Should we have additional higher income tax brackets?

[BurnItDwn]

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.

That's already been happening for the last 30+ years.
Look at the entire manufacturing industry.

 

[Juror No. 8]

Yes, the government doesn't steal enough money from the American people as it is. We must let them steal more, because they've proven so effectively time and time again that they won't waste it.

Raise all tax rates to 100%. Go government!

 

[ivwshane]

That's already been happening for the last 30+ years.
Look at the entire manufacturing industry.

But the Capitol gains tax rate has been historically low!?? I guess that means it needs to be lower./s

 

[mvbighead]

Yes, the government doesn't steal enough money from the American people as it is. We must let them steal more, because they've proven so effectively time and time again that they won't waste it.

Raise all tax rates to 100%. Go government!

I don't engage in much of these discussions, but... just... WOW.

They're called taxes. Taxes allow your government to do things for you. Whether it is to build roads or to pass laws. You won't agree with everything they do, but if you weren't paying taxes, a great number of things wouldn't happen.

As it is, it'd be great if they can figure out the optimal way to apply taxes and generate the most income while not adversely affecting the economy. I am sure it is a tricky scenario, as taking more at the top means less of the upper class are going to be investing in new business that creates work for the lower class. But taking more at the lower end generally means less people buying products, and being able to support their families.

As it is, taxation is necessary. Calling it stealing is being about as dense on the subject as you can get.

 

[Gonad the Barbarian]

I don't engage in much of these discussions, but... just... WOW.

They're called taxes. Taxes allow your government to do things for you. Whether it is to build roads or to pass laws. You won't agree with everything they do, but if you weren't paying taxes, a great number of things wouldn't happen.

As it is, it'd be great if they can figure out the optimal way to apply taxes and generate the most income while not adversely affecting the economy. I am sure it is a tricky scenario, as taking more at the top means less of the upper class are going to be investing in new business that creates work for the lower class. But taking more at the lower end generally means less people buying products, and being able to support their families.

As it is, taxation is necessary. Calling it stealing is being about as dense on the subject as you can get.

They have figured it out, it's not that complicated. Taxing the rich hampers investment capital*, taxing the poor hampers consumption. Which do you think has a greater effect on a consumption-based economy?

*Though in a fractional reserve system there's never really any shortage of investment capital. If someone doesn't have the money to invest it can always be borrowed. Which also nicely demonstrates why it's economically constricting (ie: stupid) to go with a gold a standard.

 

[mvbighead]

For me, there are an awful lot of complexities here, but I'd be in favor of the system suggested involving a scaling tax from the poverty line up. I suppose I'd say that'd be ideal for wages/income. So if a CEO earns 500,000, he should be paying a greater percentage than Joe Schmoe, as Joe has less money to work with to meet his expenses.

As for the guy not creating the business based on being taxed at a higher rate, I'd like to think the government can come up with a smart enough system to award job creators. Take, for example, two imaginary scenarios:

A - Guy earns 10,000,000 annually, buys a $2,000,000 yacht. He gets taxed at the normal rate, no deductions.

B - Guy earns 10,000,000 annually, buys a $2,000,000 business that employs 200 people. Gets taxed at a lesser rate, hypothetically based on the number of people he employs.

Granted, in scenario A, the guy buys a yacht that was assembled by a number of employed individuals, but the idea being that the guy who creates jobs is a bigger benefit for the economy. I suppose the reality is, both guys are benefiting the economy. My thought is that guy B is creating a more long term benefit by creating jobs, whereas guy A is creating a short term benefit, and more so benefiting the profits of a large corporation.

The idea being that those at the upper level would be "incentivized" to create jobs, which would create more individuals earning an income, buying products, and paying taxes. Obviously, there is no guarantee that the investment would work out, and that the jobs will be long lasting, but adding incentive to those with wealth to create jobs is certainly not a bad thing, IMO.

 

[blankslate]

Risk is not subsidized.

True in most cases...

but it depends entirely on which sector you are talking about.

 

[crownjules]

I don't engage in much of these discussions, but... just... WOW.

They're called taxes. Taxes allow your government to do things for you. Whether it is to build roads or to pass laws. You won't agree with everything they do, but if you weren't paying taxes, a great number of things wouldn't happen.

As it is, it'd be great if they can figure out the optimal way to apply taxes and generate the most income while not adversely affecting the economy. I am sure it is a tricky scenario, as taking more at the top means less of the upper class are going to be investing in new business that creates work for the lower class. But taking more at the lower end generally means less people buying products, and being able to support their families.

As it is, taxation is necessary. Calling it stealing is being about as dense on the subject as you can get.

I think his general point, said in a sarcastic way, is that a lot of taxpayer funds have been mishandled. Our defense spending is out of control and defense contractors make out like fat cats (not to mention the few times money has just gone missing). We bail out or fund industries because they don't have the foresight to plan or make reckless decisions or they get sweatheart deals because of connections (banks, auto industry, airlines, alternative energies, etc). So yes, in those ways where government money is being spent in a terrible fashion it is indirectly stealing from us. Our hard earned money is being used to prop up and line the pockets of people that failed us or deliver nothing but empty promises.

Of course, government has many functions it has to perform that require funding. And investing in new technologies that will benefit the country and public is not a bad thing. We just need to cut back on some of the massive budgets the politicians have carelessly ballooned over the last decade. Start with defense and medicaid/medicare. You could easily eliminate hundreds of billions of spending.

Higher taxes will be needed. I think some just want government to prove that it can responsibly handles its finances first before giving it more to play with.

 

[ivwshane]

For me, there are an awful lot of complexities here, but I'd be in favor of the system suggested involving a scaling tax from the poverty line up. I suppose I'd say that'd be ideal for wages/income. So if a CEO earns 500,000, he should be paying a greater percentage than Joe Schmoe, as Joe has less money to work with to meet his expenses.

As for the guy not creating the business based on being taxed at a higher rate, I'd like to think the government can come up with a smart enough system to award job creators. Take, for example, two imaginary scenarios:

A - Guy earns 10,000,000 annually, buys a $2,000,000 yacht. He gets taxed at the normal rate, no deductions.

B - Guy earns 10,000,000 annually, buys a $2,000,000 business that employs 200 people. Gets taxed at a lesser rate, hypothetically based on the number of people he employs.

Granted, in scenario A, the guy buys a yacht that was assembled by a number of employed individuals, but the idea being that the guy who creates jobs is a bigger benefit for the economy. I suppose the reality is, both guys are benefiting the economy. My thought is that guy B is creating a more long term benefit by creating jobs, whereas guy A is creating a short term benefit, and more so benefiting the profits of a large corporation.

The idea being that those at the upper level would be "incentivized" to create jobs, which would create more individuals earning an income, buying products, and paying taxes. Obviously, there is no guarantee that the investment would work out, and that the jobs will be long lasting, but adding incentive to those with wealth to create jobs is certainly not a bad thing, IMO.

One doesn't create jobs for the benefit of creating jobs. They create jobs for the benefit of making profit. Unless taxes are so high, as in 100%, there will be those that create jobs if it means they only make a dollar profit.

To think that someone won't create a business where a good profit model exists because they won't get an extra 4% or 10% in profit because of slightly higher taxes is completely asinine and has been proven false throughout this countries history multiple times!

 

[ivwshane]

I think his general point, said in a sarcastic way, is that a lot of taxpayer funds have been mishandled. Our defense spending is out of control and defense contractors make out like fat cats (not to mention the few times money has just gone missing). We bail out or fund industries because they don't have the foresight to plan or make reckless decisions or they get sweatheart deals because of connections (banks, auto industry, airlines, alternative energies, etc). So yes, in those ways where government money is being spent in a terrible fashion it is indirectly stealing from us. Our hard earned money is being used to prop up and line the pockets of people that failed us or deliver nothing but empty promises.

Of course, government has many functions it has to perform that require funding. And investing in new technologies that will benefit the country and public is not a bad thing. We just need to cut back on some of the massive budgets the politicians have carelessly ballooned over the last decade. Start with defense and medicaid/medicare. You could easily eliminate hundreds of billions of spending.

Higher taxes will be needed. I think some just want government to prove that it can responsibly handles its finances first before giving it more to play with.

Fair enough. Sounds reasonable to boot.

Just curious though. If there are some people who think like you do (or believe in what you posted) would they vote for or see it as responsible if a presidential candidate said they want to increase military spending?

 

[crownjules]

Fair enough. Sounds reasonable to boot.

Just curious though. If there are some people who think like you do (or believe in what you posted) would they vote for or see it as responsible if a presidential candidate said they want to increase military spending?

I would not, no. At $900B/yr, defense spending is already the biggest single line item on the government's budget. It needs to be cut back by a lot, not increased even further. It's just another form of government welfare in many ways. But the "for the troops!" contingent is a lot harder to overcome then government pensions and welfare babies even though it eats up far more spending.

 

[BoberFett]

buys a $2,000,000 business that employs 200 people

This is why people who actually understand business laugh at Democrats.

See my sig for more hilarity.

 

[BoberFett]

To think that someone won't create a business where a good profit model exists because they won't get an extra 4% or 10% in profit because of slightly higher taxes is completely asinine and has been proven false throughout this countries history multiple times!

15% LTCG to 50% top rate income tax as some of the proposals here seem to promote is not a small jump. It's a 233% increase in taxes. Or if you want to look at it another way, it's a 40% decrease in profitability. And it could greatly incentivize someone to invest elsewhere, such as emerging markets. If you took a 40% paycut, would you stay at your job?

 

[ivwshane]

15% LTCG to 50% top rate income tax as some of the proposals here seem to promote is not a small jump. It's a 233% increase in taxes. Or if you want to look at it another way, it's a 40% decrease in profitability. And it could greatly incentivize someone to invest elsewhere, such as emerging markets. If you took a 40% paycut, would you stay at your job?

What people propose here doesnt mean shit. Obama has called for a 5% increase which is a small jump and is still, historically speaking, low.

http://finance.yahoo.com/news/historical-changes-capital-gains-tax-191518219.html

And higher rates have not historically harmed investing.

http://www.forbes.com/sites/leonard...l-gains-tax-rates-and-economic-growth-or-not/

These are facts.


With regards to taking a 40% pay cut (red herring btw), if there is a jobs deficit I can guarantee you someone would stay at their job.

 

[Jhhnn]

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.

You misrepresent risk as it applies to extreme wealth. At that level, portfolios are extremely diversified world wide, and real returns are based on averages. You also fail to understand that even large losses will have no effect whatsoever on lifestyle, because only a small fraction of income is actually spent in that fashion, and that they have enormous reserves capable of sustaining them even if some portion is liquidated. If today's billionaire woke up to half the value of his paper assets being gone tomorrow morning, those losses are merely on paper.

None of that applies to wage earners at all, whose ability to stay afloat depends entirely on employment at the whim of the larger economy & to forces beyond their control.

 

[Suspicious-Teach8788]

As it is, taxation is necessary. Calling it stealing is being about as dense on the subject as you can get.

At what point is it unreasonable? You say the government needs money. We agree. There's basic things to be funded like defense, basic social services, roads, education, etc. but at what point is it just spending too much?

It's not so much that we should be taxed to match the government's spending. The government's spending needs to be kept in check and kept at a minimal amount.

 

[Jhhnn]

At what point is it unreasonable? You say the government needs money. We agree. There's basic things to be funded like defense, basic social services, roads, education, etc. but at what point is it just spending too much?

It's not so much that we should be taxed to match the government's spending. The government's spending needs to be kept in check and kept at a minimal amount.

Why? So Mitt & his peers can get richer at the expense of everybody else?

 

[Suspicious-Teach8788]

Why? So Mitt & his peers can get richer at the expense of everybody else?

why does it matter? what about the 47% that don't pay squat in income tax? how about we make them pay?

 

[Jhhnn]

why does it matter? what about the 47% that don't pay squat in income tax? how about we make them pay?

It matters because Mitt & his peers have no real use for more money, other than to exercise more power over the lives of the rest of us, and because there is no infinite pie. Sure, the total economy might grow, but that doesn't matter if they get all the growth & more, does it?

How about trying to collect taxes from people whose meager incomes fuel the economy with every dime they get, whose spending is the backbone of commerce in general? Why? to satisfy some perverted sense of superiority on your part? So that Mitt can have more?

Why do you think he's entitled to more, anyway?

 

[mvbighead]

It matters because Mitt & his peers have no real use for more money, other than to exercise more power over the lives of the rest of us, and because there is no infinite pie. Sure, the total economy might grow, but that doesn't matter if they get all the growth & more, does it?

How about trying to collect taxes from people whose meager incomes fuel the economy with every dime they get, whose spending is the backbone of commerce in general? Why? to satisfy some perverted sense of superiority on your part? So that Mitt can have more?

Why do you think he's entitled to more, anyway?

This is generally my thought on the subject. While I certainly understand that big money can result in big business, the reality is that big business people are interested in generating more revenue. Part of that is laying off work force. So, they get tax breaks because they can greatly benefit others by creating jobs, but ultimately, if firing Jan saves them $30k/year, they'll do it to create bigger profits.

That's not to say that it is wrong, but the reality is, many job creators ultimate interest is lining their pockets, or their share-holders pockets. If laying off 30,000 people is acceptable for a short term to increase profits, they'll do it.

So ultimately, the only way to ensure that many people have jobs is to provide incentives that are directly tied to just that, creating jobs. For every job you create, you get X dollars off of your taxes. For every job you remove, you get X dollars added back to your taxes. Basically cutting some incentive to perform mass lay-offs, which may or may not sway the decision in a different direction.

Ultimately, this country allows many people the opportunity to succeed as they do. If I am capable of earning a 6 figure income year after year, I should pay a little more than the guy who can't. And the higher you get on the scale, the less the difference matters. You take $5000 away from someone who earns $25k, and you've just put him below the poverty level, and getting by is going to be extremely difficult. You take 50k away from someone who earns 200k, and now he won't buy that Escalade he had his eyes on.

Ultimately, both affect the economy, as that Escalade puts some people to work. But the reality is, that guy will just buy a 35k-40k vehicle that is a bit more reasonable for him, which still puts people to work.

I suppose I can be completely in the wrong here, but to me, if I am fortunate enough to earn a high income, I believe that can be attributed to the opportunities this country allows. My success, while largely due to my own efforts, may not be possible in some other countries. My share of taxes should be equal to or greater than those that haven't had that level of success.

And of course, that opinion could change if I ever get to a higher level of earning. But at that point, I'll have a much easier time meeting all of my expenses.

 

[soulcougher73]

15% LTCG to 50% top rate income tax as some of the proposals here seem to promote is not a small jump. It's a 233% increase in taxes. Or if you want to look at it another way, it's a 40% decrease in profitability. And it could greatly incentivize someone to invest elsewhere, such as emerging markets. If you took a 40% paycut, would you stay at your job?

The problem is these people are not working a "job". They have someone invest it for them. So taking a 40% decrease in profitablity while still making profit shouldnt really harm them any. To them its just digital numbers in a account fund somewhere making them money for no work.

I mean sure it sucks to lose 40% but if im still making money hand over fist im not going to care. The problem is a lot of people dont know when enough is enough. All they care about is my epeen bank account has more money in it than the next rich guy who could never fathom spending that much to begin with either.

Bunch of greedy money bags worshipping the almight $ more than caring about their fellow humans.

 

[soulcougher73]

I suppose I can be completely in the wrong here, but to me, if I am fortunate enough to earn a high income, I believe that can be attributed to the opportunities this country allows. My success, while largely due to my own efforts, may not be possible in some other countries. My share of taxes should be equal to or greater than those that haven't had that level of success.

This is sort of my outlook on it as well. If im lucky enough to be in a country that gives me these opportunitues/pathways to success. And the more success i derive from such a system the more i feel entitled to give back. Especially when its due to a business venture as the people consuming are the ones who got me to where i was in the first place. Id feel compelled to give back to them as much as possible. If i have to pay higher taxes so they can pay less so they can consume more of my product them im all for it.

Because if it wasnt for them i wouldnt have been successful in the first place.

 

[Throckmorton]

because there is RISK involved in the stock market. it's not guaranteed income like a salary

Since when is a salary guaranteed? Every job is a risk, and plenty of people pick up their whole lives and move for new jobs. That's more risky than playing with money you won't miss

 

[BoberFett]

What people propose here doesnt mean shit. Obama has called for a 5% increase which is a small jump and is still, historically speaking, low.

http://finance.yahoo.com/news/historical-changes-capital-gains-tax-191518219.html

And higher rates have not historically harmed investing.

http://www.forbes.com/sites/leonard...l-gains-tax-rates-and-economic-growth-or-not/

These are facts.


With regards to taking a 40% pay cut (red herring btw), if there is a jobs deficit I can guarantee you someone would stay at their job.

You're probably right. 5% isn't likely enough to make people jump ship. But this conversation is a theoretical discussion about higher brackets at the top.

 

[piasabird]

I dont think we need addittional income tax brackets.

I think what we need is to get rid of all the free welfare we give to rich people. We need to just take away all their deductions if they make $300,000 or more. It is the loopholes and the business deductions that are ruining America. If you run a business that is fine. However, if you are rich we should not give businesses any deductions, or tax abatements.

In fact if any business receives any break on their taxes from a local or state level, then that should by federal law have to be counted as income as payment-in-kind.