71–80 of 136 posts
> The fund [Medallion] has earned an average annual return of more than 35 percent for two decades. OK, can someone explain this? Most people say that "you can't beat the market in the long term", "market is efficient", etc. So how can these people have done so well over more than 20 years??
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> And yet this is what we seem to be experiencing in this case No, Congress passing a law saying that "IRS can set taxes at any level they want" is not what we are seeing. If you want to argue that the actual laws Congress has passed are unconstitutional delegations, please, point to the specific laws, and make that argument. > but since tax evasion is itself a crime it seems to indirectly violate the ex post facto l…
> Evasion is a different thing than non-payment. No act that occurred in the past that was not evasion when it occurred becomes evasion as a result of this change in application. Incorrect, but I can see how you might think so. It is the same because if I disagree with the IRS and refuse payment then according to https://www.law.cornell.edu/wex/tax_evasion , I have committed tax evasion. So yes, since the IRS can adj…
I guess people have different definitions of evasion, but I would probably define it as having the intent to evade taxes "from the start". As a citizen (or a corporation), you are free to decide on your own interpretation of the law. Tax authorities (around the globe) aren't always right. Hence you ask a judge, because an interpretation is just that: an interpretation. It's not the law. And the law is the only thing that counts.
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The rules are deeply arbitrary, and goes to the nature of financials as being rather abstract concepts with arbitrary definitions. I buy stock in a firm, that firm makes a lot of profit, but I don't liquidate my position. How is that different (short-term vs long-term gains) from me selling their stock and buying another stock? It's even the same word: A retail business sells its stock (product), and sells it's stock…
The difference is the people who make the tax rules want to encourage one kind of behavior over another, regardless of anything else. You're free to think that's a fundamentally bad idea, but it isn't "arbitrary," it's the basic idea of Behavioral Economics.
Today's step function, with made-up tax percentages: 20% if held for less than a year, 10% if a year or more. You end up with a bunch of trades held for a year and a minute.
My proposal, with interpolation: 20% if held for less than 6 months 10% if held for 18 months or more Between 6 and 18 months, we interpolate between 20 and 10%.
The difference between waiting 364 or 365 days is now minimum. I chose 6 and 18 because they're 12 +/- 6. However, a different curve could be drawn. The idea is to replace the step with a gradual increase.
Maybe all cap gains should just be taxed at the same rate. 1 year threshold his so artificial.
There's a massive difference between the long-term and short-term gains rates. And, hedge fund folks aside, long-term capital gains are also the taxes that apply to retirees drawing income from years of investments. Raising those rates would cause serious problems for folks who have already done all their financial planning and investing, and cannot afford to pay higher taxes.
Tax-sheltered vehicles such as IRAs and 401Ks already exist specifically for retirement. That's unrelated to the issue of preferential tax treatment for capital gains, which is not limited to retirees and is completely regressive, privileging those who already have access to capital over those who rely on their labor for income.
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Exactly, my hypothetical would universally not be allowed and is forbidden (esp. by the nondelegation doctrine). The point is that the two situations are very similar in spirit. I never said the discretion was unlimited; rather, I think that any retroactive decision in guidance/policy/interpretation is prohibited by the constitution. The words are just semantics. IRS tax avoidance constitutes criminal punishment. Tha…
> The point is that the two situations are very similar in spirit. You keep asserting that, but you have failed to even begin to argue that. > rather, I think that any retroactive decision in guidance/policy/interpretation is prohibited by the constitution. You are welcome to think that, however, that's not consistent with the history of the use "ex post facto law", which was a legal term of art already in existence…
There seems to be no good word for nonpayment of tax; tax evasion you take issue with elsewhere, tax avoidance is not the correct word I agree, but I don't know what word you really would like.
One thing is very clear: the IRS will take what it feels is due ('legally', or retroactively legal) and is willing to use the criminal justice system to do so. I and any freedom-loving American see this as a gross violation of the constitution.
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> Evasion is a different thing than non-payment. No act that occurred in the past that was not evasion when it occurred becomes evasion as a result of this change in application. Incorrect, but I can see how you might think so. It is the same because if I disagree with the IRS and refuse payment then according to https://www.law.cornell.edu/wex/tax_evasion , I have committed tax evasion. So yes, since the IRS can adj…
> It is the same because if I disagree with the IRS and refuse payment Nonpayment and refusing payment are different things. The act of refusal would happen after the policy change, therefore, the only act that might even arguably be criminalized is an act that would occur after the change, and no retroactive criminalization has occurred. No act before the policy was adopted is criminalized, even by your characteriza…
The NYT even called it a retroactive policy change!
U.S. Constitution, Article I, Section 9: No Bill of Attainder or ex post facto Law shall be passed. How does that square with the article's "The new I.R.S. guidance will be retroactive, applying to all transactions as far back as Jan. 1, 2011." ?
1. In the US, the supreme court has repeatedly held that the ex-post-facto clause only applies to criminal laws (See Calder v. Bull, which was decided in 1798). This is actually consistent with the history of the clause (It was understood to apply to criminal laws. Motions were made to change the wording to say it also applied to civil cases, they were turned down) 2. This is not a law, and may not even be administra…
Newly independent Americans in the late 1700s were very concerned with “this shameful abuse of power”, “those engines of oppression”, ex post facto laws. American businessmen were concerned with the macroeconomic effects and unfairness of interference with contracts by provincial/state legislatures.
One of the shameful abuses was the “paper money laws” that changed outstanding debts by permitting payment in paper money where the contract originally called for the use of gold or silver. There was widespread fear of the drying up of credit (in the context of an ongoing major depression at the time) as a result of concern that loans might not be paid back due to legislative intervention.
The dictionary of reference in 1739, Giles Jacob’s Law Dictionary, defined “ex post facto” as “a Term used in the Law, signifying some Thing done after another Thing that was committed before”.
Check out these sources: William Winslow Crosskey, “The True Meaning of the Constitutional Prohibition of Ex-Post-Facto Laws” (1947) 14 U Chicago L Rev 539
Roger W Weiss, “The Issue of Paper Money in the American Colonies, 1720-1774” (1970) 30 J of Economic History 770
Elmer E Smead, “The Rule Against Retroactive Legislation: A Basic Principle of Jurisprudence” (1935) 20 Minn L Rev 775
Harold J Krent, “The Puzzling Boundary Between Criminal and Civil Retroactive Lawmaking” (1996) 84 Georgia L J 2143
W David Slawson, “Constitutional and Legislative Considerations in Retroactive Lawmaking” (48) California L Rev 216
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Not a 'fictional' entity; a legal construct (perhaps multilayered) that groups ownership of real assets and/or obligations of real people.
The fiction is to believe that 'a legal construct (perhaps multilayered) that groups ownership of real assets and/or obligations of real people' is an entity.
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> Evasion is a different thing than non-payment. No act that occurred in the past that was not evasion when it occurred becomes evasion as a result of this change in application. Incorrect, but I can see how you might think so. It is the same because if I disagree with the IRS and refuse payment then according to https://www.law.cornell.edu/wex/tax_evasion , I have committed tax evasion. So yes, since the IRS can adj…
And then you go to court and ask a judge, who is (in general) a neutral party, to interpret the law based on the situation and ask what the correct course of action was. I guess people have different definitions of evasion, but I would probably define it as having the intent to evade taxes "from the start". As a citizen (or a corporation), you are free to decide on your own interpretation of the law. Tax authorities…
The legal standard for proving tax evasion disagrees with you.