patrick.net

Vicente says

I'm sure Richie Rich likes best the state of affairs where they get to enjoy all the trappings of a first-world country, no bloody street riots, National Parks, first-class military, etc. they just don't want to pay for any of it. And it has to be paid for, so in a sensible tax policy we don't leave them an out. Worst of all, it really messes with the American sense of fair play when Mittens is paying a lower tax rate than you and I.

I don't disagree with your concept.

The maybe 1000 super rich and well connected that control our government are the problem. It isn't your neighborhood millionaire (think Nomo), who is the problem.

I simply don't see how taking wealth and power from the 500k or so upstarters earning over a million per year helps anyone but those same powerful 1000 that control our government.

CBOEtrader says

I simply don't see how taking wealth and power from the 500k or so upstarters earning over a million per year helps anyone but those same powerful 1000 that control our government.

The problem is many of these 500K are not providing as much value to society as they think they are. For example, many are "small" businessmen. They scream bloody murder about providing health insurance for their employees. But someone pays for their health care. They are just shifting this cost onto other people. So much of their profit is illusory.

While this will get Thomas Wong (our local proclaimed tax expert) worked into a frenzy, people who are busy creating real jobs typically have low taxable income. Hence a tax hike doesn't really affect their behavior. People pulling out $1 million a year are usually living the good life and less focused on creating jobs.

CBOEtrader says

I simply don't see how taking wealth and power from the 500k or so upstarters earning over a million per year helps anyone but those same powerful 1000 that control our government.

You've heard my argument before.

I think the over 1million group is just a start. It has to be more progressive down to 250 or 300K. We're not talking anything huge. Maybe someone who makes 400k per year would pay 6 to 10K more than they do now.

Or maybe raise it even a bit higher. We aren't talking about forced equality or anything remotely close to that. A big part of it is just the principal of paying for our government. Even if a lot of it is what you call charity. I assume that's what you call it when a lot of what a high income person pays is going toward social programs that benefit the poor.

My bigger issue is that only when we actually pay for what we spend will be get spending under control. And if this is done with progressive taxes, I believe that the high income decision makers will have a much harder time getting backing from their pals for corrupt policies.

marcus says

I think the over 1million group is just a start. It has to be more progressive down to 250 or 300K. We're not talking anything huge. Maybe someone who makes 400k per year would pay 6 to 10K more than they do now.

In Maryland you only have to make 100K to get hit with "rich people" state income taxes.

zzyzzx says

In Maryland you only have to make 100K to get hit with "rich people" state income taxes.

That's why I don't live in Maryland. Not that New York is any better.

interesting..

Patrick is mentioning all the places where people LEFT to come have the ability to create their OWN wealth, the USA.
Of course those miserable places in Europe and Asia who had hereditary rulers and serfdom ingrained for centuries had a giant poor class which supported the wealth of a privileged few.
The notion of their revolutions having any relation to the situation of taxes confiscating wealth in the USA is completely wrong.
Ted Turner is a nutcase but he made his money and he BOUGHT his land, he did not inherit it.
The cases abound.
Not to worry, I know of a few cases where the rich entrust their businesses to their adult children to avoid eventual death taxes. So, as the adult child mismanages the business they end up losing plenty of money and assets are sold to pay to keep the business alive.
The reason that Europe is having difficulties is that the place has essentially tried to raise the standard of living beyond their actual production and wealth of natural resources.
The exeptions are of course the smart, productive, or resource rich among them.

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.

Of course they are death taxes, they are paid upon someone's death.
There is no aristocracy here, you must not have lived outside the USA. Go and report back to us.
The proof of my point is the millions of Europeans and others who have come here to improve their lives. No one stopped them.
You must be unaware of the caste system in India, the feudal serfs in Japan before McArthur reformed it, and why people from Europe came to the New World in the first place.
If social mobility today is worse than Europe the reason could be that millions of children of illiterates choose to drop out of high school. They of course do not go to college either.
These will of course not be very upwardly mobile, but I have nothing to do wit hit.
Attacking me personally is just the liberal in you venting frustration. I want to leave you alone and I want to let you give your money to your own children or biafrans or whomever you choose to.
I believe that there is nothing wrong with me because I want Uncle Sams hand out of my wallet and yours also.
Unlike all posters here, I was instrumental in developing a clean renewable industry in a third world country, so I feel not a smidgen of guilt over being American and keeping what I have SAVED over my lifetime of work.
The actual aristocracy here is the political class, the Clintons, the Bidens, the Obamas, the Reids, those who were POOR before they become involved in politics and magically got rich. Hillary making more in cattle futures options trading in a couple days than most guys make working in years is one example.
I am not brainwashed nor ignorant.
"When you have no basis for argument, abuse the plaintiff". Cicero.

swebb says

I find it hard to maintain faith in the idea that everyone has a fair shot if money is being passed down from one generation to the next.

Lol ! clearly you hate kids... just kidding around.

As part of our tax laws, the tax payer can simply donate their estate to some worthy cause of their choice. If you hate the idea of your greedy little rug rats getting all of your hard earned money... donate it..

Why are you concerned about other peoples wealth ?

thomas.wong1986 says

Why are you concerned about other peoples wealth ?

Indeed, we should never concern ourselves with the opinions of peasants.

Vicente says

Indeed, we should never concern ourselves with the opinions of peasants.

and somehow you expect the govt to do what with this already taxed wealth.. 35% the first time wasnt good enough .. so lets take the other 70% what is left ?

They are not aristocrats.. they are the merchant class you seem to hate so much. Why ? because they came from nothing and did something with their life... while you wasted your life reading poetry and debating politics. Some here had a wasted life...

People are forced to pay capital gains tax because the government fails and refuses to live within its means. Government has, is and will be constantly seeking new ways of fleecing its loyal subjects and capital gains is just another of a long list of ways to raise more money to continue to pacify the army of indentured voters it, government, has created.

Government always needs more just like a junkie always needs more. Enough is never enough. When they run out of other peoples money, they need to find new ways to get more. Its really that simple.

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?

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.

Patrick, YesNot , Comrades - why not just go to the end result and be done with it? Punish all successful people and businesses, take it all and get to the real goal - a dreary, misreable combination of progressive, creeping socialism and communism.

Are you happy now?

^ The end goals are to reward successful people and businesses and to encourage economic growth.

However, you cannot reward income earners while taxing the crap out of them and giving huge tax cuts to inheritors and financial hoarders.

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.

Even with a flat tax..

Why should I be taxed x2 if I work x2 than somebody else and I obtain the same services from the government...

Isn't this an inefficient/unfair government? What stops me to migrate to the first country that promises me x1 tax only?

For good or for bad, in the era of globalization, governments loose their monopoly power. It's just a question of time till they start treating us as a corporation would do.. competing to obtain our labor and to offer their services.

Yes, the game is pretty much over. A few people own everything, and continuously redistribute the wealth of everyone else upward to themselves without doing any work.

Honest Abe absolutely loves wealth redistribution, as long as it is redistribution from people who actually work and produce upward to the 0.1% who do not work or produce.

Abe, you're the best friend the ruling class ever had. And the best entertainment! They laugh themselves silly as you demand that we all serve them forever because they are "successful". Of course they'd never eat with you or let you marry one of them though. You're just a useful idiot.

dunnross says

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

The real question is why do we tax productivity, not rent. We shouldn't have an income at all except as it was originally intended, a tax on the opulently rich to pay for social services that eliminate systematic and inherited poverty. It should never have been used for general purpose funding or the military.

But we could eliminate the capital gains tax on proper investments by using the formula I've proposed many times:
max(0.0, 1.00 - 0.01 * m) where m is the number of months you hold a property. Simple, easy to calculate formula. Doesn't allow for cost-averaging, but everyone would want to use FIFO anyway to minimize their tax burden.

I'm still here. Lord the gullible are alive and well.

clambo says

Of course they are death taxes, they are paid upon someone's death.
There is no aristocracy here, you must not have lived outside the USA. Go and report back to us.
The proof of my point is the millions of Europeans and others who have come here to improve their lives.

The proper term is inheritance tax. "Death tax" was a marketing term selected after expensive marketing studies and promoted by the Republican party to please their major donors.

Obviously there is an aristocracy in America. The upper classes inherit their parents' vast wealth without working, duh. Just look at the wealth distribution. You are forced to labor for them simply because they own all the best land and capital assets. So they get richer AND pay lower taxes than productive people, widening the gap more and more each generation, killing all incentive to do productive work.

I've lived outside the USA several times. A year in Austria, a year in Germany, a summer in England, and a summer in Holland. All of those countries have higher social mobility than we do (and better health care systems too). They do not have a tiny 0.1% taking all the money from productive workers like America does. They no longer emigrate to the USA. Why would they? We have adopted hereditary aristocracy after they abandoned it.

oliverks1 says

People pulling out $1 million a year are usually living the good life and less focused on creating jobs.

I sure would be, wouldn't you?

The proper term is inheritance tax. "Death tax" was a marketing term selected after expensive marketing studies and promoted by the Republican party to please their major donors.

Yep. The term "death tax" is a political term. Just like the term "homophobia." Just by using these words, we do the bidding of those who created them.

Also see "death panels."

They no longer emigrate to the USA. Why would they? We have adopted hereditary aristocracy after they abandoned it.

God Bless America. The best country in the world!

Patrick, redistribution is where money is taken, under the threat of force, and given to those deemed "worthy".

It is not "redistribution" when an employer willingly OFFER's a position to an prospective employee who willingly ACCEPT's the offer of employment. (Then the boss pays as little as possible in order to keep the employee, while the employee does as little work as possible in order to prevent termination).

Please point out the "redistribution" in this very common scenario.

The main problem is that the rich are forcing middle classes to pay their taxes for them

In so far as I can tell it's the low to middle income people who aren't paying any income taxes.

Approximately 50% pay NO federal income tax at all. Whats wrong with them paying their "fair share"?

There has never been a time in modern history "my" system worked, BECAUSE there has never been a time in modern history that "my"system was allowed to work without laws, rules, codes, regulations which sabotaged the results.

Liberal, democratic, socialistic, communistic thinking creates laws which gum up the works and yield bad results. Their solution? MORE bad laws, rules and regulations.

Radical liberalism, and democratic policies have created a relentless attack on all of the principals which individual liberty, sound business practices and rational social order rest...for the "common good", of course.

Honest Abe says

There has never been a time in modern history "my" system worked, BECAUSE there has never been a time in modern history that "my"system was allowed to work without laws, rules, codes, regulations which sabotaged the results.

And yet you are sure it will work. Sounds like an ideolog to me. I think the closest thing to what you want would be Somalia or central Congo.

The use of that term immediate identifies you as a brainwashed supporter of hereditary aristocracy in America.

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?

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.

1. For a regular investor (not an insider) investing is a lot of work, and many of his investments are at risk of loss (and do lose value). E.g. in my case I was "underemployed" in 2001 and had a luxury to spend days and weeks analyzing the stock market bubble and learning how to invest. As a result I still carry some nicely appreciated positions (mostly, gold mining stocks and mutual funds).

2. If you want to be 'fair', you need to propose equal treatment of gains and losses. The way it is now, they happily tax your gains, but limit your loss deduction to $3K/yr. I know a few people that still were not able to deduct they market bubble losses from 2000-2001.

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?

Because the rest of us don't want your kids controlling our labor. That's an aristocracy/kleptocracy, not a democracy.

anon12366 says

The use of that term immediate identifies you as a brainwashed supporter of hereditary aristocracy in America.

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?

"Being wage slaves" is what your parents used to call "working for a living". The last thing the world needs is more trust fund slackers.

bdrasin says

"Being wage slaves" is what your parents used to call "working for a living". The last thing the world needs is more trust fund slackers.

Alameda CA? Everybody's a wage slave... look at real estate prices ESPECIALLY the people who work for a living. I don't want to pay health care,retirement, or second home mortgages for greedy Cali baby boomer "middle class" retirees with a million dollars in home equity in the middle of a reinflating housing bubble.

Personally, in my opinion being able to live off dividend income whether they be off of individual equities, or bond mutual funds is the true american dream instead of being the homeowner. However, bond mutual funds have always been taxed as ordinary income (municipal bond funds being the exception) so it's not as though one is living high on the hog off of this cash flow via tax advantages. Well, you can always keep them in the roth ira and not pay tax, but then you can't touch the "earnings" unless you r 59.5 and had the account open for 5 years. In which case, you can't really quit the "rat race." As far as pure capital gains oriented funds go, they tend to be much more volatile and while they do enjoy favorable tax structure, they have a much bigger speculative feel of "paper wins" and "paper losses" till cashed out.

anon12366 says

bdrasin says

"Being wage slaves" is what your parents used to call "working for a living". The last thing the world needs is more trust fund slackers.

Alameda CA? Everybody's a wage slave... look at real estate prices ESPECIALLY the people who work for a living. I don't want to pay health care,retirement, or second home mortgages for greedy Cali baby boomer "middle class" retirees with a million dollars in home equity in the middle of a reinflating housing bubble.

Don't look at me, I rent.

anon12366 says

I don't want to pay health care,retirement, or second home mortgages for greedy Cali baby boomer "middle class" retirees with a million dollars in home equity in the middle of a reinflating housing bubble.

You can always move to the Rust Belt. Here in Corning-Elmira you can buy a modest house for $100k in a safe neighborhood. For $200k you can have a large and very nice house.

Just be sure you have a good job lined up before you move here, of course.
;-)

wthrfrk80 says

anon12366 says

I don't want to pay health care,retirement, or second home mortgages for greedy Cali baby boomer "middle class" retirees with a million dollars in home equity in the middle of a reinflating housing bubble.

You can always move to the Rust Belt. Here in Corning-Elmira you can buy a modest house for $100k in a safe neighborhood. For $200k you can have a large and very nice house.

Just be sure you have a good job lined up before you move here, of course.

;-)

You know who should be living in cheap housing in the middle of nowhere? Retirees, baby boomer hippies... not young working adults with families.

Do you know who should be "house poor"? Unemployed, government assistance-dependent retirees, not mortgage-indebted young working adults with families and children.