress2k12nbynd
(221 posts)We tax someone for producing something from their labor? The whole idea stinks.
Taitertots
(7,745 posts)Those all adversely effect lower income families. The net effect is worsening economic inequality, worsening wealth disparity, and a lack of economic mobility.
What else could be taxed? Water or food? Medical care?
1-Old-Man
(2,667 posts)So if your total income was $100,000, half earned by the sweat from your brow and the other half received in interest or dividends or capital gains you'd first pay taxes due on the $100,000 income. Let's say that the taxes on a hundred grand is $25,000 and then in addition to that much tax you'd also owe 15% of the $50,000 that was unearned, which would be another $7,500.
So with that scheme a guy who worked for a living and made 100,000 would owe $25,000 in taxes. But a guy who earned the same total but only half from work and the other half from investment, he's pay $32,500 in taxes.
dkf
(37,305 posts)The future of growth is not in the United States...it's in Asia. That is where incomes are expanding, where the middle class is emerging and where the worker to retiree ratios are the best.
If you deincentivize investing in the US you will only speed the movement of ambitious people and capital to where the opportunities are.
I guess if the goal is to make us all poorer and therefore more equal then this is a great policy.
SunSeeker
(51,550 posts)Taxing capital gains at zero like Romney-Ryan wants to do is not going to get us there. We've tried the race to the bottom. It hasn't worked out.
dkf
(37,305 posts)But we will have our turn at being at the mercy of the markets. Increasing capital gains taxes will only exacerbate things.
SunSeeker
(51,550 posts)Increasing capital gains taxes will increase revenues, which will lower the deficit. Then we can use that revenue to invest in Americans, through school and infrastructure spending, further increasing GDP and the size of the middle class. You know, like what happened in the 1950s. That's the kind of exacerbation I can live with.
dkf
(37,305 posts)The 1950s happened because a lot of the worldwide manufacturing base had been destroyed in war and we were the beneficiaries. That was not normal and I don't think we can expect that.
SunSeeker
(51,550 posts)and thus we were able to take advantage of the opportunity. We have opportunities now. We can transform the way the world uses energy. We just need to invest in ourselves. But I think we're getting a little off topic now.....
Drahthaardogs
(6,843 posts)For some reason, sitting on your ass collecting interest is considered more valuable than having a job.
4th law of robotics
(6,801 posts)Taxes aren't (well shouldn't be) to reward/punish certain behaviors.
It's to raise revenue.
It simply makes more sense to tax those with more money more (as a rate) than those with less since they can better afford it. How they earned that money is irrelevant.
A person worth 1 billion because they are a wonderful singer is no more or less rich than a person worth 1 billion because they're good playing with stocks.
Both should be taxed at the same rate.
/and if it needed to be said that rate should be higher than someone earning MW.
SunSeeker
(51,550 posts)But the rate should be lower for earned income. If you are spending time managing your stocks, then that is work and you should be paid for that time, by the hour. And it should be taxed at a lower rate than the gains on your stocks.
And it's not just about raising revenue. It never was. We have always had to decide what to tax and how much, and those decisions should be based on what is in the best interests of our country, i.e. everyone as opposed to the privileged few.
lumberjack_jeff
(33,224 posts)The economy doesn't lack for concentrated wealth. It lacks consumers with discretionary income.
deaniac21
(6,747 posts)worked and saved for your lifetime to help with retirement, you may not be rich.
SunSeeker
(51,550 posts)Now someone with Romney's IRA should have the bejeezus taxed out of them--or be put in jail. How the F does Romney end up with 200 million in an account that you can only add $3,500 a year to?!
deaniac21
(6,747 posts)Canuckistanian
(42,290 posts)Taxation schemes should be based on principles that keep money circulating, to encourage growth and productivity through DEMAND.
Ultra-low capital gains taxes just encourage money to be tied up in bank accounts, financial devices and job killing investments in outsourcing companies.
It's HOARDING, and it should be discouraged at all costs.
AllyCat
(16,177 posts)Next time some Republican starts this nonsense of people should work hard and the job creators need less taxation, I'll bring this up
Not that it will change their minds, but it could change what someone listening thinks.
Starry Messenger
(32,342 posts)Hell yeah.
Spitfire of ATJ
(32,723 posts)It's blasphemy to suggest even a crumb.
aka-chmeee
(1,132 posts)and usually any friend is better than none, they always insist the rich should be rewarded for the "risk"....I always insist the the "gain" is the reward for the risk and the tax should reflect their appreciation for their circumstances.
Of course, here in Kansas it looks like just about the only taxable income is going to be from labor.
airplaneman
(1,239 posts)The 9 9 9 plan would affect the 99% every step of the way.
His plan for the rich was 0 0 0 - zero capitol gains, zero dividends, zero interest.
The unfairness is mind boggling.
-Airplane
nightscanner59
(802 posts)And god knows the billionaires got the lowest rate of all.
jerseyjack
(1,361 posts)SunSeeker
(51,550 posts)But whatever the progressive tax structure you choose ends up being, the rates for earned income should be less than the rates for unearned income.
Flat income taxes are terribly regressive and are particularly unfair to the poor and lower middle class (i.e. most people) who have much less disposable income.
a2liberal
(1,524 posts)The while concept of capital or property is a "necessary evil" because humans cannot yet share everything in harmony. Excessive accumulation of capital should be strongly discouraged/prevented.
duhneece
(4,112 posts)Why is it so easy to recognize the mental illness of 'stuff' hoarders and not of money hoarders?
Coyote_Bandit
(6,783 posts)Some people are solely dependent upon the income generated by the assets they have. Those who are disabled or otherwise unable to work, for instance. That would include those who are born with disabilities but have funds because a parent or family member made financial provision to care for them. It would include those who are badly injured through the negligence of others (i.e., accident victims and injured workers). These are some of the weakest members of our society. They often do not have the ability to replace the funds they spend. Yet you want them to pay a higher rate of tax on their capital gains tax than you would pay on income you earn from your job. Not only are they victimized to subsidize our society those who voluntarily provide for them are discouraged from making the effort.
For some such income is a necessary supplement to other income. Retired folks. Social Security was never intended to be the sole means of support for its recipients. It was intended to supplement other income and assets that had been saved for retirement. Again, you want these folks to pay a higher rate of tax on their capital gains tax than you would pay on income you earn from your job. Such a tax scheme would motivate workers not a save for their retirement.
For some, capital gains result from the sale of a business asset. If the funds are invested back into the business and the business continues to generate income and employment then why should those funds be taxed at a higher rate than those you earn on your job?
For some, investing their money and using money to generate money is their employment - and capital gains represent the earnings of their labor. If they assume that risk and responsibility rather than employ the services of a money manager or broker then why should the gains of their labor be taxed at a higher rate than those you earn on your job?
Not everyone who pays capital gains taxes is rich. Not all those taxes are generated by playing the stock market lottery. Not all the sales that generate capital gains are even voluntary chosen sales. Capital gains taxes can be generated by sales forced by eminent domain actions.
Capital gains should be taxed as income. Taxes on income should be progressive. And as far as I'm concerned there should not be any available tax credits or deductions which might reduce tax liability.