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The true issue is hidden in the rhetoric. The true issue is the capital gains rate. It was 49% at the start of the Reagan term. It was 20% during Clinton. It will be 20% next year as the bush tax cuts expire. A long term investment is different than normal income. The marginal rate will be about 42% next year.
With these proposed tax rates and Krugmans proposed inflation rate the long term investor is about to get screwed.
I talked about the effects of inflation on investment in my blog.
http://www.prophecypodcast.com/journal/2011/5/14/inflation.html
OurBroker
2012 Apr 17, 12:19am
The issue is not tax rates. Eisenhower ran the country with a maximum rate above 90 percent. So what?
The point is very simple: We will not be competitive if our people are uneducated, ill-housed and unhealthy. These goals can only be achieved with government help and government help can only be achieved if taxes are collected.
Look around: Remember when the largest buildings were always in America? Remember when best trains were in America? The best airlines? When we produced the most cars? When we were a net exporter of food?
Gov. Romney is now talking about getting rid of HUD. Perhaps poor people can live in his sumptuous underground garage. Forbes magazine, predictably, supports Romney and says:
"While the Department of Housing and Urban Development has lots of different programs, its bread and butter falls into two categories: subsidies that help poor people pay for homes (Section 8, HOPE VI, and the like) and subsidies that help middle to upper income people pay for homes (FHA and oversight of Fannie Mae and Freddie Mac). Most of what HUD does is deal with the unaffordability at housing by throwing money at people who use housing."
Wow. Imagine that. People want to live indoors. The horror of it....
http://www.forbes.com/sites/joshbarro/2012/04/16/romney-is-right-abolish-hud/
Instead of arguing about tax rates which are good for greed and bad for the country, let's talk about how we can create a stronger country with better education, better housing and better healthcare.
OurBroker
2012 Apr 17, 3:02am
From the New York Times today:
>>>From 2000 to 2007, incomes for the bottom 90 percent of earners rose only about 4 percent, once adjusted for inflation. For the top 0.1 percent, incomes climbed about 94 percent.
taxee
2012 Apr 17, 12:07pm
Notice the huge increase in white collar 'crime' as the tax rates went down? Now they legally loot the US treasury and the US companies and the IRS lets them keep most of it. Go bankrupt and retire in style in a matter of months. Low tax rates on high compensation encourages massive fraud.
OurBroker
2012 Apr 17, 12:16pm
The bankruptcy system allows perfectly healthy companies to back out of contracts and pension obligations. That not only hurts workers, suppliers, landlords, etc., it also reduces the ability of others to compete because they have the burden of sticking to their agreements.
The bankruptcy system was changed in 2005 to tilt unbelievably. For instance, you can go bankrupt and reduce the loan on a yacht but not the mortgage on a prime residence.
A big problem is the sense of 'morality' amongst the 1% and I blame Ayn Rand. She taught that self interest was the only morality and now her true believers sleep well gaming the system while other people end up sending their kids to bed hungry, then shipping them off to failing schools in the morning because taxes on the 1% have been cut too far and their ability to game the system legally, through loopholes in the tax code, hides even more money overseas that should reasonably be subject to taxation. We need to bring back guilt and shame for tax evasion. You're not a hero and producer for gaming the system, you're a sociopath and a criminal if you don't pay your fair share.
OurBroker
2012 Apr 17, 9:21pm
Rand is quoted and endorsed -- but only selectively. No one mentions that she was for gay marraige, for abortion and against religion and conservatives. Who said so? Ayn Rand! On tape! See:
On Abortion: http://www.youtube.com/embed/H0yUjMklVuI&feature=related
On Gay Rights: http://www.youtube.com/embed/H0yUjMklVuI&feature=related
On Conservatives: http://www.youtube.com/embed/oTf6NK0wsiA&feature=player_embedded#!
Should the incomes of the rich and famous be taxed on the basis of the Buffett Rule? That’s the latest question on the political front, a question which explains just how distorted our political conversation has become.
Worries about a 30% tax rate for our financial elite are laughable. Under President Reagan the top marginal rate was 69% and it was 92% under President Eisenhower, 91% under Kennedy, 77% under Nixon and Johnson, and 39.6% under Clinton.
The government has a massive deficit. A major reason for that deficit is a lack of tax revenues. Some applaud the government’s financial problems, seeing smaller tax revenues as a way to “starve†the national government. Of course, they don’t seem to object to the paved roads that run outside their homes or the security of living in a nation where your money is safe.
The Buffett Rule should be regarded as the first step in an effort to balance the nation’s finances before there are no finances to balance. Happily, Mr. Buffett and many in the upper brackets understand that paying taxes is not unfair, that they won’t miss a meal and that a functioning federal government and working social contract benefit everyone.
http://www.ourbroker.com/news/buffett-rule-041612/