The Buffett Rule

[RIJIMMY]

Originally Posted by justplugit

It's already double taxation as taxes were paid on the $$ before invested.

To raise CG tax would make people think before willing to take a chance
in investing in stock which companies need for capitalization and
creating jobs.

Market wouldn't like it and it would affect the retirement and investment funds except for the the tax exempt IRA, 401K etc.

you're only taxed on the gains, not the initial investment so not sure its double taxation. The market would recover quickly, I dont think it would be a big hit. A lot of $$$ is funds and institutional investment which wouldnt impact the average investor
Look at the web news postings the last few days and people are seeing O's proposal for what it is. He is not tackling the problem. He is throwing it over the fence and meanwhile - taxing FAMILIES making over 250k more, AND limiting their deductions AND suggesting (via the Buffet rule) that these families (you know millionaires who make 250K) will pay a higher rate on cap gains? Do you guys realize that all these increases are ANDS, meaning multiple hits??????Where is the tax reform? When are we getting rid of the AMT, which already dings the working families HARD? This is a shameful, no-brain approach which is the same thing O has been proposing over and over. He is f'ing over the working, successful families who are fueling this economy!

for your pleasure -
http://money.cnn.com/2011/09/20/news....htm?hpt=hp_t2

[justplugit]

Originally Posted by RIJIMMY

you're only taxed on the gains, not the initial investment so not sure its double taxation.

RIJ, your taxed 2x when you get your paycheck, and then taxed again on the same
money that you invest by the capital gains tax.

[zimmy]

Originally Posted by RIJIMMY

you're only taxed on the gains, not the initial investment so not sure its double taxation
for your pleasure -
Buffett Rule: Sounds simple but ... not so much - Sep. 20, 2011

Bingo. Some of my take on it... so guy A goes to work, makes $50,000 busting his arse in the mill or whatever and gets hit @ 25%. Multi-millionaire ceo gets $100,000 or whatever capital gains from money sitting an account and gets taxed on that at 18% (not sure what the percentages actually are). Not sure that is a reasonable policy.

[RIJIMMY]

Originally Posted by zimmy

Bingo. Some of my take on it... so guy A goes to work, makes $50,000 busting his arse in the mill or whatever and gets hit @ 25%. Multi-millionaire ceo gets $100,000 or whatever capital gains from money sitting an account and gets taxed on that at 18% (not sure what the percentages actually are). Not sure that is a reasonable policy.

Gulp....i actually agree.

Its even bigger than that as many super-wealthy are not collecting salaries. They are buying and selling businesses, investments, etc and making cap gains which are taxed at a lower rate. AND dont forget, you can deduct losses!
Thats why we shouldnt raise tax rates across the board. It doesnt fix the problem. Fix the tax code.

[Backbeach Jake]

Flat tax. 13-18% across the board. No matter what you make. Everyone contributes. The rich not paying taxes is as distasteful as those who collect undeservedly. Those who do not contribute are parasites no matter what the level.

[detbuch]

Originally Posted by zimmy

Bingo. Some of my take on it... so guy A goes to work, makes $50,000 busting his arse in the mill or whatever and gets hit @ 25%. Multi-millionaire ceo gets $100,000 or whatever capital gains from money sitting an account and gets taxed on that at 18% (not sure what the percentages actually are). Not sure that is a reasonable policy.

Apples and oranges, as some like to say on this forum. Capital gains tax and income tax are two different kinds of tax. You might say capital gains at a lower rate than employment tax is a "targeted" tax. It tries to create results other than mere "revenue." Supposedly, it should "stimulate" investment. So folks who have extra "wealth," rather than spending it, or stuffing it under the mattress, might put it to productive use for the rest of society by capitalizing business and job production. Capital gains benefits the wealthy only because they can invest more. But it doesn't favor the wealthy within its structure. Middle class or lower often get lower or no capital gains tax (e.g., when selling a home). It would be more honest to compare similar taxes as paid by the rich versus the poor. A wealthy person, perhaps a CEO of a big corp., who "earns" income, may have an income tax and a capital gains tax to pay. His income tax will be at a higher rate than that of a middle class or poor earner. His capital gains tax might also be at a higher rate. If there are loop holes, if they are not "targeted" to help create a more productive outcome, they should be eliminated. If capital gains is, ultimately, a scam and doesn't produce the desired investment, it shouldn't be tweaked, it should be eliminated and all gains should be considered income as earned.

But an underlying problem in deciding is whether our economic view is win/win or win/lose. When tax policy benefits or harms all parties, its a win/win (or lose/lose). When it benefits one party and harms another its win/lose. Win/lose creates internal warfare and jealousy. If capitl gains tax is not a win/win, in my opinion, it should be abolished.

[zimmy]

[QUOTE=detbuch;889131]If there are loop holes, if they are not "targeted" to help create a more productive outcome, they should be eliminated. If capital gains is, ultimately, a scam and doesn't produce the desired investment, it shouldn't be tweaked, it should be eliminated and all gains should be considered income as earned.
QUOTE]

I agree with some of what you are saying, but it isn't really apples to oranges. It is about income and capital gains are a huge part of income for some people who have enormous amounts of money to invest. I am not sure what the answer is, but it basically equates to a tax shelter. For the guy making $50,000 working, they are limited in what they can put in an ira or 401k or roth. Are there limits on the amount of capital gains that are taxed at the 15%? I may be wrong, but it seems like the economy is driven by middle class people buying homes, cars etc. The very richest people are still investing today and many businesses are typically sitting on more cash then ever. The problem is consumer confidence is low. Call it what you like, the middle class guy that gets most of his money from working gets taxed at a rate higher than the rate for alot of money the rich guy makes through stocks. I am not sure buying stocks necessarily helps the economy in the same way the middle class guys car, home, restaurant, and gift purchases do.

[detbuch]

[QUOTE=zimmy;889854]

Originally Posted by detbuch

If there are loop holes, if they are not "targeted" to help create a more productive outcome, they should be eliminated. If capital gains is, ultimately, a scam and doesn't produce the desired investment, it shouldn't be tweaked, it should be eliminated and all gains should be considered income as earned.
QUOTE]

I agree with some of what you are saying, but it isn't really apples to oranges. It is about income and capital gains are a huge part of income for some people who have enormous amounts of money to invest. I am not sure what the answer is, but it basically equates to a tax shelter. For the guy making $50,000 working, they are limited in what they can put in an ira or 401k or roth. Are there limits on the amount of capital gains that are taxed at the 15%? I may be wrong, but it seems like the economy is driven by middle class people buying homes, cars etc. The very richest people are still investing today and many businesses are typically sitting on more cash then ever. The problem is consumer confidence is low. Call it what you like, the middle class guy that gets most of his money from working gets taxed at a rate higher than the rate for alot of money the rich guy makes through stocks. I am not sure buying stocks necessarily helps the economy in the same way the middle class guys car, home, restaurant, and gift purchases do.

I don't favor a capital gains at different rates than any other special taxes at different rates. I like the flat tax on everything. Probably won't happen. The current tax code is ridiculous. I also don't like a flat tax that has different brackets. I think eliminating people from the burden of paying taxes is wrong. If the pain of paying taxes at an equal rate is shared by all, the government is less likely to waste or spend "irresponsibly" or suffer the wrath of everybody rather than play phony games of divide and conquer.

That said, as of now, capital gains tax at lower rates is a different tax than income, or other types of tax. And the rich do pay higher capital gains tax than the rest of us. Those of us who fall in the 10% to 15% tax bracket pay no capital gains on anything we sell of value. Supposedly, as I said, giving a tax break of a rate less than that of income tax, is an incentive to invest. Maybe that is bogus. Maybe those who have "income" solely from investments would do so even at higher rates up to the 39% rate on income. Investments are often risky. A lot of money is lost on bad investments. As long as you have a job, the income is not at risk. Many who have both earned income and investment "income" might not want to risk as much on investment. Investment in new business might be hurt the most, and it is new business that is most needed. Some few who are good at it make obscene profits by investing. The amount of money that the government would realize by equalizing capital gains rates to that of income tax rates, if investment remained the same, is not huge. And if needed investment went down, revenue might drop a bit. If wealth is spent rather than invested it is it is transferred once into the economy.

I don't know if it all really works this way. I understand the bad feeling of those who see some rich folks paying a lesser rate of tax. I do see the mess of a tax system that creates jealousy and animosity between us. I do see us divided.

[justplugit]

[QUOTE=detbuch;889942]

Originally Posted by zimmy

I understand the bad feeling of those who see some rich folks paying a lesser rate of tax. I do see the mess of a tax system that creates jealousy and animosity between us. I do see us divided.

Another promise broken. Divide and try to conquer is what's happening now
for the sake of an election a year + a way. It's only getting worse.

For the sake of the country I'd like to see Obama take what's left of his term,
and as a true leader bring us back to a united nation. That would take a
selfless man who truly wants to put his country first and serve the American
people. Swell chance.

[JohnnyD]

Originally Posted by justplugit

For the sake of the country I'd like to see Obama take what's left of his term,
and as a true leader bring us back to a united nation. That would take a
selfless man who truly wants to put his country first and serve the American
people. Swell chance.

It'd also take completely dissolving the House and Senate, enacting term limits, putting limits on PACs and strict regulation on lobbying.

Our political system is broken from top to bottom and it's not because Obama hasn't delivered on most of his campaign promises and is a crappy domestic leader. This isn't something that just "popped up" in the last 3 years.

[Fishpart]

[QUOTE=zimmy;889854]

Originally Posted by detbuch

If there are loop holes, if they are not "targeted" to help create a more productive outcome, they should be eliminated. If capital gains is, ultimately, a scam and doesn't produce the desired investment, it shouldn't be tweaked, it should be eliminated and all gains should be considered income as earned.
QUOTE]

I agree with some of what you are saying, but it isn't really apples to oranges. It is about income and capital gains are a huge part of income for some people who have enormous amounts of money to invest. I am not sure what the answer is, but it basically equates to a tax shelter. For the guy making $50,000 working, they are limited in what they can put in an ira or 401k or roth. Are there limits on the amount of capital gains that are taxed at the 15%? I may be wrong, but it seems like the economy is driven by middle class people buying homes, cars etc. The very richest people are still investing today and many businesses are typically sitting on more cash then ever. The problem is consumer confidence is low. Call it what you like, the middle class guy that gets most of his money from working gets taxed at a rate higher than the rate for alot of money the rich guy makes through stocks. I am not sure buying stocks necessarily helps the economy in the same way the middle class guys car, home, restaurant, and gift purchases do.

A guy works hard to earn an income, pays some % in taxes then puts his money at risk by loaning it to a business so they can grow. If the business grows, he makes some money, if not he loses it. He has already been taxed on the initial investment, by taxing him at a higher rate on the profits from his loan, you reduce the amount of money available to grow other businesses he may make a loan to.. In my eyes helping companies grow through loaning them money is at least as powerful as growth through consumption, but a business can't grow without some level of both.

[justplugit]

[QUOTE=Fishpart;890071]

Originally Posted by zimmy

A guy works hard to earn an income, pays some % in taxes then puts his money at risk by loaning it to a business so they can grow. If the business grows, he makes some money, if not he loses it. He has already been taxed on the initial investment, by taxing him at a higher rate on the profits from his loan, you reduce the amount of money available to grow other businesses he may make a loan to.. In my eyes helping companies grow through loaning them money is at least as powerful as growth through consumption, but a business can't grow without some level of both.

Well put.
Politicans are well aware of the jealousy factor and love to use it to
try to make points by making it sound like, "its just not fair" with out
reminding people of the risks that are taken, and the good effects the
market has on the economy and jobs.