<p>Why is that sinister? It’s true. It happens every day. Ask Barrons.</p>
<p>What are these mysterious multi-million dollar subsidies.</p>
<p>Ok, well maybe I shouldn’t be in this discussion (I feel like I entered a room where everyone shared a private joke before I showed up…), but are you implying that your friend pocketed millions from the government in some personal bank account somewhere or paid someone off? (I don’t think that is what you mean.) Or is the money going to create jobs via your friend’s business? If it is the latter, I don’t see the crime in it.</p>
<p>What I understand from you and Kluge is that you would like the rich to pay more taxes than they currently pay, and appreciate the benefits they are receiving. The top earners in this country already pay most of the taxes collected. I don’t think Buffet’s 17% capital gains vs. secretary’s 33% is a legitimate comparison. If her $60,000 came from cap gains, she’d be paying 17% too, and vice versa. As barrons said, Buffet is an anomaly. It really comes down to which philosophy you ascribe to: Let the rich keep more of their $$ to spend and create jobs, or tax them more and let the government spend it. Obviously you are in the latter camp, while others of us are in the former.</p>
<p>I never said it was a crime. It’s not a crime.</p>
<p>Ask me what? I have no idea where you are going on this. I am no conspiracy theorist.</p>
<p>“The top earners in this country already pay most of the taxes collected. I don’t think Buffet’s 17% capital gains vs. secretary’s 33% is a legitimate comparison. If her $60,000 came from cap gains, she’d be paying 17% too, and vice versa. As barrons said, Buffet is an anomaly. It really comes down to which philosophy you ascribe to: Let the rich keep more of their $$ to spend and create jobs, or tax them more and let the government spend it. Obviously you are in the latter camp, while others of us are in the former.”</p>
<p>I have no idea why capital gains are more valuable than pay from labor. I don’t know why money made by rich people is more valuable whether it is spent or helps create jobs than money made by people that aren’t rich.</p>
<p>People who make $60,000 a year don’t usually have the opportunity to make capital gains. Certainly not at the level of those people that make considerably more.</p>
<p>I don’t know why the choice is the government spends the money or the rich spend the money and why it is assumed that the rich spend the money better.</p>
<p>We need about 20% of the GDP to fund the federal government. It doesn’t matter if the government is controlled by republicans or democrats. Twenty percent is about what it takes. (The republicans have been spending more than the democrats. A lot more). </p>
<p>When you tax the richest people in the US less than 20%, that doesn’t even cover their share. Where do you think the money that is necessary to run the government comes from then?</p>
<p>
</p>
<p>…since progressive taxation is based on income levels and not location, that argument is fallacious. Even if it weren’t, it would be irrelevant.</p>
<p>Caveat: I do not purport to be a tax law specialist, but I do know enough to proffer some (hopefully accurate) answers to dstark. Anyone more qualified, please feel free to jump in!</p>
<p>The capital gains tax rate is lower than the income tax rate for public policy reasons and really serves to benefit the middle class, and the majority of Americans (not just the rich). The lower capital gains tax is paid on the sale of real estate (your home), small businesses and most securities. The intent of the lower rate is to stimulate or not discourage/punish those transactions, as they benefit homeowners, children who inherit their parent’s businesses, and for example, parents who sell stock to fund their kids’ college educations. That some (relatively few) rich people seem to benefit a lot from the reduction does not lessen the righteousness of the policy behind it.</p>
<p>If Buffet’s secretary sells her house or her securities, she will pay the lower (17%) rate on any gain she recieves. If Buffet takes home a salary from his job, he will pay the higher (33%+) income tax rate on it.</p>
<p>It is falacy to think that most higher income Americans don’t pay their “fair share.” If Buffet is paying 17% on $12million, then he is paying $2,040,000 in taxes while his secretary is paying less than $19,800. (The 33% is progressive).</p>
<p>Again, it is a matter of personal philosophy and politics as to whether you believe it is better for the government to take more from the rich (Buffet) and decide how to spend it, than leave more with him and let him decide how to help stimulate the economy. Even if all it does is sit in a bank account (unlikely- it is probably diversified in securities and properties), it will be used by the bank in ways that will create/support jobs.</p>
<p>Bay, </p>
<p>Capital gains rates are not for the middle class. Yes they benefit. A little. The rich benefit more.</p>
<p>I’m going to say this one more time.</p>
<p>It costs 20% of GDP to run the government. If everybody, including corporations, paid 20% of what they made to the government, the budget would be in balance.</p>
<p>When people pay less than 20%, somebody has to pick up the slack. (Yes I know about deficits. They don’t change the argument). </p>
<p>It doesn’t matter if the income is wages, capital gains, dividends, etc. We need 20% from everybody to balance the budget.</p>
<p>I can see paying more than 20% to take care of those that live in poverty and near poverty. </p>
<p>Why should I pay more than 20% so people like Warren Buffett, and people that are well-off, but not that well-off, can pay less?</p>
<p>That is what happens. Because the richest people don’t pay their share, I have to pay more than my share. Maybe, you do to? And don’t tell me what they do with their money is more valuable than what I do with my money. I know some of these people. :)</p>
<p>Ok, I think I understand your thinking now… So everybody, including 95-yr-old granny who sells her lifelong home to move into the retirement apt, needs to pay at least 20% to make the federal budget balance. I don’t have anything to contribute to that discussion.</p>
<p>"Ok, I think I understand your thinking now… So everybody, including 95-yr-old granny who sells her lifelong home to move into the retirement apt, needs to pay at least 20% to make the federal budget balance. I don’t have anything to contribute to that discussion.</p>
<p>Is that what I said?"</p>
<p>"I can see paying more than 20% to take care of those that live in poverty and near poverty. </p>
<p>Why should I pay more than 20% so people like Warren Buffett, and people that are well-off, but not that well-off, can pay less?"</p>
<p>I have no idea what your granny has to do with those that are well-off.</p>
<p>Yep, because of granny, I have to subsidize millionaires too. And billionaires. :)</p>
<p>Hasn’t trickle down been debunked by economists ? What about the lower taxes increase revenue to the treasury myth (A Bush and Cheney favorite) ? I myself don’t favor raising capgains for income tax equality. But there are many more ways. How come hedge fund managers (private equity and hedge fund staff pay 15% on their share of the profits, known as carried interest), are allowed to pay the capital gains rate on money that they are paid, which is paid for a service ? Mutual fund managers, on the other hand, are taxed at the normal rate.</p>