patrick.net

HydroCabron says

No. But it is of some value, if less than the guy who changes the HVAC
filters every six months.

"Noble" is a near-meaningless intensive here. I'm lightly mocking their
profession.

Verbal irony, or, as Bgamall would put it, a sort of false flag.

I think the value is questionable, but regardless, all I'm asking is to tax them like we tax all other value enhancing work. According to the same progressive rates. How could anyone be against that?

tatupu70 says

mell says

Fairness aka equal opportunity comes way before redistribution and equalizing.

Fairness is BS. It's completely subjective and impossible to implement. Redistribution is what's important.

You'd rather have a "fair" system and economy of Somalia or "unfair" system like the US had from 1950 - 1980?

Well that's where we disagree then. It's every simple to be fair to the best possible extent. A simple way to start out with is treat everybody the same under the rule of law, no bailouts or get out of jail free cards. Keep laws short and to a minimum so that there is no wiggle room to misrepresent/misinterpret them or take advantage of loopholes. Etc.

mell says

It's every simple to be fair to the best possible extent.

That's comlete BS. Like I said--fairness is 100% subjective. What's "fair" to you is not to your next door neighbor. Ask 1000 people what is fair and you'll get 1000 different answers.

mell says

A simple way to start out with is treat everybody the same under the rule of
law, no bailouts or get out of jail free cards. Keep laws short and to a minimum
so that there is no wiggle room to misrepresent/misinterpret them or take
advantage of loopholes. Etc.

How does that have anything to do with capital gains tax rates?

tatupu70 says

HydroCabron says

No. But it is of some value, if less than the guy who changes the HVAC

filters every six months.

"Noble" is a near-meaningless intensive here. I'm lightly mocking their

profession.

Verbal irony, or, as Bgamall would put it, a sort of false flag.

I think the value is questionable, but regardless, all I'm asking is to tax them like we tax all other value enhancing work. According to the same progressive rates. How could anyone be against that?

Brainwashing, maybe?

It reminds me of William Shirer's statement about having lunch with perfectly intelligent Germans in the 1930s, who could converse in depth on numerous topics, and then blandly assert outrageous bullshit about Jews or the persecution of Germany by the world as if no one could find such statements unreasonable.

I once had a boss who came to work one morning and flat-out told us that the reason the economy was so good (this was 1999) was due entirely to Reagan's tax cuts in 1982. I know people who believe no income beyond a certain level should be taxed at all. You would have been laughed out of a John Birch society meeting for saying that in 1970. Now you're welcome at any Republican or Libertarian Party gathering.

tatupu70 says

That's comlete BS. Like I said--fairness is 100% subjective. What's "fair" to you is not to your next door neighbor. Ask 1000 people what is fair and you'll get 1000 different answers.

If you don't think your country has fair laws you either have to leave the country or work to repeal those laws or challenge them in court. Selectively applying them is far worse.

tatupu70 says

How does that have anything to do with capital gains tax rates?

It is a prerequisite for me however to get support for the capital gains tax adjustment. I consider this the fundamental problem, you don't. That's fine.

mell says

If you don't think your country has fair laws you either have to leave the
country or work to repeal those laws or challenge them in court. Selectively
applying them is far worse

I think fairness is an abstract concept that is unimportant. Laws are made to promote behavior that society wishes to encourage. Often the two are the same.

mell says

It is a prerequisite for me however to get support for the capital gains tax
adjustment. I consider this the fundamental problem, you don't. That's fine.

You really are a Republican. You must extract a bounty to support something you believe in??

tatupu70 says

So how about we put a special tax on short term trading in addition to increasing capital gains rates to the same as labor?

Problem with capital gains is that certain corporate structures get taxed twice. However, taxing all income at same as labor... I'm all for that.

It's an abomination that working man pays more in taxes than the man who is controlling the money. I'm a strong believer that all income should be taxed equally without special interest loopholes.

tatupu70 says

You really are a Republican. You must extract a bounty to support something you believe in??

It's fairness first AKA equal opportunity. How can you talk about RAISING already existing taxes while you can flip a house after 2 years and pocket 250K/500K taxed at 0%?? I am not married to a specific cap. gains tax rate, but you have to understand that there is a significant difference between committing your money for years with the possibility of losing it all vs getting a paycheck every month and getting taxed on that. Also, what tax rate for interest from savings?

mell says

I am not married to a specific cap. gains tax rate, but you have to understand that there is a significant difference between committing your money for years with the possibility of losing it all vs getting a paycheck every month and getting taxed on that.

Robert the Bruce: Wait! I respect what you said, but remember that these men have lands and castles. It's much to risk.
Willam Wallace: And the common man who bleeds on the battlefield, does he risk less?

tatupu70 says

easier than investing your money somewhere and watching it grow?

Or losing it all, like in 2008 (for most). Ok, I can see your point and where we disagree is how we think wealth disparity is mainly generated in the first place. The TBFTs and connected one (I count most politicians and people such as Buffet amongst them) would grow a bit slower, but without the tail risk they would still be TBTFs. Give me a continuously printing-press backstopped, guaranteed multi-bagger investment and bailouts if something goes awry and I don't care much what tax rate I pay on those ill-gotten gains. While you can redistribute some of those they don't address the core problem.

seeitnow says

these men have lands and castles.

Are you talking about our resident patnet landlord rentiers? None of the people I know who trade or invest at the side or even as their main source of income have lands or castles. Plus they invest other peoples retirements who don't want to get fucked over by the Fed and 0% savings interest and if they are good at it they do good for their clients.

mell says

Give me a continuously printing-press backstopped, guaranteed multi-bagger
investment and bailouts if something goes awry and I don't care much what tax
rate I pay on those ill-gotten gains. While you can redistribute some of those
they don't address the core problem.

You really need to get over the bailout that happened 5 years ago. There was no policy decision that decreed that whenever a company is in trouble, it will be bailed out. If anything, the backlash has ensured that bailouts will never happen again.

So, why exactly do you think there is no tail risk?

And the whole crony argument is BS. It's a distraction from the real issues.

Homeboy says

m, we were talking about JOBS. Unemployment went UP starting in 2000. Where was the job-creating effect of that cut in capital gains rate?

there was lots of job formation after 1997 especially in Silicon Valley..
the PWC money tree will showed $150B flowing into venture backed startups.

Money to hire employees, manufacture goods, pay vendors, and rent facilities.

This is obvious.. even to Bill Clinton since he always liked to visit the Bay Area (esp Santa Clara) to ask for Donations.

Homeboy says

You seem to be having an imaginary argument with someone other than me. Did I say tax increases promote business activity? No, I simply said cutting the capital gains rate does NOT promote business activity. You are committing the fallacy of denying the antecedent. The reason to tax capital gains as ordinary income would be to balance the budget by ending preferential tax treatment for the investor class. The problem could be solved without people going hungry or dying from lack of medical care.

As the above example shows.. lowering taxes actual promoted activity... it is clearly documentation by PWC money tree and in any history books.. Salaries paid to employees, payments to vendors, rent paid to office landlords were all ORDINARY INCOME to these parties and GOVT be it FED or STATE taxed the INCOME at HIGHEST RATE.

ALL of the funds came from one source.. AFTER TAX Savings from the RICH ( your so called 10%) put at RISK as Venture backed INVESTMENTS to fuel economic expansion.

At the end .. the original dollar invested was taxed as Ordinary Income rates.. the gains above ordinary income were taxed at lower rates due to risk. You rather there was NO investment made and no jobs created and those no higher tax revenues collected?

thomaswong.1986 says

At the end .. the original dollar invested was taxed as Ordinary Income
rates.. the gains above ordinary income were taxed at lower rates due to risk.
You rather there was NO investment made and no jobs created and those no higher
tax revenues collected?

Nope--I'd rather the same investments be made and then taxed at the same rate as labor.

Your argument comes down to this reasoning. People will pass up opportunities to make $1MM because they'd have to pay an extra $30K in taxes. Maybe that makes sense in your world Thomas--it sure doesn't in mine.

And btw--there's no guarantee that the original dollar was taxed as ordinary income... The 1% get very little earnings as ordinary income. That's why the Koch Bros. et. al., are programming you to think raising capital gains will have a negative effect on jobs and the economy.

Seriously--sit back and think for a second. Companies don't hire based EBIDTA or net earnings. They hire when they need more people to meet demand. If they can meet demand and increase earnings, that's what they'll do--they certainly won't hire any more people just because their earnings are up.

Plenty of delusions on both sides:

http://patrick.net/?p=1230589&c=1017529#comment-1017529

smaulgld says

Plenty of delusions on both sides:

http://patrick.net/?p=1230589&c=1017529#comment-1017529

Yes: Both sides do it.

(Source: precious-metals bugs who lecture everyone on the evils of partisan divisiveness while voting a straight Republican ticket their entire lives.)

There are the Foxbots / Rushbots, i.e. CaptainShuddup, TomWong, and Bap33.

Then there are AustrianBots, i.e. mell and "Reality."

Said bots just keep repeating the same PRATTs (Points Refuted A Thousand Times) over and over again. They hope to establish truth by perpetual repetition. If you repeat something often enough, it becomes the truth!

Do we have any RandRoids on here just to complete the far-right economic insanity? As if we don't have enough of the GNP flowing into the hands of the wealthiest 400 people?

I suppose errc's constant whining about how the Democrats won't let him smoke dope is relatively harmless. It does get annoying though.

I can't take credit for the term "PRATT." I got it from RationalWiki.

freak80 says

There are the Foxbots / Rushbots, i.e. CaptainShuddup, TomWong, and Bap33.

Surely you little lefty pricks heard of the National Review... or your just some 20 year old Obamatron..

thomaswong.1986 says

freak80 says

There are the Foxbots / Rushbots, i.e. CaptainShuddup, TomWong, and Bap33.

Surely you little lefty pricks heard of the National Review... or your just some 20 year old Obamatron..

You mean that National Review? The one which purged Buckley's son for being a dirty leftist?

tatupu70 says

Your argument comes down to this reasoning. People will pass up opportunities to make $1MM because they'd have to pay an extra $30K in taxes. Maybe that makes sense in your world Thomas--it sure doesn't in mine.

It all makes prefect sense and the multiplier effect kick in fueling more jobs, rent payments and puchases.. all this increases Federal, State, Retail Sales Tax, Property Taxes several times over.

Your solution is Federal Govt gets its all once for all up front.. there is no circulation of investments and disposal incomes to benefit society as a whole.

HydroCabron says

You mean that National Review? The one which purged Buckley's son for being a dirty leftist?

Is that all you know of it ? surely you must know more about the Late Buckley himself.

thomaswong.1986 says

It all makes prefect sense

lol. OK. Show me someone who would pass up $1MM because he would have to pay $30K of it to the government.

tatupu70 says

And btw--there's no guarantee that the original dollar was taxed as ordinary income... The 1% get very little earnings as ordinary income. That's why the Koch Bros. et. al., are programming you to think raising capital gains will have a negative effect on jobs and the economy.

there is no guarantee that ORIGINAL investment was returned either.. what is your risk incentive ? Based on your logic .... savings would never get invested into high risk projects... what you see today, would not have happened.

Yes, before the 2008 election, there were the Obamatrons/Obamabots. And yeah, they were "true believers" in the "hope and change" sloganeering. But we don't hear from those people much. At least not on PatNet.

Rationally, there really isn't much difference between Bush and Obama on *actual policy*, other than ObamaCare. But even ObamaCare is a plan drawn up by *conservative* think tanks. It was called RomneyCare in MA. But during the campaign, nobody was going around calling Romney a "socialist" or "statist" (or whatever the Rushbot term for Obama is these days).

tatupu70 says

Seriously--sit back and think for a second. Companies don't hire based EBIDTA or net earnings. They hire when they need more people to meet demand. If they can meet demand and increase earnings, that's what they'll do--they certainly won't hire any more people just because their earnings are up.

Companies/Industries start from somewhere.. they just dont appear because of some Demand. Had it only been demand, there would be no start up failures.
But that is not the case..

thomaswong.1986 says

what is your risk incentive ? Based on your logic .... savings would never
get invested into high risk projects... what you see today, would not have
happened.

Uh, the same incentive they have now. To make money. I don't want to tax capital gains at 100%. Just the same as labor.

So according to you, raising capital gains to the same level as labor would stop investment? If that's the case, why do people go to work at all?? With taxes on labor being so high and all.

tatupu70 says

I don't want to tax capital gains at 100%. Just the same as labor.

That's crazy talk!!! Tax capital at the same rate as labor??? Instant Great Depression!!! Like we had in the late 1990s!!

tatupu70 says

If that's the case, why do people go to work at all?? With taxes on labor being so high and all.

People work mainly for fun and enjoyment. It has nothing to do with survival. If taxes get too high, the 99% will simply stop working. The 99% will just live off their investment income.

thomaswong.1986 says

Companies/Industries start from somewhere.. they just dont appear because of
some Demand. Had it only been demand, there would be no start up
failures.
But that is not the case..

Tommy--there is so much capital out there right now. No business is going to starve from lack of capital unless the business plan is horrible.

Start up failures occur for all sorts of reasons--lack of demand, poor execution, poor management, etc.

tatupu70 says

Tommy--there is so much capital out there right now. No business is going to starve from lack of capital unless the business plan is horrible.

Makes me wonder why I work a 9-5 job when I could get my hands on some of that "supply side" money desperately searching for yield. All I need is a shitty business plan, a few good lawyers, and no morals.

freak80 says

tatupu70 says

I don't want to tax capital gains at 100%. Just the same as labor.

That's crazy talk!!! Tax capital at the same rate as labor??? Instant Great Depression!!! Like we had in the late 1990s!!

Horrifying!

The most offensive thing I have read since the news accounts of Obama harvesting organs from Christian babies. Stalin is smiling in hell right now.

The half-dozen 20th-century economic booms which occurred with top capital-gains tax rates of 28% and up, are just like global warming and the germ theory of disease: vicious liberal lies meant to control us and defile our precious bodily fluids!

freak80 says

All I need is a shitty business plan, a few good lawyers, and no morals.

I have most of that! Now, where can I get some lawyers?

HydroCabron says

The half-dozen 20th-century economic booms which occurred with top capital-gains tax rates of 28% and up, are just like global warming and the germ theory of disease: vicious liberal lies meant to control us and defile our precious bodily fluids!

You mean the 1950s when US Factor orders were booming to rebuild the world, higher taxes kept inflation down and repaid the war debt. Perhaps you like to point to Kennedys tax act of 1964..

HydroCabron says

The most offensive thing I have read since the news accounts of Obama harvesting organs from Christian babies. Stalin is smiling in hell right now.

I agree completely about how horrible taxing capital gains like ordinary income is with the current tax rates.

Since Social Security is a forced retirement savings plan with pay-outs a function of what you put in I'll ignore that in my calculations.

Assuming married filing status, the standard deduction, personal exemptions for myself plus a spouse, and $100K salary I'd make $2.5M over 25 years coasting through life in a corporate job paying $11,858 each year as income tax totaling $296,450 plus $29,450 for Medicare for a $325,900 grand total which is a 13% effective rate.

If I decided to work five times as hard for five years at a startup for the same base salary but a $2M liquidity event for the same $2.5M total and my earnings were taxed as ordinary income I'd pay $899,397 in taxes which is 36%, 175% more.

That's horribly unfair.

Work which adds up to a big win should be taxed at the same low effective rate people pay when they spread it out over a lifetime.

To keep things fair we need a flat tax on all income like the 15% effective rate many people pay (or used to pay prior to the recent 60% tax hike). That way you wouldn't get punished for compressing your working life.

In historical terms that would still be egregious but you have to start somewhere - in 1913 when we got our first federal income tax the top rate was 7% and only applied to people earning over $11.6M annually in 2013 dollars.

drew_eckhardt says

If I decided to work five times as hard for five years

200-hour work week?

I understand that start-up employees and entrepreneurs put in barbaric hours, but I dislike the assumption that total compensation is proportional to work.

a $2M liquidity event for the same $2.5M total and my earnings were taxed as ordinary income I'd pay $899,397 in taxes which is 36%, 175% more.

You overlook something here: the present value of an annuity.

You have an advantage over the poor corporate drudge: you get the money now, and not paid out over the 20 years after you strike it rich. And the same amount of money right now, instead of spread out over 20 annual payments, is a bird in the hand. (That's why lump-sum lottery payments are so much smaller than the sum of the yearly payments.)

The present value of an annuity paid out over 20 years, assuming 3% interest (not an unreasonable long-term assumption, taking into account taxes and inflation), is $108,000.

That is, your hard-earned payday, at 5 years, of $1.6 million, is worth $108,000 per year for the next 20 years, with nothing taken out of it - no taxes, no Social Security, no Medicare, no disability: it's all yours.

Even under your scenario, you do far better than the corporate schmoe, who'll owe taxes on his $100K each year.

HydroCabron says

That is, your hard-earned payday, at 5 years, of $1.6 million, is worth
$108,000 per year for the next 20 years, with nothing taken out of it - no
taxes, no Social Security, no Medicare, no disability: it's all yours.

Wouldn't the interest be taxed? That is, in year 1 there is about $48k in interest paid and $60k in principle paid back? Meanwhile in year 20 there is only about $3k in interest and $105k in principle.

Regardless, taxes would only be owed through year 10 of the annuity, after which point the deduction and exemptions would exceed the interest income from the annuity. The total of the taxes, assuming a 2% growth in the standard deduction, exemptions, and 10% bracket and no changes to tax law, would be $14,700.

Adding all of that - you have $400k taxes on the liquidity event, $14,700 taxes from the annuity, $54,743 in Income taxes from the 5 years $100k salary, and $14,500 in Medicare taxes. Total is $483,960 on $3.05M in income. 16%.

This is a stupid example though because at $100k income for a married couple, with standard deduction and married, is only in the 15% bracket. Capital gains is 20%. Move the number to the higher portions of the income brackets and it goes the other way. Not to mention good luck selling a small private company for 20 times earnings.

thomaswong.1986 says

Perhaps you like to point to Kennedys tax act of 1964..

Or maybe St. Raygun's tax hike he signed Jan 6, 1983 when unemployment was 10.8%?

Reagan's remarks before signing the law hiking taxes 125% and increasing government spending to create jobs:

"Today, as this bill becomes law, America ends a period of decline in her vast and world-famous transportation system. Because of the prompt and bipartisan action of Congress, we can now ensure for our children a special part of their heritage -- a network of highways and mass transit that has enabled our commerce to thrive, our country to grow, and our people to roam freely and easily to every corner of our land.

"This bill was possible because of the contributions of so many Senators and Congressmen, many of whom are standing here today. Without their leadership, cooperation, and determination, this bill would never have become law.

"Anyone who's driven the family car lately knows what it's like to hit a pothole -- a frustration, expense, a danger caused by poor road maintenance. Woeful tales of highway disrepair have become part of the trucking lore. Bridges are crumbling from under us in many of our older cities while growth is being stifled in our newer ones, because the transportation system can't cope with the expanding population.

"Overall, we have 4,000 miles of Interstate Highway that needs resurfacing and 23,000 bridges that need replacement or repair. Our cities need new buses, new or rebuilt railcars, and track improvements that will cost $50 billion during the next 10 years. Common sense tells us that it will cost a lot less to keep the system we have in good repair than to let it disintegrate and have to start over from scratch. Clearly this program is an investment in tomorrow that we must make today. It will allow us to complete the interstate system, make most -- the interstate repairs and strengthen and improve our bridges, make all of us safer, and help our cities meet their public transit needs.

"When we first built our highways, we paid for them with a gas tax, a highway user fee that charged those of us who benefited most from the system. It was a fair concept then, and it is today. But that levy has not been increased in more than 23 years. And it no longer covers expenses. The money for today's improvements will come from increasing the gas tax, or the highway user fee, by the equivalent of a nickel a gallon -- about $30 a year for most motorists.

"The repairs and construction are expected to stimulate about 170,000 jobs, with an additional 150,000 jobs created in related industries. Another provision in this bill adds up to 6 weeks of unemployment benefits for people who have used up all their unemployment insurance. Such badly needed assistance will put more than half a billion dollars into the pockets of family budgets of our long-term unemployed.

"While the action we take today will bring some relief to those of us who so want to work and yet cannot find jobs, its principal benefit will be to ensure that our roads and transit systems are safe, efficient, and in good repair. The state of our transportation system affects our commerce, our economy, and our future.

"That's why I'm pleased today to sign House resolution 6211, the Surface Transportation Assistance Act for 1982. It will help America enter a brighter and a more prosperous decade ahead. And so saying, and before the bridges fall down, I'll get this bill signed. [Laughter]"

That 125% tax hike followed corporate tax hikes a few months earlier, and a payroll tax hike to preserve Social Security a few months later in April. Unemployment fell back to what it was when he won the election, reversing the unemployment caused by his disastrous job killing tax cuts.

finehoe says

Unemployment fell back to what it was when he won the election, reversing the
unemployment caused by his disastrous job killing tax cuts.

I want someone from the right to refute this. If you run a business - in times of low tax rates you maximize profits. In times of high tax rates you invest in infrastructure and avoid taxes. In short, at 50% tax rates, any investment in the company is paid 50% by tax savings and 50% by the company.

$100k spent hiring someone with a 50% tax rate affects the bottom line by $50k. When taxes are 20%, $100k spent hiring someone is paid by $80k from shareholders and $20k by the government.

Now when they are 12.6% as in the US today...I wonder why productivity is soaring but wages and employment remain stagnant. Profit taking.....

Higher taxes encourage investment. Historically this has been proven.

finehoe,

Why spend money fixing highways and infrastructure when it could be used for war? War kicks ass! ;-)