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Why America Had A 90% Income Tax - Hudson

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January 23, 2011 – Comments (7)

7 Comments – Post Your Own

#1) On January 23, 2011 at 4:54 PM, checklist34 (99.71) wrote:

rec from me.  I have long been perplexed and fascinated and frustrated by the fact that my tax rate for sitting in my living room, napping occasionally, excercising occasionally, drinking some coffee, and sometimes making a phone call or pushing some buttons on my keyboard is the same...

...  as the tax rate I paid to own my old businesses.  Which required, 80-100+ hours a week of work, numerous inventions and patents pending, stress like nothing else, and which employed, verygainfully, many persons. 

    One clearly made th eworld a better place, one clearly does not.  Yet if anything, to the eyes of our government, playing the markets is PREFERABLE.  When you own that business there are entire government agencies with no purpose other than to impair your life, and MANY of them, in this "profession" nobody cares about anything.  

professional traders, pro athletes, celebrities, and other value-less ways of making a living should without any doubt suffer muchhigher tax rates than, say, starting a manufacturing company and employing alot of people, after working an average of >90 hours a week for a DECADE.  Probably no more than 2 or 3 of the readers of this comment could even imagine that kind of workload for a week, or a month.  

But for that, I am a target to OSHA, numerous minority rights groups, numerous rule sand regulations, attorneys seeyou, the business owner, and salivate over how they can extract some of your cash.  Employees fired for things like smoking weed on the job sue you, its a mess.

But sitting here, making MORE money, doing nothing of any use to anybody, nobody seems to hate me all that much at all...  

Fascinating, the irony.  

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#2) On January 23, 2011 at 5:05 PM, AvianFlu (40.52) wrote:

As long as we punish and torment the job creators we will have high unemployment.

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#3) On January 23, 2011 at 8:26 PM, OneLegged (< 20) wrote:

Fascinating.

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#4) On January 24, 2011 at 6:04 AM, dbjella (< 20) wrote:

I find it interesting when people talk about tax rates from long ago. Tax rates are a function of government's need for money and power and they create revenue.  Revenue or government funding is made up of taxes, borrowing and plundering.

But first, we need to discuss the spending side of government.  Long ago, governments never "needed" programs to "help" the sick, the poor and the under served.  Instead, they were fighting wars and building empires.

Today, democracy has led to a new form of government that cares about the sick, poor and under served.  They still fight wars although in a different way.  In my opinion, government is now bigger and spends significantly more % wise.

On the revenue side, long ago, governments plundered others and the spoils of war funded war.  As time went on and paper currency sprouted up, governments turned to bonds.  Remember war bonds?  Finally, central banks have entered the picture. 

But, I wonder why we pay taxes at all?  I am not against taxes per se, but what is the point?  The Federal Reserve has stated two things on 60 minutes:

1) If member banks reserves are too low, then they will "magically" raise the reserve i.e. create money.

2) They will buy and are buying US Treasuries. 

So, if gov't no longer needs the bond market for funding and the Federal Reserve has served/replaced it as a funding mechanism, then why are the people paying taxes?

The Federal Reserve can't run out of money.

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#5) On January 24, 2011 at 3:15 PM, Gemini846 (56.52) wrote:

checklist34, I'm surprised there aren't more people talking about capital gains. The thought that rich people will hole up in a wall and not invest thier money if they have to pay high taxes is obsurd considering sitting in the wall it looses to inflation.

The current capital gains laws do in fact make it more profitable to speculate than to start a business. They were supposed to help business creation, to provide people who wanted to make blockbuster returns, not sit & flip leveraged high yield bonds and etfs.

I'm not sure what the answer is, but my suggestions would be:

1) Allowing corporations to partially write off dividends paid to investors. Eliminate or reduce double taxation.

2) Revert Capital Gains to "Regular Rate" like dividends.

3) Provide reduced capital gains taxes to money invested in the first 2-3 years of an enterprises operation. That way if you take risk and help start businesses you help create jobs. This should pull some of that money out of the stock market since prices are inflated due to "all the money chasing established ideas".

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#6) On January 25, 2011 at 2:45 AM, FleaBagger (29.74) wrote:

I would be happy with simply stopping the government from stealing from me and giving it to the rich. Every time 51% of the population gets the idea that we need to soak the rich and give it all to us, we get a whole bunch of crap dropped on our heads. Look how prosperous the welfare state of the 60's and 70's made us! When we cartelized industry and inflated the currency to help farmers and put the poor to work in the 30's, look how we flourished!

One thing that checklist (along with numerous Americans) either doesn't understand or simply doesn't believe, is that investment capital is required to start a business, and speculation is necessary to efficiently allocate investment capital. It's a free market truism that those who allocate capital inefficiently lose it to those who are more efficient. In this way, markets are self-regulating, and those who are the best at predicting which uses for capital will be most valued next year, next week, or next minute (who am I to judge?), are justly rewarded for their efforts. Just because there are intermediaries between the day trader and, say, an electrical discharge machine, or a combine harvester, it is easy to get the erroneous impression that the two ends of the capital allocation process are unrelated, and that the less tangible end is unnecessary. If this misunderstanding becomes too politically popular, catastrophe is not far behind. 

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#7) On January 25, 2011 at 2:45 AM, FleaBagger (29.74) wrote:

I would be happy with simply stopping the government from stealing from me and giving it to the rich. Every time 51% of the population gets the idea that we need to soak the rich and give it all to us, we get a whole bunch of crap dropped on our heads. Look how prosperous the welfare state of the 60's and 70's made us! When we cartelized industry and inflated the currency to help farmers and put the poor to work in the 30's, look how we flourished!

One thing that checklist (along with numerous Americans) either doesn't understand or simply doesn't believe, is that investment capital is required to start a business, and speculation is necessary to efficiently allocate investment capital. It's a free market truism that those who allocate capital inefficiently lose it to those who are more efficient. In this way, markets are self-regulating, and those who are the best at predicting which uses for capital will be most valued next year, next week, or next minute (who am I to judge?), are justly rewarded for their efforts. Just because there are intermediaries between the day trader and, say, an electrical discharge machine, or a combine harvester, it is easy to get the erroneous impression that the two ends of the capital allocation process are unrelated, and that the less tangible end is unnecessary. If this misunderstanding becomes too politically popular, catastrophe is not far behind. 

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