Twelve reasons

Well - I don't really know a lot about tax rates for business (other than I think once again, they should just be simple - a certain percentage, and do a minimum global tax for companies who hold profit off-shore).

But I do know that:

The SBA has a section called Office of Size Standards that defines the appropriate size for a small business. The size standards are broken by NAICS industry classification and are based on two things (a) size standards in millions of dollars; and (b) by number of employee. In most industries, 500 is the maximum for small businesses, though there are industries where a business can have 1000-1500 employees yet still considered "small business"

So, it is small businesses that are creating the jobs...

Just because some govt agency says so does not make it accurate.
When people think of small business they don't think of companies with 500 employees.
There needs to be a designation for medium business and not just big and small.
You can't accurately include the local restaurant and the 500 employee manufacturer in the same group.
 
But, when the government says small business is making jobs, they are correct, because they are including businesses up to 500 people.

I think that business up to at least 200 is pretty small...

But, yep, I can see your point for making more categories - or having the government state things more clearly - such as saying "Companies who employ 50 to 500 people are creating the most jobs in this country"

I have no problem with inequality of results - I think it is just fine that there are winners and their are losers...

But, I also think that the government should tax everyone the same - winner or loser, everyone pays 18% on income. No matter where it comes from.
 
But, when the government says small business is making jobs, they are correct, because they are including businesses up to 500 people.

I think that business up to at least 200 is pretty small...

But, yep, I can see your point for making more categories - or having the government state things more clearly - such as saying "Companies who employ 50 to 500 people are creating the most jobs in this country"

I have no problem with inequality of results - I think it is just fine that there are winners and their are losers...

But, I also think that the government should tax everyone the same - winner or loser, everyone pays 18% on income. No matter where it comes from.

Well that 18% flat rate would cut mine in half and certainly be more delightful and euphoric than the 45% combined Fed and NYS income tax I currently pay for the government to hand out :(:mad:
Self interestedly ;)
I don't want to see capital gains tax rates raised now that after 5 years of paying millions in taxes redistributed by the government I have earned enough to invest 6 figures in deals like the one that brought me a 50% return in 18 months on a share of a real estate redevelopment:D:p with a buddy I went to school with who owns a property management and redevelopment firm.
Making your money make money for you at a 15% tax rate while providing an increase of lasting value is the next level.
Not having more of your money than 15% redistributedly handed out and frittered away makes it sweeter:eek:;)
Just like the "small business" monicker is too vague so too is the "1%" a varied group from new junior almost millionaires to 250 million net worth plutocrats like Romney and the Billionaires above him.
You say a company with up to 200 employees is small yet 100 is more than plenty to generate the revenues for the owners of a tightly held company to become junior millionaires at the near bottom of the 1% of income earners.
So owning a small company is enough to make it into the top 1% by your broad government supplied academic world definition.
1+ million dollars a year in income is the new yardstick of being rich, earning a million a year as opposed to merely being worth a net 1 million.
 
I see the Che-types don't recognize the difference between 'income' and 'compensation for labor'.

If I enter into a contract to provide a ditch and then hire someone to dig the ditch---the 'digger' is paid compensation for labor. And what I have left over after paying all expenses of the job is income.

It is entirely appropriate that the two sorts of payments be taxed differently. With that said, a completely flat tax scheme is very likely to be to the benefit of the person with income.

Personally, I'd prefer a flat tax on spending.

KS
 
Changing the tax rate on investments doesn't lead to more or less economic growth - when you look at the availability of capital (percent of GNP) during Reagan (capital gains taxed at 28%) and BushII (capital gains taxed at 15%) there is very little difference. So, rewarding investment with lower tax rates doesn't change the amount of investment capital in the system.

I knew you were going to substitute stats for economic theory. ;)

Let's be clear on this; STATISTICS ARE NOT THEORY.

In fact, when it comes to economics, statistics have no worth unless they can be tied back to an economic theory of social causation.

In fact you used one of the classic statistical contrivances used to foster the illusion of a static economy; using the ratio of whatever factor in question to GDP (or in this case, GNP which is derived from GDP). These statistics are generally meaningless because there are so many factors that dramatically effect that ratio that you cannot gain an accurate measurement of whether a theory is confirmed or not or even of the factor in question. A LOT can be hidden in those ratios.

The typical example is when the tax revenue to GDP ratio is used to claim that Reagan's and Bush's tax cuts didn't work as promised. This is literally turning reality on it's ear to fit a preconceived notion (often that exploitation narrative I talked about earlier).

When you look at the most accurate measurements to examine whether tax cuts work (revenue data for the relevant taxes over the following years), the facts back up the theory. Income tax revenue rose (in both real and nominal terms) after the income tax rates were cut by Coolidge, JFK, Reagan and Bush (43). As I pointed out earlier, lowering capital gains rates was followed by an increase in capital gains revenue as well.

This article spells out why the tax revenue to GDP ratio is utterly worthy. The same basic arguments apply to most any factor as a ratio in comparison to GDP or GNP.

Basically, one statistical contrivance (GDP or GNP) is stacked on top of another (a ratio of "X" to GDP/GNP). All this serves to do is confuse the issue (through statistical abstraction) to the point where the static economy shame can claim some empirical evidence.

This type of thinking is why, as economist W. Kurt Hauser put it, “None of the personal income tax or capital gains tax increases enacted in the post-World War II period has raised the projected tax revenues.” The statistic are gamed through these contrivances to confirm the bias of the political interests. Truth be damned!

The truth is that the Reagan tax cuts not only increased revenue, but spurred economic activity (just as ALL economic theory claims). Likewise for capital gains reductions (specifically under Clinton). Economic growth creates wealth (contrary to the zero-sum and static economy assumptions of Leftists). In this case, that allowed for enough capital to fund the tech boom.

Contrary to many of the "ivory towered elites" you like to identify me with, in economics as with all social sciences, theory does not follow from empirical evidence, it is the other way around.

EVERY economic theory says that tax cuts spur economic growth and EVERY economic theory says that investment is necessary for economic growth. Heck, even the GDP metric you cite is built on that premise:

GNP = GDP + net income

GDP = private consumption + gross investment + government spending + (exports − imports)​


Also, don't forget to look at the context of when those capital gains and income tax rates were changed and when the various increases in tax revenue and economic growth happened. This too confirms theory. Simply citing one metric from Reagan and one from Bush (43) doesn't really prove anything. repeated patterns over time are what matter.

I heard a good joke recently that goes along with economists confirming bias.

A mathematician, an accountant and an economist apply for the same job.

The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."

Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."

Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says, "What do you want it to equal"?
 
It taxes 'work' at a higher rate. Ordinary income, other than very low income rates, is taxed at a higher rate. Therefore, if make 100,000 at an ordinary income job, and are taxed at 22%, you will take home $78,000. However if you make 100,000 on capital gains, and are taxed at 15%, you will take home $85,000. If you work you will take home $7,000 less. Pretty decent sized penalty.

So, I assume you would agree that taxing higher income at a higher rate is punitive, right?



Once again - if someone buys a part from us - and I get paid with the profits from that part - that source of income is taxed twice.

'04 would probably be better equipped to answer that question, being a business owner and all, but..
  • I am pretty sure the cost of your pay is built in to the price of whatever it is you are selling
  • I am pretty sure that payroll is deductible as a business expense

But that is the private sector 'rewarding' risk of harm on the job (but that is false too - I make more than fireman, however, my risk is considerably less). We are talking about the government rewarding monetary risk, which they do, but they do nothing to reward physical risk. Once again - why is physical risk considered 'less' than monetary risk? And why is the government making a distinction?

More accurately, it is supply and demand determining what the job is worth. Markets pay better for more highly productive jobs and most of those high risk jobs are not overly productive. However, due to the high risk involved few people are inclined to do them so more incentive has to be given in the result of higher pay.

Taxes inherently alter market incentive structures. making capital gains lower then income taxes minimizes that to allow the markets to work. Making them even would severely hamstring the economy. Especially considering the corporate tax on top of that.

Really - the WSJ doesn't think so... (you have some fairly old source shag...)
From 2000 to 2010, median income in the U.S. declined 7% after adjusting for inflation, according to Census data. That marks the worst 10-year performance in records going back to 1967. On average, the economists expect inflation-adjusted incomes to rise over the next decade, but the 5% projected gain isn't enough to reach prerecession levels.

Government created bubbles suck, don't they. ;)

18% tax on all income - then the government isn't manipulating the game.

A flat tax? I'm impressed! Though, I would rather a sales tax to promote savings; probably something like that Bradford X tax which attempts to alleviate a lot the other traditional problems with a national sales tax.

Not sure I would make it 18%, but a simplified tax code is certainly ideal.

I assume you do not think the tax code should be used to try and make everything more "fair", then.

Given the necessity for funding of government, would you agree that taxes need to have as small a footprint toward that end? Would you agree that, beyond funding of government, the tax structure should be as conductive as possible toward economic growth and prosperity for all?
 
I have no problem with inequality of results - I think it is just fine that there are winners and their are losers...

But, I also think that the government should tax everyone the same - winner or loser, everyone pays 18% on income. No matter where it comes from.

Careful, you are starting to sound a little conservative. ;)
 
I knew you were going to substitute stats for economic theory. ;)

Let's be clear on this; STATISTICS ARE NOT THEORY.

In fact, when it comes to economics, statistics have no worth unless they can be tied back to an economic theory of social causation.

more, more, more

Well, shag - that whole dissertation is nice, but it has nothing to do with what I was talking about - capital investment didn't change (in percentages) between the times when the tax rate for it was 28% and 15%.

Which indicates if you were going to invest money in US companies in the 2000s it didn't matter that the tax rate was 1/2 of what it used to be in the 1980s, people invested the same percentage....

I don't see where you addressed that...
 
So, I assume you would agree that taxing higher income at a higher rate is punitive, right?
No - I don't think it is, until it gets very high - certainly much higher than our current 34% rate. Clinton's 38% rate certainly wasn't punitive.

There is a 'sweet spot" (laffer curve) but, we certainly didn't hit it with Clinton's rates - so lets at least go back to those.

'04 would probably be better equipped to answer that question, being a business owner and all, but..
  • I am pretty sure the cost of your pay is built in to the price of whatever it is you are selling
  • I am pretty sure that payroll is deductible as a business expense

Payroll is deductible - the business isn't paying taxes on my salary - but I am, so our customer's money which is taxed, buys our product, and then his money is used to pay my salary, which I pay taxes on... it goes on and on - money is taxed a whole lot... why should capital investment be different?

And yep, my salary is built into the products that we sell.

More accurately, it is supply and demand determining what the job is worth. Markets pay better for more highly productive jobs and most of those high risk jobs are not overly productive. However, due to the high risk involved few people are inclined to do them so more incentive has to be given in the result of higher pay.

Yep - but why is the government in the position to reward capital risk and penalize ordinary 'work'.

Taxes inherently alter market incentive structures. making capital gains lower then income taxes minimizes that to allow the markets to work. Making them even would severely hamstring the economy. Especially considering the corporate tax on top of that.

But the economy was hardly hamstrung when capital gain taxes were higher - and when corporate taxes were higher - during Reagan... you always say how wonderful the economy was during Reagan...

A flat tax? I'm impressed! Though, I would rather a sales tax to promote savings; probably something like that Bradford X tax which attempts to alleviate a lot the other traditional problems with a national sales tax.

Not sure I would make it 18%, but a simplified tax code is certainly ideal.

Yep - I have stated I was for a flat tax 100% a before (it is darn hard to search on this site this was the first one I found in quite a few posts)...

I would back a flat tax system - 100%. And I would like you to point out where I defended the progressive tax system currently in place. I defended the fact that Obama has cut taxes, I didn't defend the US tax system - you need to review that Cal, nowhere have I defended the current form of progressive tax. In fact I went after loopholes big time in that previous tax thread as well as supported the flat tax system.

Actually from what I have seen it needs to be right in the 18%-20% range - heck mittens would have only a 3% tax increase - that wouldn't be too bad for him.

Once again, a sales tax punishes those who can't save - the working poor - because they have to spend all their money just to survive - so they end up paying a higher relative tax.
 
Careful, you are starting to sound a little conservative. ;)

Conservatives will in no way back a flat tax.... they win the most with the game as it is currently set up...

Hi Stack - hope you enjoy!!!!
 
Either the tax code should be based on impersonal rules and treat everyone equally only with regard for what balances the interests of maximizing revenue and prosperity, or it will be focused on making everyone equal. You can't have it both ways.

If the goal is economic prosperity and equal treatment under the law, then there is no justification for taxing capital or for progressive taxation.

Only if the focus is on making everyone equal is there any justification for taxing capital gains and for progressive taxation.

The two view are, ultimately, incompatible in the long run.

Once the goal of making everyone equal is accepted, there will always be some group who thinks of themselves as less equal and organize to lobby the government to rectify their "inequality". There is no objective way to determine who is and is not equal. Originally narrow laws are expanding to include more people who are not "equal" and promoting economic prosperity eventually becomes nothing but a pretense for redistribution (typically through biased studies, emotional appeals, and other manipulations).

This is what results...

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Top_40.png

our customer's money which is taxed, buys our product, and then his money is used to pay my salary,

Double taxation is only on the same source of income. Same money is not same income. There is a distinction in property rights. Money that was once their property becomes your employer's property and then your property.

Corporations are the property of their owners and their owners pay capital gains on any profits they get. The corporate tax and capital gains tax are taxes on the same sources of income.

35% (corporate tax) + 15% (capital gains tax) = 50% tax

Once again, a sales tax punishes those who can't save - the working poor - because they have to spend all their money just to survive - so they end up paying a higher relative tax.
Read the link.
it addresses that.
 
Well, shag - that whole dissertation is nice, but it has nothing to do with what I was talking about - capital investment didn't change (in percentages) between the times when the tax rate for it was 28% and 15%.

Consider all the variables involved in your metric;
  • GDP = private consumption + gross investment + government spending + (exports − imports)
  • GNP = GDP + (income from overseas investments by residents - income from the domestic economy by overseas residents)

Overall, we have 7 variables plus that added layer of statistical abstraction in comparing investments (as a percentage) to calculations from those 7 variables.

If your goal is to measure increases in investment dollars why would this be a more accurate measure then simply looking at the actual amounts of investment dollars after a tax drop?

Toward that end, why would your metric be more accurate then looking at the tax returns which can only go up after a rate drop if the tax base increased?

In your metric, how do you determine if some other factor rose at such a high rate as to hide any increase of investment dollars?

During the two administrations you cite (Reagan and Dubya), we were running huge deficits and increasing military spending. That would likely hide any rise in investment under your metric. On the other hand, in the 1990's we had a balance budget, so government spending was comparatively low. Do you have the same metric for that time?

Also, a simple number from an 8 year period is overly broad. A lot can happen in those 8 years. Bush started out with a recession, had an economic boom and ended with the beginnings of a new recession. Considering the gravity of our current recession, a single figure would hide the fact that there was a boom in those 8 years. Context matters.

Stats are simply a snapshot in time. For them to be anything more then meaningless numbers they have to tie back to an logical explanation of how the phenomenon in question occurred and fits in with a broader understanding of the economy. Also, it has to be viewed in the context of history from which it is derived. Otherwise, it is simply a case of bias confirmation.

You need to justify your metric.

Stats do not explain "how" and are not an economic argument.

We need an argument for how economic growth occurs without investment.

Here are the facts:
  • Capital gains rates were cut in 1978 (from 48% to 28%), 1981 (28% to 20%), 1997 (28% to 20) and 2003 (20% to 15%). In each instance, tax revenue from capital gains increased.
  • Capital gains rates were raised in 1986 (20% to 28%) and were followed by a decrease of tax revenue from capital gains.

The Concise Encyclopedia Of Economics has some interesting facts regarding capital gains and business creation. They cite three measures of new business generation, "the number of initial public stock offerings (IPOs), the dollars raised from those IPOs, and the dollars committed to venture capital firms". The facts regarding the change in capital gains tax rates is rather telling...
  • The 1978 rate drop went into effect in 1979. In that year, IPO's increased by 145% over the previous year, the dollars raised from IPO's were up 73% but the commitments to venture capitalists were dropped by 54%. However, in 1980, those commitments increased by 114%, IPO's were up by 151% from the previous year and dollars raised from IPO's were up an astonishing 227%
  • 1981's rate drop went into effect in 1982. IPO's initially dropped by 54% that year but rebounded an incredible 328$ in 1983. Dollars from IPO's dropped in 1982 by 58% then rose by 887% in 1983! Commitments to venture capitalists rose 30% in 1982 and 140% in 1983.
  • Rates were increased to 28% in 1986 and took effect in 1987. IPO's dropped to 33% in the first year of the new rate and dollars from those IPO's dropped 14%. However, in that year, commitments to venture capitalists increased by 5% that year before dropping 57% the following year when the top capital gains rate when up to 33%.
  • The capital gains rate was dropped back to 20% in 1997 and retroactively took effect that year. Initial IPO's dropped that year and the next (by 25% and 39% respectively) before rebounding by 40% in 1999. Similarly, the money from those IPO's dropped 20% in the first year and 17.5% in the following year but rebounded the following year by 90%. The commitments to venture capitalists is where it get's real interesting. 1997 saw an increase by 52%, 1998 was up by 31%, 1999 was up by 162% and 2000 increased by 79%
The general trend is for investment activity and new business creation to increase as corporate tax rates drop (at least initially). Without capital gains rate cuts we would not have had the tech boom or the budget "surplus".

Most economists recognize that the ideal capital gains rate is zero. Here is a study that claims, “Lower financial income taxes stimulate innovation and enhance labor productivity in the long run.” Here is another study concluding that, "the optimal tax on capital income is zero."

Of course, economists tend to focus on generally universal goals like increasing government revenue and increasing economic prosperity. They also recognize that businesses simply function as tax collectors. A tax on capital will be passed on to the consumer in some fashion. One way or another, taxes on capital are ultimately paid by the middle class and the poor as the tax burden is shifted onto them. There is no law that can change that except to abolish taxes on capital.

We have a minority in this country who think we should focus on statistical abstracts (income inequality) over real world consequences and accept their subjective priorities over our own.

Should taxes be determined by who they seem to reward or on the incentive structure created and how far it goes toward universally held goals. Should we allow the values of a minority to override the interests of all simply because that minority is too blind to see that their preferred values actually undercut that generally shared interest?


While the economics of the situation are interesting, that is where the ultimate debate is. For the longest time, discourse has been dominated by attempts to redefine universally held priorities in a manner consistent with partisan redistributionist goals (redefining "fairness" for instance). With OWS, Obama's aggressive push for higher taxes, and not his calls for "fairness", the mask has slipped off.

If we are to fundamentally change our national values, the Left should be forced to make an honest argument and let the people make up their mind. Rarely is that the case. More often we get sanctimonious condescension and bullying or attempts to manipulate and confuse the issue (which is why so many non-Leftists are highly distrustful of the Left).

My hope for this election is that we finally get that honest national debate.
 
Shag -

I am no way stating we shouldn't have investment - your ramblings are becoming disjointed... way out there shag...

We need an argument for how economic growth occurs without investment.

The fact is shag - that as a percentage of the money out there that the same percentage was used for investment when the tax rates were at 28% as they were when the rate was 15%.

The higher tax rate didn't discourage investment. Now, of course there will be some point where higher tax rates do discourage investment, but apparently Reagan's rate of 28% didn't dissuade investors. That is how you measure it - not by how much the government gathered in taxes from capital gains...

Capital gains rates were cut in 1978 (from 48% to 28%), 1981 (28% to 20%), 1997 (28% to 20) and 2003 (20% to 15%). In each instance, tax revenue from capital gains increased.
Capital gains rates were raised in 1986 (20% to 28%) and were followed by a decrease of tax revenue from capital gains.

Have you looked at what the market was doing during those times - during the times you mention in the first group, the market was up - so more gains were realized - more people made more money with their investments - so of course the revenues were up - even with a lower rate. The rate had little to do with the increase of revenue - the fact that the market went up is why the revenue increased. You can really see that in the 1997 gain - when we had the tech bubble. The increase can be directly tied to the huge gains in the hi tech sector.

Shag - the real way to look at this is how much was invested - because that takes out the 'fuzzy' numbers that you use - how much money was made. The money made is dependent on many, many things, not the least is how is the market doing. Certainly the amount taken in was higher in 1997 - but people would have been pouring money into tech stocks even with a slightly higher tax rate - because there was money to be made.
 
Double taxation is only on the same source of income. Same money is not same income. There is a distinction in property rights. Money that was once their property becomes your employer's property and then your property.

Corporations are the property of their owners and their owners pay capital gains on any profits they get. The corporate tax and capital gains tax are taxes on the same sources of income.

35% (corporate tax) + 15% (capital gains tax) = 50% tax

But the gain on the stock isn't part of the profits by the company. Perhaps I bought Apple when it was $45 a share. If my stock in Apple goes to $600, Apple didn't paid any additional taxes over the years because my stock is worth more. The street has decided because of various things that Apple is now worth $565 more than what it was when I bought it. Yes, they made profit, and that might be part of the reason that my stock is worth more, but the street could have easily thought it wasn't enough profit, and my stock could be worth only $400. The amount of taxes Apple paid on their profit didn't change if my stock went up, way up, or even down. Say that Apple tanks - and my stock is back at $55 dollars a share - that doesn't change what apple has paid in taxes on its profits over the years.

There isn't any double taxation on the value when I sell the stock - I am not selling apple's profit which they have paid taxes on - I am selling because I am making money on the Street - Wall Street funny money.

Or say I sell my office building - which I bought in 1990 for 600,000. Say I sold it last week for 1 million - I will pay capital gains on that 400,000 that I made on the building - but that isn't double taxation - I have never, ever paid taxes on that money - that is all my profit. Why should I only pay 15% on that income instead of my normal tax rate? It is a long term capital gain.
 
Thanks foxpaws. I so tired of his BS and not willing to admit that the 15% capital gains tax can be a lower rate for some wealthy than what a minimum wage worker has to pay on his first dollar earned with SS. And with Bush. The recession was mostly from the tech bubble and we would have recovered quite well no matter what they did and of course the same for 9-11. But of course your going to have boom years when you pass out big tax breaks and start two wars and drive up big deficits during good global economic times. But with a price down the road.
 
Don Pfau. It is NOT the governments money! The rich & the middle & the poor earned it!
The government has a spending problem, not an income problem. Never in the history of governments have they had ENOUGH money to meet all the ways they can think of spending it to stay in office! Between corporate & personal taxes, Mitt paid 40% combined taxes! The top 1% pay 70% of all taxes collected by the government. The bottom 47% pay nothing! Clinton pushed the sub-prime mortgage. Remember the govenment works on a 5 year budget cycle, each year certain budget lines can be adjusted, not all. The American people are led to believe the government implements spending cuts they pass, but in effect they only decrease some budget line projected increases, based on a fixed basis increase and rising from there. There hasn't been a dime of actual decrease in government spending since the the Eisenhower administration! I have been involved in federal budget proposals for years!
 
I fully agree with the spending problem. Your stats are not including SS which has been included into the general budget and the surplus has been spent on what should have been strictly income tax making it subject to the same. And trust me someone who goes hungry doesn't care what you called the tax that they couldn't afford. I'm not saying tax the rich I'm saying The minimum wage worked shouldn't have to pay the same rate on their first earned dollar as the lowest rate available to the wealthy. It cost more to tax a minimum wage worker and then turn around and give them assistance. its inefficient. 20% would be low enough to encourage investment and then lower the top rate so the overall rate balances out. Or put a low deduction on SS and raise the top amount that it is paid on a little and cut a lot of the poor income hand outs. Let face it we can talk about it all we want but if they don't start spending less then we all are going to have to pay more. I'm not saying tax more. The big discussion is were to cut. I have little sympathy for those who sit on there ass and get a check. Everyone can do something. Even the unemployed.
 
I so tired of his BS and not willing to admit that the 15% capital gains tax can be a lower rate for some wealthy than what a minimum wage worker has to pay on his first dollar earned with SS. And with Bush. The recession was mostly from the tech bubble and we would have recovered quite well no matter what they did and of course the same for 9-11. But of course your going to have boom years when you pass out big tax breaks and start two wars and drive up big deficits during good global economic times. But with a price down the road.

I will get to foxy tomorrow when I have a day off but a few points here...
  • Don, you have presented no evidence or logical proof for your arguments. Simply denial of the facts I have laid out and baseless assertions. The reality is far more complex then the easy answers you buy into.
  • All your sanctimonious outrage is based on statistical red herrings. It is not based on real world consequences but on cherry picked (typically false) statistical comparisons by elites looking to work up the populace into a tizzy so they can further their grip on power.
  • Comparing the 15% capital gains rate to "what a minimum wage worker has to pay on his first dollar earned with SS" is an absurd comparison of apples and oranges that has no basis in reality. First, the 15% rate is simple what the legislation says, while what is paid on the first dollar earned has to do with actual money earned. Policy vs. it's application. Also, percentages are simply abstracts and that don't equate to reality. It is very easy to change the focus of things through numbers. As a wise man once said, there are lies, damn lies and statistics. If you have five dollars and I have ten, there is not much real world difference between us. But, as an abstract, I have double the money you do. As a percentage, 50% more. it is easy to manipulate the focus through numbers but statistical abstracts are no basis for the moral bullying you are attempting.
  • Are you saying the recession had nothing to do with the housing bubble? What about monetary policy?
  • How do tax cuts and war create a bubble? War is not good for the economy (see the broken window fallacy). I dare you to provide an explanation of how tax cuts create a bubble that can stand up to critical examination.
  • If driving up deficits is a concern, they why are you against the republicans? It has taken Obama less then 4 years to run up the deficit as much as under the 8 years of Bush. The Democrat controlled Senate has refused to pass a budget in over 1000 DAYS! If fiscal and economic responsibility is a concern to you, the Republican party is unquestionably the lesser of two evils.
  • Seriously, where are you getting this "first earned dollar" nonsense? I have already pointed out that those in the bottom 20% of income earners have a NEGATIVE effective tax rate...even with social security.You do know that the first earned dollar for all income earners is taxed the same because it is a progressive tax, right?
  • Why are you ignoring the arguments for why only the first $100K or so and why it might be a bad idea to change that. I will repeat the arguments from this link:
    Buffett also mischaracterizes the impact of the Social Security payroll tax, which is dedicated for a specific purpose. The law only imposes that tax on income up to about $107,000 per year because the tax is designed so that people “earn” a corresponding retirement benefit (which actually is tilted in favor of low-income workers).

    Imposing the tax on multi-millionaire income, however, would mean sending rich people giant checks from Social Security when they retire. But nobody thinks that’s a good idea. Or you could apply the payroll tax to all income and not pay any additional benefits. But this would turn Social Security from an “earned benefit” to a redistribution program, which also is widely rejected (though the left has been warming to the idea in recent years because their hunger for more tax revenue is greater than their support for Social Security).​
  • You complain about the fact that SS is simply used as a slush fund yet your complaint about the rich not paying SS about $100k would institutionalize SS as a slush fund for politicians to buy votes with.

The difference between skepticism and cynicism is that skeptics demand to be shown the truth why cynics refuse to see the truth.

To paraphrase your earlier posts, your cynicism is getting TIRING. ;)
“Class-warfare politics is bad enough when it is for real. But often it is as phony as a three-dollar bill, when the same politicians pass high tax rates on "the rich" to win votes -- and then get financial support from "the rich" to create loopholes that enable them to avoid paying those high tax rates.”
-Thomas Sowell​
 
There is no sense talking with you when you can not accept and want to argue about common knowledge. I'm only against Republicans on the 15% capital gains tax. And for the common knowledge and common sense reasons you will not acknowledge. Its just insulting. From the past I was against Bush for starting a unnecessary war in Iraq and running up huge deficits during good economic times including Medicare with out funding it. And trashing Americas name to much of the world. Not a very good Republican. Yes the biggest concern should be cutting spending. My biggest fear is them cutting the SS before I ever get a dime of what I paid into for almost 40 years. I wouldn't mind if I could afford to retire on my saving alone. I was well on my way until 2008 and I still haven't recovered. I always knew SS would come up short but I really believed they would work out a sustainable path before it was to late and I would just receive less than predicted. I now fear we are on the same path as country's like Italy and Spain. I am not happy with Obama but have good reason to fear complete Republican control. I think thinks work best when neither party has complete control and they work together but with a Republican majority. I'm an Independent but I have to admit I agree with republicans the majority of the time. I have never voted for what I thought was best for me but for what I thought was best for American. I wish more would do the same. Complaint with Republicans. At times they are to pro war. At times they are to pro business when it is not whats best for the country. They claim conservative and at time run up huge deficits. At times they are to pro tax cut (To all but mostly the wealthy) when it is not whats best for the country. I would gladly pay more taxes if it was actually paying off the deficit. Even G.H. Bush knew he had to pay for most of the war. I liked him. I didnt vote for Clinton but in hind site he was a good president but the republican congress gets as much credit. Yes the democratic list is much larger and I do not even wish to attempt it and they even overlaps a little. I like most don't want a hand out just an opportunity. And its slipping away for many but that started before Obama. Not defending him at all as it gets worse. I personaly do not like this kind of exchange because it acomplishes nothing. I would much rather work on solution to make thinks better for all. I am a true conservative. I owe nothing. Everything I own is paid for.
 
It's "insulting" to question "common knowledge" and find it lacking in evidence or logical proof?

FYI; "common knowledge" does not equal truth.

When it comes to SS and medicare, Paul Ryan has offered plans and the Dems blatantly LIED about what was in them. Those will not be reformed until they blow up in our face and there is only ONE party to blame for that because they constantly demagogue it to score cheap political points.

Unfunded liabilities between the two programs are in excess of $100 TRILLION dollars. IIRC, our entire GDP last year was under $15 trillion. Neither program is sustainable but any attempt to reform them now and minimize the pain of changing them is only met with short-sighted, self-aggrandizing demagoguery by the Washington elities who define that "conventional wisdom" that you seem to scared too question.
 
Foxy, we’ve already gone over your bogus statistics. If you can’t offer up a defense for their validity and relevance, then you are simply wasting everyone’s times…unless you are attempting to legitimize through repetition what you cannot legitimize through reason.

When it comes to selling stock and corporate profits you are confusing two different types of double taxation. Stock dividends are paid out from the profits of the company (double taxation). Profits from the selling of stock are a different type of double taxation that doesn’t relate to corporate profits. Confusing the two only confuses the issue. But that is what deconstruction does; manipulates and break down concepts and language until no truth can be discerned from them. It is not a valid means to discerning truth, only to conceal it.

You say that you are not arguing that we shouldn’t have investment, but I never suggested you were. I simply pointed out that you were implying that economic growth is not dependent on investment, something you spent the last two paragraphs of post #64 trying to prove. But your argument puts the cart before the horse.

Pointing to the correlation between economic growth and tax revenue as proof that investment is irrelevant is only a half truth at best. There is no explanation of why there is such a correlation. This study shows the connection between the two which is the negative correlation between corporate taxation (including taxes on capital) and economic growth. As the study puts it, "we...find that increases in corporate tax rates lead to lower future growth rates within countries." The Tax Foundation's Andrew Chamberlain explains the theory that study confirms by pointing out that higher corporate tax rates, "reduce incentives to take risks, accumulate capital and engage in entrepreneurial activity, making us less wealthy over time."

In short, the increase in revenue is a natural indirect effect of lowering corporate taxes. Not all taxes are equal and if there is one tax more vital to economic grow then income taxes, it is corporate taxes (including capital taxes).

Have you ever heard of Say’s Law? In essence, it points out that supply creates demand. economic growth is not simply followed by investment and increases in tax revenue; investment creates economic opportunity and economic growth.

This is why Reagan’s cut in the cap gain rate helped fuel the economic boom that followed. When it comes to the late 1980's and the tech bubble, that link I cited in an earlier post explains things rather nicely;
Venture capital funds are the economic lifeblood of high-technology companies in industries that are critical to U.S. international competitiveness: computer software, biotechnology, computer engineering, electronics, aerospace, pharmaceuticals, and so forth. The high capital gains tax rate appears to have contributed to the drying up of funding sources for those promising new frontier firms following the 1986 tax hike. Significantly, the massive technology boom of the late 1990s came immediately after the 1997 capital gains tax cut, unleashing another period of venture activity.​
That same link has a few charts to demonstrate this fact as well;
lfHendersonCEE2_figure_005.jpg

lfHendersonCEE2_figure_006.jpg

lfHendersonCEE2_figure_004.jpg

I have already pointed out some studies that show the optimal capital gains rate is 0%. If the tax code is to be constructed in such a way as to promoted economic growth, there is no justification for capital/corporate taxation. In fact, there has been no "pro-growth" argument for such taxation offered in this thread. Simply moral posturing and rhetorical attempts to separate economic growth with investment.

Even JFK recognized how important investment was to economic growth and how much capital taxation effected that:
”The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital from static to more dynamic situations, the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential growth of the economy.”​
 
When it comes to selling stock and corporate profits you are confusing two different types of double taxation. Stock dividends are paid out from the profits of the company (double taxation). Profits from the selling of stock are a different type of double taxation that doesn’t relate to corporate profits. Confusing the two only confuses the issue. But that is what deconstruction does; manipulates and break down concepts and language until no truth can be discerned from them. It is not a valid means to discerning truth, only to conceal it.

Once again shaggy - until you get into the real world of investment - don't pretend you know something about it - I make no dividends on Apple stock - they don't pay dividends - they take their profits and pour them back into the company (so since those profits are used to buy stuff, invent stuff, hire smart people - those profits are mostly written off, and not taxed) and then they expect shareholders to be happy with the increase value of the stock.

There is no double taxation there at all.

And you didn't even try to approach my office building profits - why - they aren't doubly taxed - but you would like people to think they are.

And once again - your little charts don't show what the market was doing during those times - market gain and loss has far more to do with the amount of revenue from capital gains tax than the tax rate...

And heck since 2003, since Bush lowered capital gains tax, capital gains tax revenue has plummeted - why - because the market tanked.... However, according to your theory of lower taxes on capital gains equals larger capital gains tax revenue - tax revenue from capital gains should have been really high during the bush tax cuts.

Capital gains tax revenue is tied mostly to market fluxuations, and not as much to the tax rate.

The market is what is pushing the revenue when it come to capital gains - when the market is up - we see increases in capital gains tax revenue - when the market is down - we see decreases in capital gains tax revenue.

That is what happens in the real world shag - your theories are just that - theories in a ethereal world...

And it is always quite interesting to see the right embrace Kennedy - when it is convenient...
 
Do you enjoy attacking straw men?

I never commented on your hypothetical.

I commented on what double taxation is and it's context in regards to various means of income (context being something you clearly want to avoid). The CLASSIC example of double taxation is the taxing of dividends and the taxing of corporate profits. Take any introductory econ or accounting class and this is the example they give you.

Just because dividends are not paid out on your particular investment does not mean that they are not paid out in other investments (for instance, my own investments in a local bank here in Kansas).

As to my charts not, "show[ing] what the market was doing during those times", my arguments did point out what the markets were doing. interesting that you keep skipping over that...

You seem to be missing my point about the connection between tax revenue and economic growth. There is a correlation between market growth and tax revenue because of the lower tax rates that stimulate economic growth.

You have not provided any alternate explanation to explain that correlation you keep citing nor any credible evidence to support it. Correlation is not causation.

It is very easy to cite any correlation you want and attribute whatever contrived notion of causation fits your agenda. It is much harder to actually provide a logical explanation of causation that stands up to critical examination and fits into a broader, logically coherent worldview.

You seem to be throwing any rationalization against the wall to see what fits.

Why is the fact of double taxation and taxes rates effect on economic growth so offensive to you?
 

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