Militant conservatives are effective because they are absolutely shameless. Many of the same people who think the rich should be free to spend unlimited sums influencing our politics without having to disclose anything are now asking Buffett to make his tax returns public. I guess if you’re indifferent to consistency, you have a lot of freedom of action.
Yeah, I guess. *rolling eyes*
I'm as disgruntled with the repubs as anyone, but give me a break. This whole piece is over the top, and reads like it was penned by angst-ridden teenage boy. The entire political conversation is so far in the sewer that it's become painful to read the opinion pages in most newspapers.
Reform the tax code? You betcha. And soon. It's a thorn in my side that capital gains is taxed at 15%; I think it's flat-out wrong. How about this solution: come tax time, subtract your ACTUAL investment losses from your gains and add it to your income. No loopholes, no extra clauses...just one sentence with a period on the end.
I also think that everyone should pay tax at the same rate (on purchases, not income), but that's an argument for a different post. For now, we can pick the low-hanging fruit; tweaking the capital gains tax, and requiring EVERYONE to put some skin into the game. EVERYONE.
All of this partisan politics is driving me insane. Can't we just solve our problems in a fair and just fashion?
If everyone is supposed to have skin in the game, I propose that everyone should be paying taxes. Including people with lower incomes.
ReplyDeleteI didn't say that someone making 20 grand a year should be paying 10 grand a year in taxes - but SOMETHING is necessary. If you use the services and benefits of the government (and even the Unabomber did from his cabin, as he benefitted from Forest Service at the very least), you should be contributing.
It's amazing how one's perspective changes as soon as they have to pay the bill. I'll order the appetizer when my boss is picking up the check at a work dinner, but on my own I stick with the salad.
If you know what I mean.
lady red - I'd be very interested to see and understand how the gov't could switch from taxing income to taxing purchases.
ReplyDeleteI read an article a few days ago that had African nations telling the West to just bit the bullet and do what needed to be done, using their own experiences with debt as an example. It was interesting, and many African countries (including where we're going) have been very successful at working through the issue.
AFW, you know we're in the sh*tter when 3rd-world African countries are better problem solvers than we are. Good grief.
ReplyDeleteMaybe, in Africa, they don't squander their time shooting spitballs at each other across the political aisle, picking their nose, and exporting the wealth of their citizens.
~x(
Well, the African countries already went through the whole "Hey! I can borrow this and whomever follows me has to repay? AWESOME!" thing. We're relative newbies to that one.
ReplyDeleteHere's Zambia's tax policy. When you look at it on face value, it seems a hell of a lot less complicated than ours. I'm not sure how it works in practice, though.
http://en.wikipedia.org/wiki/Taxation_in_Zambia
In comparison, here is the wiki on the US's tax policy:
ReplyDeletehttp://en.wikipedia.org/wiki/Income_tax_in_the_United_States#Year_2011_income_brackets_and_tax_rates
Granted, more people care and more people know and so there is more available to put on wiki in the first place. But I'm pretty sure the ridiculousness and complications are a part of it.
Oh poo. That was the link merely for the INCOME taxes. There's an even longer wiki for the whole shebang.
ReplyDeletehttp://en.wikipedia.org/wiki/Taxation_in_the_United_States
There is a two-party system for a reason. The problem today is that one party wants to totally change the makeup of the country into something it was never intended to be. Which side cries "racism" whenever anyone criticizes the President, but calls a black candidate on the other side an "Oreo?"
ReplyDeleteI saw a quote a few minutes ago, "When two people agree, one is being redundant." Barney Frank wants to take away the voting power of the heads of regional Federal Reserve Banks in banking matters because some of them do not agree with the administration and are roadblocks to giving the administration carte blanche to do whatever it wants.
A governor from which side suggested that Congressional elections be postponed until after the government gets the economy in order? And, despite what that party is now trying to say, she did not say it as a joke.
Massachusetts Senate candidate Warren says that no rich person ever got rich on his own (she must be thinking of the Kennedy family). But where did the money come from to begin with? There was a fascinating article in Smithsonian about twenty years ago. It followed the big society register that was first done in 1892 (can't think of the name of it off hand). IIRC, after 50 years, 50-60% of the names that were on the list had fallen off -- many of them were not rich any more. After 100 years, about 92% of the names on the original list had fallen off. In other words, the makeup of the "rich" changes.
Remember the definition of partisan politics: when Republicans try and do the what they think they should be done. When Democrats control Congress, the Republicans should do what the Democrats want. When Republicans control Congress, Republicans should do what Democrats want. Anything else is partisan politics.
The problem with this "we should end this partisanship" is that people always think it should be the other side that shuts up. I certainly have no problem with political opposition, as long as they know the Constitution and know the foundation on which the country is based. You have differing ideas on how to improve it along those lines? Let's hear them. It's when the other side wants to destroy the greatest country the world has ever seen and turn it into something that has failed every time it has been tried that I get upset.
whoa, too much sense in here.
ReplyDeleteWe want to encourage capital investment for a long term, so I would require investments to be held for a substantial period of time, such as five years, before they could get the "standard" capital gains rate we see today. Capital gains in investments held under a year should probably be taxed as ordinary income. And have a step in between for the "intermediate" investments. Those two endpoints (1 year and 5 years) might also need to be moved, too.
ReplyDeleteAnd here's a solution to the Warren Buffets of the world: require that all income over a certain threshold (say, $1 million) be taxed at ordinary rates, with no deductions permitted, no matter what source it came from, whether regular salary, capital gains, or whatever.
All this, of course, assumes we don't just chuck it all and enact The Fair Tax or something very much like it.
If you think that raising taxes on "corporations" will help...remember, kids, corporations don't actually "pay" any taxes. They treat them as costs and pass them on to their customers--meaning you--in the form of higher prices.
Erbo - and lady red - a couple points.
ReplyDeleteShort term capital gains (held under a year) are already taxed as ordinary income.
Speaking as an investor I think the 5 year idea is interesting - but I see the value more for startup capital, which typically "waits" around that amount of time to see any payoff.
(There is no "selling out" of a startup - when you invest, you're in it until it's sold, has an IPO, or goes bust. Interestingly the company can become successful and sustainable, and you _still_ don't get your money out if you didn't include the right items in your term sheet... but I digress...)
Absolutely right on the corporate income tax. I worry about the impact of raising taxes on cap gains and dividends - but - it'd be a lot easier to swallow if corporate taxes were eliminated...
...except for the fact that corrupt, interlocked boards of directors would probably allow the CEOs and other management to simply loot the corporations of the extra cash. Some major reforms would be necessary for the shareholders to see a dime.
And all that said... I'm compelled to point out, once again - the money that got invested anywhere for there to be a capital gain, has already been taxed at least once, as (somebodies) income.
So if I earn money and pay tax on it, and then invest it, and I make a good investment and realize a gain on it, how is it fair that I pay tax again? I could have lost it all, or just sat on it and spent it.
Or, consider Erbo's suggestion: let's say I realize $2M in gains some year. So, I could either re-invest that money in some new venture, or I could blow it on fast women and fast cars. Erbo's proposal would tax me the same, regardless. You get more of the behavior you incentivize in the tax system - don't we want to incentivize investment?
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ReplyDeleteFrom Erbo's pretty good Fair Tax link:
ReplyDeleteThose spending at twice the poverty level pay a FairTax of only 11.5 percent -- a rate much lower than the income and payroll tax burden they bear today.
How will this effect retirees, whether defined benefit pension, 401K, Social Security/Medicare, Return on Investment, etc?
Will his/her tax be more or less than paid aggregate now, whether working or retired?
If retiree has been prudent, paid off the house, etc., what is the impact?
I admit that the above are "trap" questions.
Consider that most retirees do not pay "FICA or Medicare taxes, but they DO pay fees for Medicare, which are geometrically increased if one is still "earning" income after age 65.
Consider the fact that a retiree with aggregate income of around $40,000 or so (roughly 4 times or 400% of the federal poverty level), utilizing the standard deduction, pays about 9% to 10% in federal income tax now.
Then, explain to me what a "prebate" is and and how it would apply generally, given the federal poverty level of around $10,000?
Finally, advise me on how the federal government can mandate that states collect and administer a federal "consumption tax" that they must in return pay to the Feds?
Ari - I think the upshot of your comment is that some amount of complexity is entailed when you talk about actual fairness, practicality, etc.
ReplyDeleteIn fact, I'd conjecture: there are fair tax codes, and simple tax codes, but no fair, simple tax codes.
That said: it has to be the case that the current tax code could be simplified by about a factor of 10 with minimal impact. I think the choice between the various simple "fair tax" proposals and the current tax code is a false choice.
Lewy ... nice dodge :D
ReplyDeleteSeriously, the "Fair Tax" as defined now is full of misleading, perhaps inadvertent, information.
My questions still stand.
That said, I have no argument with your summary that there are no fair simple tax codes. The devil is always in the details.
Sojo! Good to see you here old friend! :)
ReplyDeleteAs for the tax debate, I don't have enough information to tackle every detail (does anyone?). I know two things: it's a tangled up mess, and it needs to be simplified by 72,535 pages or so.
Burn the old one. Give the legislature one piece of paper, a pencil, and a big eraser. Lock 'em in a room, and tell them they can come out when we have a new tax code with NO loopholes and no special interest considerations.
{Shudder} I think I just scared myself silly. Let me rethink this...b-(
Sojo! Good to see you here old friend!
ReplyDeleteI was wondering if that really was Sojo. I guess I just never realized that she was "The" Sojourner. I'm a bit jealous now. Anyhow, good to see you!
As for the topic at hand, good discussion all around. I'd put in my two cents, but it ain't worth a dime these days. I'll just quietly nod and agree.
Alphie, I'd love to hear your opinion. Wade into the fray! :)
ReplyDeleteI'd like to hear The Alphie's take as well :-)
ReplyDeleteYes, great to see Sojo here, I think she's started a trend...
LOL, I think you are right!
ReplyDelete