patrick.net

thomaswong.1986 says

Back in Clinton's era, Congress disqualified the expense deduction of CEOs
and Officers salary above $1M. so what ever results were you seeking back than
didnt change.

Let's raise capital gains up to where they belong. That's a start.

tatupu70 says

Let's raise capital gains up to where they belong. That's a start.

why is your number better than another.. where do you peg it "belongs"? Not going to happen...

"Probably there are people in this room still mad at me at that budget because you think I raised your taxes too much. It might surprise you to know that I think I raised them too much, too."

- Bill Clinton 1995

tatupu70 says

thomaswong.1986 says

Back in Clinton's era, Congress disqualified the expense deduction of CEOs

and Officers salary above $1M. so what ever results were you seeking back than

didnt change.

Let's raise capital gains up to where they belong. That's a start.

The right number for that will always be in debate. However there is a difference between stock options (while you work at the company) and stocks bought on the open market. The stock options have no risk associated with them as you don't have to exercise them, so these gains behave more like regular income as compared to gains from regular stock purchases. Furthermore no raise of capital tax rates without eliminating all deductions and loopholes, such as mortgage interest deductions and capital gains exemption from house sales after 2 years.

mell says

Furthermore no raise of capital tax rates without eliminating all deductions and loopholes, such as mortgage interest deductions and capital gains exemption from house sales after 2 years.

LOL! Why do you hate home ownership and the American dream ?

.
.
(Psst... I do agree)

thomaswong.1986 says

mell says

Furthermore no raise of capital tax rates without eliminating all deductions and loopholes, such as mortgage interest deductions and capital gains exemption from house sales after 2 years.

LOL! Why do you hate home ownership and the American dream ?

.

.

(Psst... I do agree)

Ever since I realized the best times were those hacking years back then at Sun Microsystems when we slept in the labs, medical rooms or in our cars and weren't missing much ;)

thomaswong.1986 says

so there was no cut in capital gains in 1997 ?

Did I say that?

how do you explain the rush with over $150 Billion in Venture Capital flooding the start ups ?

Um, we were talking about JOBS. Unemployment went UP starting in 2000. Where was the job-creating effect of that cut in capital gains rate? I'm not denying that a flurry of stock market investing follows cuts in the capital gains rate; in fact I specifically mentioned that it helps the investor class. But we were talking about whether it helps the WORKING class, and no, it does not.

You seem to be having an imaginary argument with someone other than me. Did I say tax increases promote business activity? No, I simply said cutting the capital gains rate does NOT promote business activity. You are committing the fallacy of denying the antecedent. The reason to tax capital gains as ordinary income would be to balance the budget by ending preferential tax treatment for the investor class. The problem could be solved without people going hungry or dying from lack of medical care.

What happened when Clinton slightly cut the capital gains rate? The long trend of declining unemployment reversed, and people started losing jobs again for the first time in 8 years. Unemployment declined throughout Clinton's first term yet you inexplicably claim that there were no economic effects during the Clinton era until 1997. Cherry pick data much?

What happened when Bush further cut the capital gains rate? Overleveraging in the financial sector, housing bubble, Wall Street coup, and the destruction of the US economy, which has resulted in one of the worst wealth disparity situations in the world.

Trickle. Down. Doesn't. Work.

mell says

The right number for that will always be in debate. However there is a difference between stock options (while you work at the company) and stocks bought on the open market. The stock options have no risk associated with them as you don't have to exercise them, so these gains behave more like regular income as compared to gains from regular stock purchases. Furthermore no raise of capital tax rates without eliminating all deductions and loopholes, such as mortgage interest deductions and capital gains exemption from house sales after 2 years.

Or we could just tax capital gains as ordinary income. Period.

Homeboy says

Or we could just tax capital gains as ordinary income. Period.

COMMUNIST!!!

Homeboy says

You seem to be having an imaginary argument with someone other than me.

Mell does that a lot. It takes some getting used to.

Homeboy says

Or we could just tax capital gains as ordinary income. Period.

Could be a possibility if income taxes come down. But taking a risk or doing a job where you could lose all your money instead of making money is very different form a guaranteed paycheck. Furthermore stock losses would need to be able to be completely written off at once, not asymmetrical like it is now, i.e you get taxed instantly for the full amount of the gain, but you can only write off a tiny amount of losses per year. In any case I am opposed to any raises as long as there are loopholes and deductions for other types of gains and/or debt. Btw. if the market would have been allowed to correct itself in 2008 there would not be that much calls for a capital gains debate as the money possibly collected from those gains would not matter much amidst a sea of losses.

thomaswong.1986 says

many liberals talk of unfair or declining wages yet make no comments regarding domestic and foreign competition.

The Left view on this subject is that capital has too much freedom and power in and between nations and too often gets to set or even dictate its own rules to labor. Global wage arbitrage was not an issue for instance until the 70's/80's when corporations were allowed to move jobs and factories en mass to foreign nations. This was essentially a trade of long term prosperity for short term cheap goods and it has done us no good.

I have no clue what you think your chart shows but whatever you're thinking is probably incorrect. It clearly shows employment being higher until the recession hit. That jobs have not recovered since then is due to businesses taking advantage of Labor's lack of bargaining power by having less people do more. This is why productivity keeps going up even though wages have stagnated or fallen.

thomaswong.1986 says

you want more pay for workers.. talk to HR people about that..

HR takes their marching orders from the VIP's, not the other way around.

The only thing that will break the trend of people being paid less to more is for Labor to organize and demand their fair share of the pie.

The alternative is to watch America develop a massive and permanent underclass of people who are essentially viewed as disposable by the monied interests. Or in other words a return to a late 1800's/early 1900's style economy and society.

IMO were probably already about half way there.

thomaswong.1986 says

how many times have you heard of a Japanese Car Maker going into Bankruptcy

You know the Japanese mega corps get tons of assistance from the Japanese govt. right? The pretty much run the show over there, not unlike the Korean Chaebol's:
https://en.wikipedia.org/wiki/Keiretsu

They don't go to bankruptcy because they have what amounts to Too Big To Fail status, not because they're ran so well.

thomaswong.1986 says

They lost because they screwed up and Clinton knew it.

Screwed up where and on what? Clinton hadn't done a huge amount by that point, the biggest thing then was Hillarycare, which had tons of bad press by R's but never even got implemented.

thomaswong.1986 says

Everyone knows about Capital Gains and everyone uses it.

Most people don't even know how tax brackets work but you're going to claim, with no proof again, that everyone knows about capital gains taxes? Also only about half of Americans own some sort of stock, so no everyone doesn't use it.
thomaswong.1986 says

There is no 1% here as some would like to claim.

I love it when people post stuff like this. Totally discredits anything else they say for-ever.

tts says

I love it when people post stuff like this. Totally discredits anything else they say for-ever.

Agree. I try to tune-out the Foxbots and Rushbots. It's the same B.S. over and over.

Homeboy says

Um, we were talking about JOBS. Unemployment went UP starting in 2000.

That was at least partially the result of the end of the Y2K scare employment bubble. You know, when people for some reason thought that anything that used electricity would stop working on Jan 01, 2000.

tatupu70 says

Come on--you're smarter than this.

Ha! He's not called "WrongWong" for nothing.

mell says

But taking a risk or doing a job where you could lose all your money instead of making money is very different form a guaranteed paycheck

Capital gains are taxes on profits not principal. If someone is losing their shirt/house/car due to a bad stock call it won't be due to capital gains taxes. It'll most likely be due to them making a bad call and using debt to finance it.

mell says

In any case I am opposed to any raises as long as there are loopholes and deductions for other types of gains and/or debt.

There will always be loopholes and ways to abuse any tax law, particularly for the very rich, so this is at best poor reasoning.

mell says

Btw. if the market would have been allowed to correct itself in 2008 there would not be that much calls for a capital gains debate as the money possibly collected from those gains would not matter much amidst a sea of losses.

Unfortunately if the market had been allowed to correct itself back then there would be no market and the modern economy does need the market. IMO it should have been done in a better manner, by putting the bad banks in receivership and manage the bad debt over time. I know the banks/regulators claim it wasn't possible but they said the same thing to William Black back in the S&L days and it worked just fine.

More importantly though if capital gains taxes had been higher there may not have been such a bubble to begin (less money for the banks to mal-invest) with and if there had anyways it would've been smaller in magnitude and the govt. could've been redistributing the money throughout the rest of the country. Which would've allowed the US to weather a major recession in a much better fashion.

mell says

But taking a risk or doing a job where you could lose all your money instead of
making money is very different form a guaranteed paycheck.

Yes, in one case you have to sacrifice your time and energy and in the other you just sit back and make money while sipping umbrella drinks in the Caribbean.

You think money earned by sweat should be taxed MORE than money made doing nothing?

tts says

More importantly though if capital gains taxes had been higher there may not have been such a bubble to begin (less money for the banks to mal-invest) with

Why? It would have taken them just a tad bit longer, but without tail-risk nothing will change.

tts says

Unfortunately if the market had been allowed to correct itself back then there would be no market and the modern economy does need the market.

No it doesn't - DOW 6000 is also market, but one where people speculate far less, no matter what the capital gains tax is.

tatupu70 says

Yes, in one case you have to sacrifice your time and energy and in the other you just sit back and make money while sipping umbrella drinks in the Caribbean.

You think money earned by sweat should be taxed MORE than money made doing nothing?

You take money that you already earned from your sweat job and that has been already taxed to invest and you bear the full brunt of the risk. This imagery of siting in the Carribean while watching your accounts multiply is mostly just fantasy, esp. in a real market with all the tail-risk. What's next, paying and taxing people by how much you think they are sweating/thinking/working at their job? Most full-time traders I know work more than the average person and often have a second "normal" job.

That being said, I consider short-term investments and flips less productive than long-term investment that give corporations necessary capital to develop (e.g. development stage biotech), so maybe the distinction we currently have in taxing short vs. long term investments is not all that bad.

However the problem is not the capital gains tax, it's removing the tail-risk for some insiders and sectors that can blow assets bubbles that pop when retail finally gets on board, and while retail bears the full brunt of their losses, the few TBTFs caught in this as well will be bailed out by the same retail middle-class citizens - double-whammy!

mell says

You take money that you already earned from your sweat job and that has been
already taxed to invest and you bear the full brunt of the risk

Yes, and expect commensurate return for the risk. What's your point? Please give me one reason why capital gains should be taxed LESS than labor. Just one.

mell says

However the problem is not the capital gains tax, it's removing the tail-risk
for some insiders and sectors that can blow assets bubbles that pop when retail
finally gets on board, and while retail bears the full brunt of their losses,
the few TBTFs caught in this as well will be bailed out by the same retail
middle-class citizens - double-whammy!

Well, we have many problems, but capital gains tax rate is a big one. Moral hazard is way down the list, IMO. But, break up the TBTF immediately, if that's what you're worried about. I'm all for it!

tatupu70 says

You think money earned by sweat should be taxed MORE than money made doing nothing?

Absolutely. People who earn their money from labor are ASSHOLES!

tatupu70 says

Please give me one reason why capital gains should be taxed LESS than labor.
Just one.

I'll take your silence as indication that you have no good reasons.

tts says

Capital gains are taxes on profits not principal. If someone is losing their shirt/house/car due to a bad stock call it won't be due to capital gains taxes. It'll most likely be due to them making a bad call and using debt to finance it.

Investing into companies, esp. long-term, is not just "betting", you are loaning them your cash for product development. It's irrelevant whether you use debt (margin financing for equity investments is super strict as opposed to housing and there are no bailouts) or not and whether you consider it a bet or not, it comes from already taxed money most people have earned in another job. When there are zero deductions, capital gains exemptions and pre-tax opportunities across the board to fund other assets such as housing, then we can talk about capital gains tax rates, before it's a no-no. And once we achieve the former, overall income tax rates can likely be lowered due to the money taken in from eliminating loopholes and exemptions.

tatupu70 says

I'll take your silence as indication that you have no good reasons.

I've given you my reasons, esp. for long term investments. You had noting of significance for rebuttal, so there is nothing for me to say. Otherwise, see above.

mell says

it comes from already taxed money most people have earned in another job.

So what? Is there some golden rule that money can only be taxed once? Every dollar in existance has been taxed an uncountable number of times. Who cares?

mell says

When there are zero deductions, capital gains exemptions and pre-tax
opportunities across the board to fund other assets such as housing, then we can
talk about capital gains tax rates, before it's a no-no.

Why? We can't talk about two things at once? Why is one more important than the other?

mell says

I've given you my reasons, esp. for long term investments. You had noting of
significance for rebuttal, so there is nothing for me to say. Otherwise, see
above.

You can't repeat them again? They must really be good ones if you're afraid to clearly state them in a new post.

mell says

1. Yes you can.

2. Short term speculation, even a trade that lasts 5 minutes, has a long term capital gains tax rate on 60% of the profit. This is the 60/40 rule that applies to commodities and traders have been screwing people for decades.

It's impossible to foresee company developments or market conditions over a year or years, you cannot rely on that as source of income, 2008 comes along and your long-term investments are gone. Why do you think all the TBTFs and major power brokers/funds now make a guaranteed major chunk of their money with HFT/algo and short-term trades? Because that's where they have an unfair edge. Long-term, not so much.

mell says

It's impossible to foresee company developments or market conditions over a
year or years, you cannot rely on that as source of income, 2008 comes along and
your long-term investments are gone. Why do you think all the TBTFs and major
power brokers/funds now make a guaranteed major chunk of their money with
HFT/algo and short-term trades? Because that's where they have an unfair edge.
Long-term, not so much.

So how about we put a special tax on short term trading in addition to increasing capital gains rates to the same as labor?

mell says

Long-term investment is not speculation, it is giving companies much needed
cash to develop their products. E.g. biotech could not exist without cash
infusions from investors throughout their entire development stage cycle which
can easily last 10-20 years.

Nor could it exist without smart people actually developing products that make our lives better.

But you think that the people who come up with the product should be taxed MORE than the people who give them money?

tatupu70 says

So how about we put a special tax on short term trading in addition to increasing capital gains rates to the same as labor?

A transaction tax could solve this (esp. with regards to HFT, but also requiring bids and asks to stand for a minimum duration to maintain fairness), but every tax has pros and cons. Again, if all deductions and exemptions are eliminated I could support it, but not before. Also I would like to see a lower income tax overall once everything is taxed the same and loopholes and exemptions have been eliminated. Maybe flat 25% or 30%, and if progressive, then the rates for middle-class and upper middle-class should be significantly lowered. And spending curtailed of course ;)

mell says

Again, if all deductions and exemptions are eliminated I could support it, but
not befor

Seriously--you can only handle one good idea at a time? You need some work on time management.

tatupu70 says

mell says

Again, if all deductions and exemptions are eliminated I could support it, but

not befor

Seriously--you can only handle one good idea at a time? You need some work on time management.

Fairness aka equal opportunity comes way before redistribution and equalizing. That's all. But yes, I am open to all proposals in the right order. Discussion is important, but a blow-hard I-am-always-right mentality as shown by some does not advance this topic at all. But, hey it's just an internet forum ;)

mell says

Fairness aka equal opportunity comes way before redistribution and equalizing.

Fairness is BS. It's completely subjective and impossible to implement. Redistribution is what's important.

You'd rather have a "fair" system and economy of Somalia or "unfair" system like the US had from 1950 - 1980?

HydroCabron says

No. But it is of some value, if less than the guy who changes the HVAC
filters every six months.

"Noble" is a near-meaningless intensive here. I'm lightly mocking their
profession.

Verbal irony, or, as Bgamall would put it, a sort of false flag.

I think the value is questionable, but regardless, all I'm asking is to tax them like we tax all other value enhancing work. According to the same progressive rates. How could anyone be against that?

tatupu70 says

mell says

Fairness aka equal opportunity comes way before redistribution and equalizing.

Fairness is BS. It's completely subjective and impossible to implement. Redistribution is what's important.

You'd rather have a "fair" system and economy of Somalia or "unfair" system like the US had from 1950 - 1980?

Well that's where we disagree then. It's every simple to be fair to the best possible extent. A simple way to start out with is treat everybody the same under the rule of law, no bailouts or get out of jail free cards. Keep laws short and to a minimum so that there is no wiggle room to misrepresent/misinterpret them or take advantage of loopholes. Etc.

mell says

It's every simple to be fair to the best possible extent.

That's comlete BS. Like I said--fairness is 100% subjective. What's "fair" to you is not to your next door neighbor. Ask 1000 people what is fair and you'll get 1000 different answers.

mell says

A simple way to start out with is treat everybody the same under the rule of
law, no bailouts or get out of jail free cards. Keep laws short and to a minimum
so that there is no wiggle room to misrepresent/misinterpret them or take
advantage of loopholes. Etc.

How does that have anything to do with capital gains tax rates?

tatupu70 says

HydroCabron says

No. But it is of some value, if less than the guy who changes the HVAC

filters every six months.

"Noble" is a near-meaningless intensive here. I'm lightly mocking their

profession.

Verbal irony, or, as Bgamall would put it, a sort of false flag.

I think the value is questionable, but regardless, all I'm asking is to tax them like we tax all other value enhancing work. According to the same progressive rates. How could anyone be against that?

Brainwashing, maybe?

It reminds me of William Shirer's statement about having lunch with perfectly intelligent Germans in the 1930s, who could converse in depth on numerous topics, and then blandly assert outrageous bullshit about Jews or the persecution of Germany by the world as if no one could find such statements unreasonable.

I once had a boss who came to work one morning and flat-out told us that the reason the economy was so good (this was 1999) was due entirely to Reagan's tax cuts in 1982. I know people who believe no income beyond a certain level should be taxed at all. You would have been laughed out of a John Birch society meeting for saying that in 1970. Now you're welcome at any Republican or Libertarian Party gathering.

tatupu70 says

That's comlete BS. Like I said--fairness is 100% subjective. What's "fair" to you is not to your next door neighbor. Ask 1000 people what is fair and you'll get 1000 different answers.

If you don't think your country has fair laws you either have to leave the country or work to repeal those laws or challenge them in court. Selectively applying them is far worse.

tatupu70 says

How does that have anything to do with capital gains tax rates?

It is a prerequisite for me however to get support for the capital gains tax adjustment. I consider this the fundamental problem, you don't. That's fine.

mell says

If you don't think your country has fair laws you either have to leave the
country or work to repeal those laws or challenge them in court. Selectively
applying them is far worse

I think fairness is an abstract concept that is unimportant. Laws are made to promote behavior that society wishes to encourage. Often the two are the same.

mell says

It is a prerequisite for me however to get support for the capital gains tax
adjustment. I consider this the fundamental problem, you don't. That's fine.

You really are a Republican. You must extract a bounty to support something you believe in??

tatupu70 says

So how about we put a special tax on short term trading in addition to increasing capital gains rates to the same as labor?

Problem with capital gains is that certain corporate structures get taxed twice. However, taxing all income at same as labor... I'm all for that.

It's an abomination that working man pays more in taxes than the man who is controlling the money. I'm a strong believer that all income should be taxed equally without special interest loopholes.

tatupu70 says

You really are a Republican. You must extract a bounty to support something you believe in??

It's fairness first AKA equal opportunity. How can you talk about RAISING already existing taxes while you can flip a house after 2 years and pocket 250K/500K taxed at 0%?? I am not married to a specific cap. gains tax rate, but you have to understand that there is a significant difference between committing your money for years with the possibility of losing it all vs getting a paycheck every month and getting taxed on that. Also, what tax rate for interest from savings?

mell says

I am not married to a specific cap. gains tax rate, but you have to understand that there is a significant difference between committing your money for years with the possibility of losing it all vs getting a paycheck every month and getting taxed on that.

Robert the Bruce: Wait! I respect what you said, but remember that these men have lands and castles. It's much to risk.
Willam Wallace: And the common man who bleeds on the battlefield, does he risk less?