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Discussion in 'Too Hot for Swamp Gas' started by philnotfil, Oct 7, 2013.
This is the error in liberal thinking. Wealth is not a zero sum game.
You're right. Depending on how the economy is doing it can actually be a negative sum game.
There is a difference between the wealthiest top 1% and the highest paid 1%. Bill Gates is probably in the top 1% of the wealthiest people but his income might not be in the top 1%. His wealth comes from his holdings in the company he founded and his income from that is totally different than his change in overall wealth based on the value of his stocks.
Would not you agree that Bill Gates wealth has benefitted many people?
Well the ACA in gumming up the works which certainly is not going to help. A part-time America workforce is no way to go.
Treating investment returns like regular compensation income would force the annual liquidation and handover of huge amounts of capital to the government. Might have some economic impacts perhaps. This policy would be about as anti-capitalist as they come... which suits the left just fine, of course.
What difference does it make how you earn your money if it is going to be taxed? Should a person who makes theirs by the sweat of their brow be forced to pay taxes on it whereas a person who makes it by investments allowed a pass? If you are not going to tax income from investments then why tax income from manual or mental labor?
This is strictly meant as a question and not a rebuttal of what you said. It's a question I have pondered before.
Capital is what puts the wage earner to work in the first place. That is the reason.
No offense but that is not a very good answer. You can have capital and still pay taxes on it or you can have potential capital and do little with it but let it reside somewhere.
The more you tax investment returns (for government consumption, on the dubious notion that they are not functionally or morally distinguishable from regular wages), the less capital is available for added production, and there is less incentive to invest as well. When you start carving up the golden goose and consuming it, fewer golden eggs are produced. So you have to be careful of incentives.
People are creative, if you starting taxing a certain way of making money then they will shift their money to where they're no going to be as severely penalized.
Income from investments has already been taxed.
Now I am all for eliminating the carried interest and ISO loopholes...
Not always they haven't been. Many people inherit money that they use for investments and that money may not have been taxed as earned income for a very long time. Even so you are still earning income on the money you invest and many things in this country have several tiers of tax built into them. Not saying it is the right thing but I'm still not convinced that you should tax one and not tax the other. I also believe the tax codes are built to favor the rich and the poor with the middle class left holding the bag all too often.
I personally believe our tax codes are a damned mess.
However if you look at the movement of wealth toward the top tier that really doesn't appear to hold true. If that wealth is there then why isn't it being invested and where did all the money go when our economy collapsed? This has always been a question there seems to be little answer to other than it was not really there to start with.
I won't argue you with you at all on that other than to say those who are wealthier have better means at their disposal to do such things.
Hall when I sold my restaurants the cap gains tax actual amount of dollars was mind blowing - as a sub S Corp the profit I made from these restaurants went right on my 1040- I had already paid taxes on the money I invested to build and open them-now I am paying again
Not versed on farm subsidies but I believe oil profits are around 7% which is not excessive. Stop those subsidies and we'll all just pay more at the pump.
I understand that Bill. It would be the same if I turned a good profit on a piece of land I own, or at least that is my understanding. I'm not arguing so much for more taxes on what you made as I am questioning why making money with money (even if it has been taxed) is different than making money with your back? After all most of us have to buy a car and clothes to work on pre-taxed money. Tools that are used are bought with pre-taxed money. We use these things to make more money but that money is taxed. Why is money making money any different and that doesn't even touch on those born into it that have an army of attorneys at their disposal to pay less than many average workers pay
I'm afraid that part of this has to do with race, Phil. If we had a homogeneous society maybe we would have an economic system that is closer to Denmark's.
The short answer is risk. Using Bill's restaurant as an example, if he had invested $100,000 and only sold it for $50,000 there would be no tax to be paid and he would have lost $50,000. But because he put his capital "at risk" when he sold it for $200,000 his tax rate was lower than normal income tax rates.
I understand the risk factor, I've experience it myself in the past. In this case it would be perfectly justifiable for a person to be able to make a good return without taxes. But at what point should he start paying them? Should he be allowed to go right on for years making money without paying taxes on what he earns?