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Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

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Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#21

Post by ashark »

fooster wrote: post #10
cylinder wrote: post #6

The biggest lie is this nonsense about "double taxation," ie taxing money that's already been taxed is somehow unfair. So stupid. Capital gains tax shouldn't exist. It should all be one income tax. You can carve out discounts or exemptions for things like sale of PPOR, sale of family business up to a certain point, if you want.

I don't see it that way. When you invest you risk the capital. You might get a return, you might not and therefore the taxation rules should reflect that. The situation as a worker is different. The only risk you take is that you might select a bad company.

> You might get a return, you might not and therefore the taxation rules should reflect that.

So... you take a loss on your taxes, probably spreading it out in some way so you don't pay taxes for a few years, if it's a serious enough loss. Right? Why does the rate need to be different?

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#22

Post by TheAdamAndChe »

et2o wrote: post #12
TheAdamAndChe wrote: post #7

Earlier quoted context omitted.

There are many people making over $200,000/yr. With 20 years of investing $150,000 of that, it's incredibly easy to have over $6.5 million. I don't see why it can't be a two-pronged approach with both higher income taxes and wealth taxes. It's what was done in the 1950's, and there was still plenty of wealth then.

Investing 100% of your post-tax income for 20 years is easy? (Which would get you to three million by the way)

I'm saying there are plenty of people making $200k post-tax. Also, 7% annual returns combined with an additional $150k/yr would lead to having $6.5 million like I said.

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#23

Post by toomuchtodo »

TheAdamAndChe wrote: post #19
toomuchtodo wrote: post #11

Earlier quoted context omitted.

> It's what was done in the 1950's, and there was still plenty of wealth then. That time period was one of great prosperity that won't be repeated. Market returns were higher; most of the low hanging fruit has been plucked, and you can expect ~5% in equities returns. Its going to take far more capital now to get the same returns your grandparents had, which is why you see capital chasing returns across the world. htt…

Then why not try to structure our economy so that the lower and middle classes have more money to spend? It seems like that would be a pretty good way to get the economy moving more since giving poorer people money increases the velocity of money considerably[1]. [1] https://en.wikipedia.org/wiki/Velocity_of_money

I agree entirely.

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#24

Post by taeric »

fortythirteen wrote: post #14
pcurve wrote: post #3

Makes my blood boil reading this, especially how poor republicans who have the most to gain through tax reform are consistently voting against their interest.

That's not true. Actual poor people pay very little, if any, income tax. As the article pointed out, this is most damaging to the upper-middle class.

They would benefit from a funded government. Schools and other public services cost money.

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#25

Post by etwigg »

fooster wrote: post #10
cylinder wrote: post #6

The biggest lie is this nonsense about "double taxation," ie taxing money that's already been taxed is somehow unfair. So stupid. Capital gains tax shouldn't exist. It should all be one income tax. You can carve out discounts or exemptions for things like sale of PPOR, sale of family business up to a certain point, if you want.

I don't see it that way. When you invest you risk the capital. You might get a return, you might not and therefore the taxation rules should reflect that. The situation as a worker is different. The only risk you take is that you might select a bad company.

"The only risk you take is that you might select a bad company." - that's the same risk an investor takes no? Except the investor can diversify across many companies, while the employee can rely on only one. Yours seems like an argument for investors to pay a higher rate than an employee, because they can diversify their risk.

Personally, I don't think taxes should be based on risk assessment.

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#26

Post by maxxxxx »

fooster wrote: post #10
cylinder wrote: post #6

The biggest lie is this nonsense about "double taxation," ie taxing money that's already been taxed is somehow unfair. So stupid. Capital gains tax shouldn't exist. It should all be one income tax. You can carve out discounts or exemptions for things like sale of PPOR, sale of family business up to a certain point, if you want.

I don't see it that way. When you invest you risk the capital. You might get a return, you might not and therefore the taxation rules should reflect that. The situation as a worker is different. The only risk you take is that you might select a bad company.

Selecting a bad company is a pretty big risk. It may do a lot of damage to your career from which you potentially never can come back. The opportunity cost is pretty high.

I don't believe capitalists take more risk or should get preferential tax treatment.

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#27

Post by menacingly »

TheAdamAndChe wrote: post #13
brianwawok wrote: post #5

Earlier quoted context omitted.

But poor republicans have often a religious obligation to vote republican. So do you vote democrat to get more money and fail your religious obligtation? Or do you vote repblican to fulfill your religious obligation at the cost of some rich guys getting richer? Not all people vote through an economic lens. Many othet lenses exist. Religion is just one of them. You could replace religion with gun rights. Or states rig…

This is why our two-party political system needs to change. It's proven inadequate to reflect the people in a nuanced enough way.

It's the same as the old cable company model. Slicing the list of available concerns up just perfectly enough that you can't get what you want without a bunch of shit you don't.

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#28

Post by RHSeeger »

> The most famous economic boom in U.S. history, right after World War II, occurred when the top rates on dividends were between 70 and 90 percent.

This seems very much like presenting correlation without any semblance of causation. Specifically, "right after World War II" is a pretty significant variable to ignore. The financial impact of the war being over (and massive amounts of resources being re-allocated) may well have been large enough to counteract any other variables.

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#29

Post by paulpauper »

Americans in the top 1 percent, and especially the top 0.1 percent, have seen their wealth and income multiply in recent decades as the rest of the country’s share of the economic pie shrank. Since 2000, a recent study found, the top 1 percent have made those gains almost entirely on income from capital, especially corporate stock—not on labor income. One reason may be the financial options of the wealthy: Business owners can lower their tax bills by paying themselves in dividends rather than in salary, for example.

Yeah...look at Bitcoin, Bay Area real estate, tech stocks (Google, Tesla, Amazon, Apple, Facebook, Sales Force, etc.)...it would seem like 'assets' are kicking the asses of wages. People are getting rich buy & holding assets and with speculation than 'building and making things' (except for Tesla). And the low long-term capital gains taxes to boot just makes it all the sweeter.

Now obviously,doctors, coders, and lawyers can do very well too. To get to the stage where you can live off assets, you need income.

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#30

Post by vasilipupkin »

chollida1 wrote: post #8

> Americans in the top 1 percent, and especially the top 0.1 percent, have seen their wealth and income multiply in recent decades as the rest of the country’s share of the economic pie shrank. Since 2000, a recent study found, the top 1 percent have made those gains almost entirely on income from capital, especially corporate stock—not on labor income. One reason may be the financial options of the wealthy: Business…

I am confused. If you put your bonus into a corporation, you will have to pay tax twice, the corporate tax and your personal tax. And if your corporation is an LLC, it all flows through to your personal taxes anyway. So, I don't see how you shelter this just by putting into a corporation.
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