Mitt Romney

Should We Knock Down Romney's Fence?

Why Mitt Romney Is Paying More Than Enough in Taxes

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“There exists . . . a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road.” So wrote G. K. Chesterton in a 1929 piece recently excerpted in The Wall Street Journal. “The more modern type of reformer goes gaily up to it and says, ‘I don't see the use of this; let us clear it away.’ To which the more intelligent type of reformer will do well to answer: ‘If you don't see the use of it, I certainly won't let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.’ ”

This brings us to Mitt Romney’s tax returns.

Romney says he pays about 15 percent in federal taxes. Received opinion suggests we all ought to be just horrified by this. After all, even billionaire investor Warren Buffett professes to be dismayed that because (like Romney) he makes a lot of money in the stock market, and the tax rate on capital gains is lower than the tax rate on ordinary income, he pays a smaller slice of his income in taxes than employees who make much less.

Romney, on the other hand, doesn’t want to raise the capital-gains tax rate. Left-wingers think this is laughable on its face. But is it?

If you’ve been hanging out at a protest encampment for the past few months, then you might think the only reason for the disparate tax treatment is because Congress is a wholly owned subsidiary of Evil Rich Dudes, Inc. But there are other reasons that sound equally â€" indeed more â€" persuasive.

First, there is the problem of double taxation. A share of stock is simply a piece of a company. A stock’s price goes up a little if a company is expected to make a little money and it goes up a lot if the company is expected to make a bundle. The future earnings of the company are thus built into the stock price. When you buy a stock, you are basically buying a piece of its earnings. But those earnings will be taxed as corporate income. (The top corporate income tax rate in the U.S. is 35 percent.) If the added value of the stock is taxed as well, then those earnings effectively are being taxed not once, but twice. That hardly seems fair.

Second problem: inflation. Let’s say you bought a share of stock for $100 in 1995 and sold it in 2010 for $200. You cleared $100, right? Not really â€" because a dollar in 2010 buys less than a dollar bought in 1995. (That’s why people on Social Security get annual cost-of-living adjustments.) Because of inflation, in 2010 it took $143 to buy what $100 bought in 1995. So you really made only $57.

If you pay a 15 percent tax on the $100 face-value gain, then you are really paying $15 on an actual gain of $57, so your true tax rate is 26 percent.

The spread between 15 percent and 26 percent isn’t huge, of course. But suppose you bought a stock in 1970, and sold it for double the price 30 years later. You actually would have lost money â€" lots of it â€" because what cost $100 in 1970 dollars cost $443 in 2010 dollars.

And there have been times when the results of inflation plus higher capital-gains tax rates have been terrible. For instance, according to one Federal Reserve analysis, the actual tax rate on investments in the Dow Jones Industrials index between 1972 and 1992 was a whopping 233 percent. In other words: Investors paid $233 in taxes for every $100 they made. That hardly seems fair, either.

Or at least it doesn’t sound fair unless you’re a soak-the-rich kind of guy and you want to “spread the wealth around.” But this brings us to the third reason to keep capital gains tax rates reasonable: Investment serves many social functions that also spread the wealth around. Investing in stocks is a good way to plan for retirement, for instance. But such investment â€" which is crucial to job creation â€" is also risky. Lower capital-gains taxes help compensate people who take risks that benefit everyone else.

Not everybody finds these points persuasive (Buffett certainly doesn’t seem to). But if you’re going to tear down a fence, it helps to know why someone put it up in the first place.

A. Barton Hinkle is a columnist at the Richmond Times-Dispatch, where this article originally appeared.

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  1. First!

  2. OT on those Elizabeth Warren ads:

    If I click through, but don’t give anything, does the Warren campaign have to pay Reason for the ad?

    Please say yes. I’ve got a conference call later today, and I could easily spend the hour running up the tab for Reason.

    1. Ads like that usually only pay for unique click throughs.

      1. that’s what proxies are for!

      2. Might just be cpm…

  3. What I think we should really get from this article is that we need to put the screws on the government (Federal Reserve included) to stop their inflationary monetary policies.

    1. Crazy Paulbot.

  4. It’s always concluded that we should raise taxes on the higher earners and never concluded that we should lower taxes on the lower earners.

    1. That’s just crazy talk!

    2. The lowest income earners already get a check for more than they paid in. Almost 50% of taxpayers pay a negative to 0% tax rate. Exactly how much lower than negative tax rates should they receive?

      1. You can’t squeeze blood from of a rock. 15% of US tax payers are below the poverty line. Another 40% are lower class.

      2. I’m talking about people who DO pay taxes and when they do, and when it’s compared to millionaire cap gains, I want to know why liberals NEVER conclude that the problem is middle-class tax payers are paying too much. NEVER.

      3. “Almost 50% of taxpayers pay a negative to 0% tax rate.”

        Doubtful. The actual tax is not just the income tax rate, but also includes inflation, borrowing (competing with the private sector for capital), productivity losses due to malinvestment, and so on. I would imagine most people experience a true tax of at least 30% of their income, pulling the number out of my ass. Those who are poor and receiving little assistance may be experiencing taxes that are substantially higher than their incomes.

        1. We need to raise sales taxes on food, water, and hell, even put a fee on oxygen. This will incentivize the poor to start their own businesses and stop leaching off the rest of us.

  5. Secret Cayman Island bank accounts is a bigger issue than his tax rate.

    1. Why? If I had shitloads of cash, I’d offshore some, too. It’s hardly illegal.

    2. Apparently it’s not so secret considering everybody knows about it including the IRS.

  6. The capital gains/labor disparity is one of the main reasons for increasing wealth inequality. It’s not always been this wide a gap and there’s no reason to think current law represents some kind of correct balance.

    The cuts given to the very wealthy were never offset by spending reductions. That means according to debt hysterics that “our children and grandchildren” get to foot the bill for Mitt Romney’s low tax rates.

    This kind of disparity is not defensible and bullshit about double taxation hardly rises to the occasion.

    Romney is the poster child for everything that’s wrong with American capitalism lately, and that’s why he’ll make an excellent foil in the election. When people act horrified that this guy, to whom the “not very much” he makes in speaking fees alone is many multiples of the average income in this country, pays less in taxes than your average worker, try not to act so shocked. I realize this is ground zero for defense of plutocracy but at some point it does become legitimate to question whether tax law is skewed too favorably to the rich.

    1. I don’t totally disagree with you on this. How would you unskew it, though? The point about capital gains being taxed at a rate lower than “income” causing capital to more freely flow is legit. Why invest if your gains are going to be sucked up by the government?

      Maybe a tax on assets if said assets are astronomical, say above $100M? This would have a similar effect as the anti-trust laws in that it would bust up what are, in essence, monopolies?

      1. Give everyone a lifetime exemption from capital gains taxes of say $2million dollars. Make it like the inheritance tax. Let everyone save and invest tax free. And then watch how much more people save and invest and how much better off the economy is.

        1. I like the idea of exempting savings and investments from taxation.

        2. This idea would make sense with some tweaking on amounts and inflation adjustments, etc.

      2. I disagree about the capital gains tax being legitimate. If I make $10k selling a stock, that’s $10k profit pre-tax. Why shouldn’t that $10k in profit be counted as personal income? There’s nothing fair about that. Someone working a 9-5 shouldn’t pay more taxes on their labor than an investor pays on profits they personally receive.

        This is precisely the sort of idiocy that causes capitalism to have a bad name. It is grossly immoral that a man who makes $30m in profit should pay a lower tax rate than a worker who makes $30k. I think they should pay the same rate, but it’s unconscionable to support the richer man paying **less** than the poorer man.

        1. If you make that same $10k selling your house and don’t roll it into another one, do you want to pay income tax on that, too?

          1. I don’t want to pay income tax period, but as long as we have one, I think all labor and profit income should be treated equally. I don’t want a system that treats my profit on a good investment favorably while treating paid overtime that my blue collar relatives get as different things (to the detriment of the latter).

            1. Yep. It’s picking winners and losers. That is crony capitalism not a free market.

            2. Except for the risk element. If I sold my house today, I’d lose $30k — a capital loss. I can’t create an analagous situation for salary renumeration. That’s the key difference, there’s a discount for risk.

              1. Gambling at a casino is even riskier. By your logic, gamblers should pay even lower rates than investors.

              2. ‘Except for the risk element. If I sold my house today, I’d lose $30k — a capital loss. I can’t create an analagous situation for salary renumeration. That’s the key difference, there’s a discount for risk.”

                People do take risks with salary, to some extent. But the risk element could be ameliorated if losses were not only factored in, but allowed to roll over from year to year if they put taxable income below the minimum taxable level. I think that would be fair, though some sort of long term averaging in general would be better for the sake of people with highly variable incomes.

            3. That sounds fair to me with two additional changes:
              1) I get to deduct all capital losses in the year in which I incur them (i.e. not limited to $3,000 as under current law) and if that makes my income negative I get a check equal to the negative*tax rate (if the government share in the reward they also share in the risk)
              2) The corporation isn’t separately taxed on the profit too.

            4. mike,
              why should govt get anything from your good investment. It sure as hell does not compensate you for your bad ones. As it is, govt treats bonuses differently from regular pay, as though DC is entitled to something because you did an especially good job.

              1. Neither of those things have anything to do with what I said. Income is income. It shouldn’t matter whether or not it comes from investments, labor or running a business. When you accept the idea that the government can treat one class of personal income better than another, you accept the idea that it can pick winners and losers among ways of making money.

                1. ‘Income is income’ is not an argument, point or explanation. There are much bigger problems than that the government allows a relative advantage to capital gains. Your implication is that it should be taxed higher. I suppose you think the gov’t does such a good job that it deserves more money. You are neither addressing a problem nor providing any solutions.

                  “I don’t want to pay income tax period, but as long as we have one, I think all labor and profit income should be treated equally.”

                  This is completely non-sensical. I can only conclude that you’re a fool.

                  “It is grossly immoral that a man who makes $30m in profit should pay a lower tax rate than a worker who makes $30k.”

                  Are you fucking serious? Lower tax rates are not immoral. Taking more money from someone merely because they produce more is immoral. You’re a pathetic hypocrite. You think it’s “unfair” that some wealthy people have a relatively low tax rate, yet you completely ignore the fact that they still pay vastly more in taxes. There’s no moral argument for these rates. They are just an arbitrary way for the gov’t to steal money. You say you don’t want to pay taxes and yet everything else you say suggests some people aren’t being taxed enough.

                  Fuck off.

                  1. Your implication is that it should be taxed higher.

                    I didn’t imply a damn thing about that. I said that whatever tax rates we have should not discriminate based on how you make money. The government shouldn’t be giving investors one rate and workers another. That’s mercantilism, not capitalism, you jackass.

        2. I feel the same way. The double taxation argument applies to everyone including employees and consumers. I don’t blame Romney at all for this though, everyone would pay as little tax as possible including these holier than thou liberals.

          Lower everything to a flat rate, preferably zero.

          1. No, those liberals should be paying 1960s-level Swedish taxes 😉

          2. “The double taxation argument applies to everyone including employees and consumers.”

            Not sure I follow. Please explain.

            1. Like all costs, the corporate tax is passed on to the consumers(double taxation, they pay tax on their income then have the corporate income tax incorporated into their purchases) and it also deprives the business of money, at least some of which would be used on salaries(which are then taxed again, double taxation just like the double taxation on investors).

              1. I don’t think that’s what people mean by “double taxation.” Of course, each dollar is taxed again and again as it traded for goods or services, and thus becomes someone’s income. If that’s what’s meant, then we have infinity taxation.

                I think people are saying that income to the corporation is really income to the corporation’s owners, and the fact that there is a legal entity in the middle shouldn’t be relevant (in fact, it’s not relevant when that entity happens to be a S-Corp, LLC, partnership, or trust, but the tax code has a strange exception for C-Corporations). To put it another way, there is no economic transaction between corporation and its owners that creates “income” (which is the basis of the “income” tax), but only a pass through of profits from economic transactions with the corporation’s customers.

                1. The easy solution is to allow c-corps to expense dividends. That eliminates the double taxation issue without opening a shit can of potential abuse by eliminating corporate income taxes altogether, or creating a paperwork nightmare by treating c-corps as pass through entities in the way that s-corps and other business structures are.

        3. SO obviously, you support lowering the tax rates on the lower earner, right?

          1. I support the lowest taxes and most equitable distribution of them possible provided we pay for the things we want to buy as a country.

            1. “equitable distribution”? Marx much? The idea is not to tax one person in order to give to another; taxes are to pay for govt services, a list of which is contained in both the US and each state’s constitutions. Govt is not about “the things we want to buy”.

              1. I don’t think a free and democratic people should be slaves to a piece of paper treated as a sacred text. The constitution clearly allows for a more expansive public sector than you want, since we have one and it hasn’t been nullified by the courts, so you’ve got to explain why a free and democratic people should be forced to accept your fringe, unpopular idea of how the country should be against their will.

                1. tony,
                  that’s where we differ – I am not advocating that people be “forced” to accept anything. You on the other hand….

                  1. Sure you are. You want to radically alter society much more than I want, mostly against the express will of the people. That you think it wouldn’t entail force is simply a matter of you asserting it.

                2. Geez, Tony, whatever happened to “if you don’t like the law, change it” stuff that people like you always come up with.

                  The constitution in not “a piece of paper treated as a sacred text”, it’s the law of the land. If you don’t like something in it, then change it.

                  1. When the supreme court rules medicare unconstitutional, I will.

            2. In other words, no. High taxes for all. Got it.

        4. When you invest your capital you take a risk of losing all of it. Without an expectation of reward you are less likely to invest. If you raise the tax rate on capital gains you tilt the risk/reward ratio toward risk. This will freeze capital into less risky parking places. This will reduce growth in the economy causing your blue collar relatives to lose their jobs.

          I understand why capital gains are taxed at a lower rate: to encourage the flow of capital to grow the economy. What bothers me is that most of the capital is owned by a relatively few and they pay no taxes on that capital. Is Warren Buffet’s (Bill Gates, The Koch’s, etc) life style going to change if he is forced to pay taxes on his assets?

          1. If you raise the tax rate on capital gains you tilt the risk/reward ratio toward risk. This will freeze capital into less risky parking places. This will reduce growth in the economy causing your blue collar relatives to lose their jobs.

            That’s only even partly true under our current income tax system which makes predicting future tax liabilities difficult. It’s not inherent to taxation in general. It wouldn’t even be true at all if you lowered the federal income tax to a 15% flat rate (that for the workers included FICA).

        5. To me, saying you shouldn’t pay tax on cap gains because you took a risk is a non-starter. First, so what? Second, you get to deduct your losses, so you get credit for your risk there.

          No, the real argument for cap gains is the inflation argument. And its a laydown winner, IMO. OF course, the way to handle inflation is to reduce the recognized gains by the amount of inflation since the asset was purchased.

          1. “Second, you get to deduct your losses, so you get credit for your risk there.”

            Not completely true. You can get to deduct your losses against your gains in the that year. You only get to deduct your losses against ordinary income in that year up to $3,000. You can carry over additional losses against gains or ordinary income in future years, subject to a bunch of limits. You never get to deduct your losses against gains or ordinary income in prior years.

          2. The thing is, interest income is taxed as regular income and the exact same inflation argument applies there.

        6. Mike T – Your money was at risk in the capital investment. Not in the salary.

          This raises the bar for investing. Look at how the UK lost all invest,ent in the 1970s. If you have 1 million to invest for 15 years, make 1 mil more, pay 35 pc in taxes, then another 35 pc you have 420k and then if there is a death tax, your heirs get 210k.

          Pretty poor returns when you consider inflations eats 25 pc every decade. Better off spending it on hookers and blow.

    2. I realize this is ground zero for defense of plutocracy but at some point it does become legitimate to question whether tax law is skewed too favorably to the rich.

      Why is it you never conclude that tax law is skewed to UNfavorably to the non-rich?

      1. Same thing isn’t it?

        1. No, it’s not. Do you understand why?

          1. Because you think there is an inherent moral distinction between raising taxes and lowering them?

    3. Tony, 15% on Romney’s uber billions is actually quite a lot of money. Definitely more than I pay in taxes (even though my percent is higher). I know you can play the percent game and get your 20-minute hate on, but it’s still a lot of money.

      I think there should be one tax rate for all income (and massive spending cuts), but that’s neither here nor there. But Romney’s low tax rate doesn’t mean he’s stealing from someone, depriving someone of something, or getting away with something.

      Of course, I’m sure you can twist it in your mind. Any tax rate below 100% is depriving someone of some government goodie, somewhere.

      1. “15% on Romney’s uber billions is actually quite a lot of money. Definitely more than I pay in taxes”

        Holy fucking Christ.

        This explains what ratios are:

        http://en.wikipedia.org/wiki/Ratio

        This explains what you’re suffering from:

        http://en.wikipedia.org/wiki/Stockholm_syndrome

        1. Do you have trouble with math?

          Person A pays 15% on his 1 million income.

          Person B pays 50% on his $50,000 income.

          Who’s paying more in taxes there?

          I’d like a cleaner tax code and a flat rate for everyone, but people (like you) act like 15% on an evil rich CEO’s income isn’t a lot of money.

    4. If I work for someone I can’t lose money. I get a check, or if I’m fired I lose my job, but I don’t lose the money I’ve already earned.

      If I invest $100 in a stock (and remember, I had to pay income taxes on that money so to invest $100 I have to make over $100) and the stock goes bust I just lost $100 dollars. That’s called risk. If my stock takes a 5% gain (after paying corporate taxes on gross earnings) I just made $5, at the risk of totally losing $100, and you think I should now pay income tax on that? My money was already taxed twice, I’ve risked it all investing in jobs and now you want to tax it a third time? Throw in inflation and I’m making less than 5% on my initial investment and you think you should get half of it? If you consider the payroll taxes on my earnings, the corporate tax that decreased the profit (and thus my stock price) and the capital gains tax the government already made more on my $100 for doing nothing than I did for risking my money on a company that creates jobs.

      1. and the stock goes bust I just lost $100 dollars.

        Which you get to deduct. So, its all good.

        If my stock takes a 5% gain (after paying corporate taxes on gross earnings) I just made $5, at the risk of totally losing $100, and you think I should now pay income tax on that?

        Yeah, I do. If we’re going to have an income tax, then you should pay tax on your income (adjusted for inflation, where relevant).

        1. Would it solve the inflation problem to eliminate the concept of “capital gains” as a special form of income, and instead let people fully write off capital purchases in the year they’re bought as a loss, but then treat the entire revenue from the sale of capital as normal income?

          1. Yes it does.

            Depreciation schedules create too much opportunity for political meddling in business decisions.

        2. You get to deduct it which means you get to reduce your taxable income. You don’t get a credit. You deduct a $100 which means you you pay $36 less in taxes (assuming your tax rate is 36%). You don’t get a tax credit which would mean $100 less in taxes.

    5. This argument is retarded.

      If I work at a job, I have zero risk of not getting a paycheck.

      If I choose to invest that paycheck, I incur risk AND have to pay taxes on it when I sell it (then only IF I profit).

      If you want just taxation, switch to a consumption tax. Income taxes are simply wealth redistribution.

      1. Higher risk should be compensated with a marketplace demand for higher returns, not lower government taxes.

        Lower risk should yield lower returns in the marketplace, not higher government taxes.

        Jeebus, I can’t believe I have to go all Econ 101 with some paste-eater who probably thinks of himself as a free-market champion.

    6. tony,
      stop with the revisionist history. Taxes were lowered FOR EACH BRACKET, not just the top ones. Yes, a reduction for higher earners results in more dollars for them. So what? And who says tax cuts have to be “paid for”? It’s not the govt’s money in the first place.

      Romney is a poster child for capitalism – he built a business, which not coincidentally helped other businesses, and made himself successful. Tony’s right in that alone makes him a foil for Dems as they hate anyone who makes it without Big Nanny’s intervention.

      1. “And who says tax cuts have to be “paid for?”

        *********

        Sooner or later, the people who loan the government money?

        Or we could just print it…

        1. the idea of paying for tax cuts implies the money belongs to the govt in the first place. It does not. And fiscal religion is a bit much from the same govt that run SS/Med aground, continues to borrow yet refuses to address spending, and so forth. Besides, tax cuts wind up being paid for through economic impact; happened with Kennedy, Reagan, and Bush. Lower taxes brought more revenue to the treasury. Each time, Congress figured out a way to squander it. It’s not taxes that are the problem.

          1. “the idea of paying for tax cuts implies the money belongs to the govt in the first place.”

            *************************

            No, it implies the government should not default on its bonds.

            1. You’re both wrong. “Tax cuts must be paid for” implies nothing about government entitlement or defaulting on bonds.

              What it implies, wrongly, is that tax cuts affect the EXPENSE side of the government’s balance sheet, rather than the REVENUE side.

  7. This crap post got 404ed, TWICE!

  8. “Lower capital-gains taxes help compensate people who take risks that benefit everyone else.”

    The Libertarians finally find a governmental cross-subsidy they like: hard-working wage-earners subsidizing wealthy passive investors.

    1. Without those investors, there wouldn’t be any job to earn the wage.

      1. …and so we have to subsidize them through the government.

        1. Lowering taxes is not a “subsidy”.

          1. Higher taxes on me plus lower taxes on you for the same money is a subsidy.

            1. And who advocates higher taxes? Not us.

              1. If you advocate lower taxes on one guy and higher taxes on another guy for the same money, then, yes, you advocate “higher taxes.”

                1. for the same money

                  See, folks, that’s how you beg the question.

                  1. …same money, equal money, a buck however earned …

                    Do you need a shot of B12, today, RC?

            2. Bullshit. Lower taxes isn’t a subsidy unless you think all money belongs to the government.

              A guy breaks into my house. He doesn’t steal my TV. Therefore, he’s GIVEN me a TV, right? Isn’t he nice?

              1. Okay.

                Let’s say everybody pays 15%, unless they have a tattoo of Bart Simpson on their chest, then they only pay 7%.

                You say “not fair!”

                And the people with the Bart Simpson tattoos say “it’s our money – it doesn’t belong to the government!”

                Did they just win the argument and did you just lose the argument?

                1. Is that before or after we take another hit of acid?

                  1. Before. What’s you’re answer?

                2. You say “not fair!”

                  Actually, I don’t say that.

                  1. Jordan is a true “Simpsons” fan. Homer is his favorite.

                3. Did they just win the argument and did you just lose the argument?
                  ———————
                  neither; they simply sounded like Obama, challenging a point that no one is making. Stick with “everybody pays X%”; leave out the ‘unless’. No unless. Equal treatment for all.

                  1. I think wareagle just took my side. Not sure if he realizes it.

                    1. you’re not making an argument; you are setting up a straw man, trying to attack a point no one here is making. I don’t see folks advocating one income tax rate for you and a lower one for themselves, tattoos notwithstanding.

                    2. “I don’t see folks advocating one income tax rate for you and a lower one for themselves…”

                      Except Romney.

                4. Unfair to us Homer fans.

            3. derp, I choose to invest my money to get taxed twice and yet *I’m* the one subsidized? Fuck off dumbass.

              1. Yes, you are, because everyone else gets taxed MORE than twice. I pay payroll taxes, then I pay income taxes, then I pay sales taxes, then I pay excise taxes, then I pay gas taxes and liquor taxes and cigarette taxes (not really, but still). I get taxed again and again and again and I only get one paycheck.

                If you are only getting taxed “twice” on an “investment” then count yourself lucky. You’re getting hit a lot less than the rest of us.

                1. Wow, you’re retarded. You don’t think the proceeds (or lack thereof) of the investment maturing don’t get taxed for those things too?

                  Until you grow a brain, do yourself a favor and shut up. The stupid hurts my eyes.

                  1. I don’t think, I know for a fact that the proceeds on investment are not subject to payroll tax.

                    You need to grow the brain, Friendo.

                    1. Derp, where does the initial investment come from shitbrain?

                      How do I invest money if I first don’t have money to invest?

                    2. If you’re Mitt Romney, inheritance. Estate tax! Doh! Another “double taxation”! Where’s my tiny little violin?

                    3. So you’re suggesting Mitt’s family simply received money directly from the federal reserve at some point with no taxation involved, and that none of the money was earned?

                      If so, you’re delusional at best.

                      At some point the money was earned and taxed as income. Just because Romney inherited it does not mean that it should be taxed again because he chose to invest it.

                    4. So he should pay no tax on investment income because one of his ancestors earned the money in a previous generation and was taxed on it at that time.

                      “Delusional?” Maybe you need to google “projection bias.”

                    5. So wealth should be taxed merely for the fact that it’s been given to someone out of the goodness of their heart?

                      Say goodbye to charities.

                    6. ???

                    7. Hint: Inheritance is purely an act of good will. Much like charity.

                    8. Inheritences are taxable. Charity donations are deductable. Are you changing the topic? I don’t see the relation to the capital gains disparity under discussion.

                    9. If you’re Mitt Romney, inheritance.
                      ———————-
                      no, not true. Romney’s money didn’t come from daddy, it came from his own work, pretty much like every other millionaire.

                    10. What did his dad do, wareagle? Give it all away to “Save the Whales?”

                    11. his dad used to be Gov of MI and worked in the auto biz. He was also alive when Mitt went to work. Bain did not succeed because of George Romney. Inheritance is more the province of meddling Dems like the Kennedys and Jay Rockefeller. And Kerry who has the remarkable talent of finding and marrying rich women, one of whom got that way when her hubby died.

                    12. George Wilcken Romney died in ’95. I’m pretty sure Mitt got an inheritance by now.

                    13. but it’s not how Mitt made his money.

                    14. “Made?” I don’t think Mitt has ever stopped making money.

                    15. And that just burns you up, doesn’t it?

                    16. Hey, you’re the one with the handle “Barely Suppressed Rage.”

                      Returning to the primary discussion — point being, the past source of investment money could be anything, and thus tells us exactly nothing about how return on a given investment should be taxed going forward.

      2. That’s no argument for why investors’ income should be taxed under one system and the workers’ under another. That’s just a foreign of discrimination and one that makes capitalism look exploitative.

        1. Mike T, hope your parents never need to live off the investments they made their whole lives and were planning on 15% instead of 26% or whatever it will be. That’s will also be the result of what you are advocating.

    2. How does a private equity outfit like Bain take risks? They make money in fees whether the companies they “invest” in succeed or fail.

      1. They provide the service of finding things for people to invest in. And they get a fee for that. The investors take risks but also get to keep the gains.

      2. Ask PE investor Cerberus, which lost billions on Chrysler.

      3. If there’s no risk in investing, why don’t you start a private equity firm Tony? Then you can donate all your millions to the DNC.

        1. Do you suppose there was ever a risk Mitt Romney would go without food or medical care, under any circumstance?

          Why does a guy like that get to lecture poor people about the wonders of the free market?

  9. Unless Romney violated the law and is a tax cheat like Timmy, who cares what his tax rate is? If you don’t like it change the law. To object to Romney is to say he should have paid more taxes even though he wasn’t required to. And aren’t liberals always saying how childish that would be when told to send more money in if they think taxes should be higher?

    1. You can’t speak reason to these people and of all things you can’t expect consistency in their positions and arguments. It’s all emotion and the primary emotion is jealousy as far as I can tell.

    2. If you don’t like it change the law.

      This. Vote out every incumbent until they make good on the perennial lip service about “changing the unfair tax code”.

      Then vote them out again.

    3. Here’s why you should care. Capitalism is getting a bad name because of tax policies like this. Even if you support lower tax rates for all income (I do), you should be outraged that we have a system that doesn’t even make him pay the same basic rate as a skilled worker. He may not be the problem, but the system certainly is, and I bet that if you asked him about it he wouldn’t change the tax code to harmonize the tax rates between workers and investors since that’d mean either lower tax revenues (workers paying less) or higher taxes for him and his buddies.

      1. Capitalism isn’t to blame for anything the government does. It’s not a political system, and taxation is something imposed on it from the outside. When the government interferes with markets, that’s not capitalism.

        1. No shit, Sherlock. I know it’s not to blame. I said that Capitalism is getting the blame.

  10. You’ve got to love this phony, ginned-up outrage over Romney’s wealth. These are the same lefties who adore Warren Buffett, even though he owes a billion dollars in back taxes that he refuses to pay, makes much of his wealth through rent-seeking and taking advantage of other people’s suffering from the estate tax, and is a general full-of-shit windbag.

  11. I’ve neve liked the way the tax code treated different income streams. All income whether it’s from interest, rents, wages, capital gains (indexed to inflation), royalties, profits, dividends or gambling winnings for that matter should be treated as normal income and taxed at the same rate. Otherwise you’re treating some people’s economic activities better than others.

    As to the double taxation issue the easy solution is to just get rid of the corporate income tax. The people in control of the corporate structure don’t pay it. It’s a source of government coruption. It punishes the people who do the actual hiring. And it’s mostly paid for by the consumer.

  12. I think all taxes should be lowered to a flat 15% or whatever (preferably a flat 0%) but the double taxation argument doesn’t help much. The double taxation also hurts the employees as well, as without it corporations would have more money available for salaries.

    1. Or could sell their product at a lower cost, passing on advantages to the “working man” consumers.

  13. The tax is misnamed and misrepresented. It is not a tax on capital gains, it is a tax on realized capital gains. In other words income derived from the SALE or other conversion of invested capital. Low rates are therefore an incentive to liquidate capital in favor of consumption, they are a disincentive to long term investment.
    In my opinion income is income and equity demands that all income be treated equally. The solution to the inflation penalty is simple. Index the tax basis capital assets to the CPI os some other measure of dollar depreciation.

  14. If I work for someone I can’t lose money. I get a check, or if I’m fired I lose my job, but I don’t lose the money I’ve already earned.

    If I invest $100 in a stock (and remember, I had to pay income taxes on that money so to invest $100 I have to make over $100) and the stock goes bust I just lost $100 dollars. That’s called risk. If my stock takes a 5% gain (after paying corporate taxes on gross earnings) I just made $5, at the risk of totally losing $100, and you think I should now pay income tax on that? My money was already taxed twice, I’ve risked it all investing in jobs and now you want to tax it a third time? Throw in inflation and I’m making less than 5% on my initial investment and you think you should get half of it? If you consider the payroll taxes on my earnings, the corporate tax that decreased the profit (and thus my stock price) and the capital gains tax the government already made more on my $100 for doing nothing than I did for risking my money on a company that creates jobs.

    1. The expected returns are what you get for the money that you risk. It doesn’t have to do with tax policy. I invest in stocks because the expected return is better than that of CDs, savings accounts and mason jars, not because the returns are taxed at a lower rate.

      You don’t pay lower taxes on riskier asset classes like junk bonds or penny stocks and higher taxes on T-Bills and AAA munis (which are actually tax advantaged).

  15. Having neither RTFA nor the comments, I ask:

    Why is it that everybody who talks about the rate discrepancy based on “class” of income assumes everybody should pay the higher rate, and not the lower?

    I think I already know.

    1. Because at the end of the day, someone needs to pay to keep the lights on. ONe group wants the hobo who is distilling his own urine to pay for it, while the others want the duck with a swimming pool filled with gold coins to pay it.

      1. Because at the end of the day, someone needs to pay to keep the lights on.

        However, one group wants people to pay for a lot more than just keeping the lights on. Blame them, not us. You want your all-powerful state, then pay for it.

    2. There’s something wrong about the income tax from the beginning. Why does the government have the right to take a huge chunk of our earnings? Use fees, property taxes, and even consumption taxes seem a little more morally justifiable, accepting for a moment that government is a service provider, albeit a poor one.

    3. I think you should start with what you want to buy and then build a tax code that pays for it without unfairly burdening any taxpayer. That obviously entails progressivity, since a flat rate will burden lower income people more than higher income people. If you want to do away with Medicare and cut defense in half, we can talk about lower tax rates.

      But seems to me the Republican idea of slashing taxes first then doing nothing about spending is both fiscally irresponsible and politically vicious. Taxation should be a routine matter of financing the things we buy–you raise them during wars, for example. All the hyperbolic rhetoric about how taxation is some kind of civil rights violation doesn’t help anything.

      1. and that is where your side loses. You see govt plunder as its own right, that the tax code is to serve no purpose beyond confiscating the wealth of the citizenry. Bullshit. Taxes are to provide certain services, not to take from one to give to another.

        By the way, Repubs HAVE talked about cuts. Many were once known as Tea Partiers, the ones your side chose to denigrate and Team Red followed suit. Paul Ryan proposed a means of preserving Medicare and your side accused him of killing grandma. And by the way, EVERY time taxes have been cut, income to the feds has risen. Happened during JKF, Kennedy, even W; problem was, spending went up an even greater amount.

        1. Paul Ryan’s plan destroys Medicare and adds to the deficit–look it up.

          And if revenues have increased during tax cut periods, that doesn’t necessarily indicate a causal relationship. In fact an empirical look indicates that revenues were up during those times exclusively because of economic growth–and revenue would have been higher if tax rates had been higher. You know, arithmetic.

          Everything you believe is a lie passed on to you by political hacks. Things only need to sound plausible enough for gullible people to buy them. Everything you’ve just said is easily refutable and has been refuted many, many times by reliable sources.

          Every government service is a transfer of resources. The ONLY reason you think it’s less legitimate to provide a safety net to poor people than to provide one to Halliburton is because of tired ugly stereotypes you have of poor people.

          1. tony,
            when a particular action leads to a specific result ON THREE DIFFERENT OCCASIONS, that is closer to causal than corollary. Tax cuts have a great deal to do with enhancing economic growth; when people keep more of what they earn, they tend to put that money in play. When govt keeps more of it, we just get more govt.

            I realize it’s a cycle the left hates, people keeping their own money and taking risks with it, many of them succeeding. Just kills the myth of superiority that central planners claim.

            Medicare is bankrupt; Obamacare’s stealing of a half-trillion from it does not help. No one opposes a safety net but many of us oppose a welfare state in which half the population has no skin in the game. And any stereotypes of poor people stem from liberal policies – there were no welfare queens prior to welfare. Churches and charities used to tend to the poor, but they actually expected the beneficiaries to try and help themselves at some point. Dems don’t.

          2. In fact an empirical look indicates that revenues were up during those times exclusively because of economic growth–and revenue would have been higher if tax rates had been higher.

            If, by an “an empirical look”, you mean “forcefully cramming my head up my own ass”, then yes, you’re absolutely right.

            Revenues have fluctuated in a relatively narrow band around 18% of GDP regardless of marginal tax rates since the end of World War 2. That is simple fact, and it directly refutes any claim that in a given economic climate revenues will be higher if rates are increased.

            Everything you believe is a lie passed on to you by political hacks.

            Says the guy spewing discredited Krugbot talking points.

  16. I will say again: I don’t believe the tax rate on profits from buying and selling money should be any different than the rate on profits made buying and selling dog food or frozen peas.

  17. Having read the comments: Why should somebody who “risks” his money by buying stock in a corporation be treated more favorably than someone who risks his money buying a shipping container of wooden toy trains from Indonesia?

    1. I don’t think that’s the argument being had here; to me the obvious answer would be a flat consumption tax. But, if we’re going to go with income taxes, income should not be taxed twice.

      Also, comparing apples to oranges here. A company buying toys from wherever would pay the corporate tax rate; also a travesty, but different still.

      1. I have an index fund investment where I get taxed for dividends that I immediately and automatically reinvest into the fund. If I sell it, I’ll get taxed on the gains as well. How is that fair?

        1. It’s specifically not fair, which is why I favor a consumption tax.

          I think there’s some confusion that I’m an advocate of current tax law; I am not. I am however in favor of at least having the current tax law encourage saving and investing, if that’s the system that I’m forced to live under.

        2. Well, Pro Lib, whether the money you use to (re) invest in the fund is dividends from the fund or money you earned somewhere else, its still after-tax money when you invest it.

          I don’t think its really double taxation to tax you again on the gains, at least not in any way unique to dividend reinvestments.

    2. I empathize with the inflation argument, and that is one difference (well, there might be some inflation, but there’s a difference between a month or two and 20 years).

  18. comparing apples to oranges here. A company buying toys from wherever would pay the corporate tax rate; also a travesty, but different still.

    Which is exactly my point. You “invest” in financial assets in order to make a profit; just as you purchase and resell materials and manufactured products in order to make a profit. Treat those profits the same.

    My preference is to do that with a (LOW!LOW!LOW!) gross receipts tax, which eliminates social engineering and the gaming which arises from allowing the government to define what is and is not a “legitimate business expense” and what is and is not a “profit”.

    1. You “invest” in financial assets in order to make a profit; just as you purchase and resell materials and manufactured products in order to make a profit. Treat those profits the same.

      I completely agree. Of course, the idea of trying to tax “profits” is a wild goose chase anyways. A consumption tax is really the only just way to tax wealth.

  19. Use fees, property taxes, and even consumption taxes seem a little more morally justifiable, accepting for a moment that government is a service provider, albeit a poor one.

    I am totally in favor of ‘fee-for-service” government.

    However, I am not opposed to taxing income on moral grounds; I look at it as a consumption tax on labor/knowledge/service. And it’s a real number; a specific dollar amount in a transaction between a willing buyer and a willing seller.

  20. And- my gross receipts tax would in practice be pretty much indistinguishable from a broadly based consumption tax.

  21. Yall are wasting your breath;

    Six reasonable Democrats in the House (please excuse the redundancy) want a Reasonable Profits Board (RPB) to impose additional taxes on sellers of oil and gas.

    http://pjmedia.com/tatler/2012…..board-reb/

    I assure you they want to treat all income in this manner; arbitrarily deciding what money, and how much of it we get to keep on a minute by minute basis.
    Fuckers.

    1. I should have added that this is really nothing to worry about as these are reasonable people, and Tony assures us that Obama is a moderate centrist.

      1. What Obama “is” as in his core beliefs is interesting but not very important. Where you’re mistaken is in your hysteria over the policies he’s passed–moderately centrist by any sane assessment. An insane assessment would be assuming every time Republicans lurch further to the purist far right that what counts as “centrist” follows them in that direction. You don’t have to like Obamacare but you don’t get to claim it’s some sort of socialist takeover. It’s a free market alternative to the much more socialist Medicare–not that Republicans didn’t also bitch when Obama cut that program.

        Seriously, hearing Mitt Romney last night out of one side of his face talking about the evils of top-down government control of healthcare, then out of the other side of his face whining about cuts to Medicare? He gives pandering a bad name.

        1. What Obama Romney “is” as in his core beliefs is interesting but not very important.

          Agree/disagree?

          1. Agree, I’m much more concerned with what the right-wing zealots and oil barons behind his party will push on the American people as far as policy. Libertarians are way too concerned with people’s inner souls (and don’t mind painting income classes with broad stereotypes along those lines)–discussions on tax policy don’t have to take place on Oprah’s couch all the time.

        2. It’s a free market alternative to the much more socialist Medicare
          ————–
          how in the sam hill does a govt-run program that FORCES people to buy something qualify as free market?????
          (repeatedly bangs head on wall)

          1. Precisely for that reason–it forces people into the private insurance market, which is more market-oriented than a single payer system like Medicare. It’s not “free” market, I concede, but it’s still totally inconsistent to pander to Medicare recipients while railing against Obamacare on anti-socialist grounds.

            1. thanks for clarifying – govt force is okay when it suits liberal ends. Why should people be forced into any market? I don’t like Medicare, either, but we can thank LBJ for that.

              The whole reason health care costs have gotten out of control IS govt intervention. Prior to that, it was fee for service just like everything else.

        3. A massive government-mandated program, which requires arrangements and pricing that never would develop naturally in a truly free market is a “free market alternative”. Yup.

        4. It’s a free market alternative

          You can love Obamacare but you don’t get to claim it has ANYTHING WHATSOEVER to do with the free market.

    2. But don’t you dare call them socialists.

  22. without unfairly burdening any taxpayer. That obviously entails progressivity

    This is why we like you, Tonybot; you’re nothing if not rational and totally honest.

    1. Yeah, I am starting to see the entertainment value of having tony around. He is like the left’s version of pat robertson, a laugh a minute. I mean, I couldnt make that stuff up.

      Notice he completely ignored addressing the ‘reasonable profits board’.

    2. I find it quite interesting how libertarians assess fairness in a strictly numerical way, as if what the person is able to do with his life after taxes doesn’t count for anything. Not that I haven’t received lectures about marginal utility on many occasions

      At least there seems to be some agreement that regressive taxation is unfair, though the sentiment is colored by a reflexive impulse to praise any effort to avoid taxation since it’s inherently evil. If the rich are more able to benefit themselves by tax avoidance, hey they should be rewarded for their cleverness.

      1. So you endorse the idea of a reasonable profits board?
        What a shock.

        1. I don’t know, I’ll study the issue. I don’t think that every profit anyone makes by any means is necessarily legitimate.

          It’s a real question whether you should be able to profit from destroying the environment, don’t you think?

          1. You are profiting from it right now you dumbshit.

          2. what are you now, the Lorax? It’s always hyperbole from the left – someone is destroying something, the planet’s dying, blah blah blah. Sadly, the country has plenty of massively uninformed individuals to keep re-electing Blues.

            1. You lecturing others on hyperbole is laughable.

              1. and you wanting to use the force of govt to dictate what profits are legitimate and which are not is predictable.

        2. I do, if only to watch with amusement as Republicans impose a 100% tax on income from the entertainment industry, non-Fox news media, green energy, or unionized labor.

      2. Assuming you are farmer, since you seem familiar with bullshit, you’d probably be less happy about taxes if it wasn’t that evil money that the government takes at the point of a gun(save your argument. Eventually it comes to that if you don’t pay) but the actual fruits of your labor. Like in some movie. The big bad sheriff’s men bang down your door and take four of your ten cows to pay your taxes the government. If that’s how it worked instead of money just not never showing up in your paycheck, there would be much stiffer and broader resistance to the income tax.

  23. Notice he completely ignored addressing the ‘reasonable profits board’.

    Profits are evil; “reasonable” doesn’t enter into it.

  24. Obamacare

    ‘a civilian defense force as large and well funded as our military’

    ‘under my plan….necessarily skyrocket..’

    I forget how many czars, extremists to the last one.

    Voting against the right of self defense while in the Il senate.

    Eric Fucking Holder

    Arming Mexican Cartels

    Nixing the xl pipeline

    Oh fuck it, the examples are too numerous to list, those are just the ones off the top of my head.

    A moderate centrist he is. Between Pol Pot and Chavez

    1. Gun fetishists like yourself with the political backing of the NRA have done a hell of a lot more to arm Mexican cartels than Eric Holder.

      1. Now Tony, torturing logic and deluding yourself is almost excusable, but outright lying is another matter. You cannot back that up because it simply is not true, and you fucking well know it.

      2. Gun fetishists like yourself with the political backing of the NRA have done a hell of a lot more to arm Mexican cartels than Eric Holder.

        How, exactly? Be specific and show your work.

        1. Do you suppose the NRA’s rather wild success in dismantling gun control regulations might have something to do with the arming of Mexican drug cartels? Or do the freely flowing guns in this country somehow only get across the border if Eric Holder sends them there?

          1. I think you just nailed it. Less than 7% of the guns recovered in Mexico come from US gun stores. That is, until Holder started using the BATF to send them over wholesale.

            The dismantling of gun control here has had something to do with the Mexican cartels being armed in that it has inspired Obama/Holder to arm them with US guns to have an excuse to reassemble those laws. So sure, I do.

      3. It’s far more reasonable to label the anti-gunners fetishists, they are far more emotional.

        The majority of the country is in the middle on guns. Only criminals and the Brady Bunch favor prohibition.

  25. If the rich are more able to benefit themselves by tax avoidance, hey they should be rewarded for their cleverness.

    Here’s a crazy idea; reduce the “payout” for elaborate and costly tax avoidance schemes. I’ll leave it to you to imagine how this could be accomplished.

  26. Of course, to Tonybot, there is no discernible distinction between leveling a mountain and salting the earth just for laughs and mining coal for the purposes of powering homes and businesses and machines which produce goods and add value to the economy and make our lives better.

    1. So on social utility grounds you support subsidizing certain industries?

      1. And Tony sets another record in leaping to conclusions category.

  27. Destroying the environment….what does that even mean? It is a ludicrous, cartoon-like generalization that is completely void of meaning. What the fuck are you talking about?

    1. My family has timberland. Every 30 years my family clear-cuts 40 acre tracts in rotation. It looks awful when it is finished being cut. The ‘bootiful forest’ is massacred and bambi is homeless. We are raping the land and according to Tony our profits are not legitimate ( whatever that means).

      That land is in fact a field, and the trees are a crop. It is not a ‘forest’, it is a goddamn crop like corn. We spend a lot of money planting ( next saturday planting 20,000 pines and 4000 pecans), alot of money on property taxes, and we bust our asses for 30 years managing, thinning, weeding, and generally shepherding those trees.

      when all the work is done, the money spent, and the 30 years have passed and it is time to reap the rewards, here comes fucking tony with his hand out, deciding that our profits are not legitimate .

      Maybe if you stand back and think about that a minute tony you can see why this makes you such a despicable bastard.

      1. I don’t get why people take these things personally, or assume that regulation is all designed to impose unnecessary burdens.

        If run off from my coal mine kills your trees, who’s responsibility is it to force me to compensate you? Evidence suggests that if your only recourse is the courts, even if my actions directly kill your family, you aren’t getting close to what you deserve. http://en.wikipedia.org/wiki/Buffalo_Creek_Flood

        If silt runoff from your land damages the environment downstream, there is a case to be made that the government has a responsibility to help mitigate those externalities. Seriously, its like people have never read http://www.garretthardinsociet…..mons.html. Hardin’s conclusion is crazy, but his description of the problem is spot on.

        1. “damages the environment”
          I think I addressed that issue earlier. What does that mean? Over the last 40 years I have watched the land reclaim itself over and over, and faster with help from me.

          You are dreaming if you think Tony’s proclamation that profits derived from ‘destroying the environment’ arent legitimate isnt theft. Here is a guy far removed from the sweat, danger, expense and risk who can arbitrarily declare what is and isnt legitimate for me to have ( no doubt from an air-conditioned house or office made from timber I harvested). This so-called reasonable profits board that he endorses will be a giant extension of that mindset and it’s sole purpose is to loot money and resources from the people who produce. Tony and his ilk are not motivated by concern for the environment, they are motivated by envy. I take it personally when the long thirty years is up and the hard work is already done and some shithead, small ‘c’ communist tells me I dont deserve any profit, that any gains I might have produced are not legitimate.

          As for externalities, if the court isnt dealing with them adequately, then the court needs to be reformed. Creating tens of thousands of regulations that no one can possibly keep track of and costs untold billions does not solve the problem, it only stifles production.

  28. So on social utility grounds you support subsidizing certain industries?

    If by “subsidize’ you mean “allow them to survive if they can make a profit”. If you don’t like coal fired electric utilities, cut yourself off from the grid, and generate power to post stupid shit here by training hamsters to row a boat.

    1. You claimed that there is an ethical distinction between damaging the environment for no reason and doing it for a social end, implying that the perpetrators ought to pay less for the damage if they contribute to society.

      I say if you can’t make a profit without damaging the environment or paying full restitution, you don’t deserve to make a profit. Like any free market supporter would say. Until the full cost of harm is accounted for in energy industries (by both producers and consumers, if you like), then they are getting a subsidy. Those of us who believe in social utility don’t have a problem with this per se, but wonder why we can’t channel those resources to energy production that, say, doesn’t harm the environment. For you guys that action immediately becomes evil socialism–but you guys constantly make the mistake of assuming the status quo is a free market when it’s convenient for you, more specifically convenient for the industries you whore for.

  29. I find the double taxation argument a little mystifying, to be honest. There is a difference between realized capital gains and corporate profits. They are linked, sure – but they’re not identical. I own stock in many companies through my 401K. Setting aside the scenario of dividends, if those companies make a direct profit from the sale of their goods/services, it’s not as if they turn around and pay me a share of those profits. I may see a rise in my stock price as a result (I may not), but I don’t share in those profits directly. Instead, I realize my gains from a rise in the EPS for the company. How is it double taxation to require me to pay tax on that income? Also, I’d point out that executives are frequently granted stock options at a discounted strike price, and in the past, they were granted back-dated stock options as well. In this case they can make a handsome profit from those options even if the company realizes zero profit in the time frame between buying and selling the stock. Just points to think about.

    1. 1) There’s not a one-to-one correlation between stock price and earnings, but the two track pretty closely because, over the long run, the value of a company is the present value of its earnings. This issue is dealt with in the partnership, LLC, context by passing through the profits to the owners ordinary income on a pro rata basis. The cost basis is also adjusted for the income/loss, so any additional gains or losses are taxed when the owner’s stake is sold. There’s no reason that can’t be done in the C-Corp context too.
      2) Executives that earn money from stock options are taxed on those earnings as ordinary income, not capital gains.

  30. The ‘bootiful forest’ is massacred and bambi is homeless.

    You forgot the poor little birdies; when you cut down a tree, all the birds who might possibly have built a nest in it, or even perched in its branches, will die.

    1. ….and the rattlesnakes. On the last tract the loggers ran across 11 eastern diamondbacks. One was nearly 8 feet long. Poor babies….

  31. I think economist Fred Foldvary summed up this debate quite well: Releasing Income Taxes

  32. I agree with the author, but I think he leaves out two more persuasive arguments:

    1) The money people use to invest has already been taxed (at a higher rate!). Any capital you accumulate, or save, you have to have already earned, paid income taxes on, and not spent on consumption. Why should you have to have even more money taken away from you because you take risk and create wealth and value in the economy AFTER working productively, living (at least relatively) frugally, and paying full income taxes? Morally, this double taxation is wrong.

    2) Investment is the most important element for economic growth. Good investment yields returns in terms of increased productivity, capital, and what have you. Investing money is what creates jobs, companies, products, industries – it is a wealth creation machine. From a utilitarian perspective, why should we discourage investment? Investors already have to take into account the risk of loss, the rate of inflation, and the time preference (discount rate) of their money. By definition, only those investments are made that offer the investor a reasonable chance to yield a higher return than those three elements combined. Now add on top of all of that a tax at 15%. You have just made it much more marginally difficult to invest successfully, which will obviously put great downward pressure on investment. So from a utilitarian perspective as well, the capital gains tax is just a bad idea.

    1. The answer to #2 is that you are a statist and you want control of the people’s wealth and the means of production.

  33. 1. Capital gains tax IS an income tax on investors, similar to the income tax of a corporation’s employees. It should be treated in the same way as employee’s income (i.e. no loophole tax rate).

    2. In order to avoid double taxation of corporations, there should be no corporate tax. That is where the double taxation occurs. This would do a lot more good for society & jobs, too.

    3. This problem wouldn’t exist in a perfect world with no income tax at all.

    4. We shouldn’t cite inflation as a reason for a lower capital gains tax. if capital gains don’t keep up with inflation + tax rate for any period of time, then it was a bad investment that the free market tells us should not have been made.

    5. Inflation is not an excuse for unequal tax policy, it is the reason why we should be discussing sound money and not a tax loophole built by and for those with the means to invest.

    1. So, the state provides the force to permit the corporate entity, but the people get taxed instead?

      Stop advocating for higher cap gains you fool.

  34. I don’t want Mitt Rommney to give any money to the government, but as a former Don of the Massachuttes crime racket (i.e., government) he should have all of his property expropriated and sent to all the people he victimized during his tenure; such as every single drug user and drug dealer arrested there.

  35. Damn, so many taxation advocates here. Did I misnavigate my browser and end up at Organizing For America?

  36. When I buy eggs I pay the same amount for the same eggs as a millionaire does. Which means I pay a much higher percentage of my earnings to buy eggs than a millionaire. Why should I pay a higher rate for my eggs than a millionaire?

    We should apply the logic of taxing people a percentage of their earnings to fund government to the market and see what would happen.

    If you see a problem with that why isn’t it a problem when it comes to taxes?

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