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 Post subject: Re: Taxes and who pays what
PostPosted: Mon Oct 24, 2011 8:49 pm 
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Willton wrote:
Bucfan, you're hiding the ball here. You fail to mention that capital losses can be claimed and deducted against one's gross income, which is taxed at a higher rate than capital gains. So tell me: why should capital gains be taxed at a lower rate than ordinary income when capital losses can be deducted from ordinary income (which, again, is taxed at a higher rate) and lower one's tax burden? Why the double standard?

Talk about hiding the ball ...

The limit for capital losses is $1500 per person, $3000 per couple.

Further, capital losses are first deducted from capital gains. Only if the capital loss is greater than the gain can the income deduction take place.

Further, the deduction is not permitted for strategic investments to gain a capital loss, the so-called "wash rule."

So why is a capital loss that is greater than a capital gain allowed to be deducted from income, up to $1500 per individual, so long as it passes the "wash rule"?

Who the hell knows? You think the nonsense in the tax code weighs in favor of a higher capital gains tax? Go ahead and explain that one.

The tax system SHOULD be designed to garner necessary revenue at the lowest harm possible to the economy. The concept of "fairness" has no business here.

Finally, it is a fact that higher capital gains yield LOWER revenue, and lower capital gains generate more revenue.

Image

http://www.cbo.gov/doc.cfm?index=3856&type=0

Note the inverse relationshipe between higher capital gains tax rates and resulting revenue.

Willton wrote:
You seem to be treating capital gains as money that gets taxed twice. How? If the capital investment eventually makes a profit (i.e., a capital gain), that profit is not money that you had before the investment. So how does that profit get taxed twice?

The money invested was, at its origin, income. Whether it was originally earned in 1928 or yesterday, it was income, subject to income tax. Indeed, for income earned before 1981, the tax burden would have been potentially onerous.

If that investment yields a return, then it is subject to taxation at the capital gains rate - a second tax.

If the remaining capital gain is realized, taxed, and re-invested, and it yields further gain, it is taxed AGAIN.

Get it?

Willton wrote:
You pooh-pooh appeals to fairness by labeling as destructive to reasonable discourse, but that's exactly what you're doing above: appealing to fairness. Please don't treat the lowered capital gains tax as anything other than it is: an incentive to invest.

Fairness? According to whom?

The information I posted shows that higher capital gains tax rates yield LOWER revenue.

Is the point just to "punish"?

Fairness has no place in tax policy. The goal, for reasons of economic production and no other, should be, "The needed revenue at the lowest harm to the economy."

P.S. If you believe that fairness is a proper force for tax policy, then I think it would be really fair for you to pay my tax bill this year. So how far does your "fairness" argument go? Only to what YOU think is fair?


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 Post subject: Re: Taxes and who pays what
PostPosted: Mon Oct 24, 2011 9:07 pm 
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sisyphus wrote:
Don't bullshit me with that double tax crap. A capital gain is income. Money earned by the sweat of your brow is income. Inherited money is income. Differentiating between them is one of the successful tactics used by the winning side in the class war that has been going one for over thirty years now.


False. All investment funds were, at one time, taxed as income.

"Well, what about inheritance?"

Whoever croaked and passed on wealth paid income tax for the income earned that generated the wealth that was invested (and became a capital investment) or passed on.

You saying "bullshit" and invoking class warfare does not actually constitute evidence or persuasive reasoning. It is simple-minded table-pounding.

sisyphus wrote:
Nope, I saying that income is income. You're saying that it's income when you work for it, but not when you're rich.

Get off your rant, for crying out loud.

Income is taxed as income. Investments (the origin of which was taxed as income) are taxed at capital gains rates.

Why? Well, partly because for investments, those who have the money to invest are NOT going to accept a second raping on their money (after having the origin of the investment taxed at the income tax rate).

That is why lower capital gains tax rates generate MORE CAPITAL GAINS TAX REVENUES:

Image

http://www.cbo.gov/doc.cfm?index=3856&type=0

So is your goal to raise tax revenue, a lot of it, while encouraging investment and production?

Or simply to "get those rich fuckers"?

Your rants suggest an answer, but I think you should give your own reasoning.

sisyphus wrote:
Maybe you should address the fact that the folks who have way more than 50% of the nation's wealth pay only 40% of the nation's taxes.

False. They pay 40% of the income taxes, and a massive percentage of property taxes, capital gains taxes, inheritance taxes, etc.

You are just wrong.

sisyphus wrote:
I'm all for flat taxes, just as soon as somebody proposes a flat tax plan that treats all income equally, instead of giving generous breaks to the wealthy by calling their incomes by another name.


Sisyphus, I supect that if if a flat tax were in place, then the wealthy would save massive amounts of money on tax lawyers, accountants, etc., and would probably be thrilled with having capital gains taxed at the same flat rate as income.


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 Post subject: Re: Taxes and who pays what
PostPosted: Tue Oct 25, 2011 10:37 am 
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Bucfan wrote:
Willton wrote:
You seem to be treating capital gains as money that gets taxed twice. How? If the capital investment eventually makes a profit (i.e., a capital gain), that profit is not money that you had before the investment. So how does that profit get taxed twice?

The money invested was, at its origin, income. Whether it was originally earned in 1928 or yesterday, it was income, subject to income tax. Indeed, for income earned before 1981, the tax burden would have been potentially onerous.

If that investment yields a return, then it is subject to taxation at the capital gains rate - a second tax.

If the remaining capital gain is realized, taxed, and re-invested, and it yields further gain, it is taxed AGAIN.

Get it?

You still don't understand how capital gains are taxed, and if you had read my posts, you would have understood it better. So allow me to repeat myself:

I don't think you understand how capital gains are taxed. Yes, the original money that went into an investment was likely subject to tax as ordinary income at some point (unless of course it was originally a capital gain that was later reinvested, but that's another topic). But if the investment makes a profit, the only thing that's subject to a capital gains tax is the profit itself, NOT the original investment. Furthermore, if you suffer a loss, not only is that loss not taxed, but it can be deducted from your taxable income. Therefore, you have no basis for saying that a capital gain subject to a capital gains tax is money that is taxed twice.

Either you need to get better at reading comprehension, or you need a lesson in how to argue honestly.

Bucfan wrote:
Willton wrote:
You pooh-pooh appeals to fairness by labeling as destructive to reasonable discourse, but that's exactly what you're doing above: appealing to fairness. Please don't treat the lowered capital gains tax as anything other than it is: an incentive to invest.

Fairness? According to whom?

The information I posted shows that higher capital gains tax rates yield LOWER revenue.

Is the point just to "punish"?

Fairness has no place in tax policy. The goal, for reasons of economic production and no other, should be, "The needed revenue at the lowest harm to the economy."

P.S. If you believe that fairness is a proper force for tax policy, then I think it would be really fair for you to pay my tax bill this year. So how far does your "fairness" argument go? Only to what YOU think is fair?

Again, I think you need a lesson in arguing honestly. I am certain that you don't actually think that it would be fair to have someone else pay your tax burden and that you are merely presenting the option to make "fairness" a bogeyman. Stop swinging at strawmen.

What is fairness? Unfortunately, fairness and equity are difficult to define in terms of tax policy. Thankfully, the American Institute of Certified Public Accountants offered the following principles to help determine fairness in tax policy:

1. Exchange Equity and Fairness – Over the long run taxpayers receive appropriate value for the taxes they pay.
2. Process Equity and Fairness – Taxpayers have a voice in the tax system, are given due process and are treated with respect by tax administrators.
3. Horizontal Equity and Fairness – Similarly situated taxpayers are taxed similarly.
4. Vertical Equity and Fairness – Taxes are based on the ability to pay.
5. Time-Related Equity and Fairness – Taxes are not unduly distorted when income or wealth levels fluctuate over time.
6. Inter-Group Equity and Fairness – No group of taxpayers is favored to the detriment of another without good cause.
7. Compliance Equity and Fairness – All taxpayers pay what they owe on a timely basis.

Perhaps that should help you figure out how to properly ground an argument in fairness.

_________________
"For every complex problem there is an answer that is clear, simple, and wrong."
~H. L. Mencken


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 Post subject: Re: Taxes and who pays what
PostPosted: Tue Oct 25, 2011 10:42 am 
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Bucfan wrote:
Finally, it is a fact that higher capital gains yield LOWER revenue, and lower capital gains generate more revenue.

Image

http://www.cbo.gov/doc.cfm?index=3856&type=0

Note the inverse relationshipe between higher capital gains tax rates and resulting revenue.

No, that is an opinion, based on a graph provided by an institution who does not share your opinion. Again, as I said in my prior post, you clearly did not thoroughly read the article from which that graph was taken. Otherwise, you would have read the following:

Quote:
"The sensitivity of realizations to gains tax rates raises the possibility that a cut in the rate could so increase realizations that revenue from capital gains taxes might rise as a consequence. Rising gains receipts in response to a rate cut are most likely to occur in the short run. Postponing or advancing realizations by a year is relatively easy compared with doing so over much longer periods. In addition, a stock of accumulated gains may be realized shortly after the rate is cut, but once that accumulation is "unlocked," the stock of accrued gains is smaller and realizations cannot continue at as fast a rate as they did initially. Thus, even though the responsiveness of realizations to a tax cut may not be enough to produce additional receipts over a long period, it may do so over a few years. The potentially large difference between the long- and short-term sensitivity of realizations to tax rates can mislead observers into assuming a greater permanent responsiveness than actually exists.

Because of the other influences on realizations, the relationship between them and tax rates can be hard to detect and easy to confuse with other phenomena. For example, a number of observers have attributed the rapid rise in realizations in the late 1990s to the 1997 cut in capital gains tax rates. But the 45 percent increase in realizations in 1996--before the cut--exceeded the 40 percent and 25 percent increases in 1997 and 1998 that followed it. Careful studies have failed to agree on how responsive gains realizations are to changes in tax rates, with estimates of that responsiveness varying widely."

_________________
"For every complex problem there is an answer that is clear, simple, and wrong."
~H. L. Mencken


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 Post subject: Re: Taxes and who pays what
PostPosted: Sun Nov 06, 2011 6:10 pm 
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Bucfan wrote:
sisyphus wrote:
Don't bullshit me with that double tax crap. A capital gain is income. Money earned by the sweat of your brow is income. Inherited money is income. Differentiating between them is one of the successful tactics used by the winning side in the class war that has been going one for over thirty years now.


False. All investment funds were, at one time, taxed as income.

So is the money that I invest at the track or the poker table. My winnings are treated as income, not capital gains, believe me.

Income is income. You will never find a way to convince me that income earned through investment is somehow nobler than income earned through work, and deserving of preferential treatment.

Quote:
"Well, what about inheritance?"

Whoever croaked and passed on wealth paid income tax for the income earned that generated the wealth that was invested (and became a capital investment) or passed on.

Whoever croaked is not receiving the income from the inheritance.

Quote:
You saying "bullshit" and invoking class warfare does not actually constitute evidence or persuasive reasoning. It is simple-minded table-pounding.

Class warfare has been going on since the country became independent. For the last 30 years the rich have been winning, and blaming anyone who dares to point that fact out by saying that they are invoking class warfare, in between trips to their vaults to count their money.

Quote:
sisyphus wrote:
Nope, I saying that income is income. You're saying that it's income when you work for it, but not when you're rich.

Get off your rant, for crying out loud.

Income is taxed as income. Investments (the origin of which was taxed as income) are taxed at capital gains rates.

Why? Well, partly because for investments, those who have the money to invest are NOT going to accept a second raping on their money (after having the origin of the investment taxed at the income tax rate).

Right, dirty earned income deserves to be taxed more heavily than investment income.

Quote:
That is why lower capital gains tax rates generate MORE CAPITAL GAINS TAX REVENUES:

Image

http://www.cbo.gov/doc.cfm?index=3856&type=0

So is your goal to raise tax revenue, a lot of it, while encouraging investment and production?

Willton already pointed out that you're full of crap on that one.

Quote:
Or simply to "get those rich fuckers"?

My goal is a tax system where those who control over 50% of the wealth pay over 50% of the taxes. A just, fair system.

Quote:
Your rants suggest an answer, but I think you should give your own reasoning.

sisyphus wrote:
Maybe you should address the fact that the folks who have way more than 50% of the nation's wealth pay only 40% of the nation's taxes.

False. They pay 40% of the income taxes, and a massive percentage of property taxes, capital gains taxes, inheritance taxes, etc.

You are just wrong.

When did the Federal Government start assessing property taxes?

I'm already aware that the federal tax code unjustly gives preferential treatment to most of the income that only the wealthy have access to, while taxing the shit out of what people earn through labor.

Quote:
sisyphus wrote:
I'm all for flat taxes, just as soon as somebody proposes a flat tax plan that treats all income equally, instead of giving generous breaks to the wealthy by calling their incomes by another name.


Sisyphus, I supect that if if a flat tax were in place, then the wealthy would save massive amounts of money on tax lawyers, accountants, etc., and would probably be thrilled with having capital gains taxed at the same flat rate as income.

I'm sure that they would save a ton on tax lawyers, which would free up a whole new class of people to do actual productive work. But it's pretty clear that they wouldn't save enough by their actions to stay on the gravy train that they're riding today.

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