it encourages investment. Except for the fortunate few, risk investment capital (note the word risk) comes from earned income which is taxed. You then invest some of the earned money hoping that it grows. We then tax it again which is called investment income tax
let me answer a question with a question... what is the "good reason" you believe we tax gains less than income? - - - Updated - - - and the money I blow at the blackjack table is also earned income... and when I win big, I pay taxes on my winnings.... not as capital gains, but as income.
I believe SEC already answered, but I'll partially elaborate. Economies need investment in order to grow, innovate and increase the standards of living. Gains are simply different from ordinary income. There is no guaranteed rate of return. Some carry a different set a risk than most. Not all investments pan out the way people would like. For this reason, we have always taxed gains differently than ordinary income. - - - Updated - - - It's not uncommon for an outsider to confuse gambling with investing...
You're the one who made the bad analogy. I can't really understand how anyone would consider the two correlated, unless said person was an outsider. Or a day trader...
Well then, consider this http://www.cbpp.org/cms/?fa=view&id=3629 and this: http://www2.ucsc.edu/whorulesamerica/power/wealth.html
I don't see why I would need to gamble. In any event, gambling isn't investing. The fact that the average hedge fund has done no better than flipping a coin within the last 30 years shows that much. Gambling with equities may be a good way for newcomers to have fun, but it's also a good and easy way to lose money.
LOL! I don't believe anyone in this thread that's claiming they make a high income. The ones who are making the claim are the ones in this forum 24/7 and aren't working. Unless you're being paid by Karl Rove to infiltrate political forums to spout off the far right wing agenda, you're either unemployed or on Social Security.
You're thinking backwards silly, Eisenhower started the civil rights movement. If anything, previously racist Republicans wondered on over to the dark side
It's called an income tax, not a wealth tax. Some people save a little money during their working years and some people take that extra vacation and borrow against the equity in their home to pay for it. That means some people arrive at retirement age with a pot to (*)(*)(*)(*) in and some don't. Guess which group votes democrat and wants to raise taxes on the other group?
You obviously don't have the slightest understanding of the market and what goes into trading if you're comparing it to blackjack. I've played plenty of blackjack and still I see no relation between the two. Do you think there would be economics and finance degrees if there wasn't some sort of science behind it?
there is risk in the marketplace, and there is risk at the blackjack table.... that is the only comparison I ever made. And you "obviously" should refrain from character assessments of people with whom your only contact is on a political message board.... just sayin'
So what is this is about FEDERAL TAXATION and whether the higher incomes pay their share of them, if you want to discuss your state tax structure with your fellow state citizens have at it. Going slower does not change the facts, when it comes to FEDERAL TAXATION 20% pay over 80% of those taxes, what is not fair about that and if that is not progressive enough then what would be. I don't expect you to give a straight answer, the left never does because or FEDERAL TAX SYSTEM is ALREADY highly progressive and to make it more is just beyond reason and common sense. You desperate attempts to conflate ALL taxation to hide the facts notwithstanding. - - - Updated - - - So what, that has nothing to do with paying income taxes. What percent of the income do they earn versus the income taxes they pay? - - - Updated - - - You are dealing with people who believe the tax system should be based on envy and used as a means to satisfy that envy. Their concern is not what rates produce the most revenues and the most benefit to the economy overall, just taking as much a percentage they can regardless of the consequences.
Should the rate on capital gains be set in order to produce the most revenue for the government and growth in the economy or just to satisfy the greed and envy of those who make little income and out to get the high earners? - - - Updated - - - Then how did they lose to Obama and the Democrats in 2008 and 2012?
Why, neither have anything to do with the fact that if you want to talk about how much INCOME tax they pay compare it to how much of the INCOME they make, it has nothing to do with their assets. Lots of people make LOTS of money with few assets, especially young people and lots of people with lots of assets make little income, especially retired people. Once an asset it becomes my property, do you really think we should have a system where the government taxes away 10% of your property every year simply because you own it? Or the tax rate on your earned income should be based on the value of everything you own? What utter nonsense. Why would anyone save? Once again, my wife and I have saved all our lives and have quite a bit saved up for retirement, we sacrificed to do so. My neighbor makes the same as us but has not saved, has nothing. Why should I pay a higher tax rate than he does? Why should I pay more in actual dollars than he does?
So you continue to play the game of "let's ignore all the facts that don't fit my thesis." How very convenient for you. You continue to play "let's ignore what refutes me." This continues to be dishonest. I've given it over and over. I don't expect you to accept a straight answer, because a straight answer shows you're full of it. Except for excise taxes, which you conveniently ignore. Look, nobody is saying that the federal INCOME tax isn't intended to be progressive. Warren Buffet pointed out that his secretary pays a higher tax RATE than he does, on a yearly salary which is less than he earns in one day. How does he manage this? He does so by living in the real world, which doesn't fit your requirements. Making the federal income tax more progressive isn't the answer. Eliminating the zillion ways that the Warren Buffets can avoid paying that tax is probably more helpful. Including ALL the facts is a way to HIDE the facts? Neat trick, bozo. YOU are hiding, and running full speed away from ANY AND ALL facts that undermine your argument. You continue to play a dishonest game, and I continue to point it out. You MIGHT consider being honest. It's hard to discuss anything with liars.
This is incoherent. If you and your neighbor have the same income, you pay the same income tax rate. In fact, this is how Buffet pays a lower rate than his secretary - it's a different KIND of income. If one person earns 10 million dollars in salary, he pays 35% in income taxes. If his neighbor earns 10 million dollars in qualified dividends from investments, he pays 15% of it in capital gains taxes. In that range, we're talking about the high salary guy paying 2 million dollars MORE in taxes than the high wealth guy. Is that "fair"?
When it comes to tax revenues, there are 2 types of people: Contributors and takers. Contributors vote for both republicans and democrats. Takers will 99.99% of the time vote democrat.
Most of Buffett's wealth is accumulated in stock. That is taxed as a capital gain which is lower than the income tax rate. He even gets paid in stock rather than cash. I think I'm boring you now because libs just want the government to collect more money so they can keep the nanny state going. But if greedy libs tax capital gains at the same rate as income investors here and broad will invest less in America and everyone loses.
We want to encourage investment because investment is good for the economy. However, unlike when you hold a job, you can actually stand to lose money when you make investments. In order to get people to take risks with their money, there must be the potential for higher rewards.
It never ceases to amaze me how phenomenally ignorant people are when it comes to rich people paying taxes. I have observed that, for some reason, the more ignorant an individual is, the more likely there are to be fixated on Warren Buffet. Warren Buffet pays the long terms capital gains tax rate on pretty much all of his income. He isn't hiding from or avoiding anything. I'm sure he has deductions for charitable contributions and things like that, but he isn't doing anything different than any of the rest of us with long term capital gains do.
