The Tea Party

[Rick]

Is there any tax that you support?

I'd guess "poll."

LOL

[Andrew D]

Agreed:

[Sue U]

Really, you're too smart to be that ignorant of capitalism. I guess tax law has nothing to do with capitalism.

Exactly: tax law, per se, has nothing to do with capitalism. Throughout human history taxes have been required by every organized society, whether economic activity was based on feudal, mercantile, capitalist, fascist, socialist or any other organizational principle(s).

My father invested in a startup company in the 70s, lost every penny. THAT is putting post-taxed money at risk. It is far far different than selling something at an mutually agreed to price, whether it is property or labor.

No, it's not. Your father merely made a bad bet in selecting a method he thought might generate income. It is no different than if he had taken a job and elected to get paid in stock options exerciseable at the end of the year rather than in cash every week, but the company went bankrupt on December 30. Simply because you guessed wrong about the likelihood of your arrangement paying off doesn't change the fundamental nature of income. In theory, where cash today is more certain than a payoff next year, you'd expect to be paid a premium for accepting the less-certain future payoff -- both for the risk and for the time value of money. But so what? What does that have to do with the tax rate on the income generated?

By that "logic" no one should pay taxes on anything because the cost is passed on in the price of whatever it is the taxpayer does to generate income

I'm not even sure if that sentence makes any sense. A company sells a product. If they are taxed at 10% of profit, they will maintain their margins by increasing the cost of the product to the consumer. It's not that complex of a concept.

And if a worker is taxed at 10% (or whatever) he will want a wage increase to maintain his standard of living, increasing the costs of labor to his employer. It's not that complex a concept. (BTW, your example neglects an obvious alternative -- that the company becomes more efficient in delivering its product, thus reducing costs and absorbing the tax without increasing the price of the product.)

What is your argument for creating a distinction between "capital gains" and "ordinary income"?

[GrossDad]

Especially when much of what qualifies for capital gains basically involves playing the lottery that the stock market has become.

[liberty]

I have just heard that the super committee had just admitted failure and automatic spending cuts will go into effect.

If the republicans think severe tax cuts will pave the way for republican victory next years they are out their mind. The American people want things like social security, Medicare and a welfare system that takes care of the helpless and we can not have those things without taxes. I suspect that they headed for the cliff and don’t know it.



Thanks Gob, i am a little slow tonight; you pointed it out and I still did not see it until I looked again.

[Gob]

I have just heard that the super committee had just admitted failure and automatic speeding cuts will go into effect.

What speed are they cuting you down too?

[liberty]

I have just heard that the super committee had just admitted failure and automatic speeding cuts will go into effect.

What speed are they cuting you down too?

I am not sure I understand what you are getting at. But I don’t think it will have a lot of effect on me personally. I am concerned about some poor people in nursing homes on Medicaid that I know.

[Gob]

Ok, what are these "speeding cuts" to which you allude?

[rubato]

Medicare being one of the evil "entitlement programs" that the Repuglicans wanted to eliminate.

yrs,
rubato

[liberty]

Ok, what are these "speeding cuts" to which you allude?

I got it, see previous post.

[Gob]

I take it you meant to say "spending cuts".

What cuts are happening automatically?

[liberty]

I take it you meant to say "spending cuts".

What cuts are happening automatically?

As I understand it they are across the board spending cut and here in Louisiana our social welfare system is already strained to the breaking point. I can’t see Louisiana being able to make up the difference in the federal cuts. I am concerned about people being kicked out nursing that have no place else to go.

[Liberty1]

Medicare being one of the evil "entitlement programs" that the Repuglicans wanted to eliminate.

Show me one single quote (outside of Ron Paul type loonie toons) where a Rep has ever said that.

[GrossDad]

Only Four Republicans Voted Against Eliminating Medicare.

[dgs49]

The supposed "cuts" (and we all know what that word means in Washington) will not take place until 2013.

It would be more rational to worry about rising seas wiping out Manhattan than these cuts.

Won't ever happen.

[dgs49]

No one on this board has to "justify" the distinction between capital gains and ordinary income. The United States Congress - both parties - has recognized for many decades that the two forms of income should be treated differently because a favorable capital gains tax treatment encourages investment, which is good for the entire economy.

Those who subscribe to the ethos of envy, however, fret about people who might profit "unfairly" from favorable tax treatment, rather than fretting about the fact that Gub'mint sees fit to confiscate the wealth of the citizenry for no reason other than that a transaction has taken place.

I wonder if our Betters in Congress are considering a re-establishment of the different treatment of short term versus long term gains? Or has it been done already?

[Scooter]

The United States Congress - both parties - has recognized for many decades that the two forms of income should be treated differently because a favorable capital gains tax treatment encourages investment, which is good for the entire economy.

It's a nice theory, but only certain types of investments have beneficial impacts on the economy. If I provide venture capital to someone to start a business, that has an impact on the economy, and that might justifiably warrant favorable tax treatment. (But why it should receive more favorable tax treatment than, say, a business owner who invests money into increasing production, which also benefits the economy, but whose profits are taxed as ordinary income, is the question people are asking.) But when I buy 100 shares of Microsoft or Exxon or General Electric stock, other than in an IPO or subsequent stock offering, I am not contributing a single dime to business investment. The fact that the stock has changed hands doesn't have any impact on the underlying business or the economy. There is no economic reason to privilege such transactions for tax purposes. And the only reason why they have retained privileged tax treatment is because they were not included in the definition of income when income tax was first introduced, and every attempt to tax them as regular income was met with great resistance by the monied class who had the most to lose and the most power to impose their will on the legislative process. It certainly had nothing to do with any philosophical argument that me selling shares of stock to you constitutes such a boon to the economy that it deserves special treatment.

[Andrew D]

Those who subscribe to the ethos of envy, however, fret about people who might profit "unfairly" from favorable tax treatment, rather than fretting about the fact that Gub'mint sees fit to confiscate the wealth of the citizenry for no reason other than that a transaction has taken place.

Yeah, dammit.

The Gub'mint should stick to confiscating the wealth only of the citizens who actually worked for it.

[Lord Jim]

Yesterday, the President held a press conference where he announced that he would veto any attempt to repeal the automatic trigger cuts unless an equal amount in deficit reduction (1.2 trillion) in cuts and revenue increases were sent to his desk....

He's going to get some short term applause for this, but the fact is, he is almost certain to back down from it, (and given his record, all the players involved; his allies, his opponents, the financial markets involved...will all expect him to back down)

Here's why:

Who said this:

if it did happen, it would result in a further round of very dangerous cuts across the board -- defense cuts that I believe would do real damage to our security, our troops and their families, and our military's ability to protect the nation.”

It wasn't John McCain who said that about the automatic cuts that would fall on the Defense Department if the automatic trigger went forward...

It wasn't Lindsey Graham, or Joe Lieberman, or Dick Cheney, or Donald Rumsfeld, or any other well known "Hawk"....

It was Leon Panetta, Obama's own Secretary of Defense....

Running on the platform "I'm going to allow automatic cuts to take effect, even if my own Secretary of Defense tells me that means it will "do real damage to our security, our troops and their families, and our military's ability to protect the nation" is a real hard sell...

And it will never happen...he'll back down on that long before Romney is able to use that in commercials next fall, and everybody knows it....

[rubato]

No one on this board has to "justify" the distinction between capital gains and ordinary income. The United States Congress - both parties - has recognized for many decades that the two forms of income should be treated differently because a favorable capital gains tax treatment encourages investment, which is good for the entire economy.

... "

Encouraging more investment is only an advantage when growth is slowed by a shortage of investment capital. In the 2001 recession there was a CAPACITY SURPLUS so that no one needed, or wanted, capital to build factories and hire employees. Excess capital with no place to go created the private mortgage-backed security market which, due to a lack of regulation, caused the current 'great recession' and ongoing housing collapse.

Thus treating capital gains differently is not "good for the entire economy" it was disastrously harmful.

Reagan taxed long-term capital gains as ordinary income in 1986 which continued to 1997. So apparently Reagan and the Republican party along with democrats in both houses didn't know that it was "good for the entire economy" either.

Don't read much, do you?

yrs,
rubato