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starbucks4ever (97.86)

15% cap gains tax - WTF?

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September 10, 2010 – Comments (49)

Bush's tax cuts for the highest brackets were ridiculous to begin with. But the tax cuts on cap gains and dividends was even more ridiculous. For all the Republican talk about stimulus (as if they could stimulate anything except stock speculation), I have yet to hear a convincing explanation why on earth you should pay a 30% tax on the earned income and only a 15% tax on unearned income. Do these Republicans believe that holding a stock for 365 days and selling it at a higher price is harder than flipping burgers or moving furniture and should accordingly deserve a greater reward? The only sense in which it is true is that with such dedicated support of  the stock market by the government, it did become an intellectual challenge to find a stock that still has a room to go up.  But nevertheless, I'd say equating this challenge to the challenges of a real job is taking it too far. 

It is a good thing that Obama wants to raise unearned income tax by 5% for the top brackets, but such toothless half-measures won't take us very far. What's really needed is a return to common sense. As a minimum, capital gains and dividends must be treated the same way as any other income. If you want a way to simplify the tax code - this is the way.

P.S. Buffett's mouthpiece points out the stupidity of keeping Bush's tax cuts. A recommended reading for everyone.

http://www.washingtonpost.com/wp-dyn/content/article/2010/07/30/AR2010073002671.html 

 

 

 

 

49 Comments – Post Your Own

#1) On September 10, 2010 at 3:20 PM, outoffocus (23.56) wrote:

You want to simplify the tax code? How about we just stick with the tax tables and thats that.  Forget all those stupid deductions and credits.  They aren't really necessary.  And don't get me started on the hokey pokey we call the AMT.  I mean WTFreak? 

*You put the deduction in, you take the deduction out, you put the deduction back in, then you shake it all about.  You do the hokey pokey then you call you tax accountant.*

But seriously, its all unnecessary nonsense thats costly to implement.

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#2) On September 10, 2010 at 3:37 PM, Dow3000 (< 20) wrote:

The answer to that is so simple...one puts their capital on the line to invest in a business...they are taking the monetary risk, not the business, not the government...the investor.  This is the basis for our entire capitalist system.  If you prefer socialism...that is one thing, but to ask this question is ridiculously ignorant.  There should be zero taxes on capital gains...none, the person taking all the risk should get the entire share of his/her profits.

There also should be no income tax, it is the most f'd up system I have ever seen...if we were to abolish it and get rid of the insane wasted federal spending on war and corporate subsidies and many other areas that only hurt our society instead of helping our economy would boom like crazy...get rid of the minimum wage laws at the same time and you would literally get rid of almost all unemployment.  With the huge waste of funds that goes to the ridiculously inefficient welfare system no longer necessary b/c everyone can easily get a job we could then cut taxes even further at which point businesses and individuals will profit even more and our standard of living will accelerate massively.

If we were to also get rid of the insane, evil, corrupt tax we pay to the A holes at the Fed through loss of purchasing power of the dollar...we would become prosperous beyond the comprehension of anyone here!

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#3) On September 10, 2010 at 3:43 PM, SkepticalOx (99.53) wrote:

#2 It's easy to say eliminate all taxes, but there is simply no political will to do it. People are addicted to their entitlements. 

They should seriously start with figuring out how to cut spending first and balancing the freaking budget before they think about how to make tax cuts permanent. Really, the problem with the Republicans is that they are all cool with cutting taxes but they spend as much as the Democrats. It's just silly. 

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#4) On September 10, 2010 at 3:59 PM, chk999 (99.97) wrote:

The idea is that we want to encourage people to invest rather than consume so that the pie gets bigger over time. By foregoing consumption now and investing the money the pie gets bigger. The favorable tax rate on capital gains is meant to help that along.

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#5) On September 10, 2010 at 4:10 PM, SkepticalOx (99.53) wrote:

#4 That's the goal, but unfortunately the majority of the benefits go to the rich:

The benefits of low tax rates on capital gains accrue disproportionately to the wealthy. In 2007 an estimated 92 percent of the benefit of low rates went to taxpayers with incomes over $200,000, and 72 percent to those earning over $1 million. (source: Tax Policy Center)

There are other ways to go about it too. I sort of like the Tax-Free Savings Account we have here in Canada. There's a limit of $5000 you can put in it every year, but all capital gains and dividends and interest are tax-free in the account (you can invest in funds, stocks, bonds, options). It helps middle-class savers and investors.

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#6) On September 10, 2010 at 4:36 PM, vriguy (81.50) wrote:

I'm with #2 and #4.  I can assure you that most folks earning under 500K in a high cost metro area are not wealthy, which I define as having a liquid net worth of 2 million. I pick that figure because at 4% that 2 million gives you 80K income, which is what the average family makes.  The tax-free savings account you describe is like a Roth IRA, but the US does not let you have a Roth IRA if you and your spouse make more than 160K between you, which 2 middle class incomes often reach.

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#7) On September 10, 2010 at 4:40 PM, chk999 (99.97) wrote:

#5 who cares that the gains are not fairly distributed? The goal is to grow the pie, not make things "fair".

It would be easy to make things fair with us all equally poor. That isn't a good goal. 

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#8) On September 10, 2010 at 4:57 PM, russiangambit (29.49) wrote:

> #5 who cares that the gains are not fairly distributed? The goal is to grow the pie, not make things "fair".

I think the problem is that investing doesn't really make the pie all that bigger. Productive activity  is what does it. You could say that investments encourage productive activity. But by how much? There is plenty of cash sloshing around right now looking for a good investment, but there aren't many because the productive enterprises are splatterring. So, while investment is a facilitator of growth, it is not an engine or source of growth. Productive labor is the source of growth and thus should be taxed at least equally or less as investments.

You get on a shaky ground with "who cares about fair" argument. Once people realize that the game is not fair, that it is stacked up against them, they stop making an effort. Labor should be rewarding and  the rewards should be fair. Why do you think there is so much outrage  in regard to CEO salaries?

 

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#9) On September 10, 2010 at 5:05 PM, ChrisGraley (29.81) wrote:

Hard to have productivity without investment. I do agree that labor should be more fairly rewarded though. This would increase the velocity of money and enhance the economy.

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#10) On September 10, 2010 at 5:27 PM, devoish (95.76) wrote:

There should be zero taxes on capital gains...none, the person taking all the risk should get the entire share of his/her profits

 Ridculous. If I'm up on the ladder ( or in the hole, or on the rig) I'm the one taking the bigger risk. Not the person standing on the ground.

"labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration". - Abraham Lincoln as quoted by Theodore Roosevelt

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#11) On September 10, 2010 at 5:32 PM, TimsRedbeard (< 20) wrote:

When President Bush placed tax cuts into effect more money came into the federal government.  Over 40% increase!  Over $740 BILLIONS DOLLARS MORE.  ( see link near bottom and a portion of the article regarding the increase in taxes collected by our government when taxes were Decreased)  I agree with Dow3000 and Chk999.  We need to rid the minimum labor rate.  We are worth what we can produce.  I started working $1.50 hr. and minimum wages were approximately double that, but I has happy to have a job.  Flipping hamburgers were only worth the $1.50hr when I started in the work force and today the burger flipper is not worth the $8-10hr I see advertised.  Often the "rich" are said to receive more benefit from the tax cuts, but to STICK UP FOR THEM they PAY THE MOST TAXES!  If the wealthier people did not invest we would be a third world country.  Remember the weathier folks begin  investing in companies which then hires employees.  I earn money from the job they created that I then can invest.  A broke person cannot create any jobs.  Zero.  None.  Nada.  Then all of us who spend less than we earn can invest it - at our own risk.  If we honestly look at our taxes the majority of folks do not pay in a very large percentage of their income toward taxes.  Often social security taxes make up the majority of taxes sent to the government.  Also remember this tidbit...if you pay taxes that means you MADE MONEY.  No, I would prefer to pay less in taxes, but since I made money I will pay the taxes due on it.  We should do away with tax deductions and credits and follow the tax tables and our taxes would be very easy to calculate.  Why should anyone who pays interest for their home loan be able to deduct it from their taxes.

See the link below regarding the extra taxes the federal government received from the tax cuts by President Bush:

http://townhall.com/columnists/RichardBernstein/2010/09/02/less_taxes,_more_revenue

part of the article from above link is below:

In 2003, President Bush lowered income, capital gains and dividend tax rates. As a result of the Bush tax cuts, the amount of revenue flowing into the federal Treasury over the next four years surged by over 40%, or $743 billion. To illustrate how the tax cuts boosted the economy, Gross Domestic Product grew at an annual rate of just 1.7% in the six quarters before the 2003 tax cuts. In the six quarters following the tax cuts, the growth rate was a robust 4.1%.

 

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#12) On September 10, 2010 at 5:53 PM, MyunderratedLife (89.90) wrote:

- There should be zero taxes on capital gains.

- Ridculous. If I'm up on the ladder ( or in the hole, or on the rig) I'm the one taking the bigger risk. Not the person standing on the ground.

-"labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration".

I agree with all of the above.  That's why I favor zero capital gains tax.  Because those people on the ladder, in the hole, or on the rig reap the fruits of their labor.  And we WANT to incentivize investment activity and deferment of consumption (whether they work on a rig, or own one) because ultimately it WILL make the pie bigger. 

I work far too hard to see the fruit of my labor taxed twice.  Once because I chose to work while others play, and again when I reap the windfall of my choice?

CHK999 put it better than I could.  He's saying that this shortsighted interim "fairness" is irrelevant.  Over time the standard of living in this country has improved because individuals risked their own capital to increase the standard of living for rich and poor alike.

Would you really prefer economic parity to prosperity?  The poorest American enjoys a far better standard of living than his/her counterpart in a developing corner of the world.  And although it's been harped on before, the most impoverished American today leads a life with far more luxuries than the wealthiest American a century ago.

Yes labor begets capital, but labor is not a capitalistic society's highest function.  Just like breathing, although conducive to sustaining life, is not a life's highest function.

Capital gains taxes are inimical to longterm progress.

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#13) On September 10, 2010 at 5:55 PM, MyunderratedLife (89.90) wrote:

is not life's highest function.*  strike out that "a"

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#14) On September 10, 2010 at 6:00 PM, rofgile (99.43) wrote:

zero taxes on capital gains should only happen if their are full liabilities for all share holders.

i.e., if a company crashes with 1 billion in debt - guess who pays their bills (beyond your share price..) - you do.

I would like to see more liability for shareholders for the corporations they invest in. 

BP shareholders, who profit during good times should also help pay for spill damages out of pocket. 

 -Rof 

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#15) On September 10, 2010 at 11:45 PM, ChrisGraley (29.81) wrote:

Get rid of taxing productivity period. Drop the income tax too!

rofgile please tell me about every stock you ever bought. 

I'm sure that some of them have been sued and I'll tell you how much your share is. 

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#16) On September 11, 2010 at 12:05 AM, QualityPicks (22.91) wrote:

I agree is not fair to pay 15% for unearned income and ~30% for earned income. Both should be 15% :)

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#17) On September 11, 2010 at 5:21 AM, MyunderratedLife (89.90) wrote:

Why should anyone have to be liable for more than 100% of their investment?  Investors (for the most part) do not have the ability/opportunity to partake in day to day operations.  So unless you reduce all agency conflict (because most of these "damaged" are cases where management subverts the will of the shareholder) why should someone be responsible for something they cannot affect?

Did the average investor appoint Hayward to his position?  Did the average investor violate Osha standards?  

I do not follow. 

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#18) On September 11, 2010 at 7:34 AM, devoish (95.76) wrote:

Myunderratedlife,

Everyone here knows that you did not describe being taxed twice. You were taxed on the earnings from your labor - once. Then that principle was invested and not taxed again. Additional earning from capital gains were taxed, not the original earnings you invested. In fact, your potential loss of investment is protected by the tax code, in that your loss of principle from one investment, reduced your tax burden on the gains from another. That is a tax law that should be eliminated, especially for those investors who whine about being the ones putting their capital at risk and expecting all the gain. It was also a tax law that was horribly abused by Congress to protect home building companys from their losses.

The average investor is to lazy to investigate his company's (it is his company and his responsibility after all) day to day operations, read the 8k's or check up on the quality of his employees work. I assure you ChrisGraley reads and understands every press release and filing from every company he is a part owner of and will not plead ignorance, or lack of ability or opportunity, if responsibility comes his way.

During the 1930s, our family enterprise expanded thanks to Depression-era public works projects. By mid-century, the company, under my grandfather's leadership, had become one of the most profitable mining and land development firms in the country.

Our family business was strengthened by a public infrastructure of roads, ports, and bridges that allowed us to easily transport materials. We also benefited from our nation's unparalleled system of property laws and legal remedies, designed to protect private property and investment.

These public inputs have benefited the majority of enterprises. Where would today's technology companies be without public investments in scientific knowledge, computer research, and the Internet? Where would many businesses be without our education system, transportation system, and the millions of direct and indirect subsidies that create the fertile ground for a healthy and vibrant economy?

My family's business was successful thanks to hard work. But it was also built upon a common wealth of public resources, scientific knowledge, and shared institutions. I believe that those of us who have disproportionately benefited from these investments have a corresponding obligation to reinvest in the common good. - Naomi Sobel

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#19) On September 11, 2010 at 2:14 PM, Robuh (23.79) wrote:

Wow, this site really confuses me sometimes. Forget for a moment the (very correct) arguments that a reduced capital gains tax promotes growth and healthy capital markets. Everyone around here seems to be so hell bent against inflation and increasing the capital gains tax would just exacerbate its perceived negative effect.

Any financial assets that you hold will have a portion of its price increase due to company growth and another portion from inflationary effects. Do you really want to sell an asset 20 years from now and lose a large percentage of the proceeds because of its ability to retain real value over that time period?

You would pay a lot of tax on assets that just maintain their real value over time. I'd be a huge advocate for an inflation-adjusted capital gains tax but good luck with that. I'm afraid its not as simple as ludicrous concepts as "earned" versus "unearned" income.

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#20) On September 11, 2010 at 2:49 PM, MyunderratedLife (89.90) wrote:

Everyone here knows that you did not describe being taxed twice.

You are being taxed twice.  Yes, you are being taxed on additional earnings procured by deferring consumption (as opposed to the principle itself), but capital gains are the reason you chose to save and invest, rather than consume in the first place.  No one would choose to forgo consumption now if they were not compensated for it.

At the very least, your gains should be tax free adjusted to the rate of inflation during the invested period.  If inflation is 2% and your capital appreciates 6%, only 4% should be taxed.  

Lets say over a 5 year period your investments depreciate and you lose $600.  Subsequently over an additional 5 years you manage to appreciate your capital by $600.  A decade has passed and you're at break even according to tax code.  But inflation has been eating away at your purchasing power at a clip of 2% a year.  

 

I assure you ChrisGraley reads and understands every press release... 

I was replying to Rogfile, not Graley.  And the fact that you mentioned press release lends credence to my claim.  The press reports what has already happened.  But investing is forward looking, while thorough investigation (at best) can only reveal what has already transpired. 

 

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#21) On September 11, 2010 at 2:50 PM, MyunderratedLife (89.90) wrote:

Hah, I replied without reading Robuh's reply.  Exactly.

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#22) On September 11, 2010 at 7:42 PM, devoish (95.76) wrote:

I was replying to you and using ChrisGraley as an example. If you, as the owner of a company are not willing to accept responsibility for the actions of that company, then we are definitely not going to reach nuch agreement.

"I did not pollute the river - My company did it!"

"I did not shoot the civilian - My company did it!"

"I did not piss in the lemonade - My company did it!"

Yours is about the lamest argument for a free ride I have ever heard.

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#23) On September 11, 2010 at 9:43 PM, MyunderratedLife (89.90) wrote:

Devoish,

Everyone here knows that you did not describe a free ride.   Sound familiar?   Losing 100% of your principle doesn't exactly constitute "free" anything.

How would you even enforce this sort of responsibility?  Yours is an abstract argument that has the luxury of pontificating without reaching any pragmatic resolution.  It seems to me that Graley's point was the opposite of what you infer: that every company has committed some wrong doing; so if you've ever owned any stock, more than likely you owe recompense to another party.

Enter a microcosm of your paradigm: If an institutional investor bought BP stock and held it for 10 years, then sold it the day before the blowout in April, they would have been exonerated of all wrongdoing.  And the retail investors they happened to sell those shares to would have to pay trillions in damages.  Despite the fact that the institution might actually be able to effect precautions that prevent such disasters, according to you, the retail bagholder is responsible for "his" company's actions despite being on board for less than 24 hrs.  Who reaps the benefit and who pays the price?

Idiotic. 

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#24) On September 11, 2010 at 10:16 PM, starbucks4ever (97.86) wrote:

I wonder if we should then all be financially responsible for the Irak war, all of us being shareholders of USA Inc?  When we get the bill for the people and property destroyed, the misfortunes of BP's bagholders will seem trivial in comparison. 

Yes, it was all the job of a very shareholder-unfriendly CEO whom we didn't even elect, but we could have sold our USA, Inc stock and relocated to Canada, could we not?

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#25) On September 11, 2010 at 10:16 PM, starbucks4ever (97.86) wrote:

I wonder if we should then all be financially responsible for the Irak war, all of us being shareholders of USA Inc?  When we get the bill for the people and property destroyed, the misfortunes of BP's bagholders will seem trivial in comparison. 

Yes, it was all the job of a very shareholder-unfriendly CEO whom we didn't even elect, but we could have sold our USA, Inc stock and relocated to Canada, could we not?

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#26) On September 11, 2010 at 11:47 PM, ChrisGraley (29.81) wrote:

Thanks for the defense guys, but I'm used to devoish putting words in my mouth.

 

Noticed how he ignored the part of getting rid of the income tax. He's actually all for sticking it the guy on the ladder or in the hole or on the rig as much as is the big corporations.

Economics is not his strong point and he doesn't understand that taxing productivity (be it labor or capital) is destructive to the economy.

I am all for a consumption based tax and I'm willing to exempt the taxing of the basic necessities of life from the consumption tax. This frees the low income worker from regressive taxation because they pay out a higher percentage of income for basic necessities.

Needless discretionary spending though, hurts the economy and deserves to be taxed. For an economy to be healthy and stable, it has to save and invest money and exports need to be more than imports over the long term.

If you want to invest money and create jobs, you shouldn't be taxed for helping the economy. If you want to buy a yacht, you better pay up. 

A consumption tax is fairer, easier to enforce, and better for the economy, but I'm willing to bet that devoish is opposed to it as a replacement to income and capital gains taxes for the following reasons...

1) It's voluntary and you can forgo discretionary spending to reduce your tax bill. He prefers to bleed everyone dry.

2) It's much easier to see how much government spending is out of control than when the tax is spread out among various different things and liberals like to spend, spend, spend.

3) He'd have to admit that taxing energy is regressive and he's hurting the guy on the ladder, rig or in the hole.

4) I came up with it and he's never going to concede anything to me.

devoish I see Yingli Green Energy in your CAPS account. Should I take this as a statement that you endorse their current labor practices?

Cree still uses Silicon Carbide right? I wonder what the effects are of inhaling that stuff? The MSDS doesn't look too good.

Cavco got sued in 2003 for bait and switch tactics and refusing to honor warranties or replace defective or unsafe homes. Do you support this?

I just used your 3 latest picks as an example devoish.  

You didn't abuse Chinese labor and export solar manufacturing jobs overseas, your company did.

You didn't make light bulbs with toxins that that will eventually end up in our landfills, your company did.

You didn't abuse the consumer with bait and switch tactics, your company did.

Are you willing to accept responsibility for the actions of those companies or do those rules just apply to other people? 

 

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#27) On September 12, 2010 at 8:53 AM, devoish (95.76) wrote:

Devoish,

Everyone here knows that you did not describe a free ride.   Sound familiar?   Losing 100% of your principle doesn't exactly constitute "free" anything.

NO it does not sound fmiliar, I believe I said something different: Everyone here knows that you did not describe being taxed twice.

Thanks for the defense guys, but I'm used to devoish putting words in my mouth. - ChrisGraley.  I suppose we can all agree I'm not to do that. You guys, however, self impose a different and somewhat lower standard... Please be more careful. Possibly if you just copy and past instead of retyping could improve the accuracy with which you quote me.

With some of the off topic crap out of the way lets see if we have some agreement and sure enough we do, though I am not educated enough to use the word pragmatic. The two disagreements I have with what you wrote here is that was actually rofgiles argument not mine, and I did not infer there are some companys that have zero risk, only that if you want to profit from owning a company and if some investors are capable of discerning those risks your inability or ignorance or laziness does not excuse you from liability if there is going to be an attempt to hold you liable beyond the loss of your principle.

Otherwise you are correct, and making an excellent argument for a strong regulatory structure to protect the property rights of people from the actions of the owners of companys which they do not also own. Just as mandatory auto insurance helps to compensate people damaged by the owners of cars in which they have no interest.

How would you even enforce this sort of responsibility?  Yours is an abstract argument that has the luxury of pontificating without reaching any pragmatic resolution.  It seems to me that Graley's point was the opposite of what you infer: that every company has committed some wrong doing; so if you've ever owned any stock, more than likely you owe recompense to another party.

Enter a microcosm of your paradigm: If an institutional investor bought BP stock and held it for 10 years, then sold it the day before the blowout in April, they would have been exonerated of all wrongdoing.  And the retail investors they happened to sell those shares to would have to pay trillions in damages.  Despite the fact that the institution might actually be able to effect precautions that prevent such disasters, according to you, the retail bagholder is responsible for "his" company's actions despite being on board for less than 24 hrs.  Who reaps the benefit and who pays the price?

Did you not read Rof's post? The millions of shares of BP that changed hands in the weeks before the gulf disaster would describe who has accepted the risk in exchange for the benefits.

Idiotic.  I agree, it is not a good plan for exactly the reasons you give, yet somehow non-owners/employees of a company that suffer damages need to be more than compensated, they need to not be harmed to begin with.

What is your better plan? Mine includes insurance, taxes, and a strong regulatory structure.

Noticed how he ignored the part of getting rid of the income tax. - ChrisGraley

I ignored your entire reply, but was matching the standard of personal responsibility you expect from consumers to investors. Presumably you believe that investors should be held to no lower standard of competence than consumers. Unless you think investors deserve Government protections that consumers do not. (ps. that was putting ideas on the page, not by putting words in your mouth, but by asking if you agree with those words and offering a chance to post your own).

Are you willing to accept responsibility for the actions of those companies or do those rules just apply to other people? - ChrisGraley

The laws of Democratically elected Government apply to everybody. It is about time you recognised that liberals, environmentalists, socialists expect their rules apply to  themselves as well as everybody else. Only investors seem to think their income is special.

I wonder if we should then all be financially responsible for the Irak war, all of us being shareholders of USA Inc? - Zloj

Unfortunately yes. Even though I voted for Gore. And unfortunately those with predominantly investment income are held responsible at a lower tax rate than those with predominantly earned income.

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#28) On September 12, 2010 at 12:42 PM, MyunderratedLife (89.90) wrote:

The quote was made facetiously.

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#29) On September 12, 2010 at 1:03 PM, MyunderratedLife (89.90) wrote:

Did you not read Rof's post? The millions of shares of BP that changed hands in the weeks before the gulf disaster would describe who has accepted the risk in exchange for the benefits.

I agree, it is not a good plan for exactly the reasons you give, yet somehow non-owners/employees of a company that suffer damages need to be more than compensated, they need to not be harmed to begin with.

What is your better plan? Mine includes insurance, taxes, and a strong regulatory structure.

My plan is to not try and impose unlimited liability.  One of the main reasons people own stocks is because there is a veil of limited liability.   No matter how thoroughly you research a company, if you were liable for more than the principle ANY investment could cause financial ruin.

You system does not reward responsibility - it only exonerates people with faster access to information.   The people who picked up BP stock in the example do not reflect people accepting risk - if you offer the stock at a low enough price someone will take it off your hands unknowingly.  

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#30) On September 12, 2010 at 1:41 PM, 1277507302 wrote:

Zloj,

Saw your post and thought I'd offer a possible explanation. The people flipping burgers might get sick of flipping @ McDonalds and switch to Burger King (if the wages were a bit higher).

The people who pay the bulk of the capital gains taxes might get sick of paying, what they might consider exorbitant taxes on their unearned income, and switch to, say, Dubai (if the taxes were a bit lower).

The inverse would also hold truth in that wealthy families from other countries might move here and begin paying capital gains taxes that might otherwise not be realized.

Bric

 

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#31) On September 12, 2010 at 2:03 PM, starbucks4ever (97.86) wrote:

#30,

Are you sure that Dubai, Europe, Japan, etc. charge lower taxes than America?  

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#32) On September 12, 2010 at 2:18 PM, MyunderratedLife (89.90) wrote:

Dubai is famous for having 0 taxes I thought?

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#33) On September 12, 2010 at 2:39 PM, starbucks4ever (97.86) wrote:

Yes, way less than 15% we have now. So, did most Americans threw away their US passport and moved to Dubai to enjoy these super-low tax rates?

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#34) On September 12, 2010 at 10:03 PM, devoish (95.76) wrote:

zloj,

Americans stayed in America and invested in America when the top tax rate was 70% too.

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#35) On September 12, 2010 at 10:20 PM, starbucks4ever (97.86) wrote:

#34,

Precisely. I was just asking a rhetorical question. 

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#36) On September 12, 2010 at 10:48 PM, ChrisGraley (29.81) wrote:

How's about this for cut and paste devoish?

 

I was replying to you and using ChrisGraley as an example. If you, as the owner of a company are not willing to accept responsibility for the actions of that company, then we are definitely not going to reach nuch agreement.

"I did not pollute the river - My company did it!"

"I did not shoot the civilian - My company did it!"

"I did not piss in the lemonade - My company did it!"

Yours is about the lamest argument for a free ride I have ever heard. -devoish

Everyone here knows that you did not describe a free ride.   Sound familiar?   Losing 100% of your principle doesn't exactly constitute "free" anything. -Myunderratedlife

NO it does not sound fmiliar, I believe I said something different: Everyone here knows that you did not describe being taxed twice. - devoish

Is your sole goal in life to make sure that no one can succeed?

To succeed in life all you have to do is to spend less than you make and invest the rest wisely. It's pretty simple.

Your plan seems to be have the government spend our money as lavishly as possible while leaving us nothing to invest. Even if we did manage to invest, we'd be held liable for the whims of a CEO of a company that we invest in. While, all the while, our government just keeps printing money so our children have a harder go at it than we do and their hole is even deeper than ours.

You aren't for the guy in the hole! Your solution is to dig the hole deeper. 

You want to stop corporate corruption? Put corporate executives in prison. If you lent your brother $300 and he decided to buy a gun and kill somebody, should you be responsible for that?

Why argue about bonuses for bankers? If bankers are corrupt, put them in prison. Want to make sure that labor is protected? Don't allow any CEO to make more than 30 times more than the lowest paid employee of the company. Coming after my grandfather's pension because he invested in Wells Fargo in the 50's doesn't solve anything.

 

I'm going to cut and paste again....

 With some of the off topic crap out of the way lets see if we have some agreement and sure enough we do, though I am not educated enough to use the word pragmatic. -devoish

The topic was taxes. I believe the off topic crap was sending the lynch mobs after investors.

 The laws of Democratically elected Government apply to everybody. It is about time you recognised that liberals, environmentalists, socialists expect their rules apply to  themselves as well as everybody else. Only investors seem to think their income is special.-devoish

So I should take this as your support of Chinese labor abuses, toxic chemical exposer to the consumer, and  unfair dealings with the consumer?

Unfortunately yes. Even though I voted for Gore. -devoish

I would really love if you would self-reflect on this statement. You support the party that feels that they must dictate to everyone else what they should do and should not do and yet you feel that it's unfortunate that you are responsible for decisions that are against your wishes. Your wish to make government as big as possible is only going to make your regrets equally as big. 

 

 

zloj this isn't an exact answer to your question, but I thought it was relevant...

Yes, way less than 15% we have now. So, did most Americans threw away their US passport and moved to Dubai to enjoy these super-low tax rates? -zloj

I now have 3 passports and I'm working on a 4th. I have a boat big enough to live on, docked in NY and I've been procrastinating on getting my pilot's license to make sure that I can get to that boat quickly if I need to. I will eventually renounce citizenship once I think that we have hit the point of no return. I think that point is inevitable and I think that point will come much quicker if people that share the same views as devoish are in charge. It's not the capital gains tax that would make me go. (Although the fact that those promoting it don't understand how much it hurts the economy doesn't help.) It has much more to do about freedom. It has a lot to devoish's response of being responsible for decisions of our government that we don't agree with. It has a whole lot more to do with a government that wants to make more and more of those decisions for me. It has a ton to do with politicians that make the wrong decisions for personal gains. The biggest factor is a bleak future and negative momentum though. I never heard your story about why you moved away from your country, but I'm betting that it's similar to mine. You probably moved away because it was the best decision for you and your family. I don't remember seeing a news story about tons of Russians flocking to the US, but it seems like a high number have done exactly that. I don't think you would have moved away if you thought things would get a lot better. I'm sure there are people that moved away from this country precisely because of the capital gains tax, because it was the best decision for their families. For me, I just want the freedom that everyone says I have. I want to be responsible for my own decisions and everyone else responsible for theirs. I know it wasn't the answer that you were looking for, but it's my answer. I apologize for my thoughts, because apparently according to people like devoish, they are evil.

 

 

 

 

 

 

 

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#37) On September 12, 2010 at 11:13 PM, starbucks4ever (97.86) wrote:

ChrisGraley,

Actually, the reason we had to move here was that the ex-commies became greater capitalists than the bona fide Rockefellers and started building the kind of free economy you have in mind. It didn't work then, and despite all this oil bonanza, it's still not working. I don't think it will ever work. But we need different points of view and that includes yours.

Did you come up with a good name for the boat? 

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#38) On September 13, 2010 at 1:37 AM, ChrisGraley (29.81) wrote:

I don't have anything like the Rockefellers in mind zloj. Rockefeller would have been thrown under the jail if I was in charge. So would Bill Gates! I am a consumerist remember. 

The boat is named "Who is John Gault?"  although I was very tempted by Cato's suggestion.

I'm not in the club that believes that free markets mean free CEO's. I am pro labor, but I believe that unions were the worst thing to happen to labor in the long run. They were absolutely necessary in the beginning, but they demonstrate the saying, "power corrupts" in today's world.

I also think that I understand the amount of corruption that you probably had to deal with in the newly capitalist Russia. Huge assets were sold at pennies on the dollar in Russia and ex-party members were the only ones with the pennies. They were already used to corruption, but now they had both power and freedom.

I'm interested on your feelings of Putin re-appropriating some of those same assets in the name of the people. I used to view it as regression toward communism again, but I have shifted more toward a response to the Russian consumer. I think that it is the wrong response, but I can understand the response in a country trying to re-invent itself and mistakes will be made by the pioneers.

I'm not a CEO. I don't think I'm wealthy. I could retire tomorrow though. ( That would entirely depend on whether or not you consider allowing me to actively manage my money to be considered retired)

I don't give myself any credit for the success that I've had. I give my parents a huge amount of credit for it though. I didn't cheat anyone to get what I have. In fact I had to live like a hermit much longer than most young people do. I got really lucky with some early investments.

I want to teach my own kids to succeed in the same way, but I don't think that they will ever have that chance in this country. This country is trying to promote my kids submitting to a government that will take care of them. They aren't going to take care of them. They are going to take care of themselves. My kids are already burdened with my debt and my father's debt, just like I was burdened with my father's debt and my grandfather's debt. The difference is that the government wants more dependence from my kids than they wanted from me, and my kids will no longer be able to carry the transgressions of the past.

I think that our country started out with the right idea, but that idea was corrupted early. If we could get back to what the founding fathers wanted, we would be more successful.

We are never going to get back to what the founding fathers wanted. 

 

 

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#39) On September 13, 2010 at 2:00 AM, NOTvuffett (< 20) wrote:

In what universe do burger flippers pay 30% tax?  As chk999 said, the whole point of having favorable treatment for investment is for the benefit of the society at large.  Sometimes I think we lose sight of the fact that buying shares is ownership in a company that employs the burger flippers or whatever.

If a burger flipper works for his money, pays his taxes, and manages to put away a few bucks, why shouldn't he be rewarded for investing in something that employs people when he could have used the money instead for something stupid for his own immediate gratitfication?  He has no guarantee of a return, and has the potential loss of his principle with equities.

I agree with Robuh that if capital gains were indexed for inflation that 20% would be ok.  Although the economy is not technically in a recession right now, things aren't good.  There are deflationary pressures.  Many people have concerns about significant inflation in future years.  If you hold a stock that goes up but the value of the dollar goes down, the tax man doesn't care.

So far, individuals in the US haven't moved because of tax policies, but plenty of companies have.  Even in my own small business, we have considered a move.

I think ChrisGraley's exit plan is a bit extreme, almost worthy of a James Bond super-villian, lol.  He just needs rockets and submarines instead of planes and boats, lol.

 

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#40) On September 13, 2010 at 9:21 AM, russiangambit (29.49) wrote:

I agree that capital gain tax should be adjusted for inflation on long time frames. I also agree that capital gain tax means taxing  twice. But the reality is most of the income is taxes 2-3-4 times. After you get all the taxes calculated it turns out government gets somthing like 60-70% of income ( corporate taxes, payroll taxes , income taxes, dgains taxes and so on). So , what is the solution - smaller government and more transparent tax code, not more tax breaks to whoever lobbies the most. In this case - the wealthy. This just encourages wrong behavior.

On the other hand, it is also obvious that capital gains tax breaks benefit wealthy most of all. Perhaps, we shouldn't have capital gains taxes at all. Many countries don't. But we also should have lower income taxes and less tax breaks for various special interests. And please, control the government spending. every tax discussion is really a discussion about the size of government  and government spending, not about who deserves what.

Also, I post a couple weeks back a post about what taxes really are -  a way to control inflation, nothing less , nothing more. A lot of this angst is from misunderstanding the natuyre of taxes in the first place. If people understood what taxes really are, there would be less discussion od what is fair and what not.

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#41) On September 13, 2010 at 9:39 AM, starbucks4ever (97.86) wrote:

Taxes would be a way to control inflation if government collected dollars and withdrew them from circulation. I don't see any danger of that happening, lol:)

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#42) On September 13, 2010 at 9:48 AM, russiangambit (29.49) wrote:

>Taxes would be a way to control inflation if government collected dollars and withdrew them from circulation. I don't see any danger of that happening, lol:)

Government and the FED fully control monetary supply and by extent inflation ( though not completely since it is hard to directly control the velocity of money) through amount of spending and taxes. Government spending + taxes moslty determine how much money is out there in the system. And then they attempt to control velocity of money via tax policy. Now it gotten so complex it seems the tax policy controls the government.

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#43) On September 13, 2010 at 9:50 AM, starbucks4ever (97.86) wrote:

The tail wags the dog, huh?

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#44) On September 13, 2010 at 10:08 AM, outoffocus (23.56) wrote:

Wow this really turned into a great thread.  However after reading all the comments I still in sum that the government needs to get rid of the arcane, overly complicated tax code and just replace it with a single set of tax rates and reduce spending so they can reduce taxes.

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#45) On September 13, 2010 at 10:33 AM, edwjm (99.87) wrote:

outoffocus says "reduce spending so they can reduce taxes."

That points out where Reagen and W got it wrong.  They put the cart before the horse.  The cut taxes first, thinking spending cuts would follow, but they didn't.  Taxes should be cut, but not until after spending is cut FIRST!

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#46) On September 13, 2010 at 11:25 AM, panchocharlie (22.33) wrote:

After reading comments from #1 - #45, I wish we would all as citizens push our representatives to enact the Fair Tax . And the sooner the better.

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#47) On September 15, 2010 at 1:30 PM, rfaramir (29.41) wrote:

"You could say that investments encourage productive activity."

Just "could"?? 

"Productive labor is the source of growth and thus should be taxed at least equally or less as investments."

Investment is what makes labor productive.  Labor is fundamental, (no work, no eat); but capital is what differentiates us from animals (who also labor to eat): delaying gratification so we can invest in stuff that makes our labor more productive.

Anyone who is anti-capital is anti-human.

All taxation is immoral use of force to steal someone else's fruits of their labor.  The only choice with government is how much evil we are willing to put up with.  Cutting taxes is always morally right.  Reducing spending is always morally right.  But cutting taxes without reducing spending just forces borrowing, which is promising to tax your children in order to spend now on yourselves.  It's wrong AND sneaky. 

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#48) On September 15, 2010 at 1:53 PM, russiangambit (29.49) wrote:

> All taxation is immoral use of force to steal someone else's fruits of their labor.  The only choice with government is how much evil we are willing to put up with.  Cutting taxes is always morally right.

Well, you ned to back up and say that fiat currency is stealing the fruits of someone elses labor. Taxes are just a monetary&political tool.

On your point of investment vs. labor - if you don't reward labor you won't get return on your investment either. You can't eat your bank account. Somebody actually has to produce the food etc. There has to be a balance and right now the balance is tilted too much towards investment vs. labor.

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#49) On September 16, 2010 at 3:34 PM, rfaramir (29.41) wrote:

russiangambit, you're right on regarding fiat currencies.  They are specifically designed to fleece the flock.  With a gold standard, the government cannot (easily or long) print money, as their gold gets called and their funny money returned.

Of course you reward labor.  If wages aren't paid, the labor leaves and your capital rots, as it should.  I'm just saying that while labor is a basic staple (it takes all three: land+labor+capital), the labor part is relatively plentiful, while capital is not only scarce, it is a multiplier; so it is therefore far more valuable. It's also easier for a government (or other thief) to steal, now that we nearly uniformly reject human slavery.

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