That's an assertion, not an argument. Why? Cuz they're different. One is high risk, one is not. One makes jobs, one is the job that is made.

Hmm. Rates are the same for everyone with a sales tax. People that spend more get taxed more. I get that it hits lower incomes harder, but higher incomes pay more. So it a flat rate one way, regressive considered another way, and progressive considered still another way.

Violently agree that the middle class is getting hammered here. Rent takers are making out, and medicine is not exempt. I think that increasing capital gains would not help, but would take more money out of the system and flush it down the toilet and into the septic system that is our government. MAtter of fact, I am against ALL increased taxes of any sort for that reason, given that things are as they are at present.

Not an article of faith, a logical conclusion. All investors I know consider risk and benefit in tandem. Increasing taxes on gains has the effect of lowering benefit. That will reduce investment. No data in my pocket.

Not at all, perhaps I got frisky with my language. If you want to call it sophistry, go ahead and point out the flaws in my logic. I think that the lower cap gains taxes are, the more investment you'll see, and the more jobs and production you'll see.

My proposal for a realistic system of taxation would be a sales tax with an annual rebate reflecting average tax on a family in the bottom 15%. Or perhaps an income tax with a cap of $100,000 paid in.

A question I have is what is the nature of the middle class wage stagnation? Partly due to a much lower cost of doing business offshore/higher costs (regulation, liability, employment law, etc) domestically. Theft of intellectual property contributes, no small amount of which was committed by our good friends and allies the Chinese. What else? Taxing capital gains won't put any money in the working man's pocket, but it might take his job.

What is realistic and what is likely...don't care. Not running for anything.

"Benefitted" seems to take something away from sacrifice. I make a high income. I get taxes a lot. But I get no tax credit for living a crap life for years to get here, working days, nights, weekends and holidays for free...that was my "benefit".

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?[/quote]That's an assertion, not an argument. Why? Cuz they're different. One is high risk, one is not. One makes jobs, one is the job that is made.

Hmm. Rates are the same for everyone with a sales tax. People that spend more get taxed more. I get that it hits lower incomes harder, but higher incomes pay more. So it a flat rate one way, regressive considered another way, and progressive considered still another way.

Violently agree that the middle class is getting hammered here. Rent takers are making out, and medicine is not exempt. I think that increasing capital gains would not help, but would take more money out of the system and flush it down the toilet and into the septic system that is our government. MAtter of fact, I am against ALL increased taxes of any sort for that reason, given that things are as they are at present.

Not an article of faith, a logical conclusion. All investors I know consider risk and benefit in tandem. Increasing taxes on gains has the effect of lowering benefit. That will reduce investment. No data in my pocket.

Not at all, perhaps I got frisky with my language. If you want to call it sophistry, go ahead and point out the flaws in my logic. I think that the lower cap gains taxes are, the more investment you'll see, and the more jobs and production you'll see.

My proposal for a realistic system of taxation would be a sales tax with an annual rebate reflecting average tax on a family in the bottom 15%. Or perhaps an income tax with a cap of $100,000 paid in.

A question I have is what is the nature of the middle class wage stagnation? Partly due to a much lower cost of doing business offshore/higher costs (regulation, liability, employment law, etc) domestically. Theft of intellectual property contributes, no small amount of which was committed by our good friends and allies the Chinese. What else? Taxing capital gains won't put any money in the working man's pocket, but it might take his job.[/quote]

Don
with all due respect lets not forget we call them LAWMAKERS!
we can make better laws.
Eric

I just finished Ben Franklins "Compleated Autobiography".

His discussion of the development of the Government, and the taxation and salaries paid, and his worry of the impact of what is taxed is fascinating....and relevant.


I'm not smart enough to contribute to this discussion, other than what appears to me to be obvious....taxes impact us. Many of us make decisions based on the tax code...simply because "it's not what you make, it's what you get to keep".


I was not an investor when the sweeping tax changes were made in the past...but today, any sweeping change would impact how I placed my (comparatively meager) savings.


Currently, "safe" isn't profitable, and profitable isn't "safe".

Something I seemed to have a vague intuition about but was never taught, I now try very hard to help my young adult sons understand. I tell them.. You can sell your labor or loan your capital. You will do one forever if you are not deliberate about doing the other. By observation, the tax code creates a generous head wind on one and a tailwind on the other.

I find it particularly unsightly when wealthy people advocate for higher taxes so they can pay their fair share... advocating for higher marginal rate income taxes. Never see them advocating for a wealth tax, the equivalent of a working man’s marginal income tax rate increase.

I've already expressed my broad concept issues with the tax code and read some of some of the responses. Some of the most eloquent are nothing but purely disguised BS.

I will say again, our tax codes are pure the most convoluted mishmash of poorly designed and conflicting methods imaginable. Taxes have purposes, like it or not, far beyond the raising of sufficient monies to run our absolutely necessary government functions.

I just encountered a capital gain sale that makes a focused point. I sold a piece of commercial, interstate located, property, a 5 acre parcel next to Tractor Supply. I purchased that property as part of a larger parcel of about fifty acres in 1998. It was hills and hollows and the first thing I did was move about 1.5 million yards of dirt. Over the last 24 years, I have sold parcels for a convenience store, a commercial office, three automobile dealerships, a Waffle House, and developed one site for a self owned government office building.

I have also paid taxes on all unsold property year after year for 24 years. The most recent sale of 5 acres was being taxed yearly at a rate of 2% of what became the sales price. I will now pay combined taxes of about 25% on the sales price less basis, and there is little basis.

Had I put that money in my stock account and held those stocks for appreciation, I would have paid NO TAX on those holdings for the same 24 years.

Most of the tax theory you can read here is purely self serving and does not address any of the true issues facing our country relating to taxes and wealth accumulation today.

But, like my signature says, I'm through wrestling pigs. With the help of a forked stick (an old joke) and four tax lawyers in the family, I've gotten myself and my family comfortable.

Jg

That's true, but capital invested in stocks funds companies that produce goods or services, a net positive for the economy, which in turn spin off great taxes.

Empty land produces nothing for the economy, save for a little dirt work and enrichment of the county coffers.

I see regretfully that a fairly civil conversation has been reduced to name calling again. I've always believed name calling, in its many forms, results from frustration at either the inability to persuade someone to one's position or the inability to express it adequately.

In any event it represents failure. And it illustrates a point I made back many pages ago that taxes do two things: they raise revenue and they manipulate behavior. Well, actually, they do a third: they highlight and magnify differences of opinion.

Differences of opinion are the stuff of politics. And politics is the stuff of everyday conversations like this one, and not just political campaigns. Which is how it should be. Many years ago, after the fall of communism and during a very brief sojourn into efforts at creating a democracy, I spent some time in Russia attempting to help them build the institutions of democracy in Novosibirsk and teach/train/discuss the fundamentals of democracy. The resulting debates where interesting. The Russians, based on their own histories could not, and also would not, accept that political power comes from the ground up. They insisted that it must come "from the center" by which they meant Moscow. At that time they also had over 30 political parties, not based on differences of opinion, but based on the personality of a strong leader. You see the result a quarter of a century later.

But, I digress. Bill's point is valid, which is that investment gains should be taxed no differently than labor. I believe mine is equally valid, which is that investment gains should be treated differently than labor. A discussion in between could be about whether labor should be favored over investment, which is the opposite of today. Regardless of where one comes down on this it's important to understand that there are consequences and outcomes of those choices. Some of them seem obvious. Many are unintended consequences.

The genesis of the debate was an assertion that had at its core a philosophy that wealth should be limited. More. Because, of course, capital gains taxes do, and are intended to, serve not just as a revenue source but a brake on accumulation. In their implementation, as Chuck, Stan and others point out, they do manipulate behavior. The question is whether that changed behavior is what we want.

At the core of the debate around whether we should limit wealth is a philosophical point of view. In its simplest terms those points of view are in turn defined by the holder's view of "fairness". Those who believe in the position of equality of tax treatment must see a world in which, at least in social terms if not economic (and these are vastly different), income from labor is as important as income from investment. On the other hand those that hold the opposite point of view must believe that investment creates the opportunity for labor, or some other benefit, giving it a reason for preferential treatment. Again, as Chuck implies, everyone becomes the beneficiary of one version or another and in turn resists change because the change fundamentally, and arbitrarily, shifts the outcome from the one intended based on earlier circumstances.

I can live with either proposition. What I'd prefer is to have consistent rules to play by. Of course, since differences in opinion wax and wane and thus political outcomes, that's a pipe dream. What I can't abide is an effort to limit the upper reaches on anyone's, much less my, ambitions. Which is where I started in the discussion.

My final point is that this is a usual discussion and a fairly polite distillation of the points of view that have been lobbied back and forth for hundreds of years now. The ones we don't agree with aren't just bull excrement as John would have you believe, they are the brake on extremism, one man rule and lack of freedom which Russia's failed, and all too brief experiment, with democracy demonstrate.

Funny. You folks talk about this like we can be intelligent about it. In the end it’s a political tug of war that gets bastardized into whatever the ruling crowd can wrangle.

One thing most people aren't willing to do is structure their estate and holdings such that when they retire they renounce their citizenship and...leave. There are plenty of quite pleasant places that have favorable tax systems and...aren't here.

Most retail stock purchases entail money going to someone who already owned the stock, not the company itself. So when you buy a stock the money does not go to the company itself directly. The company does benefit in other ways from a higher stock price, however.

A lot of people have a lot of money invested in the "social security" system. It would be nice to get some kind of return out of it. That and family. I'd like to move to Florida, but family ties are keeping me in Cal for now.

A lot of people have a lot of money invested in the "social security" system. It would be nice to get some kind of return out of it. That and family. I'd like to move to Florida, but family ties are keeping me in Cal for now.

Whatever! Amounts to the same thing.

First off, thanks to Bill for taking up my mantle!

Tony, your second sentence above is the entire point of my argument. We absolutely do not have consistent rules to play by. The rules are either inconsistently applied (Elon Musk committing securities fraud on Twitter and nothing happens, Bezos committing tax evasion for years, zero people going to jail for the many felonies perpetrated in 2008, etc, etc.) or certain groups are able to capture the relevant government regulator or get laws and regulations changed to suit them at the expense of others. My support of a flat income tax is an effort to do exactly that - make it a clear and level playing field for everyone. But obviously, if the govt simply applied the same rules to everyone, we would be in a much better place. We have not lived in that world for a couple of decades now.

Heck, your own story about the person you flew with helps illustrate the need to simplify our laws and regulations. How much time and money do you think this person spent restructuring their life in order to minimize their tax burden? Every minute and every penny of that was wasted from a societal standpoint. That person could instead have invested that wasted time and money into their business which would have provided more utility to society.

Most retail stock purchases entail money going to someone who already owned the stock, not the company itself. So when you buy a stock the money does not go to the company itself directly. The company does benefit in other ways from a higher stock price, however.