Should we have additional higher income tax brackets?

[ivwshane]

Risk is not subsidized.

(First thing you on the left should get straight is that a "subsidy" is when the govt hands out taxpayer (other peoples' money) money to someone or something. I.e., Solyndra. A tax benefit is when you keep more of your own money.)

A tax benefit - lower rates for LTCG - is for (at least) two reasons: (1) to compensate for inflation and (2) incentivize investment. It's not for risk. There is no mention of risk in the tax code. Instead, to qualify for the low rate the tax code defines "investment" and limits the low rate to transaction smeeting that definition (including a holding period now set at + one year).

In fact it can be argued that the tax code discourages risk. If you lose money in an investment your deduction is severely limited. Likewise with gambling losses.

Fern

Actually a subsidy comes in many forms, including a tax break.
http://en.wikipedia.org/wiki/Subsidy

Ask yourself this, if the types of risks associated with capital gains did not get special tax treatment would those activities still exist?

If you answered "no", then it's a subsidy. If you answered yes, then you just made the case for why they aren't needed.

check mate

 

[Moonbeam]

Many Republicans would gladly welcome a simple tax code. Not sure where you're getting your misinformation from, but the howls against a simple tax code seem to come from the left side of the aisle.

An taxing all capital gains as income would absolutely harm the economy. If you think investors think short term now, it would get far worse under that scenario, as long term investment would shrink to zero as long term RORs would have to increase greatly to make up for the losses to inflation combined with the now significantly higher tax. Property values would plummet, ensuring another crash.

Of course all that Democrats can think about is how to get more money from people. If you think Republicans are greedy, you've never looked in the mirror. "You have money and I want it!!!!" That's pure greed.

I think that would be envy. But government from the beginning of government put some tax on the people. It's not greed, it's reality. A no cost government is an impossibility. Try to be real.

 

[werepossum]

"That guy says we shouldn't drink 10,000 gallons of water per day! Just imagine when his party eliminated drinking water entirely, people will DIE!!!" Not everyone suggesting change is arguing for an absolutist maximal creed with no compromise or middle ground.

Calls for raising the top marginal tax rate to something like the 90%+ that it was during the 1940s-1960s, a period of great economic growth for the country, don't mean 100% and complete confiscation. Top marginal tax rates are much, much, much lower than most times in post-Civil War American history and much lower than much of the Western world. Yet there were and are very rich people in all of these times and places, and people continued to work hard. Imagine!

You seriously think that drinking 10,000 gallons of water per day versus drinking no water per day is a valid comparison to confiscating 90%+ versus confiscating 100%?

Sorry, that was unintentionally mean. You seriously feel that drinking 10,000 gallons of water per day versus drinking no water per day is a valid comparison to confiscating 90%+ versus confiscating 100%? Hint: Taking away 90% of 10,000 gallons leaves 1,000 gallons to be drank, still thoroughly fatal. Hint #2. Very few people spend or save themselves to death.

 

[werepossum]

I think that would be envy. But government from the beginning of government put some tax on the people. It's not greed, it's reality. A no cost government is an impossibility. Try to be real.

Envy is "I see you have lots of money; it must be nice to be you."
Greed is "I see you have lots of money; give it to me!"

 

[ivwshane]

An taxing all capital gains as income would absolutely harm the economy. If you think investors think short term now, it would get far worse under that scenario, as long term investment would shrink to zero as long term RORs would have to increase greatly to make up for the losses to inflation combined with the now significantly higher tax. Property values would plummet, ensuring another crash.

I'm sorry if I don't automatically assume that statements coming out of ones ass are true so would you mind providing some actual citations and facts to back up that claim?

Changes in capital gains tax rates have been shown to only affect the market short term, whether they are being raised or lower. Anything more definitive than that is BS.

 

[Moonbeam]

Envy is "I see you have lots of money; it must be nice to be you."
Greed is "I see you have lots of money; give it to me!"

That would be wishful thinking or unartful begging.

 

[werepossum]

That would be wishful thinking or unartful begging.

Not begging if you can get the armed might of the government to back it up.

 

[berzerker60]

You seriously think that drinking 10,000 gallons of water per day versus drinking no water per day is a valid comparison to confiscating 90%+ versus confiscating 100%?

Sorry, that was unintentionally mean. You seriously feel that drinking 10,000 gallons of water per day versus drinking no water per day is a valid comparison to confiscating 90%+ versus confiscating 100%? Hint: Taking away 90% of 10,000 gallons leaves 1,000 gallons to be drank, still thoroughly fatal. Hint #2. Very few people spend or save themselves to death.

The point of the analogy being, when someone suggests raising taxes, that doesn't mean you get to act like they're suggesting confiscating all private property and burning down your house. 100% taxation is silly, 0% taxation is silly, everything else is negotiable. It's entirely legitimate to hold a different opinion than me about what amounts should be taxed and for what purposes, but it's entirely dishonest of either of us to pretend like the other wants to end all police and fire services by killing all taxes, or completely change the fundamental nature of the economy by taxing 100%.

As to specifics, 90+% top marginal rate, as has been the case in some of this country's greatest growth decades. Top marginal rate does NOT mean that percentage for every dollar you earn. At the point you're making $10 million / year, a bump to $15 million is more about showing how valuable you are and the prestige factor than it is a significant boost to your material quality of life, so there's always incentive to earn more, it's just not always "I can buy more things" (because at some point you can buy the things you want anyway).
Here's historical marginal tax rates, in both absolute and inflation-adjusted dollars, from 1913-2011: http://taxfoundation.org/article/us...-2011-nominal-and-inflation-adjusted-brackets

 

[BoberFett]

I'm sorry if I don't automatically assume that statements coming out of ones ass are true so would you mind providing some actual citations and facts to back up that claim?

Changes in capital gains tax rates have been shown to only affect the market short term, whether they are being raised or lower. Anything more definitive than that is BS.

You don't think taxes are calculated into ROR? Remember, this is a global market. Money moves around easily.

 

[dank69]

Many Republicans would gladly welcome a simple tax code. Not sure where you're getting your misinformation from, but the howls against a simple tax code seem to come from the left side of the aisle.

I wasn't talking about the no loopholes part, I was talking about the taxing capital gains the same as other income. That's the part that Republicans will say would mean the end of the world. Oh look, that's exactly what you are saying:

An taxing all capital gains as income would absolutely harm the economy. If you think investors think short term now, it would get far worse under that scenario, as long term investment would shrink to zero as long term RORs would have to increase greatly to make up for the losses to inflation combined with the now significantly higher tax. Property values would plummet, ensuring another crash.

...

But wait, you say you're not a Republican. Well you certainly quack like a Republican.

The fact is that if you close all loopholes but don't tax LTCG at the same rate as other income, the middle class gets buttfucked. That is why Dems fight the closing of loopholes. Not because they want other people's money, but I can understand why a dimwit might think that.

 

[BoberFett]

I understand now what it takes to be a Democrat. All it requires is a failure to understand simple math.

 

[dank69]

I understand now what it takes to be a Democrat. All it requires is a failure to understand simple math.

It's almost as if you believe that when LTCG tax rates were higher, people didn't invest.

I'll tell you what, why don't you show us a sample ROR calculation and illustrate for us exactly how much effect the changing tax rate has on the overall outcome.

 

[Apple Of Sodom]

How about we just spend less? I love the idea of cutting funding to PBS. I like PBS, but not at the expense of this country. TV is NOT education; if you want your kids to learn the alphabet from Ernie, go buy the box set of DVDs; $500 million may be a drop in the bucket, but those drops add up and $500 million here and $500 million there add up to billions pretty quickly.

This year I've made about $550K to date. I've saved my money and opened another business where I employ 25 people or so. I would NEVER have opened this business if I would be taxed at 50% on the income. Fuck that. I was happy where I was and honestly, what is $200K/year more when I now have to deal with 25 employees, inventory, headache, and then pay 50% back to the government? I'm not white old man yacht rich, but I am pretty comfortable and don't need it. I took a risk, gave people jobs, and now you want to tax me more on that? Fuck you, you fucking fuck. What have you done for society lately?

 

[Apple Of Sodom]

My argument against taxing capital gains is simple -

With earned income you generally take very little risk. You work, you get paid for it.

With capital gains you take a lot of risk. You invest in other companies, you buy real estate and hope the market goes up, etc. There is a lot of risk involved and therefore should have a greater return. Taxing it at a lower rate provides that greater return.

How about this - we tax capital gains at 30%...but then we subsidize losses for investment by 30%. You can get 30% cash back on any loss. The government wants to be rewarded because I picked Apple instead of Enron? OK. But I want to reimbursed because I chose Enron instead of Apple and lost my retirement. That doesn't seem fair does it...

Or we can just spend less. Many Americans face similar problems at home. Their spending exceeds their income. These people cut spending, get rid of their expensive cable bill and 50Mbps internet, quit eating out, turn lights off in the house, set the thermostat low and wear a sweater... this is what the government should be doing. Quit funding PBS; quit subsidizing corn farmers; quit paying for useless government shit.

 

[dank69]

How about we just spend less? I love the idea of cutting funding to PBS. I like PBS, but not at the expense of this country. TV is NOT education; if you want your kids to learn the alphabet from Ernie, go buy the box set of DVDs; $500 million may be a drop in the bucket, but those drops add up and $500 million here and $500 million there add up to billions pretty quickly.

This year I've made about $550K to date. I've saved my money and opened another business where I employ 25 people or so. I would NEVER have opened this business if I would be taxed at 50% on the income. Fuck that. I was happy where I was and honestly, what is $200K/year more when I now have to deal with 25 employees, inventory, headache, and then pay 50% back to the government? I'm not white old man yacht rich, but I am pretty comfortable and don't need it. I took a risk, gave people jobs, and now you want to tax me more on that? Fuck you, you fucking fuck. What have you done for society lately?

It's easy to rail at hyperbolic numbers. Also, the fact that $200k isn't worth it to you is telling. Also, most people don't have that much involvment with their investments. Maybe you should hire a manager and let them deal with your 25 employees instead.

 

[Throckmorton]

How about we just spend less? I love the idea of cutting funding to PBS. I like PBS, but not at the expense of this country. TV is NOT education; if you want your kids to learn the alphabet from Ernie, go buy the box set of DVDs; $500 million may be a drop in the bucket, but those drops add up and $500 million here and $500 million there add up to billions pretty quickly.

This year I've made about $550K to date. I've saved my money and opened another business where I employ 25 people or so. I would NEVER have opened this business if I would be taxed at 50% on the income. Fuck that. I was happy where I was and honestly, what is $200K/year more when I now have to deal with 25 employees, inventory, headache, and then pay 50% back to the government? I'm not white old man yacht rich, but I am pretty comfortable and don't need it. I took a risk, gave people jobs, and now you want to tax me more on that? Fuck you, you fucking fuck. What have you done for society lately?

Here's the problem with people like you. You see it as "giving people jobs". You aren't giving away jobs. You're exchanging your money for your employees' time so you can make more money. You aren't running a charity, you're running a business.

Don't want to make more profits just because you don't like a higher tax rate? Fine, someone else will start a business instead.

 

[Apple Of Sodom]

Here's the problem with people like you. You see it as "giving people jobs". You aren't giving away jobs. You're exchanging your money for your employees' time so you can make more money. You aren't running a charity, you're running a business.

Don't want to make more profits just because you don't like a higher tax rate? Fine, someone else will start a business instead.

You don't know anything about me. I care about my employees. I pay them well. It isn't a charity, but there is a sense of charity and a sense of giving back and helping people. It isn't just about making money.

What I am telling you, and I am speaking from experience, is that no one else will start a business. What experience do you have with owning and running a business, or are you speaking purely from your ivory tower?

 

[Apple Of Sodom]

It's easy to rail at hyperbolic numbers. Also, the fact that $200k isn't worth it to you is telling. Also, most people don't have that much involvment with their investments. Maybe you should hire a manager and let them deal with your 25 employees instead.

$200K isn't worth it to me if you tax me at 50%. Now I made $100K to put myself out there and take the risk of losing everything I've ever worked for.

Most people SHOULD have that much involvement with their investment. Then maybe they would have more success. I do have a manager, btw, thanks for asking. It doesn't mean that I don't have to deal with all sorts of things from theft to upset customers to being short staffed.

Thank you for playing. Once you have experience doing anything like this (my wife and I own 3 successful businesses) then you can chime in. Please tell me, what is it that you do that makes you an expert at this?

 

[dank69]

$200K isn't worth it to me if you tax me at 50%. Now I made $100K to put myself out there and take the risk of losing everything I've ever worked for.

So now it's not a difference of $200k but the taxes on $200k? So looking at different rates of 15% like now to say, 35% where it was when Reagan took office, we are talking about a difference of $170k take home and $130k take home, or $40k less? You wouldn't have started that business for $130k but did for $170k?

Most people SHOULD have that much involvement with their investment. Then maybe they would have more success. I do have a manager, btw, thanks for asking. It doesn't mean that I don't have to deal with all sorts of things from theft to upset customers to being short staffed.

So you hired a manager but you have to manage your 25 employees? What does your manager do?

Thank you for playing. Once you have experience doing anything like this (my wife and I own 3 successful businesses) then you can chime in. Please tell me, what is it that you do that makes you an expert at this?

Your claim that only business people can have valid opinions on the subject is short-sighted. It can be turned right back around on you when you realize that business people will argue for policies that benefit them regardless of whether or not the policies are based on reality.

 

[Apple Of Sodom]

So now it's not a difference of $200k but the taxes on $200k? So looking at different rates of 15% like now to say, 35% where it was when Reagan took office, we are talking about a difference of $170k take home and $130k take home, or $40k less? You wouldn't have started that business for $130k but did for $170k?

So you hired a manager but you have to manage your 25 employees? What does your manager do?

Your claim that only business people can have valid opinions on the subject is short-sighted. It can be turned right back around on you when you realize that business people will argue for policies that benefit them regardless of whether or not the policies are based on reality.

Yes. At some point you have to say that the risk is not worth the reward. I've had people turn down jobs over 50 cents per hour (their time was not worth the money.) I'm sorry YOU don't understand that, but as someone who has actually done this I am telling you that at some point it just isn't worth it.

It is a relatively new business. I have to be hands on right now. Manager is new, employees are new, everything needs constant attention. Why don't you open your own fucking business and let me know how you would do it better? I'm sure if you could you would have already.

Business people will of course argue for policies that benefit them. However, it is of no benefit to me to have the economy in the shitter either, because that affects my business. Similarly with my employees, I set the pay rate. I am going to pay the lowest amount necessary to keep employees. It would benefit me to pay them minimum wage in thought, but in practice it means a high turn over rate. Therefore I pay more to retain them. It doesn't matter if I am saving a few bucks on labor if I cannot retain labor pool. It doesn't matter how low my tax rate is if it is to the detriment of society and nobody shops at my store. Let the people who know what they are doing and have the most to lost make decisions.

 

[BurnItDwn]

I think we should probably have 2 or 3 brackets above 200K
perhaps 45% for income above 1 million
then 55% for income over 10 million
and 65% for income over 100 million.

Also capital gains taxes should be treated the same as earned income taxes.

 

[ivwshane]

Unless your profit goes to zero people will start businesses and take risks. No you say? Well then if 50% of profit is taxed and you think that's too high than surely a 4% increase in what you pay now isnt that big of a deal. Surely you can concede that when tax rates where 4% higher than they are now people were investing, in fact they were investing like crazy. So unless you are being completely dishonest a 4% tax increase is doable and is not equatable to paying a 50% tax.

Can you agree to that?

 

[BoberFett]

LOL, at this point I would love to see LTCG taxed as regular income, then sit back and laugh as the American economy crumbles with capital fleeing the country at a record pace.

 

[ivwshane]

LOL, at this point I would love to see LTCG taxed as regular income, then sit back and laugh as the American economy crumbles with capital fleeing the country at a record pace.

Of course you would.

 

[dank69]

Yes. At some point you have to say that the risk is not worth the reward. I've had people turn down jobs over 50 cents per hour (their time was not worth the money.) I'm sorry YOU don't understand that, but as someone who has actually done this I am telling you that at some point it just isn't worth it.

Keep in mind that I was using extreme examples of 15% and 35% (as opposed to your strawman 50% ). I do understand that when one is negotiating their livelihood, 50c/hr can make a big difference for some people. I also understand that you aren't walking that line when you are talking about an extra $130k not being worth the effort. People bust their fucking asses all day long for much, MUCH less. Not micromanagement "is every i dotted because it has to be done exactly my way" ass busting. Real hard labor "I can't move my arms at the end of the day" ass busting.

It is a relatively new business. I have to be hands on right now. Manager is new, employees are new, everything needs constant attention. Why don't you open your own fucking business and let me know how you would do it better? I'm sure if you could you would have already.

So eventually your role will diminish but you'll still be raking gobs of cash?

You are in the medical industry IIRC, right? I seem to remember you asking for other backers not too long ago? I think it was a "you invest but have no say" type of offer? You make it seem like it is impossible to teach other people what you know...

Business people will of course argue for policies that benefit them. However, it is of no benefit to me to have the economy in the shitter either, because that affects my business. Similarly with my employees, I set the pay rate. I am going to pay the lowest amount necessary to keep employees. It would benefit me to pay them minimum wage in thought, but in practice it means a high turn over rate. Therefore I pay more to retain them. It doesn't matter if I am saving a few bucks on labor if I cannot retain labor pool. It doesn't matter how low my tax rate is if it is to the detriment of society and nobody shops at my store. Let the people who know what they are doing and have the most to lost make decisions.

Well the economy WAS in the shitter in 2008/2009 and the HUGE deficit makes it hard for our country to spend our way out of it. The Bush Tax Cuts, including the ones to CG are a major contributor to the deficit.