If you eliminate capital gains.

Discussion in 'Budget & Taxes' started by politicalcenter, Oct 20, 2011.

  1. politicalcenter

    politicalcenter Well-Known Member

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    Yeah...right

    Only if Europe doesn't fail.
    The banks don't fail.
    The U.S. is not downgraded...again.
    Some idiot opens his mouth...or keeps it shut.
    If unemployment does not rise.
    If we do not have a trade war.
    etc...etc...etc..

    You will see a boom...then a correction...it always happens.
     
  2. bacardi

    bacardi New Member

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    you are talking of a bubble....not the same thing!
     
  3. politicalcenter

    politicalcenter Well-Known Member

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    Eliminating the capital gains tax will cause a bubble.

    Money will pour in...profits for companies will not rise much....smart money will take profits...pension holders will take losses and foot the bill.
     
  4. IgnoranceisBliss

    IgnoranceisBliss Well-Known Member

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    You do realize pension funds usually are "smart money", right? A lot of pensions are in the billions of dollars and use financial consultants for their expertise. Along with this are non-profits, endowments, life insurance, and many other types of funds that are often very prudentally invested in things as diverse and risky as private equity and hedgefunds.
     
  5. Landru Guide Us

    Landru Guide Us Banned

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    Yep secondary and primary markets are related; but it doesn't change the fact that secondary market don't fund companies. It's a fact -- they don't.

    That's the opposite of capitalization.

    Nope, that's counterfactual. The top 1% own about 45% of all equities. The top 10% own 85%. So the bottom 90% own only 15% of the market, meaning that per capita its miniscule.

    This is the ridiculous ownership society meme -- the fact is hardly any Americans have any stake in the stock market. It is mostly for the rich.

    I hate to tell you this but most Americans don't have pensions, or don't have any of any consequence. The bottom 90% have pension that on average come to about $10K. That's how mythological our pension system is.

    What are you talking about. The secondary sales do not capitalize the firms at all. The simply pass between one portfolio and another, most of them owned by the very rich.


    You've made my point not yours. Linksedin could do an IPO because it was so successful. It could have borrowed the money any time it wanted. Or gotten private investors. But the owners wanted to make a mint, so they went public. Most of the IPO, by the way, goes to the owners and the brokers, not to the company.

    I didn't say borrowing was necessarily the best way for a company to expand; I merely pointed out that if a company can go public, it is already so successful that it can borrow funds if it wants. Struggling capital-starved companies do not go public. Nobody would buy the stock.
     
  6. Political Ed

    Political Ed New Member

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    Why do you continue the ignorance of pretended the top 10% own 81% of all stocks? Yea, the 90% enjoy 19% and you want us to advocate for tax cuts for them because it will somehow help us in big ways.

    I see you've moved on from my posts, acquiescense noted.
     
  7. Political Ed

    Political Ed New Member

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    No, they bust after the bibble pops regardless of the tax picture.

    Your 7-word post isn't enough to do anything but cheerlead, therefore, of course, you cannot provide is with a major fed tax cut over the last 100 years that led to benefit.
     
  8. Political Ed

    Political Ed New Member

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    Difference is, under Republican Admins the boom is often bigger, the busts the biggest. This works well for the rich as you need market activity to achieve gain.

    Stability works best for working people, hence D Admins are better. Radical booms/busts work best for teh rich, hence the Republican Party has their interests. There really is no 'best' just depends upon your paradigm.
    Democratic Admins lead to strong, constant gains usually w/o artificial booms. Historically, the market has done many, many times better under D presidents than under R's.
     
  9. Political Ed

    Political Ed New Member

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    That chart I posted above shows that cap gains tax has little to do with market activity/gains, it has more to do with economic condition. However higher taxes tend to keep money invested.
     
  10. drj90210

    drj90210 Active Member

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    You were making it very clear that you disagreed with the fact that I presented (that not all people contribute into the federal system what they get out of the system), and repeatedly requested that I provide evidence to support this obvious fact.


    Let's get this straight: From post #54 through post #98 (where you stated "In true debate, it is up to the person making the claims to provide the evidence"), you have been repeatedly harping on this point. Thus, you made it very clear that you were continually disagreeing with me.

    You repeatedly have requested that I provide evidence to prove this widely accepted fact (which I eventually did). If you agreed with this fact all along, then why the stubbornness? Why not just agree with the fact from the beginning?
     
  11. drj90210

    drj90210 Active Member

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    Then you agree that this statement was pointless, and not related to the discussion. Good.


    Wrong! You did not include the revenues generated from the 6 million jobs created by the Bush tax cuts (http://data.bls.gov/timeseries/LNS14000000, http://www.politifact.com/truth-o-m...oehner-says-bush-tax-cuts-created-8-million-/) You include only net negatives and ignore the net positives from the Bush tax cuts. Thus, the information that you are presenting is skewed and inaccurate.
     
  12. Political Ed

    Political Ed New Member

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    It's funny to watch people who don't cite data, try to leaen how. Uh, the data you cited doesn't support your claim, the "False" meter shows the Boener's claim is wrong about GWB tax cuts creting jobs.

    The unemp rate fell as all the stolen house money circulated, IOW's a typical Republican boom, followed by a bust. Then of course as it busted, the unemp rate blew up 3% in a single year, GWB's last year.

    Your data doesn't show strong job growth, it shows radical policy leading to a boom and bust, your citations even support that, not your claim.
     
  13. politicalcenter

    politicalcenter Well-Known Member

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    That was my point. The elimination of capital gains taxes would however bring a temporary rise in the averages on the markets. It would be "good news"...and we all know what good news brings.


    Of course "bad news" would bring the markets back down....and we all know what bad news brings.

    Just take a look at Europe.

    If you are in the markets be very, very, careful.
     
  14. Political Ed

    Political Ed New Member

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    I don't see your point, nor do I see a repeatable correlation between cap gains tax rate and anything. Per teh CBO cap gains tax accounts for 2-3% of all fed receipts, so it's irrelevant either way. In general we do better under higher taxes and Democratic leadership; do I need to repost that data?
     
  15. gamewell45

    gamewell45 Well-Known Member Past Donor

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    The main reason this won't work is becuase there are no guarantees that business owners are going to reinvest in anything other then their own pockets. Whats to stop them from taking the captial gains and sitting on them for the next 10-20 years???
     
  16. DA60

    DA60 Banned

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    Or just investing their money off shore or in commodities?

    The economy stinks and will (IMO) get stinkier - and if it does, there will be little reason to invest in it.
     
  17. Political Ed

    Political Ed New Member

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    Exactly, high taxes keep the money in the game. Taxes aren't stealing, as our lovley RWers chant, high taxes are leveraging, forcing people with profits to reinvest some or even most of it, depending upon the actual rate. Some delluded folks act as tho these rich love this country and will do what they can to ensue its survival. Truth is, they just parasite off of it and extort what they can, Reaganism illustrates this.
     
  18. Political Ed

    Political Ed New Member

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    The US is still a good bargain, just look at the stock market. Many investors are coming here now and buying land. If the Chinese would quit lending us and let our dollar sink to where it should, then our products would become an enormous baragin as the USD would be deflated, this would bring manufacturing back.

    So all is not lost, we just have to lose our admiration of tax cuts to feed the already bloated rich.
     
  19. drj90210

    drj90210 Active Member

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    If you actually READ the article, you would realize that Boener's claim of "eight million jobs" created was indeed an overstatement. The article corrected this piece of data, stating instead that "six million jobs" were created. I echoed this fact, citing the article to buttress my statement.

    Please actually READ and COMPREHEND these articles before you type a preconceived knee-jerk response. It's getting old.

    Nonsense. The data clearly shows a direct correlation between the passing of the Bush tax cuts and improvement in the unemployment rates (hence job CREATION).
     
  20. drj90210

    drj90210 Active Member

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    Are you saying that business owners would take profits from their company and, instead of reinvesting the profits into their company, just "pocket" the money into a private account? If so, then I have 2 questions for you:

    1) Why would a business owner not want to reinvest in his own company?
    2) What does this have to do with capital gains taxes?

    Business owners make up only a small percentage of those affected by capital gains taxes, so I fail to see your concern here. Isn't it a good thing for a person to "sit on" capital gains over "10-20 years", while they are in the process of preparing for their retirement? I see this as a huge positive, inasmuch as I like to see individuals aspiring for fiscally stable futures.
     
  21. Political Ed

    Political Ed New Member

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    Without going back and again reading a cite by you that has the "wrong meter" pegged out, 6M jobs in 8 years makes even fascist Ronnie look competent. Add the cost at 4.9 trillion dollars and it's an even worse bargain.

    Job creation:

    Carter: 2.6M per year

    Reagan: 2M per year

    Clinton: 2.9M per year

    GWB: 375K per year

    http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/

    You just don't do yourself a lot of favors by posting. The guy who takes the most robust economy in history, runs the highest debt and creates the least jobs is your hero.
     
  22. drj90210

    drj90210 Active Member

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    So are you going to admit that you were wrong, or are you too stubborn?

    No citation as usual. Others who have analyzed the data have reached a cost nearly half of what you state ($2.7 trillion over 8 years), and this does not account for the fact that these tax cuts brought us out of a recession.http://www.tax.com/taxcom/taxblog.nsf/Permalink/CHAS-89LPZ9

    Not sure your point is with all of these, but I'll play.

    Yeah, but his policies resulted in a massive increase in inflation rates http://inflationdata.com/inflation/inflation_rate/historicalinflation.aspx and a recession that Reagan was left to deal with.

    Yeah, but he also rescued us from runaway inflation rates, cured Carter's recession, and won the Cold War. Your comment how Reagan is a "fascist" is comicial, since he actually DEFEATED fascism.

    A trained seal could have created 22 million jobs in the 1990s tech boom.

    He also got us out of the recession that Clinton left us in, and was faced with the worst terrorist attack in American history, as well as the most costly natural disaster in American history.

    Are you on crack? Talk about revisionist history. Carter left Reagan with an out-of-control inflation rate, recession, and laughable foreign policy program. Reagan turned EVERYTHING around. Like everyone, he had his faults, but the picture that you are painting is an absurd travesty, and not based on history.
     
  23. Landru Guide Us

    Landru Guide Us Banned

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    Uhh, you do realize that Bush got a tech boom, that included Facebook, Google, Youtube, and all his conservative policies produced was a measley $2M jobs in 10 years.

    So I guess you're saying Bush is less intelligent than a trained seal.

    With that I concur.

    It is humorous, however to see you credit Bush with "getting us out" of a recession, but then you give no credit to Clinton for 8 years of astronomical growth.

    It's almost as if you spew nothing but talking points.
     
  24. unrealist42

    unrealist42 New Member

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    1) There are many cases where a business owner would be better of to not reinvest profits in growing the business.

    Times like now for example, when consumer spending is stagnant and economic demand is not expected to increase for some time to come. In this case it would be advantageous for a business owner to gamble his profits in the markets where capital gains are taxed at a low rate and can be offset by losses that are tax deductible.

    There are also many businesses where further capital investment is unnecessary. Low margin commodity producers will simply run their business as long as it is marginally profitable and then close it and sell off the machinery to producers in lower wage areas or move it themselves. Investing profits in the current business is a highly risky maneuver in an economy showing no signs of solid growth.
    We see this now, where businesses are sitting on over $2Trillion in accumulated profits, investing them out only in the risk averse money market or other short term vehicles.

    2) A low capital gains tax encourages money to move into the markets and away from other investment and savings vehicles. As a result of sheer number crunching it is often more profitable and less risky for a small or medium sized business owner to put his profits into the markets instead of his business.

    It is a perverse incentive. A high capital gains tax would require out sized gains in market investing to be less risky and less profitable than the reinvestment of profits in business. Low capital gains tax has the opposite effect, small gains at little risk bring out sized after tax gains.

    I hate to burst your bubble here but shareholders are business owners so really, it is mostly "business owners" who are effected by capital gains taxes. There is some capital gains tax on interest from savings accounts but these are insignificant.

    There is a big difference between the capital gains of the small business owner saving for his retirement and the capital gains of the wealthy who gain all their income from capital gains. The top income earners in the US obtain all their income from capital gains. A low capital gains tax means that they pay far less of their income in taxes than the middle class.

    There are republicans who want to entirely eliminate the capital gains tax. This would eliminate taxes on the wealthiest and drive savings into the markets which would create a market boom that would make the rich even richer. On the other side of the ledger savings would move out of banks and bank lending would decline. Business capital investment and lending would grind to a halt. The economy would fall apart as the stock market roared. It would be the 1920s all over again. The crash will make 2008 look like a mild recession.
     
  25. politicalcenter

    politicalcenter Well-Known Member

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    You can say that a shareholder owns part of a business but that is not always true.

    If you own shares in a company that pays little or no dividends and elect to give corporate "big wigs" stock options and inflated salaries you are no more than a speculator (i.e. gambler) and you are only betting that the price of the stock will go up.

    Then all you own is a ticket in a horserace.
     

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