$20,000 in today's money is $568K.

"Soak the rich."

Perhaps those of us who have had a bit of success in life should try to assist others to do the same instead of supporting ways to make it harder for those who follow us to do the same (i.e., increasing taxes on the successful, taxing investments at higher rates, etc.).

About a year and half ago I was flying with another pilot who was helping me adjust to my new airplane. We had about 4 hours together and after getting acquainted my new friend gave me chapter and verse on why and how it's impossible to get ahead today. He is highly intelligent, well read and has had a good education. When he finished I simply said, politely and in a normal cockpit volume and tone "Bullsh!t!".

He was quite startled.

I think he was suprised because in our current times our preeminent value seems to be not offending anyone. Translated into normal day to day behavior this means when one doesn't agree one changes the subject or agrees to be agreeable (I see this a lot - oh what a slippery slope!). Instead of doing either of these expected things I took apart his statements one by one. I did it respectfully and apparently with enough persuasion that he agreed to do more research.

On our next flight my friend brought the topic up again. This time we talked about "how" to use the system, with it's tortured and tortuous rules, along with vision, determination, sacrifice and risk to "get ahead". About six months later, flying together again after a long lack of communication, my friend told me about the changes he'd made in his life and financial organization. He'd made a lot of progress and had a lot of plans.

A year having gone by from then he now owns a business, is using the arcane tax code for his benefit, has dramatically increased his assets and fledgling net worth, found a partner for another new venture, quit his job and trebled his pay by becoming an independent contractor and has negotiated his value with another such that his student loans are being paid off early in return for a commitment of part of his time.

He now sees the world from an entirely different vantage point. He's no longer interested in soaking the successful to be fair and wants only the opportunity to take advantage of his opportunities. He has gone from the mindset of the oppressed to one of boundless opportunity.

His story is repeating itself over and over again today. Some of those who are starting today will build new industries and become fabulously wealthy in the process. If they are smart they will find a way to leverage the "system" in doing so. Just as my young friend is. Or, unless guilt, misguided thinking, jealously, envy or poverty pimps corrupt turn us into something we set out 300 years ago not to be.

Well, actually, the long term capital gains rate is effectively up to 23.8% with the ridiculously named "Medicare Contribution Tax". And, the 37% rate on income tax is a bit disingenious when left at that as it's a marginal rate (i.e. that rate is only assessed above a certain net income) not a flat rate on all income as is the case with the long (or short) term capital gains rate plus Medicare contribution. Of course, long term capital gains tax rates have been made regressive as the rate increases from 0% up to $80,800 of marginal income (after deductions) to 15% up to to $501,600 and then 20% above that (assuming married filing jointly. I.E. the "rich" pay more even with capital gains taxes.

And when discussing taxing investment gains and comparing that to taxes on income it would be well to remember that short term gains are taxed at the same rates as ordinary income PLUS the Medicare "Contribution Tax (quotes mine to point out the absurdity of the term and the fact that it means we are already taxing investment more than income).

Well, actually, the long term capital gains rate is effectively up to 23.8% with the ridiculously named "Medicare Contribution Tax". And, the 37% rate on income tax is a bit disingenious when left at that as it's a marginal rate (i.e. that rate is only assessed above a certain net income) not a flat rate on all income as is the case with the long (or short) term capital gains rate plus Medicare contribution. Of course, long term capital gains tax rates have been made regressive as the rate increases from 0% up to $80,800 of marginal income (after deductions) to 15% up to to $501,600 and then 20% above that (assuming married filing jointly. I.E. the "rich" pay more even with capital gains taxes.

And when discussing taxing investment gains and comparing that to taxes on income it would be well to remember that short term gains are taxed at the same rates as ordinary income PLUS the Medicare "Contribution Tax (quotes mine to point out the absurdity of the term and the fact that it means we are already taxing investment more than income).

Well, actually, the long term capital gains rate is effectively up to 23.8% with the ridiculously named "Medicare Contribution Tax". And, the 37% rate on income tax is a bit disingenious when left at that as it's a marginal rate (i.e. that rate is only assessed above a certain net income) not a flat rate on all income as is the case with the long (or short) term capital gains rate plus Medicare contribution. Of course, long term capital gains tax rates have been made regressive as the rate increases from 0% up to $80,800 of marginal income (after deductions) to 15% up to to $501,600 and then 20% above that (assuming married filing jointly. I.E. the "rich" pay more even with capital gains taxes.

And when discussing taxing investment gains and comparing that to taxes on income it would be well to remember that short term gains are taxed at the same rates as ordinary income PLUS the Medicare "Contribution Tax (quotes mine to point out the absurdity of the term and the fact that it means we are already taxing investment more than income).

Equitable...interesting. I would like an explanation of why it is "equitable" for person "A" to pay 2 or 100 or 1,000 times more tax than ordinary middle class person "B". The poor I will disregard for arguments sake.

"Regressive" is generally used as self-evidently wrong. But I wonder how it is that people that spend a lot more and pay a lot more, ie, those with more, are somehow getting way with something. Your (most likely) genuine concern for all 51 of the real poor people in this country, without enough to eat, plus the tens of millions of others with lower income, is easily handled with a small check rebating the sales tax on the spending of $30,000 of income in a year.

Just name calling, no logical argument. Spare me.

More name calling. But explain to me how changing the risk/benefit ratio will fail to affect investment. And no one said "choke off". I seem to have a cogent argument that affecting risk/benefit will affect investment. Your turn.

Is there any "rational, objective, real economic rationale" that there should NOT be differential treatment? This seems to be a truth that you find self-evident.

"It should be so"

--Bill Coyle

You have provided no "rational, objective or real economic rationale" for your belief.

Is there any "rational, objective, real economic rationale" that there should NOT be differential treatment? This seems to be a truth that you find self-evident.

"It should be so"

--Bill Coyle

You have provided no "rational, objective or real economic rationale" for your belief.

We need a VAT on purchases. Get rid of the entire income tax system. Pay for what you use. Some say this punishes the poor but it would certainly make the system very fair in most circumstances.

What is the effective capital gains tax rate when you adjust for the fact that there is no allowance for inflation? Sometimes you lose money in real terms and still owe taxes.

Going back up few since there are two many embedded quotes.

Cannot entirely re-write tax codes. If your reference on "equitable" somehow implies that we should all pay the same taxes independent of income, I am not sure that is terribly realistic.
There are arguments that those in the population who have benefited the most should pay commensurately. There are arguments that we should all pay equally. Not sure that we will ever get away from a system where taxation, absolute dollars, increases with the basis, whether it is assets, real estate, income, etc.

I do not think it is realistic that every one pays the same absolute flat amount.
Then it comes down to rates. Rates should not be differential based on source of income. If we have different rates for cap gains vs ordinary income, why stop there? Why not differentiate based on occupation?

Intent of regressive is not right or wrong. When it comes to taxes, progressive tax rates increase as income goes up. Regressive tax rates increase on lower levels. Sales taxes are absolutely regressive.

Concern here is the impact on the shrinking middle class. We have a serious wage stagnation problem in this country, (independent of the recent inflationary forces). Real wages have stagnated in the past 40 years for many Americans. And not just the backhanded reference to $15 an hour $30k per year. That is a real problem A consumption tax would exacerbate the problem.

I am open to the evidence you can provide where investment will not occur if cap gains rates are increased? It appears to be an article of faith, among many conservatives, that cap gains rates are some hallowed ground that has to be taxed at a lower rate than ordinary income. It is not just your opinion, it is shared by many. I just do not share that opinion. I am willing to bet that if the tax rates are equalized between cap gains and ordinary income it would have zero impact on net investment.

My reference to sophistry is to the entire notion that cap gains taxes need to be lower to spur investment. I apologize if it came off as a personal attack.

We can’t have that, even criminals who don’t report income would have to pay VAT when they spend their I’ll gotten gains.

Historically, when capital gains rates have been increased, tax collection on capital gains has gone down.

What is the effective capital gains tax rate when you adjust for the fact that there is no allowance for inflation? Sometimes you lose money in real terms and still owe taxes.

Historically, when capital gains rates have been increased, tax collection on capital gains has gone down.