Fairness

[logroller]

There's a reason cap gains get preferential treatment; it's good for the economy. Not to mention that that the effect on revenues is the inverse of the direction of rates.

Well I don't contend CG gains tax increases, alone, to be solvent of all the problems in the tax structure; not to mention government revenues and the deficit. You should know by now I favor free market business; but government isn't business; in that decisions shouldn't be made primarily based on fiscal priorities. Any more than I expect a business to make decisions prioritized by the fair and equitable principles of the social interest.

What would the disparate impact be to raise the CG rate which then lowered CG revenues potentially hurting economic growth? Would those that suffer from the hike be the rich who will simply move some money around, or not, or will it be the workers who are denied employment opportunities.

You seem to operate under the assumption that if people don't get to protect investment income they will cease investing. I would contend the opposite; that if there were a greater disincentive to keep profits, more of those profits would be reinvested-- and this would provide for greater economic growth. Either way, whether I one gets paid x dollars from stamping widgets, or x dollars from shares of widget stock-- its not 'fair' those who invest their money keep more of their net income than someone who labors for it. To say that you keeping more investment income is your justification for investment is hardly accurate. Is it not the profit you seek? The cap gains break isn't why you invest. Income is a reward in and of itself, and it should be treated according to its monetary value, not its source.

Let's say you flipped an investment and earned $10 on an initial investment of $20;

Condition 1: Cap gains @ 30%

• option A - keep $30 and pay $3.00 to tax: net 27$, no investment value.
• option B - reinvest $30 and pay no tax; invested value $30

Condition 2: Cap Gains at 15%

• option A - keep $30 and pay $1.50 to tax: net $28.50, no investment value
• option B - reinvest $10 and pay no tax; investment value $30.

Please explain to me how the lower cap gains rate affects investment positively; b/c I only see it as a disincentive to reinvest.

[fj1200]

Well I don't contend CG gains tax increases, alone, to be solvent of all the problems in the tax structure; not to mention government revenues and the deficit. You should know by now I favor free market business; but government isn't business; in that decisions shouldn't be made primarily based on fiscal priorities. Any more than I expect a business to make decisions prioritized by the fair and equitable principles of the social interest.

Right, government isn't business but it interjects itself into business ALL the time. I would contend that decisions SHOULD be made on fiscal priorities. For the same reason that business should maximize shareholder value business should favor policies that lead to economic growth. For the same reason that maximum shareholder value is beneficial for society maximizing economic growth is beneficial for society. We've had government force social engineering on to the backs of business because it seems "fair" but in the end it becomes counterproductive because they've added so many mandates that it disincentivizes business. If they were to allow growth then it would have people become employed and self sufficient leaving government to THEN focus on the safety net issues. It's quite the paradox I recognize but it is one that is becoming more and more evident.

You seem to operate under the assumption that if people don't get to protect investment income they will cease investing. I would contend the opposite; that if there were a greater disincentive to keep profits, more of those profits would be reinvested-- and this would provide for greater economic growth. Either way, whether I one gets paid x dollars from stamping widgets, or x dollars from shares of widget stock-- its not 'fair' those who invest their money keep more of their net income than someone who labors for it. To say that you keeping more investment income is your justification for investment is hardly accurate. Is it not the profit you seek? The cap gains break isn't why you invest. Income is a reward in and of itself, and it should be treated according to its monetary value, not its source.

Let's say you flipped an investment and earned $10 on an initial investment of $20;

Condition 1: Cap gains @ 30%

• option A - keep $30 and pay $3.00 to tax: net 27$, no investment value.
• option B - reinvest $30 and pay no tax; invested value $30

Condition 2: Cap Gains at 15%

• option A - keep $30 and pay $1.50 to tax: net $28.50, no investment value
• option B - reinvest $10 and pay no tax; investment value $30.

Please explain to me how the lower cap gains rate affects investment positively; b/c I only see it as a disincentive to reinvest.

I don't know where you get this "protect investment" issue. It is well known that a high CG rate creates the environment that people will not invest because of the taxes that they would have to pay IF they liquidate their investment. Conversely a low rate lowers the transaction costs of moving between investments, if the rate is low then you have more incentive to seek out a new investment. I think your "keep profits" analogy is completely backwards; the reinvestment you speak of is exactly where the CG tax would come into effect. High CG taxes are the reason people DON'T reinvest.

[logroller]

Right, government isn't business but it interjects itself into business ALL the time. I would contend that decisions SHOULD be made on fiscal priorities. For the same reason that business should maximize shareholder value business should favor policies that lead to economic growth. For the same reason that maximum shareholder value is beneficial for society maximizing economic growth is beneficial for society. We've had government force social engineering on to the backs of business because it seems "fair" but in the end it becomes counterproductive because they've added so many mandates that it disincentivizes business. If they were to allow growth then it would have people become employed and self sufficient leaving government to THEN focus on the safety net issues. It's quite the paradox I recognize but it is one that is becoming more and more evident.

Not necessarily. Profits trump social impact. The paradox between doing both is a paradox within govt, but not business. Profits trump all else.

I don't know where you get this "protect investment" issue. It is well known that a high CG rate creates the environment that people will not invest because of the taxes that they would have to pay IF they liquidate their investment. Conversely a low rate lowers the transaction costs of moving between investments, if the rate is low then you have more incentive to seek out a new investment. I think your "keep profits" analogy is completely backwards; the reinvestment you speak of is exactly where the CG tax would come into effect. High CG taxes are the reason people DON'T reinvest.

Well quoted is more like it. CGtaxes are a disincentive to sell an profitable investment, not a disincentive to invest. If you wish to make the claim that moving profits from one investment to another is a free-market activity which is beneficial, of course I agree. By the same token, offsetting capital gains is often accomplished by selling losing investments, driving investment towards more successful ventures.

Speaking of losses-- corps get to go back 3 years and offset gains, and carryover 5 years of losses...what do individuals get? Oh yeah, one year forward...totally fair

[fj1200]

Not necessarily. Profits trump social impact. The paradox between doing both is a paradox within govt, but not business. Profits trump all else.

You just agreed with my statement. Maximize shareholder value.

Well quoted is more like it. CGtaxes are a disincentive to sell an profitable investment, not a disincentive to invest. If you wish to make the claim that moving profits from one investment to another is a free-market activity which is beneficial, of course I agree. By the same token, offsetting capital gains is often accomplished by selling losing investments, driving investment towards more successful ventures.

Ask an economist. You're mixing metaphors with that last statement; Offsetting is just another artificial transaction forced because of tax laws and not germane to the issue. I don't understand your issue if you're agreeing that moving profits is beneficial, high CG tax rates don't encourage capital to find its highest and best use, it encourages tax strategies which are not necessarily preferred overall.

Speaking of losses-- corps get to go back 3 years and offset gains, and carryover 5 years of losses...what do individuals get? Oh yeah, one year forward...totally fair

You assume I disagree?

[LuvRPgrl]

^^:shakes head: The CEO does pay higher taxes. Do you realize that tax rates do not determine tax revenues​? Macroeconomically speaking of course.

^^:shakes head: The CEO does pay higher taxes. Do you realize that tax rates do not determine tax revenues​? Macroeconomically speaking of course.

understanding such an idea requires actually, GASP, wait for it, THINKING !!!!
Kids today are not taught to think for themselves
They are taught to depend on machines and the experts

They are taught if someone is making alot more than you, its not fair, even if you are doing better than 10 years ago.
They are taught that the way to correct it is to take from the rich and give to the poor.
Yet I dont see obama the great orator, going to poor neighborhoods and giving them his money

They are not of the idea that something that helps all americans is the goal
and that the dems /liberals plans help some, at the cost of others.

if you simply give money to the poor, it doesnt increase productivity. and the producers will simply respond by increasing prices.
increase in productivity is the key, and the only way to improve the economy, anything else is simply class warfare
to get votes

Those who are 'poor', should be informed, and working for improving their lot in life by getting better educations and skills, those increase productivity

but hey, obama needs votes, not solutions for our problems

OBAMA '' I cant solve any of our problems, so i will simply take money from the few rich and give it to the many poor ( of course taking my own 15% on the way), so vote for me,

that kinda sounds like extortion to me

Well I don't contend CG gains tax increases, alone, to be solvent of all the problems in the tax structure; not to mention government revenues and the deficit. You should know by now I favor free market business; but government isn't business; in that decisions shouldn't be made primarily based on fiscal priorities. Any more than I expect a business to make decisions prioritized by the fair and equitable principles of the social interest.



You seem to operate under the assumption that if people don't get to protect investment income they will cease investing. I would contend the opposite; that if there were a greater disincentive to keep profits, more of those profits would be reinvested-- and this would provide for greater economic growth. Either way, whether I one gets paid x dollars from stamping widgets, or x dollars from shares of widget stock-- its not 'fair' those who invest their money keep more of their net income than someone who labors for it. To say that you keeping more investment income is your justification for investment is hardly accurate. Is it not the profit you seek? The cap gains break isn't why you invest. Income is a reward in and of itself, and it should be treated according to its monetary value, not its source.

.

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the govt's role is not to provide fairness, but rather to provide opportunity for all
by creating fairness thru govt, it gives the govt puppeteer controls over those its giving to, and that is the antitheisis of freedom, the basic concept our country was founded upon

If there were a poll asking that all laws be cancelled except that "All decisions of the government are mandated to promote fairness", what do you suppose the poll results would be? Also, what do you suppose the implementation of such a thing would look like?

surveys arent fair