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As the end of the year approaches and the fiscal cliff looms, there is a rare bipartisan opportunity to do the right thing in this lame duck session. And while the concept of bipartisan outreach within the Republican ranks lasted about a day or two after the election, the quick return to GOP absolutism is more about pride and keeping the base happy than good, long-term political sense.

The congressional Republicans (and indirectly their corporate masters) have had the American people smack them upside the head with a clear message:  the ideology of perpetual gridlock is ruining our country and the GOP is largely to blame for it. Despite all their messaging through Fox News, and the less obvious corporate tilting of other mainstream news sources, the GOP can’t spin their way out of the stain they’ve left on Congress.

The GOP stand against allowing more tax revenue, cemented in place by Grover Norquist, can kill the Republican Party for a generation if it remains unyielding. Although it’s not in his nature, Grover Norquist will just have to accept that the pledge he demanded of congressional Republicans can no longer trump the will of the people. And politicians that intend to survive the downward spiral that the GOP is experiencing must break ranks on this issue or be pulled down the drain as well.

President Obama and the Democrats have already floated a bill to extend the Bush tax cuts to those making under $250,000 but that was held hostage by Republicans, demanding that the wealthy get the same deal despite the fiscal cost - and their debt reduction hot air.

But now, the GOP has lost its leverage in this battle. Despite that, the Democrats can be the adults in the room and do actual negotiating, taking the lead and the credit for what Americans will come to see as the right course of action in fending off the financial austerity triggers that kick in at the first of the year if nothing is done.

Although there are loads of other fiscal factors such as war and education spending, I’m going to focus on altering tax law including a new “1000 Families” top tax tier and another notch at the 100 Families level. These tiers are based around the minimum that a lower middle class family of four can survive on:  about $35,000. See what you think of these ideas and how they might play on both sides of the aisle:

-the Bush tax cuts remain for those making up to $350,000, not $250,000
-from $350,000 to $3.5 million per year, the tax rate will be at 38%, still lower than the 39.6% of the top tier during the Clinton era
-from $3.5 million to $35 million, the 100 Families rate will apply:  43%
-from $35 million on up, the 1000 Families rate will be 72%
-liquid asset capital gains will remain at 15% up to $800,000, but thereafter will be taxed at the regular income rate. For hard assets the transition happens at double that, $1.6 million, and beyond that the rate will be 24%
-the baseline for all corporate tax rates will go down to 28%
-ALL OFFSHORE CORPORATE TAX HAVENS used to shield companies from paying US taxes will be discontinued. If any business has more than 60% of its employees and/or 60% of its gross revenue within the US, there can be no more tax dodging
-the shielding of personal taxable income in offshore accounts will also end

When you put all these factors together, this could be the endpoint of a successful negotiation. Now I’m not looking to start negotiations by giving up 80% of what we want, like what Obama did by tossing out single-payer even before the Obamacare battle began. But there are ideas in these proposals that DON’T lump the “pretty rich” in with the “super rich.” And regarding the “small business owner” mantra that the GOP always throws around, these numbers prove that Democrats are at least listening even if we don’t agree on where the threshold of wealthy is. We’ve kept the status quo or even done better for small businesses and many millionaires, as well as medium-level players on Wall St.

But this election was clearly a referendum on the huge disparity in wealth that Republicans have been pushing for in their legislation and rhetoric. And by presenting these new top tax tiers in a tangible frame of reference, labeling wealth in terms of 100 and 1000 families, most rational people could see that increased taxation at these levels is reasonable.

I don’t know how the numbers would work specifically in this scenario in terms of increasing revenue, but my guess is that they’d provide a sizable surge that could help out strapped states, start needed infrastructure projects, and add momentum to the green energy revolution.

If the Democrats can champion a deal like this and have the House sign off on it, so many good things can happen. A teetering economic recovery can be strengthened. The Republicans can actually gain political ground by showing actual bipartisanship. Yes, the super wealthy can complain, but to be fair the impact on them will be far less than they’d ever admit.

The other thing that will benefit America is that GOP stonewalling as a political strategy will be shattered, and the public’s reaction for that may force the Republican Party towards splintering with the tea party base clinging to the Rove/Limbaugh-induced hard line approach, allowing it to wither away in indignant pride. For the GOP to remain relevant, they will have to chuck their tainted leaders like Boehner, Cantor, and McConnell and pretend to reinvent themselves using rhetoric that’s more centrist while still pulling subtly towards the corporate agenda that keeps the perks and campaign cash flowing. They’ll have to start playing smart instead of merely proud. And if some actual true conservatives do rise from the dust, I wish them success in remaking their party. Because the unearthing of what the current GOP has done, and plotted to do, is still in its infancy. Most of America knows about the iceberg, but will be over time amazed at just how much devious and un-American bulk lies beneath the surface.

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Comment Preferences

  •  Tip Jar (5+ / 0-)

    Winner of the American Dream Scholarship by Democracy for America and Rebuild the Dream for the concept of miniprotesting. This unique approach to curbside activism is fleshed out at http://miniprotests.com.

    by ProgToddNorCal on Tue Nov 20, 2012 at 01:38:57 PM PST

  •  The 72% rate (3+ / 0-)
    Recommended by:
    VClib, DamselleFly, bosdcla14

    would not make it out of the gate. I don't think you could get 10% of America to agree with you on this. I understand there's plenty of historical precedent, but most people aren't well enough aware of and/or comfortable with that history to agree with it.

    My guess is that the top rate would need to top out somewhere between 49 and 55%, and even then the 1% would absolutely go ballistic.

    Not sure what you mean about 100 families (3.5-35M) and 1000 families (35M+). Are you referring to how many families fit in the range? Are the family #'s reversed here? Aren't there more in the 3.5-35 than at 35+?

    As for upping the $250K to $350K, I'm guessing you are losing A LOT of revenue there.

    On capital gains, I would think the rate should increase well below $800K, perhaps $100K, and revert to normal income tax rates around $500K.

    The most important thing I see MISSING from all of these discussion is AMT's. Tax rates for long-form filers are very squishy unless there are AMT's. I had suggested something like 24% at $250K plus 1% per $4M thereafter.

    The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries.

    by Words In Action on Tue Nov 20, 2012 at 01:53:39 PM PST

    •  Took me awhile to figure out the "families" tiers (3+ / 0-)
      Recommended by:
      DamselleFly, Words In Action, rmx2630

      Finally got the general sense of it:

      These tiers are based around the minimum that a lower middle class family of four can survive on:  about $35,000.
      If you multiply that amount by 100 (i.e. 100 families worth of annual income) you get diarists first tier at $3.5 million; mutliply by 1000 and you get #35M

      "...you can’t find any oxygen from outside the aircraft to get in the aircraft, because the windows don’t open. I don’t know why they don’t do that. It’s a real problem." Mitt Romney

      by Catte Nappe on Tue Nov 20, 2012 at 02:04:35 PM PST

      [ Parent ]

    •  What's amazing is that Ike had a 91% tax bracket (0+ / 0-)

      And it was 72% under Nixon.

      But I agree with you---no one would go for that today.

      •  bosdcia - apples and oranges (2+ / 0-)
        Recommended by:
        Utahrd, bosdcla14

        The Tax Reform Act of 1986 so fundamentally changed the US tax code for individuals that comparing rates prior to 86 and those after is misleading. Prior to TRA86 you could shelter your earned income and drop your effective rate as low as you desired. For the top 1% the effective rate was less than half the top marginal rate. Post TRA86 you can't shelter earned income so comparing the two sets of rates is comparing apples to oranges.

        "let's talk about that"

        by VClib on Tue Nov 20, 2012 at 05:53:31 PM PST

        [ Parent ]

        •  1980 top rate 70%: effective rate 22.3% (2+ / 0-)
          Recommended by:
          nextstep, VClib
          For the top 1% the effective rate was less than half the top marginal rate.
          Less than half, less than a third.

          FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Tue Nov 20, 2012 at 07:24:03 PM PST

          [ Parent ]

          •  Roger - thanks for the data (1+ / 0-)
            Recommended by:
            Roger Fox

            I would love to read the source if it has more pre'86 effective rates.

            "let's talk about that"

            by VClib on Tue Nov 20, 2012 at 08:11:48 PM PST

            [ Parent ]

            •  tax policy center 2nd table (1+ / 0-)
              Recommended by:
              VClib

              not exactly effective top rate, but top 1% earners effective rate.

              http://www.taxpolicycenter.org/...

              Actually I had a brain cramp, its 23% in 1980.

              Yeah in 86 the top 1% paid an effective rate of 18.6%

              In 87 they paid 21.7%.

              Look for Clinton's effective rates under the statutory 39.6%, 23-24%, pretty good, but with historically much fewer deductions and exemptions.

              We know we can incentivize capital flow to or away from sectors thru tax policy.

              SO yeah I think 70% has to be brought back, but I dont really want to raise taxes on the uber rich and corporations, if they do good for the community.

              Leveling the playing field is so much BS, removing loopholes makes for a less stable economy.

              Have you ever seen this data?

              http://en.wikipedia.org/...

              A Recession every 4.3 yrs, 28 of 31 lasting 1 to 5 years, Job shedding of 15% to 30%, peak to trough of 20-33%.

              Thats what I think of when I think; unstable economy.

              I have a pdf of a book of economic figures 1790 to 1945, published in 1945 IIRC. Industrial production, how many cars were registered in each year, Maritime tons shipped,  all kinds of crazy stuff.

              I got turned on to the pdf after emailing the Bureau of Economic Analysis, asking for GDP data prior to 1930. They dont have any past 1929, but they sent me in the right direction.

              Prior to 1933, those were different times, infrastructure was by mostly private money. One reason I'm not enthralled by infrastructure banks, they would control the creation of 14 to 18 million jobs, if they spend the 5% of GDP that should be spent.

              FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

              by Roger Fox on Tue Nov 20, 2012 at 08:36:57 PM PST

              [ Parent ]

    •   I think DK and the nation needs to talk about (2+ / 0-)
      Recommended by:
      VClib, UntimelyRippd

      these higher rates.

      I'm really tired of the conversational limitation caused by talking about letting the Bush tax cuts expire.

      39.6% is not going to address increasing income and wealth disparity, there is simply no room to do whats needed without going higher than 55-60%.

      Tax breaks and shelters pre 86TRA were not all bad.

      I dont want more revenue from a change in tax policy, I want a stable economic system, I want the working and middle classes to be able to keep what they earn.

      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Tue Nov 20, 2012 at 04:39:13 PM PST

      [ Parent ]

  •  ProgT - you last point is already current law (3+ / 0-)
    Recommended by:
    coffeetalk, erush1345, johnny wurster

    Anyone who is complying with US tax law pays the same taxes on income from assets domiciled in a "tax haven" as they would if those assets were held in the US.

    Regarding offshore corporate tax havens, the cash held offshore are profits earned outside the US. We are the only country in the G20 that even tries to collect any income tax on profits earned in a foreign country.

    "let's talk about that"

    by VClib on Tue Nov 20, 2012 at 02:07:16 PM PST

    •  Posing a question to you directly - hope you can (1+ / 0-)
      Recommended by:
      Utahrd

      answer.

      If a tax rule is written so narrowly that it can only impact 1,000 filers in a universe of 100,000,000, does it even pass legal muster?

      •  In '62 the top tax tier was at 91% for those (1+ / 0-)
        Recommended by:
        DamselleFly

        making $2 million per year. This was incentive for millionaires to put money back into their businesses and shielding it that way. It went down to 74% before Reagan slashed it to 35%.

        So percentage wise, and in present value terms, the 1000 Families tax tier is beneath prior precedent.

        Winner of the American Dream Scholarship by Democracy for America and Rebuild the Dream for the concept of miniprotesting. This unique approach to curbside activism is fleshed out at http://miniprotests.com.

        by ProgToddNorCal on Tue Nov 20, 2012 at 02:55:11 PM PST

        [ Parent ]

        •  ProgT - why is the US the only G20 country (2+ / 0-)
          Recommended by:
          johnny wurster, Roger Fox

          that doesn't tax corporations on a territorial basis, that is, only on their US activities? If we just joined the rest of the developed world on how we tax corporations we could also tighten up those double Dutch sandwich rules along the way.

          "let's talk about that"

          by VClib on Tue Nov 20, 2012 at 03:00:53 PM PST

          [ Parent ]

        •  ProgT - there is no precedent (2+ / 0-)
          Recommended by:
          Kane in CA, nextstep

          when referring to tax rates prior to the Tax Reform Act of 1986 and those after. TRA86 so fundamentally changed the IRS code as it relates to individuals that any comparisons are meaningless and misleading.

          In 1962 the top 1,000 families were not reinvesting in their businesses they were investing in real estate and oil and gas partnerships that allowed you to write off as much as 4 to 5 times your investment amount against ordinary income. This allowed people who were in the 90% bracket to drop their effective rate to 40-45%. Those tax shelters were discontinued in the TRA86 legislation. There is no historical precedent, post TRA86, for any top marginal federal income tax rate higher than 40%. Trying to compare the pre '86 rates with those after are apples and oranges.

          "let's talk about that"

          by VClib on Tue Nov 20, 2012 at 03:09:01 PM PST

          [ Parent ]

          •  I know you've heard it from me before (1+ / 0-)
            Recommended by:
            VClib

            My "feeling" is we should use the pre 86 TRA ideas....shelters, deductions, exemptions to incentivize domestic investment in emerging tech and markets like Wind, Solar, HVDC grid work, pumped hydro renewable storage, etc.

            I see enormous potential to see capital flow into these investments.

            Could we see 1.5-2.5% of GDP moving in this direction?

            I really dont want to raise taxes on the uber rich per se....keeping effective rates about where they are now.

            FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

            by Roger Fox on Tue Nov 20, 2012 at 04:49:21 PM PST

            [ Parent ]

            •  Roger - structured right I would agree (1+ / 0-)
              Recommended by:
              Roger Fox

              I could build a new business selling tax shelters again!

              "let's talk about that"

              by VClib on Tue Nov 20, 2012 at 05:00:15 PM PST

              [ Parent ]

              •  200 billion a year? (2+ / 0-)
                Recommended by:
                VClib, Utahrd

                Thats a lot of cash, But these sorts of projects have price tags of 1 billion to start.

                1 to 1.5% of GDP would jump start these industries. Solar is still a bit pricey, but offshore wind is really coming into its own, HVDC is off the shelf, and pumped hydro storage systems are old hat.

                (A bit more realistic then I stated before) 1 to 1.5% of GDP would create 2 to 4 million jobs and expand Americas energy portfolio.

                Long term-20 to 30 year returns.

                Otherwise arbitrage rules.

                FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

                by Roger Fox on Tue Nov 20, 2012 at 05:17:44 PM PST

                [ Parent ]

        •  Reagan 28% (0+ / 0-)

          before its was raised to 30% IIRC

          FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Tue Nov 20, 2012 at 03:42:10 PM PST

          [ Parent ]

      •  ISS - It would have to be a specific income (2+ / 0-)
        Recommended by:
        erush1345, ItsSimpleSimon

        number, rather than a specific number of taxpayers. So Congress would have to estimate what annual income number would include the top 1,000 and set the bar at that point. In reality the actual number of taxpayers would likely be more or less than 1,000, but you could likely get within a range of a few hundred. At high enough income levels the number of taxpayers does drop a lot.

        "let's talk about that"

        by VClib on Tue Nov 20, 2012 at 02:57:38 PM PST

        [ Parent ]

      •  IIRC 1938 only one person got to the top rate (2+ / 0-)
        Recommended by:
        ItsSimpleSimon, VClib

        John Rockefeller.

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Tue Nov 20, 2012 at 03:39:27 PM PST

        [ Parent ]

      •  well, probably, but it would be impossible (1+ / 0-)
        Recommended by:
        VClib

        to administer.  and I mean that literally: how could the IRS know who should be hit the tax until they file their returns?  and it would take the IRS ages to sort through them.  

        most of the proposals on the list are nonsense, albeit less obviously insane than that one.

    •  You're wrong about offshore tax havens, VClib (0+ / 0-)

      There are billions in profits that are shielded through having a PO Box in the Cayman Islands. B of A, GE, and Exxon/Mobil paid NO TAXES on tens of billions in profits.

      So, do you think that's fair? It's a loophole the size of Kansas that any big corporation can fall into without a thought, because their lobbyists made it so. Much of that extra profit stays within the boardroom, never trickling down to shareholders.

      Nice try, but the lie won't fly.

      Winner of the American Dream Scholarship by Democracy for America and Rebuild the Dream for the concept of miniprotesting. This unique approach to curbside activism is fleshed out at http://miniprotests.com.

      by ProgToddNorCal on Tue Nov 20, 2012 at 02:45:11 PM PST

      [ Parent ]

      •  ProgT - I mentioned tax havens as it related (3+ / 0-)
        Recommended by:
        Kane in CA, Roger Fox, johnny wurster

        specifically to individuals, not corporations. As I noted the last point in your diary is already US law. The current US IRS code applies to income from assets held anywhere in the world, including "tax havens".  

        "let's talk about that"

        by VClib on Tue Nov 20, 2012 at 03:11:46 PM PST

        [ Parent ]

      •  What of Toyota, Unilever, Samsung (1+ / 0-)
        Recommended by:
        VClib

        and other companies with headquarters in other countries who also operate in the US.

        Should they owe less in taxes to the US just because their headquarters are outside the US?  I think what these companies own in US taxes should be the same regardless of where they call headquarters.

        The most important way to protect the environment is not to have more than one child.

        by nextstep on Tue Nov 20, 2012 at 04:16:08 PM PST

        [ Parent ]

  •  There should be more brackets at the top. (1+ / 0-)
    Recommended by:
    DamselleFly

    The top rate on 2011 income was at $379,000 (approx) which is antiquated and absurd.  It's like having a flat tax on all income over that amount.  There's no reason for a tax code that doesn't remain progressive throughout the upper income levels.

    The capital gains rate shouldn't be so far below the income rates at the upper end. The way I understand the upcoming changes, the cap gains rate will increase from 15% to 20% on all amounts and from 15% to 23.8% on amounts over $250,000.  Again, I'd expect additional brackets at the top.  

    The gap between the cap gains rate and earned income rate should be reduced or eliminated.  Today we have executives who receive non-traditional or non-cash compensation, i.e. in the form of restricted shares of the company stock.  After holding the shares for a specified period, usually two years, the shares can be sold on the secondary market with a capital gains tax due on the proceeds.  This is just a salary or wage disguised to look like a cap gain on an investment so that the earner can benefit from the lower cap gains rate.  

    Earners who are in the 35% bracket today have an incentive to attribute their income to an investment which will be taxed at 15%.  It's hard to believe that the US can't develop a system to identify income for what it really is.  I saw a statistic recently that the IRS reported on year 2009 income over a million that only 30% of it was categorized as wages/salaries.  For income over 10 million, only 18% of it was categorized as wages/salaries.  When I look at the list of CEOs who make 10, 20, 30 million I have to wonder.  

    I'd also phase out deductions and credits at the top end so that they're reduced to zero at some level of income.  Earners who make multi-millions shouldn't be offered opportunities to undo the progressive intent of graduated rates.

    "Those who deny freedom to others, deserve it not for themselves." - Abraham Lincoln

    by leftreborn on Tue Nov 20, 2012 at 02:31:49 PM PST

    •  Great info, Leftreborn (1+ / 0-)
      Recommended by:
      DamselleFly

      Well said. Thanks for contributing to the thread with this.

      Winner of the American Dream Scholarship by Democracy for America and Rebuild the Dream for the concept of miniprotesting. This unique approach to curbside activism is fleshed out at http://miniprotests.com.

      by ProgToddNorCal on Tue Nov 20, 2012 at 02:58:42 PM PST

      [ Parent ]

      •  Now that we know Boehner appointed Lyin' Ryan (0+ / 0-)

        to push the Republican agenda I'm anticipating some pretty shocking counter-offers to the Democrats' position.

        The media is already reintroducing his budget from earlier in the year.  He proposed two brackets for all income: 10% and 25%.  He didn't specify how they would be applied.  

        For 2011 income, the floor of the 25% bracket was at $69,000.  It's easy to see the effect of collapsing the 28%, 33%, and 35% brackets into the 25% bracket.  If the threshold remained at $69,000 then revenue from income over that amount would be reduced. And if the plan claims to be revenue neutral, the tax on income under $69,000 would have to be raised from the current level to compensate.  But with only one other bracket, 10%, the math doesn't work.  Does this sound familiar?

        So I began playing with the numbers to derive a model that would be revenue neutral with just two tax brackets.  I'm thinking about doing a diary on kos about it.

        "Those who deny freedom to others, deserve it not for themselves." - Abraham Lincoln

        by leftreborn on Tue Nov 20, 2012 at 03:40:39 PM PST

        [ Parent ]

    •  leftreborn - regarding executive stock options (3+ / 0-)
      Recommended by:
      johnny wurster, nextstep, Roger Fox

      There really is no capital gains benefit. Executives receive non-qualified stock options (the incentive stock options are only available for small amounts are aren't used for executives of established companies). An executive receives an option to buy 10,000 shares of Company A at $10 share, vesting over four years. Each year as the stock vests the executive is deemed to have received compensation and that shows up on his W2, even though he has received no cash. At the end of the vesting period he has recognized income on the option to this point and let's say the stock is now $15/share. Now he decides to exercise the option. He pays the company $10/share in cash and has ordinary income on the difference between the option price and the current market price. So at this point our executive has paid income tax on the $15, has spent $10 share in cash and has no proceeds. He now must wait through a holding period, and hope the stock appreciates, to actually be eligible for capital gains treatment and that will be from his basis of $15, not $0. That really isn't much of a capital gains benefit, if any. The reality is that almost all non-qualified options are held until the executive decides to sell and the option exercise and sale are done on the same day and all the gain is taxed at ordinary income rates.

      "let's talk about that"

      by VClib on Tue Nov 20, 2012 at 03:28:39 PM PST

      [ Parent ]

      •  I'm talking about Rule 144 stock aka restricted (0+ / 0-)

        I know some companies offer employee stock option purchase plans.  That's a different ball of wax and it's not what I was explaining.  

        I was referring to executives who are offered a choice to take their compensation in a payment other than traditional cash.  Instead, the company issues shares in the executive's name with a "restricted" legend that prohibits its sale for a period of two years. At the end of the mandatory holding period, the restriction is removed and the stock is the same as any other common shares.  It can be sold on the exchange where it trades or it can be held indefinitely or until market conditions are favorable.  

        Since the shares were not acquired by buying them at the market, when they're sold a zero cost basis is used to determine the gain.  In other words, the cost was zero, and the entire proceeds amount is subject to capital gains, currently at 15%.  For someone in the 35% tax bracket it can be a considerable saving.

        Now, there is some risk because the share price fluctuates at the market and there's no guarantee they won't lose value during the two year mandatory holding period.  But the shares don't expire like options do and there's no obligation to sell them at any time.  

        "Those who deny freedom to others, deserve it not for themselves." - Abraham Lincoln

        by leftreborn on Tue Nov 20, 2012 at 04:09:29 PM PST

        [ Parent ]

        •  leftreborn - that's not how it works (0+ / 0-)

          When you are issued restricted shares you have the vested value of the shares added to your W2 each year and pay taxes, at earned income rates, on the phantom income. When the stock is fully vested your basis is the amount you were taxed on. They are much better than options in that they always have some value, as you note. If the market price is higher than your basis when you sell, and you meet the holding requirements, you are eligible for capital gains treatment however, you are subject to capital loss restrictions if you sell at a price below your basis, even though you paid ordinary income tax rates during the vesting period.

          "let's talk about that"

          by VClib on Tue Nov 20, 2012 at 04:57:04 PM PST

          [ Parent ]

          •  VClib - that may be what it says in the manual but (0+ / 0-)

            I have a feeling there's a little more to it, including some ifs, ands, and buts that make room for the remuneration to be treated differently while remaining legal.  

            "Those who deny freedom to others, deserve it not for themselves." - Abraham Lincoln

            by leftreborn on Tue Nov 20, 2012 at 06:10:47 PM PST

            [ Parent ]

            •  leftreborn - I have been awarded restricted (0+ / 0-)

              stock and have been on compensation committees that have awarded restricted stock to both executives and board members. If there was a way to make these awards more tax friendly I hopefully would have found it, I asked all the right experts.

              "let's talk about that"

              by VClib on Tue Nov 20, 2012 at 06:51:09 PM PST

              [ Parent ]

    •  restricted stock is wage income. (2+ / 0-)
      Recommended by:
      nextstep, VClib

      see IRC 83.

    •  Deductions - exemptions (0+ / 0-)

      to reward domestic investment are nearly MIA since Reagan.

      That was part of New Deal tax policy, it helped create a more stable economy. Every recession from WW2 to the Reagan era was shorter and shallower, and had a recovery that created lots of jobs.

      Since the Reagan era, the 3 recessions we've had (1990, 2000, 2008-2012) have seen the jobless recovery as SOP.

      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Tue Nov 20, 2012 at 05:05:14 PM PST

      [ Parent ]

  •  Tipped for discussion (0+ / 0-)

    rec'ed for cause we do need to talk about repealing the Reagan cuts, frigg the Bush tax cuts.

    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Tue Nov 20, 2012 at 04:33:02 PM PST

  •  Rates have to apply to "unearned" income (1+ / 0-)
    Recommended by:
    Roger Fox

    Marginal federal tax rates nowadays basically apply to "earned" income, like salaries.  The truly wealthy do not get high salaries!  They make their money in the form of dividends, capital gains, and other sheltered income.  High marginal rates under today's tax structure would be largely symbolic, and not in the right way.  (Symbolic of "yes, Americans are dumb, and don't know how to write a tax law.")

    Very high "salaries" are basically limited to ballplayers, movie stars, and similar celebrities.  Industry tycoons are paid in stock, options, and sheltered instruments.  These need to be taxed. Dividends used to be treated as ordinary income.  Bush lowered the rate to 15%, claiming that dividend taxation was "double taxation", since corporations first paid corporate income tax before distributing it.  Of course in practice most corporate taxes are sheltered.  If the highest corporate rate is 28%, then no more than 28% of dividends should be sheltered, not around 60% as now.

    Then there's carried interests, how the hedge fund billionaires make their 15%-taxed money.  While raising the capital gains tax on high gains will help, the proposal still decouples capital gains rates from marginal rates.

    •  KSLaV - if you know how to make (1+ / 0-)
      Recommended by:
      Roger Fox

      stock, options, and executive compensation structured as "sheltered instruments" please let me know. I have, on behalf of others, retained the best lawyers and accountants in the US to help me find a way to have capital gains treatment of any senior, public company, executive compensation and so far have failed. Any help would be appreciated. People who manage investments, in a partnership structure, have several ways to structure compensation to qualify for capital gains treatment, but corporate executives can't, at least based on my experience.

      "let's talk about that"

      by VClib on Tue Nov 20, 2012 at 06:01:39 PM PST

      [ Parent ]

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