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Why do we have to pay cap gain taxes at all?

By dunnross   Follow   Mon, 14 May 2012, 12:49pm   8,603 views   127 comments
In San Jose CA 95120   Watch (1)   Share   Quote   Permalink   Like   Dislike  

The FED is royally screwing an average citizen of this country. They create inflation, and the only way to fight it is to take risks, and buy inflation-safe securities. Yet, as soon as you sell them, you have to pay taxes on your gains. Why do we have to pay taxes on something we buy to protect ourselves from the FED, in the first place?

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1. Patrick Follow Befriend (54) 5,188 threads 6,158 comments 46 male Menlo Park, CA

   1   1:26pm Mon 14 May 2012   Share   Quote   Permalink   Like (11)   Dislike (1)   If you have a real gain and didn't do anything productive to get it, that seems a worthy object of taxation. But I agree that any gain below inflation should not be taxed, because it's not a real gain. The best tax is on non-productive rent-seeking, specifically land ownership. The worst tax is on productive work. So the worst tax is the tax on wages you actually earned.

2. Patrick Follow Befriend (54) 5,188 threads 6,158 comments 46 male Menlo Park, CA

   2   3:06pm Sun 17 Jun 2012   Share   Quote   Permalink   Like (5)   Dislike   clambo says death taxes The use of that term immediate identifies you as a brainwashed supporter of hereditary aristocracy in America. It's OK if you want your descendants to be the permanent slaves of the artistocracy, but it's not OK for my descendents. I want them to have a real chance to succeed based on their own merits in spite of your efforts to prevent that. If you spend even ten minutes looking it up, you'll see that social mobility in Europe is far higher than in America. You personally embody everything that is wrong with this country.

3. Vicente Follow Befriend (8) 204 threads 4,414 comments Davis, CA

   3   8:51am Thu 17 May 2012   Share   Quote   Permalink   Like (5)   Dislike (1)   zzyzzx says Anything to prevent people for saving for their retirement, right? Well the line we've been sold the last few decades, is that your HOUSE is your retirement nest egg. Because pensions all had to be kicked to the curb in the name of cost-savings. Oh right, or your 401K and Roth are going to take care of you. How is that corporate/banking promise working out? Me I mostly see people praying that their Fidelity fund will return to what it was a few years ago otherwise they'll be eating cat food.

4. Vicente Follow Befriend (8) 204 threads 4,414 comments Davis, CA

   4   4:17pm Mon 14 May 2012   Share   Quote   Permalink   Like (3)   Dislike   Seems fair game to me. IMO there should be a double-penalty for anyone trading in Facebook shares, a more useless "investment" I cannot imagine.

5. Vicente Follow Befriend (8) 204 threads 4,414 comments Davis, CA

   5   9:48pm Tue 15 May 2012   Share   Quote   Permalink   Like (3)   Dislike   Dan8267 says Americans consume too much and invest too little in increasing production through capital goods and infrastructure. What's the point? I mean that, really. You pour your every cent into "investing" and what comes out of it? American factories and jobs? Nope. Fat fees and skims for executives, offshored jobs, more robots. I hate to sound Luddite, I'm an engineer. However it does seem like the last few decades that we have "invested" quite a lot. I have virtually every cent I can scrape up "invested" and I lack confidence the money I am floating to public corporations is actually building anything lasting. Nobody has a plain pension any more it's all gone to Wall Street, and what do we have to show for it? A huge malinvestment in burbclaves and securities derived from that. And what's the hottest IPO consuming every financial brain right now? Fakebook. What kind of "investment" is that? Ugh. You think that's driven by Joe Retail Investor? No, we are at best the fleas on the coattails of big funds and sovereign mega-wealth.

6. thunderlips11 Follow Befriend (13) 52 threads 2,639 comments Premium

   6   8:35am Thu 17 May 2012   Share   Quote   Permalink   Like (3)   Dislike   Left out from this conversation is not only income tax, but the de facto regressive tax on wages and salaries paid by workers: Social Security and Medi- care/caid withholding. Someone working and being paid ~$100k is paying a marginal rate of ~40%. I think it bizarre that somebody could make ten times more by NOT working, but rather off dividends, and pay far lower tax rate. Our tax code seems to say: "Productive endeavors bad, laying on beach collecting dividends good."

7. iwog Follow Befriend (48) 274 threads 12,571 comments 47 male Lafayette, CA Premium

   7   12:07pm Thu 12 Jul 2012   Share   Quote   Permalink   Like (5)   Dislike (2)   anon12366 says Why shouldn't I be able to retire on my parents' money? Why shouldn't I be able to, upon my death, pass the money I have accrued to my children so that they can live better instead of being wage slaves in the rat race? Wow, I guess the new aristocracy has totally abandoned the idea of merit and now just want us to go back to feudalism and an entrenched monarchy. At least you're honest.

8. swebb Follow Befriend (3) 29 threads 490 comments Denver, CO

   8   7:34pm Mon 14 May 2012   Share   Quote   Permalink   Like (2)   Dislike   clambo says Of course he should keep 100% of his capital gains, they are HIS. Why doesn't this same logic apply to wages?

9. Kevin Follow Befriend 40 threads 2,652 comments

   9   8:54pm Mon 14 May 2012   Share   Quote   Permalink   Like (2)   Dislike   clambo says I invite you to fly Swissair over to Switzerland and then train up to Germany and see how they are suffering the deprivations of no capital gains taxes. Report back here. http://en.wikipedia.org/wiki/Flat_rate_withholding_tax_(Abgeltungsteuer) Switzerland is hard to compare because they have a very different system. Income taxation is generally lower, but things like dividends are taxed significantly higher than in the U.S due to double taxation. I don't believe capital gains should be taxed, but idle wealth should be. We should also have a minimum inheritance tax of 50%, with a $1M deduction.

10. Dan8267 Follow Befriend (16) 764 threads 7,710 comments Boca Raton, FL Premium

    10   8:42am Tue 15 May 2012   Share   Quote   Permalink   Like (2)   Dislike   dunnross says The FED is royally screwing an average citizen of this country. They create inflation, and the only way to fight it is to take risks, and buy inflation-safe securities. The solution to that is to make bankers to compensate us, tax-free, for the inflation they create. If inflation came out of banker's income, I guarantee you it would be at 0% immediately. The real question is why do we have an income tax for anyone but the richest 1%? Why tax productivity? ...especially since so few people are doing it nowadays.

11. Vicente Follow Befriend (8) 204 threads 4,414 comments Davis, CA

    11   3:14pm Wed 16 May 2012   Share   Quote   Permalink   Like (2)   Dislike   rockyroad says What does it torque you? Capital gains, in theory, result from investment gains, such as selling real estate, business, or commonly from stocks and bonds. You do want to encourage investment right? And thus we loop back around to the "rent-seeking" problem. Most "investment" these days does not seek to expand our economy in ways that benefit the common man. They seek to extract rents using finance shenanigans. The richest families in America are majority inherited wealth not personal achievement.

12. Patrick Follow Befriend (54) 5,188 threads 6,158 comments 46 male Menlo Park, CA

    12   3:56pm Wed 16 May 2012   Share   Quote   Permalink   Like (2)   Dislike   Two seemingly contradictory facts drive a lot of this debate: 1. Most wealth in inherited, not earned. 2. Most millionaires did not inherit their money. They are both true, but how can they both be true? The answer is that a fairly small number of people inherit a VAST amount of wealth. Most people don't inherit very much. rockyroad says The money was earned by someone No, not necessarily. The money could have been gained purely by non-productive rent-seeking. And it usually is, for the vast fortunes of the elite. rockyroad says do you still believe in private property rights? Would you still be for private property rights if ONE person owned 100% of everything, and everyone else has to be their slaves, forever, because that one person owned all the land and extorted maximum rent from everyone? The question is, what is the limit of private property, beyond which the situation is simply unfair and harmful to the whole society?

13. swebb Follow Befriend (3) 29 threads 490 comments Denver, CO

    13   8:24am Thu 17 May 2012   Share   Quote   Permalink   Like (2)   Dislike   rockyroad says Unless you want even distribution of wealth... but that's a different topic, and I hope none of us want that? Even, as in everyone has the same amount? No, of course not. More even? Flatter? Yes! I think it's better for the country. Scary things happen when the wealth disparity grows too severe.

14. Patrick Follow Befriend (54) 5,188 threads 6,158 comments 46 male Menlo Park, CA

    14   8:40am Thu 17 May 2012   Share   Quote   Permalink   Like (2)   Dislike   thomas.wong1986 says Patrick says Look up the paper by Kotlikoff and Summers "The Role of lntergenerational Transfers in Aggregate Capital". Most wealth is in fact inherited and they proved it. Next time, you give a dollar to your son or daugher .. I want the Govt to be there to take half of it ! Wow, are you determined to misunderstand or what? Not talking about a dollar. We're talking about VAST UNEARNED HEREDITARY wealth. Meaning permanent ruling class whose ownership of all resources (especially land) makes everyone else into a permanent servant class with no escape no matter how hard they work. Can't happen? Hmmm.... French revolution Russian revolution Chinese revolution and 1,000 other examples Why did those people revolt?

15. zzyzzx Follow Befriend (9) 416 threads 4,137 comments Baltimore, MD

    15   10:08am Thu 17 May 2012   Share   Quote   Permalink   Like (3)   Dislike (1)   rockyroad says Kids in Africa are starving, and that's not fair! Of course it's fair! It's the only form of birth control they have there!

16. zzyzzx Follow Befriend (9) 416 threads 4,137 comments Baltimore, MD

    16   10:09am Thu 17 May 2012   Share   Quote   Permalink   Like (2)   Dislike   Vicente says Well the line we've been sold the last few decades, is that your HOUSE is your retirement nest egg The haven't seen my rather low end house. Houses don't generate dividends like stocks do, which is why I buy stocks.

17. Vicente Follow Befriend (8) 204 threads 4,414 comments Davis, CA

    17   9:27pm Sun 17 Jun 2012   Share   Quote   Permalink   Like (3)   Dislike (1)   thomas.wong1986 says Why are you concerned about other peoples wealth ? Indeed, we should never concern ourselves with the opinions of peasants.

18. Patrick Follow Befriend (54) 5,188 threads 6,158 comments 46 male Menlo Park, CA

    18   1:56am Mon 18 Jun 2012   Share   Quote   Permalink   Like (4)   Dislike (2)   Honest Abe says Its really that simple. No, not that simple. The main problem is that the rich are forcing middle classes to pay their taxes for them. And they are succeeding, thanks to people like Honest Abe, who somehow don't notice that billionaires pay only 15% on capital gains for doing NOTHING while the upper middle class productive people pay 28% and more. Why don't you tell the truth about how we being screwed by the 1% Abe?

19. YesYNot Follow Befriend (2) 15 threads 430 comments Reston, VA

    19   4:20am Mon 18 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike   I agree. Get rid of capital gains & inheritance tax. Tax it all as income. It is not double taxation just because someone had to pay taxes to earn money before you 'earned' it. It is not considered double taxation if I pay taxes on money I earn and then pay a carpenter who pays taxes on what he earns. It is fair game, b/c we are two separate entities. Capital gains on stocks happen if I loan money to someone else, and they make money with it and pay me a fee. We are two separate entities. I made money by loaning it. If you don't like this, there are pass through structures for businesses that are less obviously separate. thomas.wong1986 says Why are you concerned about other peoples wealth ? The first answer to this is obvious. The value of my money is directly tied to the amount of money that other people have. The second answer is more up for debate. The country needs a mix of savers and borrowers. Too little, and people with drive and good ideas cannot get hands on capital. Too much, and we have what we have now. We have huge gov't and personal debts balanced by vast fortunes controlled by a few people and mini-fortunes controlled by many people sitting on excessive nest eggs. Of course this requires a complicated financial structure and a bunch of wizards in the middle convincing the rich that their money is safe and convincing the debtors that they are on their way to becoming rich. We need to find ways for the rich to spend some of their money or to tax some of it away from them. Either way would be fine, but I would prefer taxes to space flights.

20. Vicente Follow Befriend (8) 204 threads 4,414 comments Davis, CA

    20   9:05am Mon 18 Jun 2012   Share   Quote   Permalink   Like (3)   Dislike (1)   Honest Abe says why not just go to the end result and be done with it? We are on the road to the end result already, and it looks far more like the Monopoly endgame than your USSR fantasies.