Skip to comments.Why Not Eliminate the Capital Gains Tax for Everyone?
Posted on 10/01/2009 6:47:29 AM PDT by SeekAndFind
The Case-Shiller home-price index increased yesterday for the third month in a row. Thats terrific news. After a 40 to 50 percent drop in home prices in recent years, sales are picking up, because prices are way down. Thats also great. Markets work.
But heres what I dont like about this story: Big, central-planning, government-directed tax preferences for housing, like the $8,000 dollar tax credit for new buyers. Or even the popular mortgage interest deduction. And lets not forget perhaps the biggest one of all: Home sales are basically capital-gains-tax free. That passed back in 1997. Many people (including myself) believe it helped create the bubble.
Why not eliminate the capital-gains tax for everyone and all sectors, including investors and stocks and bonds? Why direct it only to housing? Lets abolish the capital-gains tax altogether. Lets quit double-taxing investment, which is what capital gains does. But lets do it for everyone and everything not just housing. While were giving all these preferences to housing, what about manufacturing? What about transportation? Or health care? Or any other sector in the economy for that matter?
We also could be cutting business tax rates across-the-board for companies big and small.
And for all individuals and businesses, why not a simple, low, flat-rate tax? Somewhere between 15 and 20 percent? Get rid of all of the special preferences and deductions in the code. Stop favoring one sector at the expense of the others. Incidentally, this would stop the corruption of K-Street lobbyists who love to get these preferences in there.
Lets make the tax code simple, fair, and pro-growth, to unleash prosperity. Lets stop the political direction of the economy, and lets substitute a market direction of the economy. A true flat tax would do it.
If you get to keep more of what you earn and invest at the lower tax rate if you tax something less youll get more of it. If you tax the whole economy less not just housing, but the entire economy you will get a much more prosperous and healthier economy. At a time when were all worried about economic growth, we ought to be thinking hard about this.
While I might well be persuaded on the merits of the argument, I think the next two to four years are going to have to be spent keeping more of the private sector from being nationalized. The only businesses that will be exempt from capital gains under Obama will be those that he owns or indirectly controls.
They can’t do that. It would cause GOOD things to happen.
Call for REAL reform in 2010 -2012!!!!!!!!!!!!!!!!!!!
We’re going to be lucky just to keep fascism at bay for a bit,
much less wrest control of income freedom from the elitists and return it to the individuals.
Because Life would improve dramatically, and the Dems just can’t have that happening.
I'm for a new "Green Movement".
This is the BEST bumper sticker I’ve yet seen. Lol...
I love it!
The why is obvious.
Because the Democraps core constituency does not own stocks and bonds. Most probably do not even own a house.
The people that the Democraps demonize are the people that would be directly helped. The fact that the poor would also be helped by an improving economy and a rising employment rate is a non-starter.
The Democraps voter can not be expected to think beyond the obvious. That would take more brain power than the average Democrap voter can muster.
Considering the government basically caused the financial markets to collapse and a lot of people were forced to sell their assets or risk losing more money, I think it would only be fair, at the very least, to wave cap gains (and refund taxpayers) for the last year or two. Just my opinion.....
Because it's income.
If you can pay your way through life entirely out of capital gains, why should it not be considered income and be taxed?
Income tax is the problem here, along with inflation. We don't have a way to identify the false gains from inflation from the true capital gains. I could get behind the idea of getting rid of the income tax altogether, but giving some folks a complete pass on taxing their income isn't fair.
And suppose we did kill the tax on capital gains. We already have a distorted market as companies don't give out dividends (taxed every year) in an effort to create long term capital gains which have a better tax status.
And any scheme to provide an inflation deduction would be open to manipulation for political purposes. The only real fixes are: stop inflation or end the income tax.
I consider stopping the double taxation of dividends a better idea, and a more important one to returning some sanity to the stock market.
Larry: ‘It’s the jobs economy, stupid’, not the investor economy that is the key to recovery.
Because it is a "tax break for the rich"! Poor folks don't have investments. < /RAT response >
Why not collect the tax when the money is spent?
Rich, poor, middle class all pay their share based on consumption.
Exactly! It’s a simple rule. If that’s the way Texas does it, you can be sure it makes sense. ;)
Then you haven't been paying attention. Taxing Paul while not taxing Peter is market distortion.
Taxing apple sales while not taxing orange sales is market distortion.
If you are going to tax income, it's a moral failure to describe some folks income as not-income. Gingrich tried to do it with interest paid to banks, as if renting money were any different than renting land. Now the effort is to say that buying low and selling high is somehow protected as long as there is 6 months or so between the buy and the sell.
I missed this on the first read. Dividends are double taxed for sure, and that should be stopped. But capital gains not so much. Maybe there's a case for saying there is double-taxation on retained earnings (same case as for dividends), but suppose we are talking about a gold bar. You bought it at 300, sold it at 950. When was that $650 ever taxed, except as capital gains? Maybe the 300 you used to buy the gold in the first place was taxed via the income tax, but never the $650.
There is no case for a blanket statement that there is double-taxation on capital gains.
Do you care to be explicit here on the tinfoil comment?
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