Man, I wish the poor would stop whining...Follow

Yup. Ad-hominem, right on schedule...

Er? What ludicrous argument? That capitalism assumes that the whole is greater then the sum of its parts? Really? So you think that entrepreneurship is just a non-factor to capitalism?

Silly Smash...





That's classic...

Like I said, I want to know where it says he deserves the 15%. Let's not get hung up on a fucking mushroom and let's see you cite a tax law (State Or Federal, I don't give a ****) that directly supports this.

Oh. And for the interested reader, here's an interesting essay on the subject of capital gains and the pros/cons of raising or lowering the tax rates on them.


I'll also point out that he spends zero time discussing what external benefits occur as a result of investment in the first place. He's purely talking about relative tax revenue based on changing capital gains rate. Essentially, his conclusion is that lowering capital gains taxes at best may have a *tiny* impact on revenue (and may just as well raise it). Given that, and given the other benefits the investment process brings outside of tax dollars, it's pretty easy to make a strong argument for why capital gains should be taxed less then income.

To put it bluntly: If you lower taxes on income, you lose revenue. Period. People don't change their income based on the tax rates. They're always going to try to make more if they can (except the very wealthy of course, but they're shifting "income" into "capital gains" in most cases so it's an irrelevant point).

If you lower capital gains, you increase the likelihood that people will realize those gains. The essay explains this pretty well, so I won't bother. But it does make a lot of sense. By increasing the rate at which things are bought and sold, you increase the number of taxible events. The government is taking a smaller chunk out of each, but there are more of them. Whether that fully covers the tax cut isn't that significant. IMO, there are so many other benefits to a robust investment environment that they far far outweigh that consideration by itself.

Yes. But there wouldn't have been any profits to tax if I hadn't put the money into the investment in the first place.

The issue is the economic "good" based on whether someone spends their disposable income on things that are guaranteed to depreciate in value (consumption of one form or another) or spends them on things that may increase in value. One an argue quite strongly that there's a benefit to all of us to have as many people as possible putting money into the later.

Also, as I've pointed out repeatedly, capital gains is not a straight trade of equitable values (ie: an hour of my labor is worth X dollars which is worth Y goods/services from someone else). It assumes that as a result of some action the actual value of the "thing" you invested in increases. That's how economies grow, so it's kind of a good thing to reward.




Tell that to the people who bought stock in the company I work for in say early 2000, when the price was somewhere over $100/share and ask them if their investment had "no risk" when the current price is about $45/share. Or a whole bunch of other "risk free" investments. Lots of people lost a lot of money in 2000 when the tech stock bubble burst.

It is *not* just salary. That's what I keep trying to tell you. It's an investment. It's risky. You have no guarantee that you'll get your money back, or that you'll make more money then the inflation rate (ie: you'll pay taxes, but have no actual real dollar growth).

It is different then a salary in pretty much every single way. I know that most people don't understand the difference, but that doesn't mean that they aren't different. I know that it seems like you gain money with one and gain money with the other, so why not tax them the same? But that's an incredible simplification of what's going on. I keep trying to explain the differences, but if you refuse to open your mind and think about it I don't know what elese to say.

You need to put yourself in the place of someone who could have spent their money on a new car, or super duper computer, or any of a zillion other things that would have benefited them directly, but chose instead to put it at risk investing in some company or product or research that they believe was worth supporting, and which results in some benefit to others often for years or decades before they realize the "gain" from that investment, only to have some yahoo argue that his gain should be taxed the same as income. Trust me. If you actually invested any significant amount of your income, you'd understand why lower capital gains taxes are a good thing. And not just from a "I'm greedy and want more money" perspective, but from the simple perspective that it's *barely* profitable to do this for most people as it is (except for the ultra-rich of course). Raising capital gains taxes will not significantly reduce the earnings of the super rich. All it will do is make investing less attractive to the working and middle classes, effectively ensuring that they are never anything other then wage-slaves.


If you were a snobby wealthy person and wanted to come up with the best way to ensure that you don't have to share your country club with "them", raising capital gains taxes is the best way to do it. For anyone who isn't already super wealthy, it's a sure fire way to ensure that none of them ever become financially independent. They simply can't work enough years of their lives to invest enough money to have enough so that they don't lose it all when they retire.


I've explained my concept of the "wealth line" before. If you want me to explain it again, I will. But the short explanation is that there's a set amount of wealth you must obtain before you can retire. If you have less then that amount, you'll consume your wealth when you stop working. If you have more, you can stop working and your wealth will continue to grow. The line is wholly dependent on capital gains tax rate. It also *only* varies from about 1.2 million to 3 million dollars (scaling from 0% cap gains tax to 50% cap gain tax, and assuming a single person willing to live frugally).

Anyone with tens of millions or more dollars is utterly unaffected by capital gains tax increases. The only people truly affected are those to whom the difference between needing to save up 1.2M versus 3M is significant. In other words, middle class investors. People who make good salaries, and can afford to invest money into the market(s) and do so for several decades of their working lives. If the capital gains tax rate is low and they do well, they have a decent chance to make it. If it's raised to income tax levels, it's virtually impossible.


Does that address your issue? If you want to raise capital gains because you somehow think it's unfair for ultra rich people to make money just because they're already ultra rich, you're not accomplishing what you want. But, out of your anger at "rich people", you'll ***** over millions of hard working middle class folks who do invest, not because they're greedy and want to roll in their millions, but because they know that they're unlikely to gain anything, but are hoping that their hard work and investment will benefit their children or grandchildren.

But hey! You go ahead and punish them for doing the right thing if you want...

So in other words, you can't even cite a law which would back your rhetoric. Gotcha.

Do you pull this **** out of the air?

There are all sorts of income caps that you can introduce around capital gains taxes. I'd like to see the wealthy to be taxed on all the wealth they produce. While I understand that flogging them and taking all their money would be the most satisfying, I have to be content with reasonable taxation.

Yes if you buy stock there is risk of loosing money. No, you don't have to buy the stock option, ergo you can't loose money.

Please try to keep up with the conversation. You appear fooling and ranting.

Sure. But you said that investment return was "zero risk". Clearly that's not true.


And at the risk of being obvious, if you don't invest, you wont earn *any* money, and therefore not ever get taxed for capital gains.



Er? We were talking about capital gains taxes. This assumes that one invests in some way... Saying: "It's no risk because you don't have to invest" is a bizarre statement to make...

Here's another way of looking at it. When smash "invests" money in a hand of poker, he's hoping for a good hand that will win that round for him. But no matter how good his hand is, it doesn't benefit anyone other then him.

The shareholders of Harras Inc. (myself included) would disagree.

Here's how the current law works. I buy stock in a company that makes money from poker, and hold it for a period of time, I pay 15% (let's not even get into dividends) when I sell it for a profit. I make money directly playing poker, I pay 35%.

This somehow makes sense to you, objectively?

Edit: Also, while we're here, if I decide to quit playing poker, which is an exercise in assessing likely outcomes and making bets of various monetary degrees based on incomplete information and become a hedge fund manager, which is an exercise in assessing likely outcomes and making bets of various monetary degrees based on incomplete information, my tax rate decreases by 20%.



Edited, May 13th 2008 5:35pm by Smasharoo

Yes. The difference being (again!) that as the manager of a hedge fund, the mone you put "on the table" was used to do something. That "something" made more in return then was put in.

You don't understand at all how Hedge Funds work, I see.

Ah... You're using a strict 20+ year old definition of "hedge fund". Got it...


Um. Even then. If the value of the fund increases, from the perspective of the manager's performance on the fund for his investors, he "created value". You may externally argue that this value didn't benefit anyone outside the fund, but that's a relatively esoteric argument, since you can't actually say that for sure. Hedge funds are as likely to throw large amounts of money into highly speculative investments (ie: near term IPO that they hope will go big) as sell short and use their own actions to affect the market price in order to make money. They aren't really about "hedging" anymore...


You are correct that the riskier and more speculative nature of hedge funds don't match the typical market idea of "growing the economy" in the process of generating capital as well as say a traditional mutual fund. Um... But once again, you've targeted the wrong thing. If that's the problem, then argue for regulating hedge funds. Don't argue for raising capital gains taxes...