The FED is royally screwing an average citizen of this country. They create inflation, and the only way to fight it is to take risks, and buy inflation-safe securities. Yet, as soon as you sell them, you have to pay taxes on your gains. Why do we have to pay taxes on something we buy to protect ourselves from the FED, in the first place?
Why do we have to pay cap gain taxes at all?
By dunnross Follow Mon, 14 May 2012, 12:49pm 8,602 views 127 comments
In San Jose CA 95120
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swebb says
Lol ! clearly you hate kids... just kidding around.
As part of our tax laws, the tax payer can simply donate their estate to some worthy cause of their choice. If you hate the idea of your greedy little rug rats getting all of your hard earned money... donate it..
Why are you concerned about other peoples wealth ?
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thomas.wong1986 says
Indeed, we should never concern ourselves with the opinions of peasants.
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Vicente says
and somehow you expect the govt to do what with this already taxed wealth.. 35% the first time wasnt good enough .. so lets take the other 70% what is left ?
They are not aristocrats.. they are the merchant class you seem to hate so much. Why ? because they came from nothing and did something with their life... while you wasted your life reading poetry and debating politics. Some here had a wasted life...
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People are forced to pay capital gains tax because the government fails and refuses to live within its means. Government has, is and will be constantly seeking new ways of fleecing its loyal subjects and capital gains is just another of a long list of ways to raise more money to continue to pacify the army of indentured voters it, government, has created.
Government always needs more just like a junkie always needs more. Enough is never enough. When they run out of other peoples money, they need to find new ways to get more. Its really that simple.
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Menlo Park, CA
Honest Abe says
No, not that simple.
The main problem is that the rich are forcing middle classes to pay their taxes for them. And they are succeeding, thanks to people like Honest Abe, who somehow don't notice that billionaires pay only 15% on capital gains for doing NOTHING while the upper middle class productive people pay 28% and more.
Why don't you tell the truth about how we being screwed by the 1% Abe?
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Reston, VA
I agree. Get rid of capital gains & inheritance tax. Tax it all as income.
It is not double taxation just because someone had to pay taxes to earn money before you 'earned' it.
It is not considered double taxation if I pay taxes on money I earn and then pay a carpenter who pays taxes on what he earns. It is fair game, b/c we are two separate entities.
Capital gains on stocks happen if I loan money to someone else, and they make money with it and pay me a fee. We are two separate entities. I made money by loaning it. If you don't like this, there are pass through structures for businesses that are less obviously separate.
thomas.wong1986 says
The first answer to this is obvious. The value of my money is directly tied to the amount of money that other people have.
The second answer is more up for debate. The country needs a mix of savers and borrowers. Too little, and people with drive and good ideas cannot get hands on capital. Too much, and we have what we have now. We have huge gov't and personal debts balanced by vast fortunes controlled by a few people and mini-fortunes controlled by many people sitting on excessive nest eggs. Of course this requires a complicated financial structure and a bunch of wizards in the middle convincing the rich that their money is safe and convincing the debtors that they are on their way to becoming rich.
We need to find ways for the rich to spend some of their money or to tax some of it away from them. Either way would be fine, but I would prefer taxes to space flights.
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Patrick, YesNot , Comrades - why not just go to the end result and be done with it? Punish all successful people and businesses, take it all and get to the real goal - a dreary, misreable combination of progressive, creeping socialism and communism.
Are you happy now?
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^ The end goals are to reward successful people and businesses and to encourage economic growth.
However, you cannot reward income earners while taxing the crap out of them and giving huge tax cuts to inheritors and financial hoarders.
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Honest Abe says
We are on the road to the end result already, and it looks far more like the Monopoly endgame than your USSR fantasies.
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Even with a flat tax..
Why should I be taxed x2 if I work x2 than somebody else and I obtain the same services from the government...
Isn't this an inefficient/unfair government? What stops me to migrate to the first country that promises me x1 tax only?
For good or for bad, in the era of globalization, governments loose their monopoly power. It's just a question of time till they start treating us as a corporation would do.. competing to obtain our labor and to offer their services.
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46 male
Menlo Park, CA
Yes, the game is pretty much over. A few people own everything, and continuously redistribute the wealth of everyone else upward to themselves without doing any work.
Honest Abe absolutely loves wealth redistribution, as long as it is redistribution from people who actually work and produce upward to the 0.1% who do not work or produce.
Abe, you're the best friend the ruling class ever had. And the best entertainment! They laugh themselves silly as you demand that we all serve them forever because they are "successful". Of course they'd never eat with you or let you marry one of them though. You're just a useful idiot.
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dunnross says
The real question is why do we tax productivity, not rent. We shouldn't have an income at all except as it was originally intended, a tax on the opulently rich to pay for social services that eliminate systematic and inherited poverty. It should never have been used for general purpose funding or the military.
But we could eliminate the capital gains tax on proper investments by using the formula I've proposed many times:
max(0.0, 1.00 - 0.01 * m) where m is the number of months you hold a property. Simple, easy to calculate formula. Doesn't allow for cost-averaging, but everyone would want to use FIFO anyway to minimize their tax burden.
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I'm still here. Lord the gullible are alive and well.
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clambo says
The proper term is inheritance tax. "Death tax" was a marketing term selected after expensive marketing studies and promoted by the Republican party to please their major donors.
Obviously there is an aristocracy in America. The upper classes inherit their parents' vast wealth without working, duh. Just look at the wealth distribution. You are forced to labor for them simply because they own all the best land and capital assets. So they get richer AND pay lower taxes than productive people, widening the gap more and more each generation, killing all incentive to do productive work.
I've lived outside the USA several times. A year in Austria, a year in Germany, a summer in England, and a summer in Holland. All of those countries have higher social mobility than we do (and better health care systems too). They do not have a tiny 0.1% taking all the money from productive workers like America does. They no longer emigrate to the USA. Why would they? We have adopted hereditary aristocracy after they abandoned it.
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oliverks1 says
I sure would be, wouldn't you?
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Patrick says
Yep. The term "death tax" is a political term. Just like the term "homophobia." Just by using these words, we do the bidding of those who created them.
Also see "death panels."
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Patrick says
God Bless America. The best country in the world!
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Patrick, redistribution is where money is taken, under the threat of force, and given to those deemed "worthy".
It is not "redistribution" when an employer willingly OFFER's a position to an prospective employee who willingly ACCEPT's the offer of employment. (Then the boss pays as little as possible in order to keep the employee, while the employee does as little work as possible in order to prevent termination).
Please point out the "redistribution" in this very common scenario.
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Patrick says
In so far as I can tell it's the low to middle income people who aren't paying any income taxes.
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Approximately 50% pay NO federal income tax at all. Whats wrong with them paying their "fair share"?
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Honest Abe says
They are paying their fair share. So much of their wealth creation is being sucked away that they have barely enough to live on.
This is why taxes should be higher on wealthy capitalists, so they can pay the share of taxes that ordinarily would be paid by people they exploit. Would you feel better if a McDonald's worker was paid $20 an hour and paid federal taxes? I would, but you'd fight against it vehemently and scream COMMUNISM!
You can't have it both ways. If you're going to support the Republican effort to create poverty, you've gotta exempt people who are barely making it from income taxes.
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iwog says
I guess it IS sort of a "shell game" isn't it?
I don't think that the Republicans are actively trying to create poverty. But it seems like any good job reqires a college degree anymore. It's sort of like a cartel where people who can't afford college are "shut out" and have to work in shitty low-wage McJobs their whole lives.
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Iwog, the sucking sound of their wealth creation being sucked away is the sound of government taxes, intervention, regulation and control. Come on, if were all on the same team, so to speak, shouldn't we all contribute?
Pick a number for the tax rate and let everyone pay their fair share. What should that number be? Should everyone pay 2%? 5%? 10%? 15%. The epitome of "FAIRNESS" is that everyone pay the same, equal percentage. Equality - its only fair.
People they exploit? Spoken like a true revolutionary !!
In the workplace, an employer VOLUNTARILY puts out an offer of employment. A prospective employee VOLUNATRILY accepts the offer of employment (The employer pays the minimum amount to retain the employee, while the employee works just enough to prevent termination). Since most jobs are "at will" the employee is free to VOLUNTARILY sever the relationship at any time, and seek greener pastures. Maybe I'm missing something, but point out the "exploitation" for me.
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Honest Abe says
I deal in facts, not bullshit. Capitalists exploit workers to earn a profit. That's how the system works.
I'm not against capitalism, I'm just against your misguided and very destructive form of capitalism.
Honest Abe says
So it's fair that an engineer that works for Cisco or IBM creates a multi-billion dollar technological breakthrough and earns nothing more than their $100,000 a year salary?
You apply the term "fair" very selectively. We tried your system 100 years ago. It ended in poverty, misery, and death.
Why do you want to try it again?
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Iwog - sorry for your loss - your mind that is. Your radical communistic liberal bullshit thinking has clowded whats left of your brain.
"Capitalists exploit workers to earn a profit" - well then - "WORKERS OF THE WORLD UNITE".
Comrade Iwog, any other sound advice for the downtrodden?
In case you haven't noticed, workers walk out the door every night - but voluntarily return the next day. No one is forcing them to return to be exploited.
BTW, whats stopping the Cisco engineer from creating his technological breakthrough on his own time, or starting his own company and "striking it rich"? Oh wait, I know, "The MAN' is holding him down.
No you haven't tried "my system" and the cause of poverty, misery and death is centralized government planing, disregard of the constitution, fiat currency, immoral "leadership", welfare and warfare - you know, those things that obama embraces.
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Honest Abe says
Name any time or place in history where your system worked and didn't result in poverty for workers and excess for the aristocracy.
Either you name it or I'll continue to say you live in fantasy land.
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There has never been a time in modern history "my" system worked, BECAUSE there has never been a time in modern history that "my"system was allowed to work without laws, rules, codes, regulations which sabotaged the results.
Liberal, democratic, socialistic, communistic thinking creates laws which gum up the works and yield bad results. Their solution? MORE bad laws, rules and regulations.
Radical liberalism, and democratic policies have created a relentless attack on all of the principals which individual liberty, sound business practices and rational social order rest...for the "common good", of course.
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Honest Abe says
And yet you are sure it will work. Sounds like an ideolog to me. I think the closest thing to what you want would be Somalia or central Congo.
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Honest Abe says
So I was right wasn't I. The system you worship, the system you're so bloody sure is the solution to all our problems, a completely unfettered free market with no government interference, has NEVER been successfully tested.
Well guess what. It has been tested. It's tested every time a bunch of kids get together and play Monopoly. It always has the same end result.
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Palo Alto, CA
Patrick says
Why shouldn't I be able to retire on my parents' money? Why shouldn't I be able to, upon my death, pass the money I have accrued to my children so that they can live better instead of being wage slaves in the rat race?
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Patrick says
1. For a regular investor (not an insider) investing is a lot of work, and many of his investments are at risk of loss (and do lose value). E.g. in my case I was "underemployed" in 2001 and had a luxury to spend days and weeks analyzing the stock market bubble and learning how to invest. As a result I still carry some nicely appreciated positions (mostly, gold mining stocks and mutual funds).
2. If you want to be 'fair', you need to propose equal treatment of gains and losses. The way it is now, they happily tax your gains, but limit your loss deduction to $3K/yr. I know a few people that still were not able to deduct they market bubble losses from 2000-2001.
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anon12366 says
Because the rest of us don't want your kids controlling our labor. That's an aristocracy/kleptocracy, not a democracy.
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anon12366 says
Wow, I guess the new aristocracy has totally abandoned the idea of merit and now just want us to go back to feudalism and an entrenched monarchy.
At least you're honest.
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anon12366 says
"Being wage slaves" is what your parents used to call "working for a living". The last thing the world needs is more trust fund slackers.
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Palo Alto, CA
bdrasin says
Alameda CA? Everybody's a wage slave... look at real estate prices ESPECIALLY the people who work for a living. I don't want to pay health care,retirement, or second home mortgages for greedy Cali baby boomer "middle class" retirees with a million dollars in home equity in the middle of a reinflating housing bubble.
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Personally, in my opinion being able to live off dividend income whether they be off of individual equities, or bond mutual funds is the true american dream instead of being the homeowner. However, bond mutual funds have always been taxed as ordinary income (municipal bond funds being the exception) so it's not as though one is living high on the hog off of this cash flow via tax advantages. Well, you can always keep them in the roth ira and not pay tax, but then you can't touch the "earnings" unless you r 59.5 and had the account open for 5 years. In which case, you can't really quit the "rat race." As far as pure capital gains oriented funds go, they tend to be much more volatile and while they do enjoy favorable tax structure, they have a much bigger speculative feel of "paper wins" and "paper losses" till cashed out.
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anon12366 says
Don't look at me, I rent.
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anon12366 says
You can always move to the Rust Belt. Here in Corning-Elmira you can buy a modest house for $100k in a safe neighborhood. For $200k you can have a large and very nice house.
Just be sure you have a good job lined up before you move here, of course.
;-)
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Palo Alto, CA
wthrfrk80 says
You know who should be living in cheap housing in the middle of nowhere? Retirees, baby boomer hippies... not young working adults with families.
Do you know who should be "house poor"? Unemployed, government assistance-dependent retirees, not mortgage-indebted young working adults with families and children.
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anon12366 says
Agree. But this is America!
Yeah, Corning-Elmira is a bit isolated. Other Rust Belt cities have more to do.
Then there are places like Dallas/Fort-Worth, Houston, Atlanta, and Chicago that have a "moderate" cost of living and still have plenty of urban amenities.