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Income tax is the wrong way to tax the extremely wealthy. They make most of their income from capital gains, which is taxed at a different, low rate.

refurb 9y ago
Income tax includes capital gains. At least in the US it's included when you file your "income taxes".
- cookiecaper 9y ago
  Short-term capital gains are taxed as regular income. Long-term capital gains are taxed at a significantly reduced rate (highest income tax bracket (39.6%) pays 20% on long-term capital gains). See http://www.investopedia.com/articles/personal-finance/101515/comparing-longterm-vs-shortterm-capital-gain-tax-rates.asp http://www.investopedia.com/articles/personal-finance/101515...
- deleted 9y ago
  [deleted]
rsync 9y ago
"Income tax is the wrong way to tax the extremely wealthy." That's my point. The top income tax brackets are designed for, and sold to voters as, appropriate rates for the "super rich". So to whatever degree you feel this is a bad tool for that job, I would hope you'd recognize that, therefore, the income ranges for those very high rates are not appropriate. As I pointed out, those top rates aren't for millions or tens of millions of dollars of income - they are for (roughly) $400k.
dragonwriter 9y ago
> Income tax is the wrong way to tax the extremely wealthy. No, it's the right way. > They make most of their income from capital gains, which is taxed at a different, low rate. Capital gains taxes are income taxes, they just are at a lower rate to deliberately favor holders of capital. But there's a simple and obvious way to correct that; apply regular income tax rates to capital gains [0]. [0] there is actually a good reason for special treatment of income earned over a period of greater than one year in a progressive annual income tax system, as doing otherwise penalizes punctuated, non-repeatable income; but you can address that by either (or both) of allowing income to be recognized in advance for tax purposes and allowing income to be deferred for tax purposes for a period after it is earned (neither of which, managed properly, provides any avoidance opportunity for regularly-recurring income.)
- milcron 9y ago
  In that case I agree. I ought to have said, "labor income tax is the wrong way to tax the extremely wealthy."

refurb 9y ago

Income tax includes capital gains. At least in the US it's included when you file your "income taxes".

cookiecaper 9y ago
Short-term capital gains are taxed as regular income. Long-term capital gains are taxed at a significantly reduced rate (highest income tax bracket (39.6%) pays 20% on long-term capital gains). See http://www.investopedia.com/articles/personal-finance/101515/comparing-longterm-vs-shortterm-capital-gain-tax-rates.asp http://www.investopedia.com/articles/personal-finance/101515...
deleted 9y ago
[deleted]

rsync 9y ago

"Income tax is the wrong way to tax the extremely wealthy." That's my point. The top income tax brackets are designed for, and sold to voters as, appropriate rates for the "super rich". So to whatever degree you feel this is a bad tool for that job, I would hope you'd recognize that, therefore, the income ranges for those very high rates are not appropriate. As I pointed out, those top rates aren't for millions or tens of millions of dollars of income - they are for (roughly) $400k.

dragonwriter 9y ago

> Income tax is the wrong way to tax the extremely wealthy. No, it's the right way. > They make most of their income from capital gains, which is taxed at a different, low rate. Capital gains taxes are income taxes, they just are at a lower rate to deliberately favor holders of capital. But there's a simple and obvious way to correct that; apply regular income tax rates to capital gains [0]. [0] there is actually a good reason for special treatment of income earned over a period of greater than one year in a progressive annual income tax system, as doing otherwise penalizes punctuated, non-repeatable income; but you can address that by either (or both) of allowing income to be recognized in advance for tax purposes and allowing income to be deferred for tax purposes for a period after it is earned (neither of which, managed properly, provides any avoidance opportunity for regularly-recurring income.)

milcron 9y ago
In that case I agree. I ought to have said, "labor income tax is the wrong way to tax the extremely wealthy."