To be clear, Fate's assertion on capital gains tax rates, while widely held, is faith-based Republican orthodoxy, and not supported by evidence. Further, if you believe that the most important thing people can do for themselves, the economy, and the health and welfare of the nation is to work, then you should believe wages should get the most tax advantageous rate, rather than the least.

danivon wrote:I mean, how much actual work is being done, as opposed to speculation. If 'work' is taxed at a higher rate than 'investment', then it surely has an effect on how people approach both activities.

There is a corollary with 'broadening the base'. This means lowering the point at which people start to pay Income Tax. Which means increasing the marginal rate of tax on 'work' for a section of the population. Thus reducing the incentive for people on a fairly moderate salary to do more work, and "if it has even a fractional effect in this economy, that's a bad thing", to coin a phrase.

No, broadening the base is not that. The idea is to remove deductions, lower rates, which will bring more money from businesses and the wealthy who pay big bucks to find shelters.

Btw, that was also part of the approach suggested by the President's Debt Commission, aka "Bowles-Simpson."

You do have to make allowance for the fact that some capital gain is attributable to inflation and not really a gain at all. If you own a building for 10 years and it appreciates by 2% a year, your capital gain is substantial, but in fact you've just stood still economically (and end up losing money because of taxes). To be "fair" you would have to index gains to inflation, or perhaps tie the capital gains rate to length of holding period (which we did in Mass for a while). This is where fairness and simplification collide. They are conflicting goals.

geojanes wrote:To be clear, Fate's assertion on capital gains tax rates, while widely held, is faith-based Republican orthodoxy, and not supported by evidence. Further, if you believe that the most important thing people can do for themselves, the economy, and the health and welfare of the nation is to work, then you should believe wages should get the most tax advantageous rate, rather than the least.

And, people will work . . . where exactly?

As far as I can see, Obama's plan is more government workers (100,000 new teachers, etc.)

fate

As far as I can see, Obama's plan is more government workers (100,000 new teachers, etc.)

Based on what? Since 2008 the US has lost 680,000 public sector jobs..... If the public sector had grown unemployment would be down.
http://blogs.reuters.com/macroscope/tag/unemployment/

rickyp wrote:fate

As far as I can see, Obama's plan is more government workers (100,000 new teachers, etc.)

Based on what?

Based on his actual proposal in his latest campaign ad. Look it up.

Doctor Fate wrote:No, broadening the base is not that. The idea is to remove deductions, lower rates, which will bring more money from businesses and the wealthy who pay big bucks to find shelters.

But it does mean taxing some people more than before, right? Which means taxing the activities that they carry out to earn that money. Which according to your logic means reducing that activity.

Btw, that was also part of the approach suggested by the President's Debt Commission, aka "Bowles-Simpson."

I'm not criticising the policy, so much as pointing out that your position on on CGT applies to other taxes.

Besides, even if the term I used was wrong / too vague, I do believe that you, and others, have advocated that more than the current 53% of Americans should pay Income Tax. If that does happen, then there will be some people who before were on a marginal rate of zero who would go onto a marginal rate that is non-zero.

As Income Tax is tax on earned income, and for a lot of people on moderate incomes who are not far below the current tax free allowance the main means of gaining earned income is working. So, this means for a section of the population, increasing the tax on working. So, for them, work will be taxed more. By your assertion, this means they will be slightly disincentivised to work, or at least to work more / better / harder, because every dollar more they earn is worth less than it would be.

I know that investment is important in an economy. So is working. So is the balance between them. Are you so determined to disagree with me on principle that you refute these simple ideas?

Ray Jay wrote:You do have to make allowance for the fact that some capital gain is attributable to inflation and not really a gain at all. If you own a building for 10 years and it appreciates by 2% a year, your capital gain is substantial, but in fact you've just stood still economically (and end up losing money because of taxes). To be "fair" you would have to index gains to inflation, or perhaps tie the capital gains rate to length of holding period (which we did in Mass for a while). This is where fairness and simplification collide. They are conflicting goals.

Well, I believe if an asset is held for less than one year, capital gains are taxed as Income, not CG, so there is already one aspect of this (albeit a crude one).

We used to have a 'taper' relief on Capital Gains in the UK, which did mean that the taxable gain would reduce depending on how long it had been held. But this was abolished a few years ago at the same time as a simplification in rates.

danivon wrote:

Doctor Fate wrote:No, broadening the base is not that. The idea is to remove deductions, lower rates, which will bring more money from businesses and the wealthy who pay big bucks to find shelters.

But it does mean taxing some people more than before, right? Which means taxing the activities that they carry out to earn that money. Which according to your logic means reducing that activity.

Not directly, of course. It means lessening of shelters, which are primarily used by the rich and corporations.

Besides, even if the term I used was wrong / too vague, I do believe that you, and others, have advocated that more than the current 53% of Americans should pay Income Tax. If that does happen, then there will be some people who before were on a marginal rate of zero who would go onto a marginal rate that is non-zero.

Sure, and some of those "people" might have names like "General Electric."

As Income Tax is tax on earned income, and for a lot of people on moderate incomes who are not far below the current tax free allowance the main means of gaining earned income is working. So, this means for a section of the population, increasing the tax on working. So, for them, work will be taxed more.

We don't know that. In fact, Romney has said he would veto any bill that raised taxes on the middle class.

I know that investment is important in an economy. So is working. So is the balance between them. Are you so determined to disagree with me on principle that you refute these simple ideas?

No, I'm going to disagree with you because you are talking in vague and hazy terms about a possible policy about which we have only the framework.

fate

No, I'm going to disagree with you because you are talking in vague and hazy terms about a possible policy about which we have only the framework

An apt description of Romneys entire platform. Especially his approach to the budget deficit. And health insurance...

rickyp wrote:fate

No, I'm going to disagree with you because you are talking in vague and hazy terms about a possible policy about which we have only the framework

An apt description of Romneys entire platform. Especially his approach to the budget deficit. And health insurance...

Two observations:

1. He still has more detail than the President.

2. The President's ads don't really emphasize his record. Why is that???

Doctor Fate wrote:Sure, and some of those "people" might have names like "General Electric."

Unlike Mitt Romney, I don't believe that corporations are people. And they pay Corporate Tax, which is different to Income Tax.

Anyway, forgive me, but do you or do you not think that more than 53% of households should be paying Income Tax? If you do, that means adding some households to Income Tax who currently are not paying it. Even if the rate is lowered, those households would be going from 'zero' to 'some' Income Tax.

We don't know that. In fact, Romney has said he would veto any bill that raised taxes on the middle class.

I'm not sure what he thinks is Middle Class. $200k a year? Not that I am asking what Romney's opinion is - I'm talking about your opinion and those of others (eg - bbauska) on the extent of Income Tax.

Just as you were talking about geojanes' opinion on the rate of Capital Gains Tax.

I know that investment is important in an economy. So is working. So is the balance between them. Are you so determined to disagree with me on principle that you refute these simple ideas?

No, I'm going to disagree with you because you are talking in vague and hazy terms about a possible policy about which we have only the framework.

However, we do know that the intent is to increase the overall take of Income Tax to help balance the budget. Income Tax is taken on earned income, and therefore an increase in it is an extra tax on the activities that generate earned income. Such as.. work.

And anyway, I do know what bbauska's proposal is (because it's simple and he keeps telling us what it is), and that would add millions of households to the tax roll, most of them in the 'middle' in terms of income.

No, that's not the intent. The intent is to stimulate economic activity.

I repeat, do you or do you not think that more than 53% of American households should be paying Income Tax?

danivon wrote:I repeat, do you or do you not think that more than 53% of American households should be paying Income Tax?

Although not asked of me, I think yes. In my experience, if people believe they are spending their own money, they are more careful about how it is spent. There is a certain truth to Romney's statement.