Fiscal Commission Co-Chair recommendations

[KrazyHorse]

You need to reread, arrian. I have no view on the morality or prudence of saving (consuming later) versus consuming now. That is why I don't want to penalize/advantage one over the other.

[Jon Miller]

Removing capital gains tax means that those who have the most increase in wealth will always pay the least taxes. Considering that most of the goods provided by the government have the purpose of increasing value for investments, those who make money off those investments should contribute in a reasonable fashion.

To not tax capital gains means that the taxes fall on the poor and middle class, to the benefit of the capitalist class (The very rich).

As (an extreme) example, we have Steve Jobs. He gets paid a dollar a year for his job. Why? Because the income he gets from doing a good job increases his stock prices. Despite the dollar a year pay, his actual reimbursement is much much higher than even the wealthiest of professionals.

Additionally, this would increase activities like paying highly paid employees (like CEOs) with stock, further decreasing the amount of tax paid by the wealthy.

I know the idea is a high tax on luxuries/etc, but that still doesn't change the fact that low/non-existant capital gains taxes concentrates wealth in the already wealthy and places the burden on the poor/middle class (Buffet has an averagish car/house/etc for example). Additionally, with wealth comes power (even in democracy, as money = speech), so concentrating wealth has the same effect as concentrating political power.

I thought that plan was pretty good.

JM

[Arrian]

Why is investment income not... income? How is taxing that at the same rate as income conveying an advantage?

-Arrian

[Hauldren Collider]

I support every cut in the plan. In fact, I think the plan should be made so that as many people are angry about it as possible. I hope they pass it ASAP. There are things in it I do not like and think are highly unwise but I recognize that someone thinks that of every cut in the plan and everyone thinks that of some thing in the plan, so the plan is almost perfect!

To everyone who intends to ***** about some failing of the plan, seriously consider whether you have a vested interest in that particular tax or expenditure. If I were a betting man, I would bet money on your objection being invalid. My own objections are probably invalid.

[KrazyHorse]

If neither Adam nor Bob will leave anything to their children then their lifetime consumption would have the same risk-adjusted present value before taxes (since they both earn the same amount). Therefore, both efficiency and equality imply that their after-tax consumption should also be equal.

Capital gains taxes violate that requirement.

[KrazyHorse]

Why is investment income not... income? How is taxing that at the same rate as income conveying an advantage?

-Arrian

Because investment income represents simply the difference between the nominal value of consumption today and the nominal value of the same risk-adjusted present value of consumption in the future.

[Arrian]

edit: crosspost, thinking about your most recent post.

-Arrian

[Hauldren Collider]

YOUR DEBATE IS IRRELEVANT! PASS THIS TOMORROW

[DanS]

Completely agree with KH on the capital gains taxes. It is not a good tax and it's a shame that it was inserted into an otherwise solid plan. But this is Washington, where modern financial theory seems to intrude little.

[Arrian]

Ok, let's look at at this from another angle.

There are people who get their incomes just from investment income. This results in them paying a lower tax rate than people who get their income via salaried compensation.

This makes sense how?

-Arrian

[KrazyHorse]

1$ consumption today and 1.50 consumption 15 years from now have the same value (they trade against each other at par). Therefore, charging tax on the 50 cent difference is no more sensible than charging a different tax on somebody who buys 2 50$ video games rather than 1 100$ game because 2 > 1

[Imran Siddiqui]

It's an interesting document. Not sure about the income tax cuts, though on board with capital gains and corporate tax cuts.

[Tupac Shakur]

In favor of everything in there, basically.

QFT

[Tupac Shakur]

Argh. Didn't notice that they want to increase capital gains taxation

Dumbest tax ever.

Oh, ****. Nix my previous "QFT."

[Jon Miller]

This is a far better argument against the capital gains tax than anything I have heard on apolyton:

http://www.manhattan-institute.org/html/research_memorandum_7.htm

JM