patrick.net

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.

I agree with Patrick here. This tax policy could use a lot of fixing.

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.

I disagree with those who believe it is ok to steal from Dunross.
He did not "do nothing" to make that capital gain.
He 1. worked 2. paid taxes 3. saved the rest 4. risked it with the hope but no guarantee of even preserving his capital.
Of course he should keep 100% of his capital gains, they are HIS.
What planet are you guys really from? You actually believe that screwing investors and savers is a good tax policy?
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.

I have no problem with flip house/stock/gold.

The only thing I cannot stand is the bailout money and Fed's QE.

clambo says

Of course he should keep 100% of his capital gains, they are HIS.

Why doesn't this same logic apply to wages?

Vicente says

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.

Agree. It would be an example of an NVAT: a Non-Value-Added Tax.

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.

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.

you guys sound like a bunch of old guys gathered in a park, play chess, and gripe about politics.

Fairness is a dream, always has been since Cain and Abel. It's the human condition. Adults work around unfairness, kids whine about it.

rockyroad says

you guys sound like a bunch of old guys gathered in a park, play chess, and gripe about politics.

Fairness is a dream, always has been since Cain and Abel. It's the human condition. Adults work around unfairness, kids whine about it.

Adults strive to change the world in order to make it more socially just. Rosa Parks, Martin Luther King Jr., John F. Kennedy, Christopher Hitchens, Elizabeth Warren, Jimmy Carter, Tawakkol Karman.

Who's the more childish: the person who strives to make the world a better place or the person who believes that nothing can change ever and so never tries?

let me get this straight, you are comparing what you do (posting on message boards) with MLK and JFK?

Dude, get ahold of your ego... do you think there was ever a "fair" tax scheme implemented in human history? If you believe you can outdo thousands of years of social & political evolution, then.... well, I wish you luck.

Actually, there were some fair taxes in the Old Testament which were apparently in use for many centuries.

For example, farmers were obligated to leave crops in the corners of their fields and fallen fruit, etc, for the poor.

http://en.wikipedia.org/wiki/Gleaning#Old_Testament

My favorite OT law: no usury.

Actually, there were some fair taxes in the Old Testament which were apparently in use for many centuries.

For example, farmers were obligated to leave crops in the corners of their fields and fallen fruit, etc, for the poor.

How is that "fair" tax? The left-overs only applied to corn fields, orchards, and vineyards, and not to kitchen gardens. The 1% that have big kitchens with room to garden don't have to pay this tax.

rockyroad says

et me get this straight, you are comparing what you do (posting on message boards) with MLK and JFK?

Dude, get ahold of your ego... do you think there was ever a "fair" tax scheme implemented in human history? If you believe you can outdo thousands of years of social & political evolution, then.... well, I wish you luck.

Let me get *this* straight, you dont believe that MLK or JFK ever had an equitable exchange of ideas via some medium like letters? You think that those exchanges were lame, because they were writing on a desk with a glass of brandy sitting next to them?

Dude, get a hold of your short-sightedness... don't you think that people need to *communicate* to exchange ideas? those very same ideas are the seeds of this and maybe another generation.

If you believe that you can stop the tide of human memes, being cast aside and actively created, since the DAWN OF CIVILIZATION, then. . . well . . . Good Luck.

Let me get *this* straight, you are comparing what you do (posting on message boards) to MLK's "Letters from a Birmingham Jail"? Hahaha... another ego-gone-wild.

Not all communications are equal.

rockyroad says

Let me get *this* straight, you are comparing what you do (posting on message boards) to MLK's "Letters from a Birmingham Jail"? Hahaha... another ego-gone-wild.

Not all communications are equal.

Let me get *this*straight, you equate ego with writing on an Internet forum?

As for "Letters from a Birmingham jail, when I was being illegally held by the NY police last fall, they DID NOT GIVE ME A PEN AND PAPER. So there, Yes, I am comparing myself to MLK. Wouldn't you just like to put a bullet in my frontal lobe?

We should all strive for free speech and practice it, and if you call it ego, well then you need to read the dictionary, because you are way off.

Communication is what each of us make of it, and it's value is objective.

frodo says

Wouldn't you just like to put a bullet in my frontal lobe?

woah woah woah... come down frodo. you win you win, put down the gun.

rockyroad says

frodo says

Wouldn't you just like to put a bullet in my frontal lobe?

woah woah woah... come down frodo. you win you win, put down the gun.

LOL! Ok, sure, but you put yours down first.

Capital gains are taxed lower because somebody thought it would be a good idea to encourage investment - it would be good for the economy. Imagine that. Every job I ever got was the result of somebody investing money.

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.

This is why some people want to make gold legal currency. Right now, any "gains" you get by storing your wealth in gold are taxed, because it's not a currency.

Yes it's a total racket. The gummint gets to tax nominal "gains" that don't beat inflation. You get taxed via inflation or capital gains, just for "running in place."

God Bless America.

I also don't think wages should be heavily taxed.
Ideally, consumption is what should be taxed.

I disagree that consumption should be taxed. It's best just to tax things or activities that are harmful or non-productive. Consumption is good for the economy in general.

You could argue that consuming things which damage the environment, like oil, should be taxed though.

The principle evil which should be taxed is the non-productive rent seeking from monopolization of resources like land, the radio spectrum, ridiculously broad patents, etc.

rockyroad says

let me get this straight, you are comparing what you do (posting on message boards) with MLK and JFK?

No, and if you think that it's because you have no reading comprehension skills.

I'm refuting your principle that attempting to change the world is futile and no one should try. ... a point you made with the words

Fairness is a dream, always has been since Cain and Abel. It's the human condition.

I disagree that consumption should be taxed. It's best just to tax things or activities that are harmful or non-productive. Consumption is good for the economy in general.

In my opinion, Americans consume too much and invest too little in increasing production through capital goods and infrastructure. That said, the problems I see with sales tax -- other than calling it a "value added tax", which is just b.s. -- is that sales taxes are regressive, they promote black markets, and they lead to a "race to the bottom" among states or nations.

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.

Great Post. Investing creates jobs...for Wall Street speculators...and China...

I disagree that consumption should be taxed. It's best just to tax things or activities that are harmful or non-productive. Consumption is good for the economy in general.

No. This creates perverse incentives. We won't have enough money to pay for highways in the near future because of automobile efficiency.

Tax idle wealth. Penalize bad behavior, but not as a part of a revenue strategy.

Excessive idle wealth benefits nobody. Small nest eggs are important to give people confidence, but anything above what you need to maintain a certain quality of life is just score keeping.

Consumption not only should be taxed, it IS taxed. They call it sales tax. There are also special taxes on alcohol, gasoline, tires, etc.
The reason consumption should be taxed and not wages, savings or investment income is that the tax is flat, it's equal, and those who *consume more pay more*.
This is of course the idea of the VAT seen in Europe.
Someone above said that the death tax should be 50%! That's not only crazy, it's stealing wealth again.
My father is a bit of a saver. He can't make himself spend all of his money. He may be giving some to charity, may leave it to me and others. The last thing he wants to do is have it taken by Uncle Sam the grave robber.
All of the people above are completely missing the point of how the USA became rich.
The Constitution protected private property here and when wealth was created by someone's 1. work 2. brains 3. savings 4. luck 5. investments 6. inheritance, it belonged to the American not to his government.
There is no moral explanation for the government stealing my money by force of prison simply because a group of people have the stupid idea that government knows what to do with my money better than I do.
Obviously this is false. Fannie&Freddie, Solyndra, and other examples abound.
Don't mention social security and medicare because this is paid for as we go and I don't see this as really a government taking from me at all. I don't object to social security taxes on me because I plan to get them back by living long enough.
No one but you deserves your money and the proceeds of risking your money. No one but you deserves the money your parents may decide to give to you as their legacy.
I think airhead liberals and all of Congress need to go stay a while in Switzerland and see how it's done.

Vicente says

You pour your every cent into "investing" and what comes out of it?

I think that is the result of our financial markets replacing investing with speculation and other zero-sum games. In the beginning of the 20th century, America invested heavily in its infrastructure and industry. That, along with progressive reforms, is what lead to the creation of the middle class and the prosperity of the mid-20th century.

Today, I think our business leaders are pillaging the country and plundering all the resources created by those early 20th century investments. However, investment does not need to be this way. Perhaps if William Black got to prosecute all the parasites responsible for the financial collapse, we could return to real investment.

In the absence of that, I agree that individual investors are better off in foreign markets.

clambo says

Consumption not only should be taxed, it IS taxed. They call it sales tax.

Sales Tax: 6.25%
Margin Federal Income Tax: 33%

Big difference. Not that I support sales taxes.

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

Because millions on welfare/food stamps/section 8 housing/etc. depend on you!

California gasoline tax=$0.69 per gallon.
Where do you live? The sales tax where I live is almost 9%.
I do not like taxing people's wealth, labor, capital gains, passive income. The reason is it is government theft of your property to distribute it to others without your permission.
The other reason is that is accomplishes a negative effect on the economy. Seeking wealth sometimes raises our standard of living.
If they told Steve Jobs and Wozniak that they could never aspire to have wealth from their own balls, brains, and work, maybe they would not have started Apple.
If their first investor was not sure he could keep a large portion of the wealth his investment produced, maybe he'd be content to just buy muni bonds and say fuckit.
Of course zzyzzx is correct. There is not enough money being earned by wage slaves to pay for the social programs. So, where is there any money lying around? In investment accounts, of course! This is where the money saved went. So, Obama and the liberal hypocrites want a piece of this money.
You liberal fools don't seem to be aware. The next target of Reid, Pelosi, Obama and their asshole ilk is your 401K. Oh, you think that rich pot of gold will be left sacrosanct? You're smoking dope.
You have no recollection of their plans to "nationalize" 401Ks? The Democrats suggested taking it from you and giving you an annuity payout in exchange.
Their lame excuse for this proposed theft of your money? "The stock market is too risky for Americans retirement."
Of course, no one mentions that you can also own bond funds in your retirement accounts.

I can detect the wage slave hypocrites are just angry that they see their checks reduced by taxes. So, instead of complaining about it, they envy guys who have already saved and worked and invested. "Let uncle Sam take it from HIM!"
Sorry, your financial difficulties do not allow you to steal from someone else.
If you envy those jerks down on Wall St. go and try to be hired by someone down there and try your luck.
Go get hired by Goldman and join the squids. Go work for stupid B of A or their other ilk.
You'll be riding subways in Dante's hell to go to work with a bunch of nasty infighthing evil squids who want to fuck you over and climb your back to go higher.
But those who have other investments are not those guys, they are everyone who has ever saved a penny of his own sweat.
I didn't find a briefcase of cash in the street in 1982 when I began investing.

clambo says

Where do you live? The sales tax where I live is almost 9%.

Florida, just like my user info says. 6 to 7 percent is typical of state income taxes. California has an unusually high sales tax.

clambo says

Go get hired by Goldman and join the squids. Go work for stupid B of A or their other ilk.

No thanks, I just want to see these vermin taxed at LEAST the same rate I am. Why should I have to pay anything north of 30% when they pay 15%?

One founding principle is that "all men are created equal" and thus they should be treated equally before the law. Giving special tax privileges to "squids" should be a no-brainer even for no-brainers.

Vicente says

Why should I have to pay anything north of 30% when they pay 15%?

I think you need a new accountant. How are you paying 30%? last time I checked, US tax rate is progressive, the higher your taxable income, the higher your tax rate. Get a tax chart from IRS.

rockyroad says

I think you need a new accountant.

My tax table shows a top rate of 35%, perhaps you need some reading glasses. I do my own taxes thanks.