5 ms·

I'm fine with income taxes so long as they're progressive and have no holes, such as investments in the stock market not being considered "income" so that peopl

by just2n 14y ago

I'm fine with income taxes so long as they're progressive and have no holes, such as investments in the stock market not being considered "income" so that people can make $800,000+ /yr and pay some obnoxious 15% in taxes while people making under $100,000 can easily pay over 25%. Feels like we're losing out on a few hundred billion/yr in tax revenue due to nonsense like that.

chatmasta 14y ago
By "nonsense like that," do you mean nonsense like encouraging investment? We live in a capitalist society. Capital is eponymously fundamental to market growth. Discouraging investment by increasing capital gains tax is one of the surest ways to stymie economic growth. To do so for "a few hundred billion in tax revenue" would be unbelievably short sighted.
- JamisonM 14y ago
  These are pretty bold claims given that the last cuts to capital gains offered little to no economic growth and hurt government revenues as well as contributing to the recent rise in income inequality in the US. Have a look at the published research on the topic.
  - adventured 14y ago
    The Fed's massive inflation is far more responsible for the rise in inequality in the US than anything else (and far more than a change in capital gains taxes). Including their constantly exploding bubbles that hammer the bottom 75% far more than the rich in standard of living terms. The cost of a house has doubled in 15 years (and housing is currently spiking again while real unemployment is 14%, thanks to the Fed's massive housing inflation). The cost of gasoline has gone up 3 to 4 fold in the same time frame. The cost of groceries have followed a huge inflationary curve over the last 15 / 30 / 50 years. Ditto the cost of a vehicle. Rich people can shield their money from inflation (easily in fact), average or poor people cannot shield their incomes from inflation. That simple fact is responsible for a huge destruction in standard of living in the US. Incomes have not even remotely kept up with inflation.
    - JamisonM 14y ago
      There are many problems with the theory you espouse here but I will pick on just one thing. The idea that over the last X number of years you can reasonably compare one item to another for many things. A car or a house in the 1950's does not remotely compare to one today, the technology and the safety elements in a 1950's "box with wheels" compared to what you get with a modern car? Incomes are stagnant or declining in real terms we can agree on that. While low interest rates and easy credit are an element of that, why blame it on the "Fed" when easy money is happening the world over? After all, it is easy for average or poor people to shield their income for inflation, it is called getting a raise. Problems arise when the economy and tax system values capital over work - which was my original point.
- mpyne 14y ago
  I'm not a professional economist but it seems to me that consumption is what is fundamental to market growth, and that capital is merely what you must have to scale up to maximize your ability to supply the products and services demanded by the consumers. You can partition by B2B, B2C, B2G, whatever, but at some point it has to stop being a pyramid scheme, and that point is with the consumer who are generally able and willing to consume more if taxed less.
  - adventured 14y ago
    No, production is fundamental to economic growth. Consumption is a secondary dependency. Before you can consume anything you have to first produce something (unless you have credit, and that won't last very long unless you have produced something or are going to). Try consuming before you produce. It's a logical failure that modern economics tries to pretend doesn't exist (and we can see how far that has gotten many economies today). For obvious examples of production over consumption, see: China, or the US before hyper consumption took over a few decades ago. Savings + capital investment + production = wealth. Lack of savings + spending + lack of production = poverty and debt (aka modern America).
    - just2n 14y ago
      But how does taxing producers more than investors make it easier to get producers? All that does is mean that the fruits of a producer's labor generates a lot more wealth for other people, at a lower tax rate. That necessarily means we have to seek higher salaries, which requires higher investments, which necessarily means gains will be smaller, resulting in less ROI for investors. Placing more of the tax burden on the people building value doesn't make much sense, since they have to live, too.
      - adventured 14y ago
        I would argue in favor of lower taxation on producers (lower taxation on everything, with a Federal government at least 1/4 smaller by focusing strictly on key priorities). I'd argue for a government matching the Bill Clinton era size, adjusted appropriately for 13 years, and the taxes to go with it. My point was emphasis on production is extremely lacking in the US today. Presidents pay lip service to it (and absolutely nothing else), meanwhile China is beating our pants off by actually focusing on it. My other point was, production is more important than consumption (because the one must come before the other, not to say you don't need consumption of course). You turn on the TV and every talking head says the same thing: consumption is 2/3 of the economy. So in their world we need more consumer spending - more people buying junk they don't need from China so China can get richer while we get poorer. When you put that into a logical context, it's comically absurd. Where do those talking heads think the money to consume comes from? 100% of it comes from production or credit, with the ability to spend being a left-over fractional fruit of production (aka the profit from producing something).

by just2n 14y ago

chatmasta 14y ago

By "nonsense like that," do you mean nonsense like encouraging investment? We live in a capitalist society. Capital is eponymously fundamental to market growth. Discouraging investment by increasing capital gains tax is one of the surest ways to stymie economic growth. To do so for "a few hundred billion in tax revenue" would be unbelievably short sighted.

JamisonM 14y ago
These are pretty bold claims given that the last cuts to capital gains offered little to no economic growth and hurt government revenues as well as contributing to the recent rise in income inequality in the US. Have a look at the published research on the topic.
- adventured 14y ago
  The Fed's massive inflation is far more responsible for the rise in inequality in the US than anything else (and far more than a change in capital gains taxes). Including their constantly exploding bubbles that hammer the bottom 75% far more than the rich in standard of living terms. The cost of a house has doubled in 15 years (and housing is currently spiking again while real unemployment is 14%, thanks to the Fed's massive housing inflation). The cost of gasoline has gone up 3 to 4 fold in the same time frame. The cost of groceries have followed a huge inflationary curve over the last 15 / 30 / 50 years. Ditto the cost of a vehicle. Rich people can shield their money from inflation (easily in fact), average or poor people cannot shield their incomes from inflation. That simple fact is responsible for a huge destruction in standard of living in the US. Incomes have not even remotely kept up with inflation.
  - JamisonM 14y ago
    There are many problems with the theory you espouse here but I will pick on just one thing. The idea that over the last X number of years you can reasonably compare one item to another for many things. A car or a house in the 1950's does not remotely compare to one today, the technology and the safety elements in a 1950's "box with wheels" compared to what you get with a modern car? Incomes are stagnant or declining in real terms we can agree on that. While low interest rates and easy credit are an element of that, why blame it on the "Fed" when easy money is happening the world over? After all, it is easy for average or poor people to shield their income for inflation, it is called getting a raise. Problems arise when the economy and tax system values capital over work - which was my original point.
mpyne 14y ago
I'm not a professional economist but it seems to me that consumption is what is fundamental to market growth, and that capital is merely what you must have to scale up to maximize your ability to supply the products and services demanded by the consumers. You can partition by B2B, B2C, B2G, whatever, but at some point it has to stop being a pyramid scheme, and that point is with the consumer who are generally able and willing to consume more if taxed less.
- adventured 14y ago
  No, production is fundamental to economic growth. Consumption is a secondary dependency. Before you can consume anything you have to first produce something (unless you have credit, and that won't last very long unless you have produced something or are going to). Try consuming before you produce. It's a logical failure that modern economics tries to pretend doesn't exist (and we can see how far that has gotten many economies today). For obvious examples of production over consumption, see: China, or the US before hyper consumption took over a few decades ago. Savings + capital investment + production = wealth. Lack of savings + spending + lack of production = poverty and debt (aka modern America).
  - just2n 14y ago
    But how does taxing producers more than investors make it easier to get producers? All that does is mean that the fruits of a producer's labor generates a lot more wealth for other people, at a lower tax rate. That necessarily means we have to seek higher salaries, which requires higher investments, which necessarily means gains will be smaller, resulting in less ROI for investors. Placing more of the tax burden on the people building value doesn't make much sense, since they have to live, too.
    - adventured 14y ago
      I would argue in favor of lower taxation on producers (lower taxation on everything, with a Federal government at least 1/4 smaller by focusing strictly on key priorities). I'd argue for a government matching the Bill Clinton era size, adjusted appropriately for 13 years, and the taxes to go with it. My point was emphasis on production is extremely lacking in the US today. Presidents pay lip service to it (and absolutely nothing else), meanwhile China is beating our pants off by actually focusing on it. My other point was, production is more important than consumption (because the one must come before the other, not to say you don't need consumption of course). You turn on the TV and every talking head says the same thing: consumption is 2/3 of the economy. So in their world we need more consumer spending - more people buying junk they don't need from China so China can get richer while we get poorer. When you put that into a logical context, it's comically absurd. Where do those talking heads think the money to consume comes from? 100% of it comes from production or credit, with the ability to spend being a left-over fractional fruit of production (aka the profit from producing something).