Posted on 01/27/2012 4:48:26 AM PST by SeekAndFind
When I hear others say "fair share," I know what is coming -- a diatribe against the wealthy followed by recommendations to more heavily tax "millionaires and billionaires."
The specifics usually follow. I learn that it isn't just millionaires and billionaires who are targeted. The actual income threshold is $200,000 for individuals and $250,000 for married couples, and it is business and investment income that constitute the real target. You know: the evil capitalists.
Today, the current top tax rate of 15% for capital gains and dividends is getting a lot of attention because of the recent release of Mitt and Ann Romney's tax returns. They reported millions of capital gains and dividend income and paid a tax of around 15%.
Let's take a look at fairness in the context of investment income. We will see a very different picture of their tax situation and the taxes paid by others with investment income.
If an individual purchased stock 20 years ago for $600,000 and sells it today for $1,000,000, we say the investor has a $400,000 gain. If the top tax rate for capital gains of 15% applies, the tax is $60,000. The question is, just how much tax should this investor pay? Is 15% too little if wages and many other types of income are taxed at rates as high as 35%?
Advocates of lower tax rates for capital gains often rely on the need for investment incentives as the primary reason for lower capital gains taxes. That is a very valid reason, but there are two other even more persuasive reasons that are rarely mentioned in public discussions.
(Excerpt) Read more at americanthinker.com ...
Consider the individual with the $400,000 gain. The investor actually lost money if the inflation rate averaged 2.6% or higher over the 20 years. That fact doesn't stop the government from taxing the nonexistent $400,000 gain at 15%. You call that fair? Isn't it supposed to be a tax on income?
I love how Great Leader is allowed to frame the discussion. We talk about ‘fair share’. Why don’t we ever talk about lowering taxes and why don’t we talk about those who never pay taxes? Remember the 53% who pay taxes? That means 47% at the bottom pay none. What is ‘fair’ about that crap?!
FWIW I think the top tax rate for working your ass off 60 hours a week should not exceed the top tax rate for sitting on your ass and letting your money work for you. If the top rate for Capital gains is 15% then the top rate for wages should be 15%. Income is income. Work is more honorable that leisure. Capital gains and dividends are the fruit of the labor of others.
All income should be taxed at the same rate.
To include those paying payroll taxes counting their 14% taxation as part of their tax rate. Someone will complain that they will draw down money from social security when they retire. Fine, let them continue to pay 14% on that.
Someone will complain that those over the 108,000 limit will not get near their share of social security tax. Fine, get them out of the system altogether. Let them fund their own retirement. But, like everyone else, they pay 15% on everything period.
Buffet and Gates are sanguine about “the rich”, ie other peopel” paying more tax on their income- Buffet only “takes” a salary of $100K doncha know
he and Bill Gates and the rest of the trust fund crowd (both parties) stash wealth safely away from the socialist crowd like obama in tax sheltered nonprofits and family trusts that preserve their luxurious lifestyles while making them feel all moist eyed about helping the poor
Taxes are for little people who have to work for their money instead of their money working for them
Since FICA is an income tax, we should give credit for FICA against the 15% tax limit on all income. IOW we tax the first $108,000 at 2% and all income after that at the Capital gain rate.
People who dig ditches or pick strawberries should not have a higher effective overall fax rate than a guy who forgets he has 3 million dollars in a Swiss bank account.
While I agree with your conclusion....a flat tax....I don’t agree with your description of capital gains. Investing in business is not leisure nor ‘sitting on your ass’. The vast majority of business investment requires intense work to select the right places to put money. Never mind the many layers of tax paid before the final 15% at the investment level. The company pays tons of payroll taxes, property taxes, state, local taxes, taxes built into the products they buy, federal corporate taxes if they make a profit and then finally the investor is taxed 15% IF they get a retun on their investments.
As I read it what they were trying to do in 1913 was to implement Alexander Hamilton’s ideas about using govt. debt as a basis for money i.e. establish an income tax to pay interest and roll the principle over in perpetuity. So long as the debt was used to finance productive projects the idea had some chance of working particularly since there is a multiplier effect in the picture, but when a clown like Bork Obunga waltzes in and spends $5T with nothing to show for it at all, something is gonna have to change. We no longer have 20 years to think about what we want to do.
I agree with that. It will work.
As always, I’d prefer a sales tax and no income tax at all. Check your freepmail.
Santorum prevailed big last night.
If that individual plunked down $600,000, it was most likely in after income tax dollars.
Should earnings from horserace betting be taxed at a lower effective rate than the earnings of the the guy who shovels the horse shit out of the stable stalls?
We accept these stupid notions about how investment income should be taxed at a lower rate because we have been fed this load of crap by wall street and their bought and paid for politicians since we were born.
I am not denigrating those who gamble and win in the market, but the income they earn in the market is not more noble than the income earned from shoveling horse shit.
All income should be taxed at the same rate. Government should not be picking and choosing which kinds of income should be punished and which should be rewarded.
Amen!
Middle class America is going to have to get it's head out of the political rhetoric about class warfare and realize that this is not about "economic classes" but is about power groups seeking to impose their vision on America.
As near as I can tell, a lowly private in the American army calling King George a tyrant was not "class warfare" but was recognizing "opposing powerful interests."
There are powerful interests in America today: media, entertainment, labor, banks, investment, insurance, health, law, and on and on.
I am an average American voter, not vested in any power group, who doesn't want to be fleeced by any of those groups or enslaved to any of those groups. How do I best maximize my outcomes?
You will notice that those groups have huge money and are the primary donors to political campaigns. They expect a return on their investment. It can even be sinister.
I'm so sure of this that I think Romney is running for the presidency for some covert objective of his regarding Bain Capital (and other investment houses). I don't think you spend multi-millions to get a 200,000 a year job without some hidden agenda.
That is not class warfare. It is healthy suspicion of a man who represents a powerful interest group(s).
“People who dig ditches or pick strawberries should not have a higher effective overall fax rate than a guy who forgets he has 3 million dollars in a Swiss bank account.”
Who has created more wealth and opportunities for others? The ditch digger or the inventor of the back hoe?
“Should earnings from horserace betting be taxed at a lower effective rate than the earnings of the the guy who shovels the horse shit out of the stable stalls?”
Absolutely they should. The gambler has already paid an income tax on the money that he then uses for gambling. In addition, he can not fully claim his gambling losses and be reimbursed from the government.
Non sequitor.
The earnings of the back hoe inventor should be taxed at the same rate as the ditch digger who he just put out of work and the heavy equipment operator who replaced him.
So? The earnings he gets from the after tax income is new income that hasn't been taxed.
This nonsense about double taxation is just nonsense designed to placate the sheeple. Income is Income.
My savings income is taxed at the top rate (over 30%). It should be taxed at the same rate as Capital Gains, which should be taxed at the same rate as wages.
Your system has the government picking and choosing winners and losers. I guess you like that because you think it is "Capitalism" at work.
It is capitalism. It is CRONY Capitalism.
Absolutely they should. The gambler has already paid an income tax on the money that he then uses for gambling. In addition, he can not fully claim his gambling losses and be reimbursed from the government.
I've gotta disagree for the most part CSM. If the gambler at the horse track puts down 10 bucks at the $10 window and receives $2000, then I'm perfectly willing to allow him to remove from that the $10 he already paid tax on.
The other $1990 has not yet been taxed.
And there's no reason to tax it at a rate different than the stableboy OTHER THAN political intrading.
Let’s expand this discussion a bit.
The Founder’s rejected any notion of an income tax, and I think it was for just this reason....that it would empower government to reward some and punish others.
They believed in a sales tax. With a sales tax, the gambler would go to the $10 window, pay $12.00 for his ticket, and then collect his 2000 bucks. If he spent some of it for gas, for a restaurant, for some batteries, and then stopped to pick up an IPad for his kid, then he would simply be paying the sales tax as he goes.
Anytime he buys he pays the sales tax. If he socks it all away, then it is all his.
Wealthy people will buy more and more expensive things than poor people. They will pay more tax. The tax they each pay will be whatever the sales tax rate is....fair...the same for each of them.
HR Block will hate this system, but it’s the most fair of all tax systems.
totally, totally agree, but we're probably in the minority here....
"It's always about punishing those who do very well"
well no, its not about punishing people who do very well......its about punishing people that do "okay"....are a little bit above the curve...who have a little extra income...
IOWS....the working middle class....no big business expenses to claim, no golfing outings to deduct for "clients"..no superbowl tickets to deduct...no nothing...
enough money to do better than the average bear, but not enough to live richly or to avoid taxes...
“I’ve gotta disagree for the most part CSM. If the gambler at the horse track puts down 10 bucks at the $10 window and receives $2000, then I’m perfectly willing to allow him to remove from that the $10 he already paid tax on.”
Yet, the horse track would not exist without a series of losing gamblers that made the $10 outlay that allowed them to pay the $2000 winnings. Those other bettors, 200 of them, alredy paid income tax on the $12 they had to earn to allow them to take the $10 to the track to bet.
However, since you are all for taxing any percieved “income” then you must be convinced and allow all loses to be deducte from all types of income. That is ALL losses! Not a limited amount, to protect the government revenues, but ALL losses.
That is a major difference here. Investment income has a lower rate because a very small amount of losses are allowed as deductions.
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