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#52 Sep 21 2011 at 12:10 PM Rating: Excellent
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Demea wrote:
lolgaxe wrote:
Demea wrote:
lolgaxe wrote:
Tax payers don't seem to mind paying for internet, television, dvd players , projectors, computers, and cable for anything connected to defense spending.
The fact that you think that the two things are related concerns me.
So we're not talking about wasted tax payer's money?
There's a Salvation Army joke in here somewhere, I just can't find it.
We're the more militant wing. We don't wait for donations, we go into the stores fully loaded and take what we want to donate to people.

And keep the nicer swag.

But yeah, outrage at wasted tax payer dollars for one area but not another seems genuinely disingenuous.

Edited, Sep 21st 2011 2:12pm by lolgaxe
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#53 Sep 21 2011 at 3:08 PM Rating: Decent
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someproteinguy wrote:
After so many years of Republicans trying to lower my taxes I just have to chuckle that there are those among them that want to make them go up again.


It's more about countering an argument that we must raise taxes on the rich because they don't pay their "fair share". Republicans aren't arguing for raising taxes on anyone. What we are doing is saying that if the Dems are so **** bent on doing it *and* their argument is that taxes should be raised most on those who are not currently paying their fair share, then they should be raising taxes on the poor and not the rich. The fact that they are arguing for the opposite shows that this isn't about fairness or math, but is really just about class based rhetoric.


We're applying the Dems own argument to their own agenda and showing how it doesn't add up.
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#54 Sep 21 2011 at 3:19 PM Rating: Excellent
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gbaji wrote:
he fact that they are arguing for the opposite shows that this isn't about fairness
Smiley: lol That's completely a matter of perspective. There's more than one measuring stick for fairness in this scenario.
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#55 Sep 21 2011 at 3:28 PM Rating: Excellent
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gbaji wrote:
someproteinguy wrote:
After so many years of Republicans trying to lower my taxes I just have to chuckle that there are those among them that want to make them go up again.


It's more about countering an argument that we must raise taxes on the rich because they don't pay their "fair share". Republicans aren't arguing for raising taxes on anyone. What we are doing is saying that if the Dems are so **** bent on doing it *and* their argument is that taxes should be raised most on those who are not currently paying their fair share, then they should be raising taxes on the poor and not the rich. The fact that they are arguing for the opposite shows that this isn't about fairness or math, but is really just about class based rhetoric.


We're applying the Dems own argument to their own agenda and showing how it doesn't add up.


So wait, ya'll aren't going to raise my taxes unless the Dems raise taxes on the rich then? Smiley: confused

Because I thought it was part of some still-coming-together comprehensive tax reform plan or something... not sure where I got that


Edited, Sep 21st 2011 2:34pm by someproteinguy
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#56 Sep 21 2011 at 3:39 PM Rating: Excellent
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Paper from Center on Budget and Policy Priorities debunks the Claim that 51% of Americans pay no Federal Taxes.

PS I do not own a TV, though Jonwin does have 2 and Cable that I can use. My cell phone is pay for by taxes on phone service and is crappy. Anything I do own that has any real worth, I've inherited or pay for with inheritance. Any money I have after rent and basic needs, goes into the business I'm trying to get off the ground, so I might become a member of the working poor, in the next year or two.
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#57 Sep 21 2011 at 4:40 PM Rating: Default
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Uglysasquatch, Mercenary Major wrote:
gbaji wrote:
he fact that they are arguing for the opposite shows that this isn't about fairness
Smiley: lol That's completely a matter of perspective. There's more than one measuring stick for fairness in this scenario.


Sure. But the one that Obama specifically mentions with regard to the so-called "Buffet Bill" is the percentage of total taxes paid. He picked that measuring stick and attempted to use it to define what was "fair". But by his own methodology, his proposal doesn't make any sense.

Which is the point.
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#58 Sep 21 2011 at 4:41 PM Rating: Excellent
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I think Elizabeth Warren hit the nail on the head about this.

Elizabeth Warren wrote:
There is nobody in this country who got rich on his own. Nobody. You built a factory out there -- good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that maurauding bands would come and seize everything at your factory... Now look. You built a factory and it turned into something terrific or a great idea -- God Bless! Keep a Big Hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.


Quickly becoming my new favorite lady in politics.
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#59 Sep 21 2011 at 4:48 PM Rating: Decent
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ElneClare wrote:
Paper from Center on Budget and Policy Priorities debunks the Claim that 51% of Americans pay no Federal Taxes.


A claim that no one is making. While I'm sure that misstatements (like those I pointed out in the AP article) will be made, most sources make it very clear that they are talking about "federal income tax", and that this does not include payroll taxes. Heck. Even the AP article is careful to make that distinction:

Quote:
The Tax Policy Center estimates that 46 percent of households, mostly low- and medium-income households, will pay no federal income taxes this year. Most, however, will pay other taxes, including Social Security payroll taxes.
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#60 Sep 21 2011 at 4:51 PM Rating: Decent
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gbaji wrote:
Uglysasquatch, Mercenary Major wrote:
gbaji wrote:
he fact that they are arguing for the opposite shows that this isn't about fairness
Smiley: lol That's completely a matter of perspective. There's more than one measuring stick for fairness in this scenario.


Sure. But the one that Obama specifically mentions with regard to the so-called "Buffet Bill" is the percentage of total taxes paid. He picked that measuring stick and attempted to use it to define what was "fair". But by his own methodology, his proposal doesn't make any sense.

Which is the point.


Many peoples measuring sticks can be different (hence it being a matter of perspective). The way I see it is why do I get 30% income tax on my piddly income, when a rich fat cat pays 15 on the majority of money he/she makes. To me that is *********

On the other hand 30% of 100K is only 30000 dollars. The rich folks who say earn 1 mil a year pay 250,000 8.3 times more than my amount.

So which is fair, I contribute about 1/3 of my money, a rich person contributes about 1/6, but their contribution is 8 times higher then mine. Which is fair?....does it really even matter?
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#61 Sep 21 2011 at 4:53 PM Rating: Default
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catwho wrote:
I think Elizabeth Warren hit the nail on the head about this.

Elizabeth Warren wrote:
There is nobody in this country who got rich on his own. Nobody. You built a factory out there -- good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that maurauding bands would come and seize everything at your factory... Now look. You built a factory and it turned into something terrific or a great idea -- God Bless! Keep a Big Hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.


Quickly becoming my new favorite lady in politics.


Her opinion would have a lot more weight if the argument was really about spending on roads, and education, and police, and the military, and if it didn't miss the fact that "the rest of us" includes those rich people and that they paid most of the money for those things. Now if she could explain how paying for welfare and other social goodies helped that rich person succeed, she might have a point.


Can anyone explain to me how extending unemployment for a couple years helps someone start up their new factory? Anyone?
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#62 Sep 21 2011 at 4:57 PM Rating: Default
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rdmcandie wrote:
Many peoples measuring sticks can be different (hence it being a matter of perspective). The way I see it is why do I get 30% income tax on my piddly income, when a rich fat cat pays 15 on the majority of money he/she makes. To me that is bullsh*t.


If this were true, you'd have a point. But it's not, so you don't.

See how easy that is?

Quote:
On the other hand 30% of 100K is only 30000 dollars. The rich folks who say earn 1 mil a year pay 250,000 8.3 times more than my amount.

So which is fair, I contribute about 1/3 of my money, a rich person contributes about 1/6, but their contribution is 8 times higher then mine. Which is fair?....does it really even matter?


Except those numbers aren't correct. Did you bother to read the link in the OP?

Quote:
This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes, payroll taxes and other taxes, according to the Tax Policy Center, a Washington think tank.

Households making between $50,000 and $75,000 will pay an average of 15 percent of their income in federal taxes.

Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7 percent.




Your argument (and Obama's incidentally) is based on an assumption that made up numbers are real and real numbers can just be ignored. For a position that is supposedly based on "math" and not "class warfare", it's pretty darn non-mathematical.
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#63 Sep 21 2011 at 5:09 PM Rating: Excellent
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The difference seems to me to be whether or not you look at averages, or try to close the loopholes people are taking advantage of.

OP linky wrote:
With tax rates that high, why do so many people pay at lower rates? Because the tax code is riddled with more than $1 trillion in deductions, exemptions and credits, and they benefit people at every income level, according to data from the nonpartisan Joint Committee on Taxation, Congress' official scorekeeper on revenue issues.


So do we close loopholes that people like Mr. Buffet and everyone with a child takes advantage of? Will that even have an effect on the economy? And if you do, does that count as 'raising taxes' on those individuals according to Mr. Norquist and the Americans for Tax Reform?
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#64 Sep 21 2011 at 5:21 PM Rating: Excellent
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gbaji wrote:


Can anyone explain to me how extending unemployment for a couple years helps someone start up their new factory? Anyone?


It may not have helped them "start it up" but certainly, ensuring or at least trying to ensure the citizens of your country aren't forced into desperation and destitution is part of creating a civil society which allows businesses to thrive.

I don't think businesses want to locate where there is a total breakdown in civil society. Or I could be wrong. Maybe everyone wants to start a coffee shop in Darfur and Zimbabwe. Doubtful, however. (LOOK even McDonalds doesn't want to deal with Zimbabwe or Sudan! http://en.wikipedia.org/wiki/List_of_countries_with_McDonald%27s_franchises)

Ensuring everyone in society gets the basics that they need to be healthy and happy is not just the right and moral thing to do, it is the only way to maintain a society that is worth living in.

Unless you imagine a world of gated compounds like in Margaret Atwood's book "Oryx and Crake" as some sort of desirable outcome.



Edited, Sep 21st 2011 4:24pm by Olorinus
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#65 Sep 21 2011 at 5:23 PM Rating: Decent
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someproteinguy wrote:
The difference seems to me to be whether or not you look at averages, or try to close the loopholes people are taking advantage of.


I think the larger point is that to whatever degree we do decide to close loopholes or make other changes to our tax system, such changes should not be made based on completely false assumptions about who pays how much in tax.

Quote:
OP linky wrote:
With tax rates that high, why do so many people pay at lower rates? Because the tax code is riddled with more than $1 trillion in deductions, exemptions and credits, and they benefit people at every income level, according to data from the nonpartisan Joint Committee on Taxation, Congress' official scorekeeper on revenue issues.


So do we close loopholes that people like Mr. Buffet and everyone with a child takes advantage of?


Buffet does not take advantage of any loopholes. That's one big flaw in the whole thing. Buffet is an outlier. He has specifically structured his earnings so that it all comes in the form of long term capital gains. That's why he pays so little in tax relatively speaking. There's no loophole involved. To raise his tax rate, you'd have to raise the long term capital gains tax rate. And if you want to do that, you need to make a completely different argument to support it.


Quote:
Will that even have an effect on the economy? And if you do, does that count as 'raising taxes' on those individuals according to Mr. Norquist and the Americans for Tax Reform?


If you want to make Buffet pay more taxes, you have to raise the capital gains tax rate. That would absolutely count as "raising taxes". And it would hurt a **** of a lot more people than just Mr. Buffet. Everyone with a 401k will be affected. That's a lot of people who aren't super rich.


The problem is that you are conflating what is really two completely different issues. The one raised about Buffet, which has to do purely with capital gains tax rates, and the broader concept of tax loopholes, deductions, credits, etc. We can look at the real loopholes, but we should really be honest from the start about what we're really talking about, and who it will affect, and why we're doing it.


Obama's approach was not honest.
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#66 Sep 21 2011 at 5:31 PM Rating: Default
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Olorinus wrote:
gbaji wrote:


Can anyone explain to me how extending unemployment for a couple years helps someone start up their new factory? Anyone?


It may not have helped them "start it up" but certainly, ensuring or at least trying to ensure the citizens of your country aren't forced into desperation and destitution is part of creating a civil society which allows businesses to thrive.


Bit of a stretch there, don't you think? So it's an all-or-nothing situation? We either extend unemployment benefits indefinitely *or* the entire society collapses into a Darfour-like state?

What I was getting at, which apparently flew right over your head, is that what extending unemployment benefits does is not prevent people from being "forced into desperation and destitution", but it does prevent them from being "forced to find another job". Long before someone is going to be desperate enough to get piercings and tatoos, and join a post-apocalyptic gang, they're going to be desperate enough to get a job that maybe doesn't pay as much as the one they used to have.

Do you see how this might do the opposite of helping employer fill job slots in their new venture?

Quote:
Ensuring everyone in society gets the basics that they need to be healthy and happy is not just the right and moral thing to do, it is the only way to maintain a society that is worth living in.


The disagreement is over how you do that though. I'd rather we do that by making our society as free as possible so that each individual is able to pursue their own life path and ejoy the benefits of their own labors to the greatest degree possible. I think that by casing a large safety net, paid for with the fruits of the labors of the people, we make it harder for people to achieve that by themselves and force them into a life of servitude to the very government which claims to be helping them.
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#67 Sep 21 2011 at 5:37 PM Rating: Excellent
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What I was getting at, which apparently flew right over your head

This is ironic because Warren's point very obviously cruised right over yours.
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#68 Sep 21 2011 at 6:02 PM Rating: Excellent
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gbaji wrote:
Obama's approach was not honest.


Ya ok, he's a politician though, I've come to expect that.

Now how is taxing one type of income less than another not a loophole? Because to this layman that seems like the very definition of a loophole.
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#69 Sep 21 2011 at 6:17 PM Rating: Good
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****, when I lost a job recently, I took a few crap temp and part-time positions to get by. Which one was the best, immediately before finding full-time work? The Census.
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#70gbaji, Posted: Sep 21 2011 at 6:48 PM, Rating: Sub-Default, (Expand Post) Ok. I'll bite. What exactly do you think Buffet's point was other than to create a false perception that rich people don't pay a high enough percentage of taxes? More specifically, what assuming arising from what Buffet said do you think Obama is basing his proposed tax changes on? I'm reasonably certain that I am spot on in my assessment.
#71 Sep 21 2011 at 7:01 PM Rating: Default
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someproteinguy wrote:
Now how is taxing one type of income less than another not a loophole? Because to this layman that seems like the very definition of a loophole.


A loophole is something that allows you to avoid the normal rules. A tax rate on a category of economic activity is "normal". We tax lots of things at different rates. Does the fact that you pay a different rate for payroll taxes than you do for income tax and yet another for your state income tax and even another for your state sales tax make any of them "loopholes"? Of course not.

Capital gains is different than normal income. Income is money gained in exchange for goods or services. Capital gains is when you sell something you already own for more money than it cost you to buy it. There are very good reasons why capital gains taxes (long term at least) *must* be lower than the equivalent income rates. I'll explain why if you really want me to. The broader point is that it absolutely is not a loophole for one to be taxed at a different rate than the other.

Which leaves the whole "Make Buffet pay as much taxes as his secretary" argument problematic. The only way to do that would be to either raise capital gains rates for everyone and hurt a whole **** of a lot of secretaries trying to save up for their retirements in the process *or* to try to mangle the tax code to create an exception for large amounts of capital gains, which creates a whole freaking huge amount of problems and would be a nightmare to even attempt to implement. Um... And that's why the whole thing is complete BS.
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#72 Sep 21 2011 at 7:07 PM Rating: Excellent
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Gbaji, you do realize that 401(k)s are taxed at the income tax rate and not at the capital gains rate, right?
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#73 Sep 21 2011 at 7:14 PM Rating: Decent
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catwho wrote:
Gbaji, you do realize that 401(k)s are taxed at the income tax rate and not at the capital gains rate, right?


Ah. Yup (doh!). Tax deferred and all that. Ok... So other investments which are made post-tax will be affected. Which is still a heck of a lot of not-rich people. You don't suppose that Buffet's secretary gets stock options and/or stock buys? She just doesn't live on them. Yet. The irony is that the most likely means by which one might fix the problem of Buffet not paying as much tax as his secretary would require making his secretary pay more tax on any stock she's bought or rolls over during her career working for him.

Brilliant solution!
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#74 Sep 21 2011 at 7:24 PM Rating: Excellent
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The majority of people who are investing in 401(k)s as their main retirement plans aren't the ones who tend to invest in stocks. If they have any at all, it's because the company gave them to them at some point. I know that, of the three jobs I've worked where I was offered a 401(k), I had no choice in the specific options other than "aggressive," "moderate," or "cautious" and I certainly wasn't given any of the company's stock directly - probably because they were privately owned companies without any stock. If small businesses are the backbone of America... then a lot of those small businesses aren't publicly traded. Remember that.

If you went up to the average minimum wage worker and asked them about their stock portfolio, they'd probably give you a deer in the headlights stare. Or start laughing at you.

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#75 Sep 21 2011 at 7:40 PM Rating: Excellent
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gbaji wrote:
A loophole is something that allows you to avoid the normal rules. A tax rate on a category of economic activity is "normal". We tax lots of things at different rates. Does the fact that you pay a different rate for payroll taxes than you do for income tax and yet another for your state income tax and even another for your state sales tax make any of them "loopholes"? Of course not.


Well as an analogy we have people that live in Washington State (no income tax) and do all their shopping in Oregon (no sales tax). It's just a quick hop across the bridge, and you can sneak out of a reasonable amount of taxation. I suppose you wouldn't call it a loophole, but by gaming the system to pay less tax doesn't seem fair in a sense. In the same way specifically structuring earnings to pay less tax seems (Well to me at least).

Not that I don't get that there are reasons (agree with them or not) we have loopholes/incentives/whatever but still, seems kind of silly that having your farm go organic or having kids would be a loophole, but adjusting a portfolio (if I'm understanding what he's doing...) would not.

But I see a lot of grey, so probably best to take it with a grain of salt. Smiley: rolleyes
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#76 Sep 21 2011 at 7:48 PM Rating: Decent
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catwho wrote:
The majority of people who are investing in 401(k)s as their main retirement plans aren't the ones who tend to invest in stocks. If they have any at all, it's because the company gave them to them at some point. I know that, of the three jobs I've worked where I was offered a 401(k), I had no choice in the specific options other than "aggressive," "moderate," or "cautious" and I certainly wasn't given any of the company's stock directly - probably because they were privately owned companies without any stock. If small businesses are the backbone of America... then a lot of those small businesses aren't publicly traded. Remember that.


Sure. But according to about.com 9% of all private sector employees in the US receive stock options from the companies they work for, and 18% own some stock for the companies they work for (presumably all or nearly all of that 9% is a subset of the 18%). That's a pretty good chunk of people, and it doesn't include people who may directly own stock in companies other than the one they work for. Given that half the people who own stock in the companies they work for aren't granted stock options (meaning they just choose to spend their own money on stock), it's not unreasonable to expect that there's at least a few percent more who buy stock as an investment even if their own company isn't publicly traded.


In any case, it's clear we can't be talking about just the top couple of percent of the wealthiest folks in the US.

Quote:
If you went up to the average minimum wage worker and asked them about their stock portfolio, they'd probably give you a deer in the headlights stare. Or start laughing at you.


There's a huge range of salaries between minimum wage and "rich" though.

Edited, Sep 21st 2011 6:49pm by gbaji
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#77 Sep 21 2011 at 8:03 PM Rating: Decent
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someproteinguy wrote:
Not that I don't get that there are reasons (agree with them or not) we have loopholes/incentives/whatever but still, seems kind of silly that having your farm go organic or having kids would be a loophole, but adjusting a portfolio (if I'm understanding what he's doing...) would not.


Didn't I just explain the difference between income and capital gains? They are two completely different types of economic activities and are subject to two different taxes, with two different rates. The sales tax in your area is probably higher than the property tax rate, but it would be ridiculous to claim that by buying a home instead of buying stuff in the stores you're using a loophole to avoid paying taxes. Now, getting your home declared an historical site so you can take advantage of a tax deduction for maintaining said site *is* a loophole.


When we talk about tax loopholes, we're talking about things you do within a single type of tax which allows you to pay less of that specific tax.


I'm honestly beginning to suspect you have no clue what capital gains are. Which sorta hinders any discussion.
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#78 Sep 21 2011 at 8:11 PM Rating: Excellent
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gbaji wrote:
catwho wrote:
The majority of people who are investing in 401(k)s as their main retirement plans aren't the ones who tend to invest in stocks. If they have any at all, it's because the company gave them to them at some point. I know that, of the three jobs I've worked where I was offered a 401(k), I had no choice in the specific options other than "aggressive," "moderate," or "cautious" and I certainly wasn't given any of the company's stock directly - probably because they were privately owned companies without any stock. If small businesses are the backbone of America... then a lot of those small businesses aren't publicly traded. Remember that.


Sure. But according to about.com 9% of all private sector employees in the US receive stock options from the companies they work for, and 18% own some stock for the companies they work for (presumably all or nearly all of that 9% is a subset of the 18%). That's a pretty good chunk of people, and it doesn't include people who may directly own stock in companies other than the one they work for. Given that half the people who own stock in the companies they work for aren't granted stock options (meaning they just choose to spend their own money on stock), it's not unreasonable to expect that there's at least a few percent more who buy stock as an investment even if their own company isn't publicly traded.


In any case, it's clear we can't be talking about just the top couple of percent of the wealthiest folks in the US.

Quote:
If you went up to the average minimum wage worker and asked them about their stock portfolio, they'd probably give you a deer in the headlights stare. Or start laughing at you.


There's a huge range of salaries between minimum wage and "rich" though.


By your own numbers we are talking about 82% of the nation not having stock in the company they work for. And while there's a huge range of salaries between minimum wage and rich, they are all pretty strongly tilted toward the minimum wage side of the equation, in comparison to the rich side of the equation. If the median household income is ~$50,000, that's a great deal closer to the wage slaves earning $15K a year than it is the wealthy earning a million bucks a year.
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#79 Sep 21 2011 at 8:20 PM Rating: Excellent
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gbaji wrote:
I'm honestly beginning to suspect you have no clue what capital gains are. Which sorta hinders any discussion.


There's a lot of things I don't understand, which is why I ask questions. Smiley: nod

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The sales tax in your area is probably higher than the property tax rate, but it would be ridiculous to claim that by buying a home instead of buying stuff in the stores you're using a loophole to avoid paying taxes.


It's not, but since that's not your point, it's not really relevant. Smiley: smile

Edited, Sep 21st 2011 7:38pm by someproteinguy
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#80 Sep 21 2011 at 8:21 PM Rating: Excellent
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This is ironic because Warren's point very obviously cruised right over yours.
Ok. I'll bite. What exactly do you think Buffet's point was...

That you should learn to read.

Edited, Sep 21st 2011 9:21pm by Jophiel
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#81 Sep 21 2011 at 9:09 PM Rating: Excellent
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Jophiel wrote:
gbaji wrote:
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This is ironic because Warren's point very obviously cruised right over yours.
Ok. I'll bite. What exactly do you think Buffet's point was...

That you should learn to read.

Edited, Sep 21st 2011 9:21pm by Jophiel

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#82 Sep 22 2011 at 2:21 PM Rating: Decent
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catwho wrote:
By your own numbers we are talking about 82% of the nation not having stock in the company they work for.


And? It's not like 100-18 is complex math. I'm not sure how switching it around changes anything. Can you agree that raising taxes on capital gains must mathematically result in higher taxes on more than just the richest 2% of earners. I mean, it's not about class warfare, it's about "math", remember?

Quote:
And while there's a huge range of salaries between minimum wage and rich, they are all pretty strongly tilted toward the minimum wage side of the equation, in comparison to the rich side of the equation. If the median household income is ~$50,000, that's a great deal closer to the wage slaves earning $15K a year than it is the wealthy earning a million bucks a year.


And? I'm not sure what your point is. So we should punish people who are modestly successful while lying to ourselves and pretending that we're just punishing "the filthy rich"? That's the class warfare aspect to this. Obama is playing on the willingness (in some cases "eagerness") of the population to stick it to "the rich", but his proposals will hurt far far more than just that group. Even if you think it's ok to hurt the rich because they are rich, his plan is a bad one.

But that would require applying actual math. And despite Obama's statements to the contrary, his position isn't about math at all. The math doesn't support his position. What's so amazingly stupid about his speeches recently is that he's the one creating the "it's class warfare or its math" comparison. So when the math doesn't check out, his own words tell us what he's really doing. He's going all in on this one, but he's got an incredibly weak hand and his opponents are calling his bluff. Watch for disaster to result.
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#83 Sep 22 2011 at 3:52 PM Rating: Excellent
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I'd actually venture to say that a great many of those 18% don't make enough earnings off their stock options for it to matter. If you've got $10,000 in stock stashed away and your dividends for the year are five hundred dollars, and you have to pay $100 in taxes because of that and an extra $50 of taxes would hurt your lifestyle, you've got bigger problems.

My father in law, great fool he is, had $100K in GM stock. GM undergoing debt restructuring means he lost 90% of its value in a few short weeks. It's since climbed back up to about half its initial value, but he won't be paying taxes on that for a long, long time, since it's still considered a loss.

I believe the majority of folks with large amounts of stock would rather their stock do spectacularly and have to eat a larger portion in taxes than they would have their stock do poorly so they can pay lower taxes.

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#84 Sep 22 2011 at 4:12 PM Rating: Excellent
The only relevant math in gbaji-land is:


money > people
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#85 Sep 22 2011 at 4:56 PM Rating: Good
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The only relevant math in gbaji-land is:


Corporations > people


FTFY

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#86 Sep 22 2011 at 5:20 PM Rating: Good
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Lol @ whoever karma bombed this thread.

Another victory for the poor!
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#87 Sep 22 2011 at 5:35 PM Rating: Decent
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catwho wrote:
I'd actually venture to say that a great many of those 18% don't make enough earnings off their stock options for it to matter. If you've got $10,000 in stock stashed away and your dividends for the year are five hundred dollars, and you have to pay $100 in taxes because of that and an extra $50 of taxes would hurt your lifestyle, you've got bigger problems.


By that argument we should raise the income tax rate on poor people since it wont cost them much either. X% more in tax is X% more. It's relative to the amount of money you have invested, so it's always going to hurt you the same amount relatively speaking.

Quote:
My father in law, great fool he is, had $100K in GM stock. GM undergoing debt restructuring means he lost 90% of its value in a few short weeks. It's since climbed back up to about half its initial value, but he won't be paying taxes on that for a long, long time, since it's still considered a loss.


Sure. And when he does make a gain off that investment, do you think that he should be taxed at a higher rate? Don't you agree that this hurts him a **** of a lot more than it hurts the multi-billionaires that Obama wants us all to focus on?


Quote:
I believe the majority of folks with large amounts of stock would rather their stock do spectacularly and have to eat a larger portion in taxes than they would have their stock do poorly so they can pay lower taxes.


And if those relationships were the choices at hand, you'd have a point. However, the reality is that lower tax rates on capital gains tends to encourage more investment which takes advantage of that rate (ie: longer term investment instead of short term "playing the market" stuff). That investment itself tends to make the longer term outlook better.

Investors already have a choice to make fast money in the market, with the trade off being that they pay higher taxes. That's why short term capital gains are taxed as income (and why income rates must always be higher than long term capital gains rates). The lower long term gain rate is designed as a reward for putting your money into something for a longer period of time. The assumption of the whole system is that longer term investments tend to actually make the whole market grow and be more stable. Since we're talking about that long term capital gains rate here (that's what Warren Buffet gets and why his tax rate is lower than his secretary's), we're already speaking specifically about those who've invested in longer term things designed to generate greater sustained market growth. Taxing that at a higher rate is simply punishing people for doing the right thing with their money.



It's just interesting to me that it seems like current Democratic party economic policy seems **** bent on doing exactly the wrong things economically. If you were to come to me and ask how to make an economy do poorly, and recover slowly, and increase its odds of getting stuck in a recession without much chance of recovery, I'd suggest a list of things which look almost exactly like what the Dems have been doing (or trying to do) for the last few years. It's amazing that they've somehow hit on this as an economic strategy and even more amazing how many people don't realize (yet) just how horrible it is.
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#88 Sep 22 2011 at 5:53 PM Rating: Excellent
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$50 more in taxes IS going to hurt someone making $14,000 a year a bit more than it will hurt someone making $140,000. But we've already established that those folks are probably among the 82% who don't own stock in their own company.

Edited, Sep 22nd 2011 7:54pm by catwho
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Thayos wrote:
I can't understand anyone who skips the cutscenes of a Final Fantasy game. That's like going to Texas and not getting barbecue.

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#89 Sep 22 2011 at 6:03 PM Rating: Default
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catwho wrote:
$50 more in taxes IS going to hurt someone making $14,000 a year a bit more than it will hurt someone making $140,000. But we've already established that those folks are probably among the 82% who don't own stock in their own company.

Edited, Sep 22nd 2011 7:54pm by catwho


That is a matter of perspective, if both are living at the limit of their means then a hike will affect both similarly (in accordance to income taxes). However raising the capital gains tax is completely different, while it affects both similarly, to that extent most "poor" people have no investments where as richer people do.

Raising income tax on solely the rich imo is not going to change anything. Adjusting capital gains will provide a good influx. Not only that being taxed on income earned there will encourage people to leave money in the market longer, in order to avoid a larger tax on their exit amounts. (which further assists the economy in keeping money moving through many hands.)
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#90 Sep 22 2011 at 6:06 PM Rating: Decent
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catwho wrote:
$50 more in taxes IS going to hurt someone making $14,000 a year a bit more than it will hurt someone making $140,000. But we've already established that those folks are probably among the 82% who don't own stock in their own company.


If we're going to play all-or-nothing extremes again. Whether one receive stock options depends solely on the policies of the company one works for, not the salary you are paid. I started getting stock options when I was earning around $30k/year. While that's clearly higher than your hypothetical $14k/year figure, it's still well inside the "working class" income range, and certainly not even close to "stinking rich".

Twice as many people participate in employee stock purchase plans than receive options (because every company that gives options also has espp, but not the other way around). And guess what? People buy into those plans at salaries well below what you would consider "rich" as well. Certainly, well below your hypothetical $140k/year salary figure.

Raising capital gains tax rates hurts a **** of a lot of people who are not rich. It hurts middle class people. It hurts working class people trying to become middle class. I was able to buy a home (in freaking California) while earning about $50k/year and was able to put a large enough down payment to avoid many of the traps that some people fell into during that time period. Want to know how? Because I had invested money into company stocks. Capital gains tax rates absolutely could have made a difference there.


Tax rates tend to do very little to affect people's current economic condition. They do tend to significantly affect their future economic condition. Depending on the tax it can make it harder to get a good paying job, slower to get higher pay at the job you are at, and harder to obtain and retain any wealth you do manage to save/invest. This is why I keep pointing out that thinking about tax rates based on how much they hurt or help a given group right now is just the wrong way of looking at it. You can't hurt the rich by raising their tax rates. You will absolutely slaughter the middle class long before you do more than bother the rich. And you'll make it nearly impossible for working class people to become middle class even longer before that.


Higher taxes does not help the poor. It makes more people poor. Think about the long term effects, not just what you need the money for today.
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#91 Sep 22 2011 at 6:12 PM Rating: Decent
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rdmcandie wrote:
Adjusting capital gains will provide a good influx. Not only that being taxed on income earned there will encourage people to leave money in the market longer, in order to avoid a larger tax on their exit amounts. (which further assists the economy in keeping money moving through many hands.)


That is completely 100% backwards. Ok. I really do suspect that some of you don't understand how capital gains taxes work. If you buy something and then sell it within 1 year of buying it at a profit, you pay income tax on that gain. It is simply added to your income. Period. You *only* get the long term capital gain tax rate (currently 15%) if you hold that investment for at least 1 year.

The more you raise that capital gains rate the less incentive someone has to hold for a year (or more) rather than just make quick buy and sell actions on the market. Every investor is going to make decisions based on what maximizes the money that ends out in their pocket. Raising that capital gains rate means that you increase the odds that some shorter term condition will occur which will make it more worthwhile to sell something *now* even though you have to pay income tax rates on it, rather than hold it until the long term gain rate will apply.


It's math. Everything else staying the same, raising the relative capital gains tax rate will result in more short term investment and less long term investment. If we agree that we want to encourage long term more than short term, then this is exactly the wrong thing to do.
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#92 Sep 22 2011 at 6:38 PM Rating: Good
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The more you raise that capital gains rate the less incentive someone has to hold for a year (or more) rather than just make quick buy and sell actions on the market.


Cleary you have no experience with real investments. You don't make money on quick bucks, you make money through long term investment and getting out before the ride ends. That is how you make money...or you can artificially create a bubble, pop it, then take billions for nothing.
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#93 Sep 22 2011 at 7:05 PM Rating: Excellent
gbaji wrote:
Everything else staying the same, raising the relative capital gains tax rate will result in more short term investment and less long term investment. If we agree that we want to encourage long term more than short term, then this is exactly the wrong thing to do.



If that's the case, why not make the tax-break cut-off 5 or 10 years instead?
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#94 Sep 22 2011 at 7:43 PM Rating: Excellent
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gbaji wrote:

There's a huge range of salaries between minimum wage and "rich" though.



Yet the average worker still makes more than 180 times less than the average CEO... so most of those salaries are closer to minimum wage than "millionaire"
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#95 Sep 22 2011 at 10:13 PM Rating: Good
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rdmcandie wrote:
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The more you raise that capital gains rate the less incentive someone has to hold for a year (or more) rather than just make quick buy and sell actions on the market.


Cleary you have no experience with real investments. You don't make money on quick bucks, you make money through long term investment and getting out before the ride ends. That is how you make money...or you can artificially create a bubble, pop it, then take billions for nothing.


Or cycle it through really fast micro-trades but repackage it into long-term fund options that reap the capital gains tax rate even though they were generated via a really cool HFT engine!
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#96 Sep 22 2011 at 10:26 PM Rating: Good
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Gotta love all the fancy math Wall Street came up with to get around the rules.

My favorite is still the mortgage backed derivatives.
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#97 Sep 22 2011 at 10:34 PM Rating: Excellent
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...but that's not even clever, it's only another flavor of derivative.

The genius in that sh*t salad was the marketing and tranche groups, along with the underlying asset fraud.

Sidenote: exotic instrument terminology sounds pretty ***. "If someone tries to strangle your iron condor, collar a rainbow option or use a bear spread"



Edited, Sep 23rd 2011 12:48am by Timelordwho
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#98 Sep 23 2011 at 3:40 PM Rating: Good
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rdmcandie wrote:
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The more you raise that capital gains rate the less incentive someone has to hold for a year (or more) rather than just make quick buy and sell actions on the market.


Cleary you have no experience with real investments. You don't make money on quick bucks, you make money through long term investment and getting out before the ride ends. That is how you make money...or you can artificially create a bubble, pop it, then take billions for nothing.


Oh... My... F'ing... God! I'm not sure whether to fall out of my chair laughing, or just let my JAW drop to the floor. My ironyometer has gone to freaking plaid.

Edited, Sep 23rd 2011 2:48pm by gbaji
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#99 Sep 23 2011 at 3:41 PM Rating: Good
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Why would you drop your draws to the floor?
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#100 Sep 23 2011 at 3:47 PM Rating: Good
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I don't think I want to see gbaji's draw drop to the floor either.
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Thayos wrote:
I can't understand anyone who skips the cutscenes of a Final Fantasy game. That's like going to Texas and not getting barbecue.

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#101 Sep 23 2011 at 3:47 PM Rating: Decent
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Friar Bijou wrote:
gbaji wrote:
Everything else staying the same, raising the relative capital gains tax rate will result in more short term investment and less long term investment. If we agree that we want to encourage long term more than short term, then this is exactly the wrong thing to do.



If that's the case, why not make the tax-break cut-off 5 or 10 years instead?


Because you want a tradeoff between market flexibility and stability. You want both types of investors. Those who buy stocks for a long haul and those who'll actively shift their money as the market shifts. Stability and flexibility. Folks who are going to buy shares in X and hold it until they retire are going to do that regardless of the tax cut-off time period. What you're looking at is providing a reason for those who will buy and sell stocks to factor taxes into the decisions they make and perhaps ride out a bad trend for a couple years rather than selling the instant a stock starts to fall.

There are a lot of factors involved, but there really are very good reasons why there is a long term capital gains tax rate, and why it must be lower than the income tax rate, and why it must be long enough to encourage longer term investment, but short enough to be an obtainable period of time.
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