111–120 of 323 posts
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.
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It's not the progressive tax structure that's the problem, it's the fact that cap gains are taxed at a much lower rate than other forms of income.
That's to encourage money to be invested and also to compensate for the risks.
It's the investor's job to make sure their investments are producing an adequate risk-adjusted return, not the government's job to help you get there.
> 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 don't think that's right. If you look at the dividends in isolation, it looks like a low tax rate. But if you ask "what's the tax rate on capital income?", then you have to adjust for the fact that, before the capital can pay out anything, the investment must pay taxes on profits (35%), taxes on dividends (15%), and taxes on undistributed gains when selling (capital gains, 15-35%).
So, trace out the taxes on a $100 investment that miraculously pays for itself and throws off $200 in profits on top and pays $50 as a dividend. I exit the position. How much was I taxed at?
$200 profits -> $70 in corporate income tax. (35%)
$50 dividend -> $7.5 dividend tax. (15%)
$115 capital gain (it retained $115 of the $200 profits, raising its market price by that much) -> $17.25 capital gains tax (15%)
Total investment (capital) income: $200.
Total capital income tax: $94.75 (17.25 + 7.5 + 70)
Total capital income tax rate: 47.3% (94.75/200).
(That understates it since you can't deduct inflation.)
And keep in mind, investment is believed to have positive externalities!
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Start by getting paid on a 1099 instead of a w2
Which means immediately higher taxes because you get to pay the employer side of payroll taxes, plus no pretax benefits like health care and no vacation or other untaxed benefits.
1. https://www.thebalance.com/what-is-a-reasonable-salary-for-a...
Because politicians sell progressive income taxes as a way to screw the rich, when it actually just screws the upper middle class, since the actual rich don't have jobs to tax the income from.
See http://money.cnn.com/2015/01/30/pf/taxes/obama-taxes-rich/in...
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Salaries (and bonuses) are considered expenses for the company and will be tax deductible. I believe the example was that you may as a contractor (with your own company) receive a bonus to your corporation and be able to offset taxes for another 11 months compared to having the bonus paid out personally.
Working as a contractor for your wholly-owned company would never pass muster with the IRS. You might be able to avoid audit for a little while, but when this catches up to you it will be a huge mess. They would recast the transactions (they can do this) and you'd end up owing a ton of tax and penalties. Source: I'm a (former) tax lawyer.
I'm still not convinced that this works, but that is how I read it.
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This is why our two-party political system needs to change. It's proven inadequate to reflect the people in a nuanced enough way.
This sounds like perhaps the top fix, to get my personal view better represented. But then I see how coalition governments work in other places. I am not sure that is overall better? Better in some ways, but I think it has a lot of downsides also.
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I don't think that's accurate. As of now the wealthy are pulling away quickly. This will continue if the majority of of workers' income (salary) is taxed higher than the income of investors.
yes, but those workers will at some point retire and live off their investment income, no?
You don't seem to want to understand my point: Low taxes for investment benefits wealthy people disproportionately. Yes, lower income also get some benefit but the vast majority goes to the wealthy. Same for all the Republic "tax reform" proposals: A little tax cut for small incomes, large tax cut for high incomes.
"Taxing investors less is really not what the U.S. needs now,” Saez said. “Instead, we should focus on trying to rebuild middle-class wealth” by encouraging families to save for retirement and pay down mortgages." How do you encourage families to save for retirement? isn't a lower tax rate on investment income a way to do that?
FTA “There is little empirical evidence showing that taxing investors less stimulates savings and growth,” said Emmanuel Saez, an economist at the University of California at Berkeley.
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At this point, the fringes are the only groups that have any interest in changing this aspect of the tax system
So great, let's make a system of government where fringe groups can get more things done. Your fringe group wants to reform the tax code. Awesome. Another wants to build a wall with Mexico. Another wants to ban immigration by non-whites. Another wants to take away voting for women. Another wants to legalize the right to carry AK-47s in public. How do you get your "fringe" change through, but not other crazy changes t…