Sure there is. I don't actually disagree, personally, with having a larger proportion of people paying Income Tax. Personally, I think the allowance for tax free income should be about the same level as a full-time salary on the minimum wage (with a reasonable minimum wage).

However, in order to get from where you are now, that will mean more people paying Income Tax, and so the effect that DF is so grievously concerned about with CGT applies just as much to those people who would be in the transition from zero Income Tax to some Income Tax. Sure, at the same time other people may see their rate go down, and so the overall effect will be mixed, but it will be complicated.

ray

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

Then how could you vote for anyone who has signed Norquists pledge to never raise taxes? No matter how you finagle, eliminating deductions is a tax increase. Which ROmney is pledged to never do.
So in effect, according to anyone of Norquists ilk, 47% not paying tax is good.

Has either candidate indicated that he wants to raise taxes on those making less than, I don't know, about 25,000 per year?

Is this the only issue that is presented to the electorate?

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

I've already said, in this thread (I think), that there ought to be a minimum tax on everyone. Let's say you make $5K a year. Pay a buck. Yes, I know, "heartless."

The only way we will ever grasp the enormity of our Debt is if everyone has to look at it and not just see "free stuff."

rickyp wrote:ray

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

Then how could you vote for anyone who has signed Norquists pledge to never raise taxes? No matter how you finagle, eliminating deductions is a tax increase. Which ROmney is pledged to never do.
So in effect, according to anyone of Norquists ilk, 47% not paying tax is good.

Norquist is not the dictator of the Republican Party.

If taxes were "raised" in a way that made economic sense, most Republicans would ignore Norquist.

So, what do I mean by "economic sense?"

Succinctly, in the non-Obama way. He favors brute "tax the rich" policies. That's a sham and only provides a fig leaf for all the additional "investment" he proposes.

However, if there was a simplification in the code, as Romney has proposed, I think a lot of Republicas--and some Democrats--would vote for it.

I'm sure there would be a cut-off, which I think is a shame. Again, I think when you make any wage-earner tax exempt, you invite them not to care. I do care, but I don't think that is the norm (so sure, I'm not normal).

If we're ever going to get out of this mess, there needs to be a sense that we're all in this together. Taxing the rich alone won't work--economically, politically, or socially. It divides rather than uniting. It says the only reason we're in this bind is because "they don't pay their fair share," which is false. Demonizing any class is inherently divisive. That's why Romney's statement was dumb and worse.

That said, Obama's actual plan is worse than Rommey's statement.

Doctor Fate wrote:

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

I've already said, in this thread (I think), that there ought to be a minimum tax on everyone. Let's say you make $5K a year. Pay a buck. Yes, I know, "heartless."

If you read my recent post in reply to Ray Jay, you would see I'm not actually against a widening of the tax 'franchise'. I think my limit would be in the 15-20 grand range.

However, it's not that which I am querying. It's that you responded to the idea of a higher CGT rate because of marginal effects, and how bad they could be. I am saying the same issue would (if your assertion on taxing an activity holds, surely it holds as much for 'investment' as it does for 'work') be a consideration if here was a change made to move in the direction you, bbauska, RJ and even I would advocate.

The only way we will ever grasp the enormity of our Debt is if everyone has to look at it and not just see "free stuff."

So, do you think it should happen soon, while the US is still in recovery?

danivon wrote:If you read my recent post in reply to Ray Jay, you would see I'm not actually against a widening of the tax 'franchise'. I think my limit would be in the 15-20 grand range.

However, it's not that which I am querying. It's that you responded to the idea of a higher CGT rate because of marginal effects, and how bad they could be. I am saying the same issue would (if your assertion on taxing an activity holds, surely it holds as much for 'investment' as it does for 'work') be a consideration if here was a change made to move in the direction you, bbauska, RJ and even I would advocate.

I'm not calling for a doubling of income tax. That's what the President would do to capital gains. I believe doubling any tax would be a bad move. (Yes, I know, someone who pays zero has an "infinite" percentage increase if there is any increase).

The only way we will ever grasp the enormity of our Debt is if everyone has to look at it and not just see "free stuff."

So, do you think it should happen soon, while the US is still in recovery?

I think we will see our recovery slow further and maybe even tip into a recession if the President's current policies continue. Best case scenario is probably "stagflation."

So, would I lower deductions and rates and broaden the base now? Yes.

And today Paul Ryan told Fox News that it would take too long to explain how the Romney tax plan would actually work. I wonder how credible that sounds to voters who are wondering about specifics?

What with the broadening base, lower tax deductions and yet everyone paying less and the net revenue still being neutral.. this is some magic !

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.

I don't understand this. I've heard Ray Jay say this before, but the logic of it puzzles me. What investment takes into account future inflation? The list is really short: TIPs. I can't think of anything else. When you're earning 1% on your income your savings account, you pay tax on the 1% you earn, not 1% minus inflation. Same with dividends, same with bond income. To somehow give capital gains some kind of inflation advantage is so contrary to how investment income is currently taxed. I'm wondering how anyone would think that's fair, or am I missing something?

Doctor Fate wrote:I'm not calling for a doubling of income tax. That's what the President would do to capital gains. I believe doubling any tax would be a bad move. (Yes, I know, someone who pays zero has an "infinite" percentage increase if there is any increase).

I thought Obama's plan would be to let it rise up back to 20% from 15% for most taxpayers. That's what this article says anyway:

http://www.huffingtonpost.com/2012/09/26/obamas-capital-gains-tax-_n_1916863.html?utm_hp_ref=elections-2012

What's your source?

geojanes wrote:

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.

I don't understand this. I've heard Ray Jay say this before, but the logic of it puzzles me. What investment takes into account future inflation? The list is really short: TIPs. I can't think of anything else. When you're earning 1% on your income your savings account, you pay tax on the 1% you earn, not 1% minus inflation. Same with dividends, same with bond income. To somehow give capital gains some kind of inflation advantage is so contrary to how investment income is currently taxed. I'm wondering how anyone would think that's fair, or am I missing something?

It becomes clearer when you compare to income from self-employment or wages.

But that's not investment income, that's wage and salary. Still don't understand how adjusting one kind of investment income for inflation but not other types would be considered by anyone to be fair.

I don't have a problem with adjusting other investment income for inflation.

What about deflation?