Capital gains tax... should it be eliminated?
- Thread starter her209
- Start date
It's FUD.
Right-wingers have a fallacy - it's looking at taxes in a vacuum, as if lowering one tax doesn't mean raising someone else's (now or later).
They just sort of say, "look at poor John having to pay the big bad tax. Don't you feel sorry for John? Then lower his taxes."
Nevermind that John is a billionare whose taxes will be shifted to the middle class and/or later generations.
Oh, they say when this point is made, lower spending to prevent that. First, that's a seperate issue, and second, how's that going, Republicans?
Anyway, the capital gains tax is a very important tax which should be increased; it's good for society. It helps prevent extreme concentration of wealth, and helps the poor.
Here's how to think about it on a basic level. Mr. X has $10 million dollars; Mr. Y is the average Ameerican with little savings and a middle class income.
Mr. X can sit at the beach all day; his income can come from the $million passively bringing him income. Fixed might bring $500,000/year; other investments closer to $1M.
Mr. Y has to labor for his income.
Now, is the right plan in this scenario to say Mr. X has to pay zero tax because his income is capital gains, and Mr. Y has to pay tax for his income?
I'd say it's the other way around, if anything.
Remember that it's the ultra wealthy who have huge capital gains income, and they are the last ones to need yet more income.
This whole issue is just their extreme greed being able to fund propaganda from think tanks to promote plans to give them yet more.
Their wealth is already skyrocketing while most Americans are flat after inflation.
One of the propaganda arguments is that giving them money will 'stimulate the economy'.
It's a lie. We have decades of evidence to confirm that now. If you want to stimulate the economy, put the money in the hands of average Americans who spend it. The ultra wealthy use the money to buy yet more of the nation's wealth - companies, real estate, etc. It's why the top 5% have gone from owning half the wealth to over three times as much as the other 95% in the last few decades.
Right-wingers have a fallacy - it's looking at taxes in a vacuum, as if lowering one tax doesn't mean raising someone else's (now or later).
They just sort of say, "look at poor John having to pay the big bad tax. Don't you feel sorry for John? Then lower his taxes."
Nevermind that John is a billionare whose taxes will be shifted to the middle class and/or later generations.
Oh, they say when this point is made, lower spending to prevent that. First, that's a seperate issue, and second, how's that going, Republicans?
Anyway, the capital gains tax is a very important tax which should be increased; it's good for society. It helps prevent extreme concentration of wealth, and helps the poor.
Here's how to think about it on a basic level. Mr. X has $10 million dollars; Mr. Y is the average Ameerican with little savings and a middle class income.
Mr. X can sit at the beach all day; his income can come from the $million passively bringing him income. Fixed might bring $500,000/year; other investments closer to $1M.
Mr. Y has to labor for his income.
Now, is the right plan in this scenario to say Mr. X has to pay zero tax because his income is capital gains, and Mr. Y has to pay tax for his income?
I'd say it's the other way around, if anything.
Remember that it's the ultra wealthy who have huge capital gains income, and they are the last ones to need yet more income.
This whole issue is just their extreme greed being able to fund propaganda from think tanks to promote plans to give them yet more.
Their wealth is already skyrocketing while most Americans are flat after inflation.
One of the propaganda arguments is that giving them money will 'stimulate the economy'.
It's a lie. We have decades of evidence to confirm that now. If you want to stimulate the economy, put the money in the hands of average Americans who spend it. The ultra wealthy use the money to buy yet more of the nation's wealth - companies, real estate, etc. It's why the top 5% have gone from owning half the wealth to over three times as much as the other 95% in the last few decades.
Double taxation is all over the place. You get taxed on income and then whenever you buy anything, and then again if it's property. No?
Schadenfroh
Elite Member
- Mar 8, 2003
- 38,416
- 4
- 0
Using double taxation for an excuse is poor, while I do support reducing the death tax, double taxation is everywhere.
Yes. Taxing capital gains is the most assine thing there is.
wonder what people would do if it was eliminated? Invest it.
wonder what people would do if it was eliminated? Invest it.
Well, except that the federal gov't uses "double taxation" and "post tax dollars" to determine almost all of our tax laws... such as is the case with IRAs and interest on certain savings bonds. So in essence, theyre hypocrits, but was else is new?
"Double taxation is all over the place. You get taxed on income and then whenever you buy anything, and then again if it's property. No?"
There is no federal property tax or sales tax. So no youre arent being double taxed.
Cutting the wealth's tax does stimulate the economy. Y = I + (G-T) + S + CA
When you cut the wealthy's tax, you increase investings and savings which has an equal increase in consumption = economy growth. When the economy grows, more jobs are created => cousin carney up in michigan who lost his ford job just got a new one.
When the rich invest the money goes into use. Of course they get a return on their investment, but everybody benifits - if that wasnt the case we'd have 5 rich people running the country and everyone struggling to eat, but thats not the case. Anyone can get rich if they work hard and make smart choices. Unfortunantly most of our youth spend 30k a year to go to film school or major in english and wonder while nobody will give them a job.
"Double taxation is all over the place. You get taxed on income and then whenever you buy anything, and then again if it's property. No?"
There is no federal property tax or sales tax. So no youre arent being double taxed.
Cutting the wealth's tax does stimulate the economy. Y = I + (G-T) + S + CA
When you cut the wealthy's tax, you increase investings and savings which has an equal increase in consumption = economy growth. When the economy grows, more jobs are created => cousin carney up in michigan who lost his ford job just got a new one.
When the rich invest the money goes into use. Of course they get a return on their investment, but everybody benifits - if that wasnt the case we'd have 5 rich people running the country and everyone struggling to eat, but thats not the case. Anyone can get rich if they work hard and make smart choices. Unfortunantly most of our youth spend 30k a year to go to film school or major in english and wonder while nobody will give them a job.
From wikipedia "In 2006, the death tax is applicable to estates valued over $2,000,000 and the maximum rate is 46%, which is due to drop to 45% in 2007, where it will stay until 2010."
Why one earth does the death tax get so much attention?? How many people with 2 million dollars home die a year? Not enough to warrant all the bickering....
Well you could be a land owner and if you are in the right part of the country, something like 100 acres could be worth way more than 2 mill. This mostly applies to farmers.
Really? You link to a thoery, while I personally know someone who was homeless for over a year and half, and now make over 150k. Where exactly does that fall in your cycle? Theories are nice and all, esoecially since one could have a theory on just about anything.
I believe in this country there are public schools, people can go to for free, and povered kids can sometimes eat at these schools for free. Now, if they bust their ass, they can apply to college (for free) and go to college (for free, scholarshps, grants, or take out loans-not free). These kids might not take advantage of the current socio-economic situation, but money isnt gonna solve that problem.
Are you saying, that its impossible for some people to get rich by working hard and making smart choices? If a homeless person can, im sure anyone else can bust their balls and do it to.
And can ignorance be astounding? Surely I could be astounding, but my ignorance? Can ignorance be dumb? Do you have smart ignorance?
The possibility to succeed in the US has never been greater. This country is experiencing unprecedented economic growth, primarily due to the Bush tax cuts. Even US state and federal tax coffers are filling up, who da thunk?
There are countless examples of people who started with literally nothing and are now wealthy. There are numerous movie stars and sports athletes that are obvious examples. One of the richest men alive, Bill Gates started his company out of a garage.
I'm sorry if you don't live in the US. There's always legal immigration if you're so inclined.
You left out comparing the benefit of the same tax cut given to the poor and middle class.
Who is going to stimulate the economy more - $ given to Bill Gates or to a middle class person who spends the money?
I'll repeat from my post above which you ignored: the ultra wealthy use the money to acuire more, which has a lot less benefit to the economy, and is why their share of the total wealth in our society has skyrocketed at the expense of the vast majority of the population. They're increasingly in control of our political system as well, not to mention the media. It's their propaganda we all hear. Someone asked why the Estate Tax gets so much attention; because the ultra wealthy care about it.
That's why it's high on Bush's agenda. He tells stories about how he talked to farmers who lost their farms because of the tax. Asked to name one, he couldn't; a search was done for them, and it found none. The democrats are happy to put in protections for farmers, raise the cap; but when they offer to raise it even to extreme amounts, the republicans say no, because it's the ultra wealthy they're taking care of.
We're moving more and more in that direction; of course it will never get that extreme, you cannot have all but 5 starving with 300 million people, no society has had that.
But we are *higher* in concentration of wealth than, if I understand correctly, any other industrialized nation, and higher than at any point in our history, save the gilded age and the pre-depression levels, which we're close to (but those are approximations, I'm not looking at the numbers). I've mentioned repeatedly, for example, that the top 5% owned half the nation's wealth before Reagan, and over 3/4 when GWB entered office. It's gotten worse since.
LunarRay
Diamond Member
- Mar 2, 2003
- 9,993
- 1
- 76
Capital Gain (assume both long and short term the same) is simply the realized gain on an asset held for investment.. right we all know that :+) You don't pay tax on the growth of the asset until you convert it in some manner. Sorta like a US Savings Bond.. but that is interest.. 
Double taxed you ask... well... the principal was taxed once upon a time but the 'growth' never was.. and that is the part that is taxed as Capital Gain... you buy a gnu for 1$ and 10 years later sell for 10$ .. the Capital gain is 9$... (forget the 'but I fed it too )
The asset you invested in might be stock... so is that then double taxed... no... it is part of the understanding of investment.. your basis is not taxed capital or at all.. just the growth..
Double taxed you ask... well... the principal was taxed once upon a time but the 'growth' never was.. and that is the part that is taxed as Capital Gain... you buy a gnu for 1$ and 10 years later sell for 10$ .. the Capital gain is 9$... (forget the 'but I fed it too
)The asset you invested in might be stock... so is that then double taxed... no... it is part of the understanding of investment.. your basis is not taxed capital or at all.. just the growth..
- Oct 11, 2000
- 56,336
- 11
- 0
I can definitely see the point of dividends paid to stockholders as double taxed where you pointed it out, but let me see if I can make a counterpoint.
Let's take the case where a company does not pay dividends but instead either keeps the cash on hand or uses it to buy back stocks. In either case, doesn't the price of the stock go up? And if so, the company's profit (which was taxed already) is used to increase the value of the stock, which is taxed (again) when the stock is sold for profit.
ProfJohn
Lifer
- Jul 28, 2006
- 18,161
- 7
- 0
The purpose of taxes is to raise money to fund the government.
Therefore, we should follow a tax policy that maximizes revenue and nothing else.
The whole ?raise capitals gains taxes because it takes money from the rich? is a false argument. The government should not be in the business of taking money from people because some feel that they have too much of it. That is not how our society was created and not how a successful capitalist country works.
Whenever someone starts their argument for taxes with the idea that some people have to much money they are more interested in social engineering and not in sound tax policy.
The cutting of capital gains taxes has results in MORE revenue for the government, that is the only fact that should matter.
On the ?death tax.? I think it is unethical and immoral to take money from someone solely because they have died. If Bill Gates dies tomorrow under the current system as much as 46% of his estate can be taken via taxes solely because he died. This is money that he has already paid taxes on for the most part. What part of dying gives the government the right to come and take your money?
Additionally, the mere existence of the tax causes people to engage in behaviors that are meant to reduce estate tax liability. That is capital that could be used to further the economy instead being used in inefficient ways solely to keep it out of the hands of the government.
The estate tax should be eliminated. Upon someone?s death their heirs should have to pay any unpaid capital gains taxes and nothing else.
If I work hard my whole life and end up with $2 million in the bank on the day of my death there is NO reason at all that the government should be allowed to come in and take ANY of that money.
I think as the baby boomers who have amassed large amounts of capital and income become older this issue will come to the fore front.
Therefore, we should follow a tax policy that maximizes revenue and nothing else.
The whole ?raise capitals gains taxes because it takes money from the rich? is a false argument. The government should not be in the business of taking money from people because some feel that they have too much of it. That is not how our society was created and not how a successful capitalist country works.
Whenever someone starts their argument for taxes with the idea that some people have to much money they are more interested in social engineering and not in sound tax policy.
The cutting of capital gains taxes has results in MORE revenue for the government, that is the only fact that should matter.
On the ?death tax.? I think it is unethical and immoral to take money from someone solely because they have died. If Bill Gates dies tomorrow under the current system as much as 46% of his estate can be taken via taxes solely because he died. This is money that he has already paid taxes on for the most part. What part of dying gives the government the right to come and take your money?
Additionally, the mere existence of the tax causes people to engage in behaviors that are meant to reduce estate tax liability. That is capital that could be used to further the economy instead being used in inefficient ways solely to keep it out of the hands of the government.
The estate tax should be eliminated. Upon someone?s death their heirs should have to pay any unpaid capital gains taxes and nothing else.
If I work hard my whole life and end up with $2 million in the bank on the day of my death there is NO reason at all that the government should be allowed to come in and take ANY of that money.
I think as the baby boomers who have amassed large amounts of capital and income become older this issue will come to the fore front.
uberman
Golden Member
- Sep 15, 2006
- 1,942
- 1
- 81
Amazing! So you wish to attack theory. How about research? Have you ever done research and then presented it along with your conclusions? What training have you recieved in research either ininterpreting or developing it? Are you familiar with using random number tables? Are you familiar with methods used in order to skew those numbers in your favor? Do you believe that everyone has equal access and opportunity in the USA regardless of socioeconomic status and/or educational background and/or race or gender? I'm curious as to your experience in research since you don't support theory. Are your beliefs only based on personal opinion?
You also say, "...while I personally know someone who was homeless for over a year and half, and now make over 150k." This is illogical. Logic says you cannot apply the general to the specific, but you do. I'm confused by your logic. Please explain.
Bowfinger
Lifer
- Nov 17, 2002
- 15,776
- 392
- 126
Except, of course, you are being dishonest, as was well documented in one of the threads you abandoned. Instead of accepting the heaping helping of crow you earned, you've instead fled to other threads where you continue to parrot the same disinformation. The available evidence strongly suggests that tax cuts reduce tax revenues, no matter how many times you want to cry otherwise.
More misdirection. It's not the death that's taxed, it's the windfall inheritance. "Death tax" is pure propaganda.
Still more misdirection. The mere existence of any tax causes people to engage in behaviors meant to reduce tax liability.
Nonsense. The threshold is high enough (and will undoubtedly continue to be increased) so that only the very wealthy are affected. Frankly, it should probably be lowered. There's no reason inherited windfall income should be taxed any less than other income. A more interesting question is whether inherited capital assets should be taxed when inherited, or only when sold. That would remove the objection about losing a family business, for example. Probably be a nightmare to track and collect, however.
It is income, the profit you get back over and above the money you invested. Income like my paycheck, that gets taxed seven or eight times before it come my way again. And what double tax, most corporations pay no tax or get a refund, just check the deals their lobbyists bought them in Washington.
ProfJohn
Lifer
- Jul 28, 2006
- 18,161
- 7
- 0
Some facts on the 2003 capital gains tax cuts.
In January of 2003 the CBO estimated that the capital-gains tax liabilities would be $60 billion in 2004 and $65 billion in 2005, for a two year total of $125 billion.
The tax cuts went into effect in 2004.
The actual liabilities for capital-gains taxes were $71 billion in 2004 and $80 billion in 2005. For a two year total of $151 billion.
Notice that the actual total was $26 billion MORE than what had been expected!
In other words, the cut in tax RATES ended up giving us more revenue.
Now bowfinger, you seem to have an aversion to facts and figure since you post a lot of hot air, but never seem to back up any of your statements with facts in figures.
If as you say:
Since I seem to be the most hated person on ATPN I am sure you and all your friends would love to prove me wrong, so please, give it a try.
Source of info for my post.
2003 Projections
The Budget and Economic outlook published in 2003 on page 82 of PDF
Actual revenue
Budget and Economic Outlook page 112 of PDF
Ps. Please keep any attempt to prove me wrong focused on capital-gains taxes since that is the subject at hand.
In January of 2003 the CBO estimated that the capital-gains tax liabilities would be $60 billion in 2004 and $65 billion in 2005, for a two year total of $125 billion.
The tax cuts went into effect in 2004.
The actual liabilities for capital-gains taxes were $71 billion in 2004 and $80 billion in 2005. For a two year total of $151 billion.
Notice that the actual total was $26 billion MORE than what had been expected!
In other words, the cut in tax RATES ended up giving us more revenue.
Now bowfinger, you seem to have an aversion to facts and figure since you post a lot of hot air, but never seem to back up any of your statements with facts in figures.
If as you say:
All you have to do is find some data to back up your argument.
Since I seem to be the most hated person on ATPN I am sure you and all your friends would love to prove me wrong, so please, give it a try.
Source of info for my post.
2003 Projections
The Budget and Economic outlook published in 2003 on page 82 of PDF
Actual revenue
Budget and Economic Outlook page 112 of PDF
Ps. Please keep any attempt to prove me wrong focused on capital-gains taxes since that is the subject at hand.
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