Taxes

[atlcomedy]

Originally Posted by discreetgent

Too many big words

[FatBastard]

There is a new dynamic in the Gulf of Mexico. The Chinese state owned oil company will begin drilling offshore Cuba by year end. Floridians should feel very comfortable that a world leader in offshore technology like the Chinese is undertaking this project. We should have embraced Cuba a long time ago.

[pjorourke]

I'm sure they will be more responsible about environmental damage than BP.

[pjorourke]

Originally Posted by discreetgent

Too many big words

I fart in your general direction.

[TexTushHog]

Originally Posted by CaptainMidnight

Is there some part of the phrase "eliminate preferential treatment for capital gains" that you failed to understand?

The guy to whose post I responded wasn't talking about a 15% or 20% cap gains tax rate; he apparently advocates raising it now to 35% and eventually to 39.6%. I assume he thinks that would raise a lot of additional revenue. It wouldn't. It would primarily just produce distortions.

I'm not sure that it would raise that much money, although I expect that it would raise some, especially if you treated cap gains and dividends identially so that there was no market incentive to structure the financed of companies to favor one over the other. However, to me, it is as much an issue of economic fairness as anything. Warren Buffet's oft told story of how his secretary pays a much greater percentage of her income in income taxes (since it's salary) than he pays of his (since it's all cap gains) perfectly illustrates this point.

And if you exempt the first $5k - 10k of cap gains and dividends from the normal tax rates -- as I proposed in my original post -- I doubt that you're going to have many of the elderly poor who get fucked out of their meager savings. But it's ridiculous to have millionaires paying less than half the tax that workers are paying.

See Table 1 in this article for a recent real world example:

http://economix.blogs.nytimes.com/20...ple-pay-taxes/



To me, a tax system that allows this to consistently happen, is indefensible and immoral.

[TexTushHog]

Originally Posted by charlestudor2005

In addition, I would eliminate the funding of foreign governments' militaries. It only gets us in trouble with the new government when (not if, when) there is a revolution. And it would save us billions.

No more financing the Shah of Iran. No more financing Egyptian military. And especially, no more financing Israel. Let every country make it or break it on their own. Same principle as capitalism.

Are you going to be consistent and refuse to help fund the Saudi military? What would you propose doing when they cut their supply of oil in half and the price of oil doubles? They get the same income and we're economically crippled. At that point, cutting off the financial aid that we give them looks penny wise and pound foolish.

[TexTushHog]

Originally Posted by pjorourke

I'm sure they will be more responsible about environmental damage than BP.

Well, they'd be hard pressed to be any less responsible.

[discreetgent]

Originally Posted by TexTushHog

Are you going to be consistent and refuse to help fund the Saudi military? What would you propose doing when they cut their supply of oil in half and the price of oil doubles? They get the same income and we're economically crippled. At that point, cutting off the financial aid that we give them looks penny wise and pound foolish.

It would be penny wise pund foolish on the Saudi side. If the US and the rest of the West were economically crippled sale of oil would plummet. What benefit would it be to the Saudi's to devastate those economies?

[TexTushHog]

Originally Posted by discreetgent

It would be penny wise pund foolish on the Saudi side. If the US and the rest of the West were economically crippled sale of oil would plummet. What benefit would it be to the Saudi's to devastate those economies?

If the Saudi's cut their supply in half and the price doubles, their revenue is the same. Why do they give a shit if they sell less, so long as the price goes up.

And do you really think for a minute that we wouldn't jump through our own asshole not to fix the situation quicker that an cat could lick his ass??!!! Hell, there would be a joint Congressional delegation in Riyadh the next day with enough weapons in tow to fight WWIII.

[discreetgent]

But they would continue to sell less and less and less; at some point they bite their nose to spite their face.

[pjorourke]

At some price for oil, they tip the world into recession and revenues fall.

[pjorourke]

One of the reasons that there are lower capital gains rates is that part of the return you get from an investment is inflation. For example, an asset that you paid $500 for and sold for $1000 has a $75 tax on the $500 capital gain. But the $500 from 10 years ago would need to be $671 today to cover inflation (at 3% for 10 years). Thus the tax on the real gain is more like 23% not 15%.

[Doove]

Originally Posted by pjorourke

Let me try and explain it to you using small words.

The line graph shows the capital gain tax receipts in each year as a percentage of GDP.

That was all you needed to say. I was reading the left scale as a simple increase in GDP. So the rest of what you said was kind of a waste of your time.

[pjorourke]

So is most of what I write here

[pjorourke]

Originally Posted by TexTushHog

To me, a tax system that allows this to consistently happen, is indefensible and immoral.

Your table doesn't take into account the fact that Janitor and the Guard are getting 6x the benefits per dollar put into SS. Do it on a net basis and you get a very different picture.

You are also aren't taking into account the diminished returns on muni bonds (which have to be a portion of AGI to produce a tax rate that low.)