Capitalism Has Failed—What Next?

[oeb11]

Capitalism has not failed It is a universal success in encouraging hard work and innovation as the means to success in life - and ties in with the basic human urge to better oneself.

EL9500 is the failure - a believer in Marx,Lenin, Maduro, etc - It is the false success of using the Vote of Socialism to steal from the productive people in society to prop up those who will not work for themselves.

See- the old story of the Ant and grasshopper - True today.

Idiot-ideology exists to provide an apologist framework for the Socialist Thieves.

[eccieuser9500]

But I'm just so good at it.

[MoExec]

Seems to me when we get caught up in this discussion of capitalism vs, socialism, we are missing the point and not recognizing what is really going on in our society that has created a level of income inequality never seen before in this country. Seems to me the real issue is that we don't value or adequately reward hard work in this country, and have not ever since we were introduced into Reganomics, but instead we reward class and "investment" (which is often just sophisticated gambling). For example, if I buy 20 head of cattle, feed them for a year, vaccinate the calves when they are born, pull those calves when the cow is having cavling problems, bust the ice on the pond during the winter when they need to get water to drink, haul hay and feed to them everyday, and basically bust my ass raising them for a year, and then take them to the sale barn, I will pay ordinary income tax on the profits. However, if I sit on my ass in a broker's office and buy some cattle futures on the Board of Trade and gamble on the price those cows and calves will bring next year, I will pay capital gains tax at a lower rate.
Another example, if I borrow some money to start and build a business, bust my ass 60 hours a week building that business, employ and decently pay some employees to help me build that business, if its a success and I am responsible for providing several good jobs, I will pay ordinary income tax on the profits. If instead I borrow that money and go to my broker's office and short some stock on a publicly traded company, and then do everything I can to try and drive that business down, and that business eventually fails, I will make a fortune on shorting the stock and will pay capital gains tax on the resulting profits at a much lower rate, all while sitting on my ass.
Or I could do like Bain Capital and Mr. Romney, and borrow that money to buy a business, use that business' assets as collateral for the loan, suck the profits out of the business, use all of its other assets as collateral for loans and pocket the loan proceeds, and when the business cannot support the debt load and has to close (e.g. Toys R Us, Office Depot or Office Max, and numerous others), put it into bankruptcy and have the tax losses for years to come, all while hundreds of hard working folks have loss their jobs.
So I don't think its about whether hard work is involved, its about what we reward in this country, and its obviously not hard work. I know lots of people who work 60 hours a week, very hard, and are barely surviving....

[lustylad]

Originally Posted by MoExec

Seems to me when we get caught up in this discussion of capitalism vs, socialism, we are missing the point and not recognizing what is really going on in our society that has created a level of income inequality never seen before in this country. Seems to me the real issue is that we don't value or adequately reward hard work in this country, and have not ever since we were introduced into Reganomics, but instead we reward class and "investment" (which is often just sophisticated gambling). For example, if I buy 20 head of cattle, feed them for a year, vaccinate the calves when they are born, pull those calves when the cow is having cavling problems, bust the ice on the pond during the winter when they need to get water to drink, haul hay and feed to them everyday, and basically bust my ass raising them for a year, and then take them to the sale barn, I will pay ordinary income tax on the profits. However, if I sit on my ass in a broker's office and buy some cattle futures on the Board of Trade and gamble on the price those cows and calves will bring next year, I will pay capital gains tax at a lower rate.
Another example, if I borrow some money to start and build a business, bust my ass 60 hours a week building that business, employ and decently pay some employees to help me build that business, if its a success and I am responsible for providing several good jobs, I will pay ordinary income tax on the profits. If instead I borrow that money and go to my broker's office and short some stock on a publicly traded company, and then do everything I can to try and drive that business down, and that business eventually fails, I will make a fortune on shorting the stock and will pay capital gains tax on the resulting profits at a much lower rate, all while sitting on my ass.
Or I could do like Bain Capital and Mr. Romney, and borrow that money to buy a business, use that business' assets as collateral for the loan, suck the profits out of the business, use all of its other assets as collateral for loans and pocket the loan proceeds, and when the business cannot support the debt load and has to close (e.g. Toys R Us, Office Depot or Office Max, and numerous others), put it into bankruptcy and have the tax losses for years to come, all while hundreds of hard working folks have loss their jobs.
So I don't think its about whether hard work is involved, its about what we reward in this country, and its obviously not hard work. I know lots of people who work 60 hours a week, very hard, and are barely surviving....

Once again, you show everyone you don't know your stuff!

What bank is going to lend money for a deal with a private equity firm that promises to "pocket the loan proceeds" and bankrupt the borrowing company? Lol! Bain Capital has done hundreds of deals, most of which were/are still successful. Ignorant critics of private equity firms only talk about the failures, not the successes. Private equity firms can help to keep a failing company open longer than would otherwise have been the case. Isn't that a good thing? They have the guts to bet on their ability to turn a business around, but guess what - the hoped-for turnaround isn't guaranteed and doesn't always happen!

Lenders and investors are paid to take risks. Far from "sitting on their ass", many of them work as long and hard as a Missouri cattle farmer trying to evaluate and measure those risks before they channel funds to companies they judge to be worthy of debt or equity.

You complain about Reaganomics in one breath and the discrepancy in taxes on ordinary income versus capital gains in the next breath. Well, guess who was President the last time both types of income were taxed at the same unitary rate?

That's right, it was Ronnie Reagan! Look up the Tax Reform Act of 1986.

Did you thank Ronnie for that? If you can't bring yourself to say thank you, you should at least stop whining ignorantly about Reaganomics.

And speaking of cattle futures, can you explain to everyone exactly how hildebeest parlayed $1,000 into $100,000 when she dabbled in that market back in the late 1970s?

[oeb11]

We have another entry into the DPST stable of idiot-Ideology adherents.

Joining TM and the merry band of Marxists.
Another Factless Wonder - 'It must be True because I want it that Way!!!'
Thank you for trying LL - until they grown up and develop a consequences cortex they cannot integrate facts, reason, and outcomes of actions into their idiot-Ideology!

[MoExec]

I think you all are proving my point....

[bb1961]

Originally Posted by MoExec

I think you all are DISproving my point....

FTFY!!

[Tiny]

Originally Posted by MoExec

Seems to me when we get caught up in this discussion of capitalism vs, socialism, we are missing the point and not recognizing what is really going on in our society that has created a level of income inequality never seen before in this country. Seems to me the real issue is that we don't value or adequately reward hard work in this country, and have not ever since we were introduced into Reganomics, but instead we reward class and "investment" (which is often just sophisticated gambling). For example, if I buy 20 head of cattle, feed them for a year, vaccinate the calves when they are born, pull those calves when the cow is having cavling problems, bust the ice on the pond during the winter when they need to get water to drink, haul hay and feed to them everyday, and basically bust my ass raising them for a year, and then take them to the sale barn, I will pay ordinary income tax on the profits. However, if I sit on my ass in a broker's office and buy some cattle futures on the Board of Trade and gamble on the price those cows and calves will bring next year, I will pay capital gains tax at a lower rate.
Another example, if I borrow some money to start and build a business, bust my ass 60 hours a week building that business, employ and decently pay some employees to help me build that business, if its a success and I am responsible for providing several good jobs, I will pay ordinary income tax on the profits. If instead I borrow that money and go to my broker's office and short some stock on a publicly traded company, and then do everything I can to try and drive that business down, and that business eventually fails, I will make a fortune on shorting the stock and will pay capital gains tax on the resulting profits at a much lower rate, all while sitting on my ass.
Or I could do like Bain Capital and Mr. Romney, and borrow that money to buy a business, use that business' assets as collateral for the loan, suck the profits out of the business, use all of its other assets as collateral for loans and pocket the loan proceeds, and when the business cannot support the debt load and has to close (e.g. Toys R Us, Office Depot or Office Max, and numerous others), put it into bankruptcy and have the tax losses for years to come, all while hundreds of hard working folks have loss their jobs.
So I don't think its about whether hard work is involved, its about what we reward in this country, and its obviously not hard work. I know lots of people who work 60 hours a week, very hard, and are barely surviving....

MoExec, you're missing a few important points.

The USA has the most progressive tax system in the developed world. If you want to reduce inequality, doubling down on a failed strategy by making it even more progressive and taking more from the successful capitalists and investors is not a good idea. Instead we need to work on the government spending side of the equation, by making government more efficient and targeting help in ways that truly help people in the long term. Better education, help for poor children and single mothers provided in an effective and cost efficient manner, and doing something about out of control medical expenses come to mind.

Lower capital gains taxes make sense for several reasons,

1. You want to encourage savings and investment, as these are the basis for growth in the economy and jobs. One way to do this is with lower capital gains taxes.

2. The rest of the world taxes capital gains at lower rates than ordinary income, in large part because of "1" above. Belgium, for example, which is far from a low tax country, has no capital gains tax. Jack up capital gains rates to the ordinary rate of 40.8%, or the 70%+ rates advocated by Sanders, Warren and AOC, and capital will go where it's treated friendlier.

3. If the capital gains rate is too high, people just hang on to things and never sell, to avoid paying the tax. For one thing, you may actually reduce government revenues by raising the tax rate as a result. For another, this disincentive to sell encourages inefficient allocation of capital. You want people selling their shares in buggy whip companies and investing in higher return businesses, solar cells or whatever. This makes everyone more prosperous.

4. A large percentage of capital gains income results from inflation. The rate should be lower to compensate for this. Say one of the old timers here bought stock or real estate back in 1975 and the price hasn't moved. He sells for what he paid for it. After inflation, he'll be losing about 80%. This of course isn't a typical situation, but it highlights the issue.

Please note that a big beneficiary of the the change in the tax laws engineered by Republicans and Trump were the ranchers and small businessment you describe above. If his business is already in a pass through entity or he puts it in one, and his income is under $157,500 ($315,000 for married couples), then he gets a 20% deduction on income. I agree that we should keep taxes low on small businessmen, although it doesn't follow that therefore we should raise them on capital gains and other investment income.

As to people who work their asses off 60 hours a week and barely survive, they're probably not paying much income tax. You're not going to improve their lot by taxing them less. Like I said in the first paragraph, you need to attack this problem by helping them, not dragging down others. And the federal minimum wage should be increased.

Short sales are not, as you think, taxed as long term capital gains. They're taxed at the short term rate, which with Obama's ACA tax is sometimes higher than the tax on ordinary income.

I agree with your concern about private equity borrowing too much money and bankrupting companies. Perhaps we should consider some limits on the deductibility of interest expense, as well as the double taxation on corporate profits and dividends, both of which encourage people to finance acquisitions with debt instead of equity.

[Tiny]

Originally Posted by lustylad

You complain about Reaganomics in one breath and the discrepancy in taxes on ordinary income versus capital gains in the next breath. Well, guess who was President the last time both types of income were taxed at the same unitary rate?

Absolutely correct. While the case is strong for not taxing capital gains and dividends at higher rates than what we have now, there's an even stronger argument for reducing the complexity of the tax system and taxing all income at the same low rates. "Low" is the key.

[eccieuser9500]

https://www.investopedia.com/25-word...blic/?video=v5

[eccielover]

Originally Posted by eccieuser9500

https://www.investopedia.com/25-word...blic/?video=v5

Thanks again Eccieuser for another great video as to why we need to get government out of the way and stop allowing it to pick winners and losers.

Allowing "stupid people" in government positions that kind of power over us is just "Stupid".

[oeb11]

"Stupid People" means anyone disagreeing with the DPST Idiot-Ideology!
Your Marxist rhetoric is old and worn out.

[rexdutchman]

'It must be True because I want it that Way!!!'

[dilbert firestorm]

Originally Posted by MoExec

when the business cannot support the debt load and has to close (e.g. Toys R Us, Office Depot or Office Max, and numerous others),

Office Depot is still in business. Office Max merged with Office Depot a few years ago.

[I B Hankering]

Originally Posted by oeb11

"Stupid People" means anyone disagreeing with the DPST Idiot-Ideology!
Your Marxist rhetoric is old and worn out.

By definition, Noam Chomsky aficionados are "stupid people".