Obama's Capital Gains Tax

[Patroklos]

It's not going to effect the middle class like that. Trust me. I prepare many people's tax returns during the tax season.

Everyone who has capital gains will be affected, no?

Of the individuals who own stocks are more of them rich or middle class?

[Jon Miller]

Who would pay more capital gain tax, the rich or the middle class?

Who pays more income tax, the rich or the middle class?

I don't mean total, I mean percent. And let's use the definition given (<200k is middle class).

JM

[Patroklos]

Who would pay more capital gain tax, the rich or the middle class?

And you just fell into the same blatantly obvious logic hole Obama did. Obama's CGT policy, by his own admission, is not based on any economic reasoning whatsoever. He simply resents the super rich and is greedy for their wealth, but in order for him to get it he is going to make a blanket raise in the CGT. By doing so he will sure stick it to the Paris Hiltons, but he will also stick it far more people like me (middle class). And yeah, he will be taking a lot more money from the average rich person than the average middle class person dollar wise, but those dollars matter a lot more to the middle class. Aren't you a progressive tax proponent? I don't like trust fund babies either, but I am not so spiteful that I am willing screw myself over royal to provide them with a minor inconvenience.

I don't even know why we are argueing this, he is dictating tax policy based on something other than economics! Seriously?!?

Again, in order for Obama to stick to the Paris Hilton's of the world he will actually screw far more middle class investors who will feel those loses a hell of a lot more than any Paris Hilton.

[Ramo]

The rich clearly get a disproportionate share of their income from capital gains, and the middle class clearly gets a disproportionate share of their income from salaries and wages. Suggesting otherwise is absurd.

Honestly, what percent of your income is capital gains?

[Jon Miller]

Why not just treat capital gains as income? Than not much will be taken from the middle class person, and more will be taken from the rich person, and almost none will be taken from the poor person.

JM

[Dauphin]

Originally posted by Patroklos


Everyone who has capital gains will be affected, no?

Of the individuals who own stocks are more of them rich or middle class?

The more relevant question is, of those who own stocks who are more able to manage their affairs to reduce their tax liabilities. If selling stock is a discretionary choice, you can tax plan very effectively.

[Jon Miller]

Taxing the capital gains less than the income, is a regressive tax model.

JM

[Patroklos]

The rich clearly get a disproportionate share of their income from capital gains, and the middle class clearly gets a disproportionate share of their income from salaries and wages. Suggesting otherwise is absurd.

Who suggested otherwise?

Honestly, what percent of your income is capital gains?

I would rather not say (less than 5%) but it goes straight towards retirement. Do you hate rich people so much that you are willing to steal the little us hard working middle class types are able to coax from the system so you can stick it to the man?

Remember, Obama's entire rational is envy.

The more relevant question is, of those who own stocks who are more able to manage their affairs to reduce their tax liabilities.

Another good question. The middle class are exactly the people who won't be able to avoid the tax increase.

Taxing the capital gains less than the income, is a regressive tax model.

The taxation of entirely different things is not readily comparable. In this case it is especially not comparable.

Why not just treat capital gains as income? Than not much will be taken from the middle class person, and more will be taken from the rich person, and almost none will be taken from the poor person.

You mean have brackets in the CGT?

[Jon Miller]

Why not tax them a bit more, and you a bit less, so that you don' thav eto put so much effort to coax from the system, and they aren't given an extra bonus freely, that they are paying less of a tax on then you are.

I mean, taxes are going to have to go up again. Why not tax the rich far more than the middle class?

JM

[Patroklos]

I mean, taxes are going to have to go up again. Why not tax the rich far more than the middle class?

There is no justification for it other than greed for one. Those of you okay with naked greed should then note that there are ways to decide what the CGT should be that makes economic sense, thats where it should be.

[Ramo]

Remember, Obama's entire rational is envy.

You're a silly person. Obama is far richer than either of us.

I would rather not say (less than 5%) but it goes straight towards retirement.

And how much do you think it is for the rich? Let's say, top 0.1%?

And as others pointed out, there are IRAs that can shelter the tax for retirement...

Do you hate rich people so much that you are willing to steal the little us hard working middle class types are able to coax from the system so you can stick it to the man?

No, I believe that there are services government needs to provide, and to do so it needs taxes. And I think that the burden should fall disproportionately on those who can most afford to pay them, and therefore raising capital gains taxes at some point should be part of the plan.

Who suggested otherwise?

You claimed that taxing capital gains instead of income isn't progressive. It is.

[Aeson]

Unless you're investing more than $5k/year ($6k over 50yo) towards your retirement, you shouldn't be paying CG.

You will pay income tax, either on the money before you invest it (Roth) or as you withdraw it (traditional).

CG isn't necessarily regressive. Many of the super rich people don't pay much capital gains tax anyways. That's because CG is applied at liquidation of an asset. Paris Hilton has an income most likely... she almost surely doesn't liquidate a Hotel (or whatever other investments she has) every time she wants to buy a new toy. No CG is going to be payed on the Hotels until they're actually sold. Which could be generations down the road.

[Ramo]

Many of the super rich people don't pay much capital gains tax anyways.

But they pay much more in capital gains than income...

[Dauphin]

Aeson. The hotels are probably owned by a corporation, whose CG tax rates are not in any way related to her tax status.

IF the company made a gain selling the hotel, it would probably distribute that profit as a dividend, which she would be taxed on as dividend income as you suggest.

[Dauphin]

Originally posted by Ramo


But they pay much more in capital gains than income...

Is that a surprise? They want to arrange their tax affairs to reduce their liabilities. If salaries were the lowest marginal tax rate you'd see that as the biggest figure, same for dividends.

And please resize that picture.