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The Center of Budget and Policy Priorities has posted 10 charts and associated text on the impact of the capital gains tax. These provide an excellent guide for anyone encountering work colleagues or radio hosts who offer stomach-churning arguments in favor of lower capital gains rates.

As you can see from this first one to the right, the beneficiaries aren't exactly hoi polloi. Nearly half the extra income from low rates go not to the top one percent but to the top one-tenth of one percent. That is hoi oligoi in anyone's book, except for the propagandists who try to convince people there was no such thing as class war until society's whiners and lazybones launched it. The top one percent of taxpayers receives 71 percent of all capital gains, according to the Tax Policy Center.

The preferential rate for capital gains is a key reason why the tax system violates the “Buffett rule,” which essentially states that high-income taxpayers should not pay [a lower percentage] of their incomes in federal taxes than middle-income Americans.  A significant group of high-income taxpayers—particularly those who derive the bulk of their income from capital investments—pay taxes at a lower rate than many middle-class families.

As this chart shows, households with incomes between $50,000 and $75,000 who receive most of their income from their paychecks (as middle-class people generally do) paid 14.9 percent of their income in federal income and payroll taxes in 2011, according to [the Tax Policy Center].  Millionaires who received more than two-thirds of their income from capital gains and qualified dividends faced a 12.0 percent rate.

That isn't good enough for some people, like the face-palmers at the Cato Institute, who think the proper capital gains tax rate should be zero.

In the fear, uncertainty and doubt division of the capital gains department, the propagandists who object to any proposals for higher capital gains rates and/or seek lower ones than now exist—have a special target: seniors. They argue that raising capital gains taxes would hurt older people who are more likely than the young to have dividend and capital gains income. But, as CBPP points out once again, the distribution of tax benefits from the already-low capital gains rate is "highly concentrated among a small group of high-income households." As can be seen from the chart, the impact on seniors of raising the capital gains rates would affect a tiny percentage of the elderly. And they could easily afford the nibble.

Nearly 60 percent of elderly filers had incomes below $40,000 in 2011.  As the chart shows, taxing capital gains and dividends at the same rates as salary and wages would have reduced their after-tax incomes by much less than one-tenth of 1 percent, on average, or less than $6.

Nearly all elderly households (96 percent) had incomes below $200,000 in 2011, and taxing capital gains and dividends at the same rates as salary and wages would have reduced their after-tax incomes by less than 1 percent, on average.

The CBPP site includes seven more charts focusing on the truth and myths of capital gains. The whole post is a nicely condensed collection whose arguments you can pull out during barbecue today when your right-wing uncle gets started jabbering about the damn socialistic scheme to alter the tax code. The way the current arrangement works, as in so much else, is socialism for the rich.

 

Originally posted to Meteor Blades on Tue Jul 03, 2012 at 02:55 PM PDT.

Also republished by Income Inequality Kos, ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, and Daily Kos.

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Comment Preferences

  •  The misnomer they distract people from is (21+ / 0-)

    pointing out the hundreds of billions of middle class dollars in the market. What they don't tell you is the vast majority of those funds are not held in traditional investments subject to capital gains taxes but are highly concentrated in retirement vehicles that are not even getting that rate as pensions/401K's/traditional IRA's/etc. are taxed at ordinary income at retirement regardless.

    •  As Thom Hartmann frequently points out (25+ / 0-)

      Higher marginal tax rates on business owners is good for economic growth.  If taxes are high, owners leave assets in the business to grow the business.  If taxes are low, they siphon more assets out for their own use, which is usually less economically stimulative than investing in the business.

      So the low-tax folks have it precisely wrong, as history has consistently borne out.

      When Free Speech is outlawed, only outlaws will have Free Speech.

      by Dallasdoc on Tue Jul 03, 2012 at 04:04:59 PM PDT

      [ Parent ]

      •  That, exactly that ... and "what you said!!" n/t (3+ / 0-)
        Recommended by:
        skyounkin, Dallasdoc, Creosote

        .

      •  Low taxes just gives them more money to buy (0+ / 0-)

        assets out from under the rest of us.  It does not impact demand because they already have all the money they need to buy anything they want.

        “when Democrats don’t vote, Democrats don’t win.” Alan Grayson

        by ahumbleopinion on Wed Jul 04, 2012 at 01:49:26 PM PDT

        [ Parent ]

      •  Why do you think people start businesses in (0+ / 0-)

        the first place?

        I've started several.

        I did it to make money to buy toys.

        If you increase my marginal tax rate then as long as I have enough money to keep my business going I'm going to take out MORE money so I have enough to spend on things I want.

        But, even more, I then need to reconsider whether I start a business at all.

        When you start a company you work 80 hour weeks on a pretty regular basis.  Why do that if the rewards are lower?  I can just work for someone else instead, put in my 40 - 60 hours, and have a life outside of work.

    •  Dividend distributions from retirement plans (3+ / 0-)
      Recommended by:
      Geenius at Wrok, skyounkin, Creosote

      also do not get the favorable tax rate of dividends from the same assets outside a plan.  Once again, workers are screwed, Wall Street rewarded.

      Not to mention that in 2012 up to $70,000 in capital gains and dividends go tax free - no payroll tax, no income tax.  Are workers exempt on the first $70,000 of income? Nope.

      “when Democrats don’t vote, Democrats don’t win.” Alan Grayson

      by ahumbleopinion on Wed Jul 04, 2012 at 01:52:28 PM PDT

      [ Parent ]

      •  That's pretty misleading (0+ / 0-)

        You presumably are talking about an IRA or a 401K.

        You get taxed on that as ordinary income because you did not get taxed when you put the money into your plan.

        •  You did not put the gains in. (2+ / 0-)
          Recommended by:
          DrPlacebo, Creosote

          You did not put the dividends in.

          If a worker has gains or dividend income in a retirement plan, the worker gets taxed at ordinary rates when that income is withdrawn for the plan.  If an investor has the same gains or dividends outside the plan, the investor gets a tax break when the income is realized.

          In other words, working Americans investing money from their paychecks in a plan get their investment income taxed at ordinary rates.  Rich people investing their existing wealth get their investment income taxed at special lower rates.

          “when Democrats don’t vote, Democrats don’t win.” Alan Grayson

          by ahumbleopinion on Wed Jul 04, 2012 at 08:17:05 PM PDT

          [ Parent ]

          •  You really don't get this (0+ / 0-)

            Let's say I'm in a 30% bracket before and after I retire and capital gains and dividends are taxed at 15%.

            I earn $1,000 and invest it at a 100% return.

            When I earn $1,000 I pay 30% tax so I'm left with $700.  I get a $700 return on which I pay 15%, so I get a $595 profit leaving me with a total of $1,295.

            Now say I invest in an IRA.

            I invest the full $1,000, get a $1,000 return, leaving me with $2,000.  I pay 30% when I take out the money, leaving me with $1,400.  This is effectively allowing tax free gains.

            That's how it works for the rich.  But IRAs are really intended for the middle class - people who retire in a lower tax bracket.  Say I retire in a 20% bracket.  Then when I take out the money from my IRA I pay 20% and I'm left with $1,600.  It's effectively a 0 tax rate on my gain and a lower tax rate on my initial investment.

            That's a better deal than the rich can get.

            •  Not exactly. (0+ / 0-)

              Your example is not pertinent to the point I was making which is not about comparing a worker investing inside and outside a retirement plan.  I am talking about the different tax treatment of workers’ investments vs the rich.  Note, I said investing existing wealth, not wages.

              Your example does make clear one advantage that the rich have however.  Workers who are able to invest outside a retirement plan have to do it with after tax dollars, while the richest Americans are investing largely with tax sheltered dollars.  

              I am pretty sure that very few of Mitt Romney’s $250 million or so in assets have ever seen a 30% tax rate.  Romney reported income of $21.7 million in 2010 and paid a 13.9% tax rate.  There were no payroll taxes on those earnings either.  Given his reluctance to release returns from earlier years, we can only speculate that his rates were even lower then.

              If you think workers get a better deal on anything related to taxes than the rich you are truly delusional.

              It is unlikely that many of today's workers will retire at a much lower tax bracket than they have now unless their standard of living takes a real dive.  Rates are at record lows and we can't keep adding to the deficit indefinately.

              “when Democrats don’t vote, Democrats don’t win.” Alan Grayson

              by ahumbleopinion on Thu Jul 05, 2012 at 08:48:41 AM PDT

              [ Parent ]

              •  Work the numbers and see where you are wrong (0+ / 0-)
                I am pretty sure that very few of Mitt Romney’s $250 million or so in assets have ever seen a 30% tax rate.  Romney reported income of $21.7 million in 2010 and paid a 13.9% tax rate.
                Snapshots in one year don't tell the story.  Tell me where you think the money came from and we can see the truth.

                For example, a big chunk of Romney's wealth is in an IRA.  That money presumably never got taxed at all.  But he will need to start taking money out soon (and in fact may already be taking money from it).  That money will be taxed at 35% under current law, and more in 2013 unless the law is changed.  (http://en.wikipedia.org/...).

                So there's at least one big chunk of Romney's wealth that is going to be taxed at a big hefty 35%.

                You can say anything with hand waving and no one can disprove it.  Put down numbers and the truth comes out.

                •  Romney used a financial sleight of hand to get (0+ / 0-)

                  that much money into his IRA.  Without knowing all the details it is hard to know how he is going to take advantage of it, but I expect he has a trick or two up his sleeve.  

                  http://www.washingtonpost.com/...

                  Hopefully we'll learn more about the ways rich people like Mitt Romney benefit from tax laws written to give them an unfair advantage over working Americans in the next few months.

                  “when Democrats don’t vote, Democrats don’t win.” Alan Grayson

                  by ahumbleopinion on Thu Jul 05, 2012 at 05:40:11 PM PDT

                  [ Parent ]

                  •  Laugh... In short, you've got no evidence (0+ / 0-)

                    of any kind that there is any way at all for him not to pay tax on that IRA money, but you just think that he's so smart that he'll find a way.

                    Of course your argument is totally impossible to disprove because you have not made an argument.

                    How about you look around and find out if there is any way at all to avoid paying tax on money in an IRA.

                    (Hint:  There isn't.)

  •  more supply side stupidity rationalizing (16+ / 0-)

    the concentration of wealth producing greed that exploits the 99%

    Präsidentenelf-maßschach"Nous sommes un groupuscule" (-9.50; -7.03) "Ensanguining the skies...Falls the remorseful day".政治委员, 政委‽ Warning - some snark above ‽

    by annieli on Tue Jul 03, 2012 at 03:02:36 PM PDT

  •  End the tax breaks for stock market gamblers (12+ / 0-)

    and pressure the rich to put their money back into America by creating businesses and jobs in the real world instead.

    •  the original economic rationale.... (25+ / 0-)

      .... for taxing capital gains lower than ordinary income was that investing was inherently riskier than having a regular job, with a safe income and a pension.

      That rationale no longer holds.

      Investors typically spread out their risk over multiple different investment vehicles.

      Ordinary working stiffs have all their eggs in one basket at a time: concentrated risk.  And ordinary jobs are no longer secure, much less with pensions and so on.

      So in fact, the investor's overall risk exposure is lower than that of the person working at a regular job.

      Therefore the favorable tax treatment for investment income is no longer justified.  

      It's all just income, and it should all be taxed as regular income.  

      At Eisenhower Administration tax rates.  Compromise to Nixon Administration tax rates.  If Republicans don't like that, they can sit on it and rotate.  

      "Minus two votes for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

      by G2geek on Tue Jul 03, 2012 at 03:32:41 PM PDT

      [ Parent ]

      •  Yeah, if we're in a good mood... Nixon levels. ;) (5+ / 0-)
      •  Should be, but never will be. (5+ / 0-)
        It's all just income, and it should all be taxed as regular income.  
        The New Deal was an attempt (very successful, but they didn't know if it would be at the time) to stave off serious revolt. Until there is that existential threat to the powers that own, we will never again have real reform.

        How many divisions does OWS have?

        by Diebold Hacker on Tue Jul 03, 2012 at 05:47:51 PM PDT

        [ Parent ]

        •  oh, i think they darn well knew it. (4+ / 0-)

          Anarchists throwing bombs in the 1910s and 1920s.  

          The Soviet Union proclaiming itself the new workers' paradise, having overthrown the Russian monarchy.

          The Great War (WW1) as recent as 9/11 is to us.  

          And then an economic crash.  The perfect mix for violent revolt with a high likelihood of a Marxist outcome.

          The powers that own damn well knew that they would end up like their counterparts in the Soviet Union unless they gave a little.  So they gave.  A little.  But enough.  

          Fast-forward about a lifetime, to today:  The existential threat to the powers that own, has to come from the workers.  If it comes from anything else, e.g. an asteroid on course for an Earth impact, they will deal with it some other way: e.g. by launching a rocket to nudge the asteroid off track, and then going back to raping & pillaging.

          If the threat comes from the workers, then there is incentive to the plutocracy to buy off the workers' discontent with reforms, the less the better.  

          However we can certainly get changes in the friggin' tax code without having to raise the spectre of a general strike or worse.  

          And on the other hand, what we really need doesn't stop with tweaking the tax code.  What we need is a steady-state economy adapted to life on a strictly finite planet, and by definition that means distributional equity which means social democracy at minimum.  

          So: how to do "pitchforks & torches" nonviolently, or put the big scare into the plutocrats without heads on pikes?  That's where truly creative tactics come into play, the kind of theatrics that look real enough to make an impression on the audience.   I've been ranting about strategy & tactics for years around here, but what we see instead are repeat performances of the obsolete script of "kids vs. cops in the streets."  There needs to be a strong and supported nexus of creative nonviolent tactics operating within a strategic plan.

          "Minus two votes for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

          by G2geek on Tue Jul 03, 2012 at 06:54:29 PM PDT

          [ Parent ]

      •  And, how hard could it be to write a progressive (2+ / 0-)
        Recommended by:
        jrooth, DrPlacebo

        Capital Gains tax schedule.

        Sure ... exempt the first ...  I dunno ...  $120.000/yr from ANY Capital Gain tax -- in other words exempt the first profits of start-up businesses so as to "encourage investment"  while at the same time "protecting the investment income" of savers and retirees.

        But the Ownership Class certainly ARE fond of their Casino Capitalism.

        I'm remembering The Gamesters of Triskelion  

        what DID they need all those Quatloos for, anyway?

        •  I'd be all for this. (0+ / 0-)

          Exempting some amount of capital gains to encourage investment, and taxing the rest as regular income, would serve the purposes that Republicans claim to care about while curbing abuses. $120,000 seems to me to be a little high for an exemption, but the idea's a solid one.

          If your investments are making 6-figure profits, then you don't need the tax breaks to encourage you to invest.

      •  That is totally untrue (0+ / 0-)
        the original economic rationale.... (25+ / 0-)
        .... for taxing capital gains lower than ordinary income was that investing was inherently riskier than having a regular job, with a safe income and a pension.
        Where do you get this from?  I've never heard this claim before.

        The rationales for taxing capital gains lower than income are:
        1. We want to encourage investment
        2. Capital gains are from investment on already taxed income.  (ie. let's say I get paid $1,000 in salary and then invest that in a company to get a capital gain of 100%.  Tax free I would end up with $2,000.  But if I have a 30% tax on income and a 30% tax on capital gains then after tax I end up with only $1,190).  So two 30% taxes leave me with only 59.5% of what I would have had with no tax.

    •  "stock market gamblers" are taxed at the (0+ / 0-)

      same rate as regular earners.

      Hillary Clinton's Liberal Ranking http://www.dailykos.com/story/2007/8/10/122232/619

      by tigercourse on Tue Jul 03, 2012 at 03:59:43 PM PDT

      [ Parent ]

      •  ...for stock market gambling (0+ / 0-)
        •  Why does someone who spends hours (0+ / 0-)

          researching the market and trading their own money deserve it less then some guy selling cigarettes at the gas station?

          Hillary Clinton's Liberal Ranking http://www.dailykos.com/story/2007/8/10/122232/619

          by tigercourse on Tue Jul 03, 2012 at 04:23:54 PM PDT

          [ Parent ]

          •  Why do horses have tails and (2+ / 0-)
            Recommended by:
            Chi, wsexson

            ducks have webbed feet?

          •  Why should someone (5+ / 0-)

            who sits on their ass at home doing no productive labor be taxed less than a firefighter or a teacher or a policeman?

            "A lie is not the other side of a story; it's just a lie."

            by happy camper on Tue Jul 03, 2012 at 04:43:20 PM PDT

            [ Parent ]

            •  I don't sit on my ass all day. I work (0+ / 0-)

              as a Realtor, for which I am rarely paid. In my spare time I day trade. And that's how I pay the bills.

              Sorry for trying to make a living.

              And I make less money then most teachers or cops and I'm taxed at the same rate.

              Hillary Clinton's Liberal Ranking http://www.dailykos.com/story/2007/8/10/122232/619

              by tigercourse on Tue Jul 03, 2012 at 04:49:13 PM PDT

              [ Parent ]

              •  And unlike teachers I work 12 months a year, (1+ / 0-)
                Recommended by:
                JesseCW

                six or seven days a week and past 3 in the afternoon. And unlike cops, I'm not going to be getting to retire at 50 making near a hundred grand a year after spending 25 years making sure no black person steps out of line.

                Hillary Clinton's Liberal Ranking http://www.dailykos.com/story/2007/8/10/122232/619

                by tigercourse on Tue Jul 03, 2012 at 04:53:52 PM PDT

                [ Parent ]

                •  Seriously? You think teachers don't put in... (11+ / 0-)

                  ...time outside the classroom. You should try living with a teacher.

                  Don't tell me what you believe, show me what you do and I will tell you what you believe.

                  by Meteor Blades on Tue Jul 03, 2012 at 05:25:17 PM PDT

                  [ Parent ]

                •  OH DO NOT go there! (6+ / 0-)

                  said the wife of the retired teacher...

                  Tell the people you love that you love them when you can. You don't always get another chance.

                  by Melanie in IA on Tue Jul 03, 2012 at 05:37:19 PM PDT

                  [ Parent ]

                •  You think cops (3+ / 0-)
                  Recommended by:
                  Larsstephens, Hamtree, skyounkin

                  get 100K pensions? And do nothing but harass black people? If it's that easy what are you doing wasting time as a realtor?

                  "A lie is not the other side of a story; it's just a lie."

                  by happy camper on Tue Jul 03, 2012 at 05:46:44 PM PDT

                  [ Parent ]

                  •  A low level police officer retires after 20 years (1+ / 0-)
                    Recommended by:
                    JesseCW

                    with  58,000 a year, every year. Which doesn't take into account pension padding. Cops here can retire at age 44 making 100 grand a year. And yeah, in the city now most of what they do seems to be stopping people on the street to find out any kind of law they might have broken.

                    In my town the biggest busts of the last 5 years were wrongfully charging a guy for picking up a container full of weed and harrassing some out of towners for not having pool passes.

                    Hillary Clinton's Liberal Ranking http://www.dailykos.com/story/2007/8/10/122232/619

                    by tigercourse on Tue Jul 03, 2012 at 06:10:00 PM PDT

                    [ Parent ]

                    •  police are RISKING THEIR LIVES (4+ / 0-)

                      Police and fire fighters are willing to risk their lives each and every day they work for you and for me and for everyone else and you begrudge them a middle-class income and some solid retirement?

                      Teachers, police, and firefighters. You obviously have something against people who work for the common good.

                      •  I don't begrudge them their income (1+ / 0-)
                        Recommended by:
                        JesseCW

                        or retirement (though, again no cop in my town has risked their life in decades and outside of elementary school, my teachers were pretty piss poor), I was only disagreeing with the idea that I am taxed less then they are. We are taxed at the same rate and again, in addition to being taxed at the same rate as they are, I'm never going to see a pension and I pay for my own health insurance.

                        Hillary Clinton's Liberal Ranking http://www.dailykos.com/story/2007/8/10/122232/619

                        by tigercourse on Tue Jul 03, 2012 at 07:23:38 PM PDT

                        [ Parent ]

                        •  You don't know what the f*&$ you're talking about. (1+ / 0-)
                          Recommended by:
                          skyounkin

                          Every cop in your town puts his ass on the line every day he or she goes to work. And all of them almost certainly shortened their life by agreeing to take the job.

                          Any point you argue is weakened by the rampant stupidity of stating otherwise.

                          •  That is absolute bullshit. Shortened their (0+ / 0-)

                            life? They are retiring at 45 years old with a good 60 grand a year pension.  The only one who is ever in any danger is the guy who directs traffic once in awhile. Our school crossing guards have harder, more dangerous jobs (and sure as shit aren't getting 60 a year when they retire).

                            Again, their major actions in the past 5 years were to arrest out of towners trying to use the pool without a pass and arrest some guy who innocently signed for a package with weed in it.

                            Hillary Clinton's Liberal Ranking http://www.dailykos.com/story/2007/8/10/122232/619

                            by tigercourse on Wed Jul 04, 2012 at 06:43:21 PM PDT

                            [ Parent ]

                          •  Like I said... (0+ / 0-)

                            You don't know what you're talking about.

                            Do you live in a community in which domestic disputes are always so diplomatically resolved that the neighbors never call 911?

                            Do you live in a community in which everyone has 2nd Amendment rights, but there are no guns?

                            Do the cops in your community ever try to enforce traffic laws?

                            If you call 911 and report an emergency, do the cops show up with lights and sirens?

                            Unless you live in paradise, your cops deal with shit every day that gets cops killed on a regular basis, and the fact that no one locally has gotten killed recently does nothing to relieve the stresses that every cop faces every day at work.

                      •  Highway Workers put their lives in far more (0+ / 0-)

                        danger by going to work than Cops do.

                        Police work is stressful and tedious and the hours are long, but it's not very dangerous at all.

                        Thinking the "food stamp challenge" teaches you about being poor is like thinking a camping trip will give you insight into being homeless.

                        by JesseCW on Tue Jul 03, 2012 at 08:18:03 PM PDT

                        [ Parent ]

                •  troll (2+ / 0-)
                  Recommended by:
                  shaharazade, Geenius at Wrok

                  Go shadow a teacher for a couple days. 5 page report due next Friday.

                  six or seven days a week and past 3 in the afternoon

                  How many divisions does OWS have?

                  by Diebold Hacker on Tue Jul 03, 2012 at 05:50:07 PM PDT

                  [ Parent ]

                •  You still haven't explained (2+ / 0-)
                  Recommended by:
                  Larsstephens, TomP

                  why your sitting at home poking at a computer in your spare time merits favorable tax treatment over the talented and dedicated people who teach the next generation, or put their lives on the line for people who generally don't appreciate it.

                  "A lie is not the other side of a story; it's just a lie."

                  by happy camper on Tue Jul 03, 2012 at 05:51:00 PM PDT

                  [ Parent ]

                  •  It doesn't. I pay the same rate. And I think (0+ / 0-)

                    there are other jobs in the country then cop and teacher.  Maybe I don't deserve as much as the people who risk their lives (though not really the cops in my town) or teach the next generation (I really didn't have many good teachers though), do I deserve less then a cashier or the guy flogging shoes made by Indonesian school children.

                    By the way, I shell out 8 grand a year to pay those teachers and cops.

                    Hillary Clinton's Liberal Ranking http://www.dailykos.com/story/2007/8/10/122232/619

                    by tigercourse on Tue Jul 03, 2012 at 05:58:40 PM PDT

                    [ Parent ]

                  •  I am going to amend my somewhat (1+ / 0-)
                    Recommended by:
                    JesseCW

                    negative comments on teachers to say that elementary school teachers deserve alot of credit. However my middle school and highschool teachers might as well have just handed out a couple of text books and never bothered us again.

                    Hillary Clinton's Liberal Ranking http://www.dailykos.com/story/2007/8/10/122232/619

                    by tigercourse on Tue Jul 03, 2012 at 06:15:03 PM PDT

                    [ Parent ]

                •  you have no idea what teachers do (4+ / 0-)

                  One thing they have over you as a realtor and day trader is that their work is focused on improving the lives of others rather than solely their own income. I suppose realtors do help a few others achieve their dreams of owning homes sometimes. Day traders? Not so much.

                  So what you have done is regurgitated a worn-out GOPer talking point while slandering some of the hardest working, most socially-important workers in the country.

                  •  he sounds more like a troll to me. (1+ / 0-)
                    Recommended by:
                    Geenius at Wrok

                    Tell the people you love that you love them when you can. You don't always get another chance.

                    by Melanie in IA on Tue Jul 03, 2012 at 08:07:45 PM PDT

                    [ Parent ]

                  •  My life certainly wasn't improved (0+ / 0-)

                    by the misfortune of having to endure public schools.

                    It certainly hasn't been improved by the police.

                    Anyone who thinks teachers and cops "are the hardest working, most important" members of society has never really though about fixing broken sewer pipes.

                    Thinking the "food stamp challenge" teaches you about being poor is like thinking a camping trip will give you insight into being homeless.

                    by JesseCW on Tue Jul 03, 2012 at 08:23:43 PM PDT

                    [ Parent ]

                •  But you don't actually PRODUCE anything of value (0+ / 0-)

                  do you ?

                  The real estate brokering is a convenience to buyers and sellers.  Is it worth 2 - 4 % of the selling price.  Well, that's what the market bears, so it must be.

                  But the stock trading:  how's that different from any other form of gambling --  being a card counter or a tournament backgamon player.

                  I mean, there's no question you put in a lot of time and effort and suffer a great deal of stress -- as do unemployed actors and unsold artists who get NOTHING for their efforts.

                  And then there's the "danger toil and woe" endured by the lower level members of the Criminal Class.  Do we think none of them are "putting bread on the table" and hoping to better themselves some day?

                •  Most have to (0+ / 0-)

                  work summers also to earn a livable decent income. It's not an easy job and it doesn't pay at all well. Public workers like cops, firemen or teachers work hard for their communities benefit.  I know a lot of teachers and very few of them can afford to take off the summer. Day traders or Realtors who make less then a teacher's salary isn't really the issue here. I also think you are using the same anti-tax, anti democratic reasoning that causes people to reject economic equity in favor of why should the public workers or lazy food stamp recipients get to freeload when I have to ....... fill in the blank. Gamblers shouldn't have to pay taxes on their gains because teachers and cops get a free ride? Gimmie a break.    

            •  Allocation of capital is pretty important (0+ / 0-)

              productive labor.

              Without it we would not have an economy.

          •  They don't. It's not the Governments (2+ / 0-)
            Recommended by:
            NearlyNormal, skyounkin

            business whether you run a shop selling baseball cards or trade stocks on-line.

            As long as your means of making a living are legal, it's not Uncle Sams business what you do.  You should pay the same tax rate as anyone who earns their income in any other way.

            Thinking the "food stamp challenge" teaches you about being poor is like thinking a camping trip will give you insight into being homeless.

            by JesseCW on Tue Jul 03, 2012 at 08:20:12 PM PDT

            [ Parent ]

      •  I don't think many of the commenters here (2+ / 0-)
        Recommended by:
        Utahrd, shaharazade

        understand the distinction between tax rates on short term gains from trading vs long term (>1yr) capital gains rates.  So they think you are full of it.

        There is still the issue of payroll taxes.

        Where are we, now that we need us most?

        by Frank Knarf on Tue Jul 03, 2012 at 08:49:37 PM PDT

        [ Parent ]

  •  I do wonder (4+ / 0-)
    Recommended by:
    Pluto, Dallasdoc, chimpy, Eric Nelson

    how this works when the capital gains and qualified dividends tax rates are 0% for those in tax brackets less than 25%, and 15% for those in tax brackets of 25% and up. Not sure how their overall tax rate is 12%.

    Millionaires who received more than two-thirds of their income from capital gains and qualified dividends faced a 12.0 percent rate.
    The only way I can think that works out if the investment income ALSO includes municipal bond income, which generally is federal income tax free.

    In my mind, income is income is income, and whatever source it comes from, ideally should be taxed at the same [bracket] rate.

    Tell the people you love that you love them when you can. You don't always get another chance.

    by Melanie in IA on Tue Jul 03, 2012 at 03:21:51 PM PDT

    •  See my chart below, Melanie. (3+ / 0-)
      Recommended by:
      Melanie in IA, chimpy, Eric Nelson


      The US is the only industrialized nation where gun ownership is a right, health care is a privilege, infant mortality is on the rise, and the constitution is written to appease slave holders rather than to benefit citizens.

      by Pluto on Tue Jul 03, 2012 at 03:37:31 PM PDT

      [ Parent ]

    •  So you think treasuries and munis should have to (1+ / 0-)
      Recommended by:
      Melanie in IA

      give taxable market rates?  It sems like public financing is one of those areas that needs subsidies.

      Where are we, now that we need us most?

      by Frank Knarf on Tue Jul 03, 2012 at 08:56:43 PM PDT

      [ Parent ]

      •  Well, treasuries' interest (0+ / 0-)

        is taxed at the federal level but exempt at the state. As for munis, yes, actually I think they do require some subsidy generally. That is an exemption I guess I'd leave carved out, unless some better means of financing could be found.

        Fair question, thanks.

        Tell the people you love that you love them when you can. You don't always get another chance.

        by Melanie in IA on Wed Jul 04, 2012 at 04:38:54 AM PDT

        [ Parent ]

      •  Why should treasuries and munis get a subsidy? (0+ / 0-)

        By giving them a tax subsidy you distort the market and push these investments to high marginal tax rate individuals while people with lower tax rates are better of with taxable investments.

        Why would anyone think that's a good idea?

        •  I guess the issuing authorities could always raise (0+ / 0-)

          taxes to cover the increase in interest payments.

          A more general question is why anything at all should receive preference in the tax system.  Home ownership, children, charitable contributions, accelerated depreciation, alternative energy subsidies, etc.

          Where are we, now that we need us most?

          by Frank Knarf on Wed Jul 04, 2012 at 08:54:50 PM PDT

          [ Parent ]

          •  At the total government level this is a wash (0+ / 0-)

            The lower interest rate that the investor accepts for a tax exempt bond is exactly offset by the lower taxes that he pays.

            It is very easy to see this - if investors got a larger tax benefit then they would all pile into tax exempt bonds, driving down their interest rates.  On the other hand, if investors got less tax benefit then they would just invest in taxable bonds and pay their taxes so no one would buy tax exempt bonds, driving up their interest rates.

            So, the major impact of allowing tax exempt bonds is a hidden transfer of funds from the federal government to tax exempt bond issuers.  I don't see why there is any benefit to that.

            At the federal level - for tax exempt Treasuries - it is even stupider.  It is the federal government giving money to itself while making the tax code more complicated and making some of its bonds less attractive to lower income investors.  How stupid.

            The other examples you give, like home ownership, children, etc. are all examples of things we want to encourage so tax subsidies for them make sense.  I just can't see any benefit to the tax break for tax exempt bonds, however.

    •  Even taxpayers in higher brackets pay zero (1+ / 0-)
      Recommended by:
      Melanie in IA

      tax on the amount of capital gains and dividends up to the top of the second bracket or $70,000 in 2012.

      “when Democrats don’t vote, Democrats don’t win.” Alan Grayson

      by ahumbleopinion on Wed Jul 04, 2012 at 01:55:45 PM PDT

      [ Parent ]

  •  All I Know Is (8+ / 0-)

    That every year, Congress "cuts my taxes" and there is a big bill-signing ceremony with the president and lots of photo ops and a celebration ... but my taxes never go down.

    "I'll believe that corporations are people when I see Rick Perry execute one."

    by bink on Tue Jul 03, 2012 at 03:23:30 PM PDT

    •  Your taxes never go down because (14+ / 0-)

      ...you're not making enough money ;-)

      And you don't have wheelbarrows of passive income dumped at your door.


      The US is the only industrialized nation where gun ownership is a right, health care is a privilege, infant mortality is on the rise, and the constitution is written to appease slave holders rather than to benefit citizens.

      by Pluto on Tue Jul 03, 2012 at 03:36:45 PM PDT

      [ Parent ]

      •  How Much Money Is "Enough" Money? (10+ / 0-)

        I don't make enough money to ensure access to quality healthcare or to save enough to provide for a secure retirement.

        At the same time, I'm aware that between my partner and I, we have an income that is higher than the national average. If we can't do it, how do other people plan to do it?

        What a puzzle this has turned out to be!

        Remember ten years or so ago when those retirement calculators were all the rage? Does anybody still believe in those? They expected you to be able to 1) save outrageous percentages of your monthly income and 2) invest in the stock market and make ten percent returns year-over-year. Whee!

        I'm pretty sure that this conundrum can't be resolved, though,  by continually cutting taxes for the 1% while shifting more and more expenses downward onto working people.

        "I'll believe that corporations are people when I see Rick Perry execute one."

        by bink on Tue Jul 03, 2012 at 03:40:57 PM PDT

        [ Parent ]

        •  bink, we are currently taking a huge hit (2+ / 0-)
          Recommended by:
          NearlyNormal, shaharazade

          ...in purchasing power. It's not exactly the same as inflation. It's stranger. There are more extras fees sur-charges and co-pays in life than there ever were -- just to stay in the same lifestyle.


          The US is the only industrialized nation where gun ownership is a right, health care is a privilege, infant mortality is on the rise, and the constitution is written to appease slave holders rather than to benefit citizens.

          by Pluto on Tue Jul 03, 2012 at 07:01:25 PM PDT

          [ Parent ]

          •  and less service or product (1+ / 0-)
            Recommended by:
            Pluto

            for your fees surcharges and co-pays not to mention penalties, late fees and adjustments. Whatever you make it's never enough as 'how much do you have?' is how much everything costs to live decently.  

    •  your taxes went down under Obama (0+ / 0-)

      in 2010 and 2011. well, most people's did. Remember? "Making Work Pay"? tax credit? $400 a person; $800 a family? it wasn't talked about much in the news; people who paid payroll taxes just took a little bit more home every week.

  •  From Ha-Joon Chang's book (15+ / 0-)

    "23 thing they don't tell you about Capitalism":

    Thing 13: Making rich people richer doesn't make the rest of us richer
    Chang calls it "The water that doesn't trickle down."

    "We don't need someone who can think. We need someone with enough digits to hold a pen." ~ Grover Norquist

    by Lefty Coaster on Tue Jul 03, 2012 at 03:24:36 PM PDT

  •  Here's another chart of what that looks like: (10+ / 0-)

    Everything but the dark blue is concentrating wealth based on "money attracts money." What is making it much much worse for the nation, its economy, and the American people is that most of this concentrating wealth is taxed at the very lowest capital gains rate -- if at all.


    The US is the only industrialized nation where gun ownership is a right, health care is a privilege, infant mortality is on the rise, and the constitution is written to appease slave holders rather than to benefit citizens.

    by Pluto on Tue Jul 03, 2012 at 03:34:56 PM PDT

    •  This does not include untaxed interest (3+ / 0-)
      Recommended by:
      Mnemosyne, Pluto, Larsstephens

      income, municipal bond interest income. I am not a tax expert, can't remember if muni income lives in AGI or is excluded from it. Again, if muni income is outside of AGI, then it doesn't show up here -- not in THIS chart but is it part of the total income included in MB's figure above?

      Not sure I am being clear: all of the tax brackets on income shown in your chart above are 15% or greater, not 12%. So how do we get to 12%?

      Thanks -- not trying to start something, just trying to understand the data.

      Tell the people you love that you love them when you can. You don't always get another chance.

      by Melanie in IA on Tue Jul 03, 2012 at 03:44:15 PM PDT

      [ Parent ]

      •  Yes, you are clear. (2+ / 0-)
        Recommended by:
        Melanie in IA, JesseCW

        I'm sure munies are dragging the rates down below 15 percent. That's a really good insight.

        I'm not an accountant, either ;-) And I tend to focus on macro issues. So, your guess is as good as mine.


        The US is the only industrialized nation where gun ownership is a right, health care is a privilege, infant mortality is on the rise, and the constitution is written to appease slave holders rather than to benefit citizens.

        by Pluto on Tue Jul 03, 2012 at 06:57:24 PM PDT

        [ Parent ]

  •  It is a strange system indeed (9+ / 0-)

    where you get taxed on your own labor, but not on unearned wealth that can only come from the contribution of society as a whole ("capital gain").

    Fake Left, Drive Right . . . not my idea of a Democrat . . .

    by Deward Hastings on Tue Jul 03, 2012 at 03:35:01 PM PDT

    •  Esp. when conservatives constantly bleat about (0+ / 0-)

      how "when you tax something, you get less of it!"

      Just to be clear, long-term capital gains ARE taxed when realized, but at a lower rate.

      "Push the button, Max!" Jack Lemmon as Professor Fate, The Great Race

      by bartcopfan on Thu Jul 05, 2012 at 10:30:45 AM PDT

      [ Parent ]

  •  Very timely (4+ / 0-)
    Recommended by:
    Supavash, Chi, jennifer poole, skyounkin

    When you examine more closely, the additional revenues which will be exacted by the ACA and where they actually come from:

    http://www.politifact.com/...

    On the 10-year timescale, far and away the largest single contributor to the new revenue, is the 3.8% investment profits tax for people making more than $200K ("Unearned Income Medicare Contribution on 3.8% on investment income for taxpayers with AGI in excess of $200,000/$250,000 (unindexed) ................", about $210B over 10 years).

    The mandate penalties are a fraction of this amount.

    So be on the lookout for pundits deftly crossing the streams and claiming that there is a massive new middle class tax in this, when there simply isn't.

    •  This is what really made Republicans mad. (1+ / 0-)
      Recommended by:
      skyounkin

      Not only did President Obama get health care reform passed, he paid for it with a tax on investment income of high earners.  How dare him?  Funny how that fact never seems to be mentioned in all the hysteria.

      “when Democrats don’t vote, Democrats don’t win.” Alan Grayson

      by ahumbleopinion on Wed Jul 04, 2012 at 02:00:06 PM PDT

      [ Parent ]

  •  The vast majority of my income comes (0+ / 0-)

    from day trading. If you want me to start paying more then 35% (not including state taxes by the way) maybe you guys could start paying me a living wage for my actual job (which seems to be more of a community service at this point).

    Hillary Clinton's Liberal Ranking http://www.dailykos.com/story/2007/8/10/122232/619

    by tigercourse on Tue Jul 03, 2012 at 03:46:33 PM PDT

    •  Your comment confuses me, if you're a day trader (4+ / 0-)
      Recommended by:
      Chi, Eric Nelson, JesseCW, skyounkin

      you're taxed at your ordinary income rate anyways. Only long term capital gains (those held for more than a year) are taxed at the lower rate...

      •  Believe me, if someone wants to raise the (0+ / 0-)

        long term capital gains/dividend tax, they also want to raise short term gains taxes. Particularly since short term gains are generally blamed for "market volatility".

        Hillary Clinton's Liberal Ranking http://www.dailykos.com/story/2007/8/10/122232/619

        by tigercourse on Tue Jul 03, 2012 at 04:12:06 PM PDT

        [ Parent ]

        •  They can't raise short term capital gains taxes (5+ / 0-)

          unless they raise ordinary income rates, they are tied together, unless you count the surcharge on financial transactions that has never been bandied about seriously by anyone within the administration, it has been more of a liberal leaning economist point of view that has yet to gain mainstream traction. I guess technically, you could say that this is another area where the Ryan budget could actually raise taxes more than the Obama plan, because it would lower the threshold of income at the lower end to get "everyone" at the bottom paying their fair share. But your concern about short term is the type of unwarranted fear that Republicans love. The only area that could see a raise that you mention is the qualified dividend rate for domestic holdings, but again, usually day traders aren't trading for dividends all that often.

          •  You make a good point. And I am a (0+ / 0-)

            fearful person, sometimes warranted, sometimes not.

            I'm still pretty sure that if the more liberal/populist people in our party had their way, I'd pe paying 90% on what I make.

            Hillary Clinton's Liberal Ranking http://www.dailykos.com/story/2007/8/10/122232/619

            by tigercourse on Tue Jul 03, 2012 at 04:44:04 PM PDT

            [ Parent ]

            •  I won't disagree with that, but fear not this (0+ / 0-)

              conversation was my only point. So many people are unaware of all these little nuggets they insert in the tax code so everyone runs around with misconceptions about what will hurt or help them. Best of luck with the trading. Hopefully the markets stay hot, although I'm liking emerging markets again after a couple bad years as there appear to be more value than the US markets, which seem close to capped (of course I went heavy in banks in 2008 when I thought the government would step in weeks before they did and got hammered, so what do I know).

            •  Even in the days when the tax rate.... (10+ / 0-)

              ...was nominally 90%, the effective rate was in the 50%tiles. And that's the marginal rate on income above a certain level, not your entire income.

              Don't tell me what you believe, show me what you do and I will tell you what you believe.

              by Meteor Blades on Tue Jul 03, 2012 at 05:27:26 PM PDT

              [ Parent ]

            •  And even if they did implement a per transaction (0+ / 0-)

              tax/fee I doubt you do enough trading for it to matter.  Let's put it this way, if there was a penny per trade/transaction tax (which is actually quite high, it would probably be more like a hundredth of a penny) would you even notice it?  Let's put it this way, do you insist on having fiber everything because making trades at "only" 80,000 miles per second isn't fast enough for you?

              There is no saving throw against stupid.

              by Throw The Bums Out on Wed Jul 04, 2012 at 02:12:51 PM PDT

              [ Parent ]

        •  How does day trading benefit society? (1+ / 0-)
          Recommended by:
          skyounkin

          How many divisions does OWS have?

          by Diebold Hacker on Tue Jul 03, 2012 at 05:53:58 PM PDT

          [ Parent ]

          •  How does almost any job in this country (1+ / 0-)
            Recommended by:
            Utahrd

            benefit society other then giving the person doing that job a way to live? Making someone a cup of coffee hardly benfits society, let's can everyone at Starbucks. Cigarettes certainly don't help anyone, let's get rid of all the farmers, advertisers, tobbacco shops and middle men. I honestly don't need anyone to check me out at the supermarket, let's fire all but one person to make sure the machines keep running. Alot of people in this country eat too much, we should close down 1/5th of the restaurants, Deli's and Farms.

            Nurses, Doctors, some teachers, some police officers, the military and other then that, it's all just an excuse to push money around.

            And I suppose I could argue that day trading benifits society by providing liquidity in the market, which might just be a bunch of bullshit.

            Hillary Clinton's Liberal Ranking http://www.dailykos.com/story/2007/8/10/122232/619

            by tigercourse on Tue Jul 03, 2012 at 06:25:00 PM PDT

            [ Parent ]

          •  A better question might be, how do capital markets (2+ / 0-)
            Recommended by:
            NearlyNormal, skyounkin

            benefit society?  I seem to remember a bit of ink spilled on this topic.

            Where are we, now that we need us most?

            by Frank Knarf on Tue Jul 03, 2012 at 09:01:57 PM PDT

            [ Parent ]

            •  Do you think Google, Microsoft, Facebook, Apple (0+ / 0-)

              IBM, Dell, etc would exist without capital markets?

              Mostly they would not and we would not have a modern society.

              If we greatly shrunk and limited the capital markets then they would only be open to the rich and the democratization of American capital which has allowed the majority of Americans to own stock and share in general economic growth would be eliminated.

    •  If you're making enough on your day-trading (1+ / 0-)
      Recommended by:
      skyounkin

      to be in the top tax bracket, then yes I want you to be paying that top marginal rate.  You'll still be making plenty of money.

      “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

      by jrooth on Wed Jul 04, 2012 at 01:33:43 PM PDT

      [ Parent ]

  •  This is exactly right. (5+ / 0-)

    Another issue I hope will be addressed some day is the Estate Tax.  No less a figure than Adam Smith argued that the amassing of great family wealth would lead to the establishment of dynasties, aristocracy, and the downfall of democracy.  He felt that a severe, confiscatory Estate Tax was the right answer, as it would force the sons of wealth to create wealth of their own, rather than simply rent-seeking.

    Gosh, that sounds like an idea Republicans could get behind!

    Early to rise and early to bed Makes a man healthy, wealthy, and dead. --Not Benjamin Franklin

    by Boundegar on Tue Jul 03, 2012 at 04:26:51 PM PDT

    •  No Cayman Islands yet (1+ / 0-)
      Recommended by:
      Larsstephens

      In theory, Smith is right.

      But back when Adam Smith was writing, you couldn't move a big chuck of your assets to the Cayman Islands with a couple of clicks of a mouse.

    •  Estate tax is getting less and less (0+ / 0-)

      effective as people become mobile and international marriages become more common.

      I could probably add an EU citizenship to my passport based on my father's former Eastern European nationality.

      When my children were born we were able to pick and choose between 3 nationalities based on where they were born, my US citizenship, and my wife's nationality.

      If estate taxes become confiscatory the global rich will start managing citizenship of their children.  

      My children currently own nothing.  I could move to Singapore, get them Singapore citizenship, and give up their US citizenships with no tax consequences.  If US tax policy changes to threaten our family's long term financial well being I will consider doing something like that.

  •  Important issue (4+ / 0-)

    That you keep on highlighting...we have the facts on our side but do we as a society have the will power to break the grip the wealthy have over us?

    Joseph Stiglitz's new book "The Price of Inequality: How Today's Divided Society Endangers Our Future" discusses the many ways that this inequality is hurting our society and why and how it is growing.

    Here is a short interview he did with Truthout that highlights and discusses the issues we face.

    The Plutocratic States of America, the best government the top 1% and corporations can buy. We are the 99%-OWS.

    by emal on Tue Jul 03, 2012 at 04:51:02 PM PDT

  •  The current 15% capital gains rate is too low. (3+ / 0-)
    Recommended by:
    ahumbleopinion, david78209, vzfk3s

    However, there has been a preferential rate for long-term capital gains for a long time. It wouldn't surprise me if the Congress hesitated before letting it go back up to the same level as ordinary income rates.

    Personally, I'm retired and my investment income is paying my bills. It's not a Mitt Romney level of income, but enough so I'm out of the bottom tax brackets. I would sure notice if the tax rate doubled next year. On the other hand, I fully realize most retired people are not supplied with a lot of taxable investments, so I don't really expect the tax code to accommodate the small minority who are. And I know full well that I've benefited over the past decade from having an exceptionally low rate, which was never a sustainable policy.

    •  The rate goes up from 15% to 23.8% next year... (0+ / 0-)

      ...maybe, if I read this right and Congress doesn't change things.

      Right now, the maximum federal tax rate on long-term capital gains and dividends is 15 percent. In 2013, the top rate is scheduled to go up to 20 percent as the "Bush tax cuts" expire. Starting in 2013, all or part of the net investment income, including long-term capital gains and dividends, collected by high-income folks can get hit with a 3.8 percent "Medicare contribution tax." Therefore, the top federal rate on long-term gains and dividends for 2013 and beyond will be 23.8 percent (unless Congress acts to extend the 15 percent rate).
      http://www.bizactions.com/...
      In that link, scroll down to the second item under Changes Taking Effect in 2013.

      I hadn't heard a word about this being in the "Obamacare" bill, but I bet it's one reason rich conservatives were so upset about it.  This one item could make the tax code considerably less favorable to them -- and that much better for the 99.9%.

      We're all pretty strange one way or another; some of us just hide it better. "Normal" is a dryer setting.

      by david78209 on Wed Jul 04, 2012 at 02:23:50 PM PDT

      [ Parent ]

  •  French Nobility was exempt from taxes (2+ / 0-)
    Recommended by:
    TomP, skyounkin

    before The Revolution.

    It worked out very very well for them in the long run...right?

    Thinking the "food stamp challenge" teaches you about being poor is like thinking a camping trip will give you insight into being homeless.

    by JesseCW on Tue Jul 03, 2012 at 08:13:52 PM PDT

  •  Since there is an argument for favoring longer (0+ / 0-)

    term investment vs short term trading, and since short term gains are never likely to be taxed at higher rates tha other income, we will probably see LTCG continue to be lower.

    One way to adress this is to add progressivity to LTCG.  A middle income rate of 15% might make sense but high income investors should pay more.

    Where are we, now that we need us most?

    by Frank Knarf on Tue Jul 03, 2012 at 09:09:17 PM PDT

  •  It'll start trickling any minute- well, I give it (0+ / 0-)

    a friedman unit or so and all that investment in our job creators will pay 10 times the dividend in the long run...just not for us.

    Slow thinkers - keep right

    by Dave the Wave on Wed Jul 04, 2012 at 12:51:49 PM PDT

  •  Index for inflation, at least (0+ / 0-)

    Long-term capital gains include the increase in the nominal value of your home after you've lived there many years.  Retirees nowadays may have homes worth $500,000 that they bought 30 years ago for $100,000.  Should the be taxed on $400,000 of income when they sell?  I don't think so.  If it's a genuinely long-term gain, then it should at least be indexed for the reduced value of hte dollar.

    The one-year rule is very generous to the rich, but some LT treatment is rational.

    •  Uh ... the way it actually works: "they're not" (0+ / 0-)

      taxed, that is.

      There's  already a 1-time exemption from Capital Gains tax on the "sale of a primary residence."

      Now, if we're talking about long term commercial investments in real estate or enterprise ... you've put your finger on exactly why the Austrian School of economics considers Inflation to be the greatest evil afflicting mankind since The Fall.   It's hard to project actual rates of return when the buying power of the currency fluctuates unpredictably.

      •  One-time exemption is inadequate (0+ / 0-)

        The primary residence is the most obvious example of something where there's a time value of money impacted by the LT tax.  In fact it can be too low -- the effective rate on something held through 300% of inflation is higher than on short-term income.  But there are other long-term investments.  Middle-income people hold income property too. I bought a cheap condo when I was in my 20s and held it for over 30 years.  I am no Donald Trump but long-term tax treatment helped, and it allowed me to keep the place on the affordable end of the rental market for years, with a low-income Section 8 tenant.

        •  I guess that's how "class struggle" comes into it (0+ / 0-)

          I'm coming from a significantly Labor-Left  ideology ... even though these days I am ... ... in a very small way ...  an "employer/job creator"

          Wealth is produced by the action of labor on resources.  The role of Capital is to organize and consolidate both labor and resources. Without the brains and brawn of Labor nothing is grown,  nothing is built.  

          Investors  are more socially valuable than Speculators" if only investors initiate new enterprises, speculators parasitize  what Investors have financed and Labor has created.

          But NEITHER Investor or Speculator is (morally?)  entitled to quite the consideration due the "saver" who puts aside a portion of what they earn, so as to survive when they are no longer able to sell their brain or muscle to employers or clients.

          (Naturally, if those without Property are simply fungible and expendable labor units ... the whole argument collapses and we say, like  Alexander Pope:

          Get place and wealth, if possible with grace;
          if not, by any means get wealth and place.
          though I suspect that Pope was being ironic ... not to mention cribbing from some Ancient Roman aphorist.

          So ... disinterestedly considered ...  inflation is one of the many risks an investor runs -- along with fire, flood and Act of Public Enemy.

          Your real estate investment might have lost some or all it's value depending on economic and demographic changes in the surrounding area.  BUT it might have greatly increased in value during the same period -- more than keeping pace with inflation.

          It is ... supposedly ... the acceptance of such risks that entitles the investor and the speculator to the rewards of Ownership, at all.  Or at least, so say the Professors in the Business Schools.

          My question would be, on what basis  are you (or any investor)  entitled to a guarantee that your investment would "only go up, never down" and that the gains would somehow be protected from monetary depreciation -- of which "always up never down" has been more nearly true for the past 400 years or so.

          Perhaps there IS  a question whether the profits of "SMALL"  investors ought to be protected by some Cost of Living/Value of Money  scheme or other ... which in turn begs the question "By WHOM should those profits be guaranteed,  FOR WHOM and TO WHAT DEGREE?"

          But, presumably, that's what "Austrian/Chicago School  Post-Keynesian economic policy is supposed to be doing for ALL members of the Investor Class -- however great or small.

          Raising yet another question:  What makes it proper that investments deserve protection (provided by Banking/Government, whereas wages ought to be determined in an unfettered "free market?"

          (Tentative answer:  "Wealth is to Power as Matter is to Energy, according to Einstein")

  •  it's not called trickle down for nothing. n/t (1+ / 0-)
    Recommended by:
    TomP
  •  Under Clinton, you had 30 days (0+ / 0-)

    to reinvest after a sale to avoid the (higher-than-current) capital-gains tax. This propped-up the stock market during the Clinton years, due to the incentive to reinvest created by the (higher-than-current) capital-gains tax. And investors made shit-loads of money off the stock market during the Clinton years, while constantly whining about the high capital-gains tax (which was creating the incentive for investors to keep money in the stock market).
    They can’t see an inch in front of their noses.

  •  Vying for "undecided voters" votes (1+ / 0-)
    Recommended by:
    maryabein

    ..is just so damn hard. It's like potty-training a dog that actually likes crapping on your kitchen floor.

    I want a living planet, not just a living room.

    by Anthony Page aka SecondComing on Wed Jul 04, 2012 at 01:06:39 PM PDT

  •  Why is it (1+ / 0-)
    Recommended by:
    ahumbleopinion

    before the tax rebellion middle class taxes averaged out at 14-20% depending on what state you lived in but after the tax rebellion middle class taxes have nearly doubled?

    Why is it that before the tax rebellion corporations paid 46% of all revenues and  personal income tax paid 42% of all revenues but after the tax rebellion corporations only pay 8% of all revenues and personal income taxes pay 87% of revenues?

    Why is it some Mexican strangers buys Mitt Romney a multi-billion dollar company that he gets tens of millions of dollars a year from decades after he left the company and nobody calls that an entitlement but the cripple down the street gets a voucher for a flop house hotel and sfood stampsamps and he is somehow part of the entitled class?

    Where there is no vision, there is no hope. George Washington Carver

    by Amayupta yo on Wed Jul 04, 2012 at 01:32:26 PM PDT

  •  "Socialism for the rich" (1+ / 0-)
    Recommended by:
    jrooth

    So very tired of "socialism for the rich" and being told that they deserve it because they're rich job creators. It's so tiring that for some reason being rich has become a character trait to be respected above all others.

  •  It's truly ridiculous (0+ / 0-)

    That capital gains have a lower federal income tax than earned income. Even if they were the same, they would still be taxed significantly lower because of Social Security taxes. Of course the Democrats are too busy capitulating on other issues to do anything about this.

    "Victory means exit strategy, and it's important for the president to explain to us what the exit strategy is." - George W Bush

    by jfern on Wed Jul 04, 2012 at 02:08:29 PM PDT

  •  Problem is, money doesn't trickle. (0+ / 0-)

    Can any serious economist, looking at 2001-2010, claim that the trickle-down theory is anything other than a lie?

    "The test of our progress is not whether we add to the abundance of those who have much. It is whether we provide enough to those who have little. " --Franklin D. Roosevelt

    by jg6544 on Wed Jul 04, 2012 at 02:55:31 PM PDT

  •  NOTE: Capital gains is ALREADY tax-advantaged, (0+ / 0-)

    even at the same marginal income tax rate, in that it can be deferred, i.e. the tax isn't paid until the appreciated asset is sold and the gain actually 'harvested'.  Until then, the gain will accrue untaxed.  This is a phenomenon that should be familiar to those w/ pretax-IRAs and 401(k)s who receive immediate tax advantage (income tax deductibility or reductions in taxable income) in exchange for future tax liability.

    My apologies if this repeats any earlier comment(s), but I wanted to post this before I reviewed 100+ comments.

    "Push the button, Max!" Jack Lemmon as Professor Fate, The Great Race

    by bartcopfan on Thu Jul 05, 2012 at 10:11:07 AM PDT

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