Quote: (01-26-2012 12:50 AM)gringochileno Wrote:
It's a commission he gets from managing other people's money. There's no principled reason to treat it any differently from ordinary income, and the only reason why it is treated as capital gains is because lobbyists for hedge fund managers had it written into the tax code for their benefit.
If he chooses to reinvest that income then it's the same thing as if you or I earned a wage and then invested it instead of spending it. It shouldn't get special treatment.
Good god man.
1) Interest received in investments is not a commission. Comprende? Its a return paid to an investor to encourage deposits and investment. Those deposits provide the capital you need to borrow money to buy cars, buy houses and fund your credit cards. Where else is it going to come from if your government takes most of it and decides where its going to be spent?
2) Its not a wage. He has invested POST TAX INCOME, not pre tax income. Understand? HE PAID TAX ON IT ALREADY! In the process, he has not bought any fixed assets with it and he has tied the money up. He should be paying zero tax on it.
This belief that interest should now be taxed at income tax rates has to be the dumbest fucking thing I have ever heard of in my life.
With low interest rates and 15% taxes, is there any wonder why Americans are spending their way into a black hole? There is no incentive to save, and with fewer savings the banks cant lend as much. When the banks cant lend, industry dies because it has no capital to grow.
You want more of this do you?
You are currently experiencing massive capital flight because its too expensive to save at home. Think about what that is doing to your economy and country while you dream of ways to spend other peoples money.
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Do you have any evidence that economic losses from the current level of US investment taxes due to these disincentive effects is greater than the amount of revenue raised? I'm sure that could be true for some marginal tax rates in some circumstances but it's equally absurd to think that it has to be true always and everywhere.
Let me ask you a question: say you were primarily concerned with maximizing the welfare of the poor rather than protecting wealthy people's property. How would you set tax rates in order to accomplish that objective? Would you argue that we should not tax the rich at all because doing so would impair their ability to reinvest their wealth and ultimately be too harmful to the poor to justify the revenue raised? What do you think would be the effect on poor people's standard of living of failing to have enough revenue to fund things like public infrastructure and a robust welfare state? (sorry, that was several questions.)
You want to improve the situation of the poor and the middle class? Remove regulations and open up markets. For some reason people think that regulation protects the little guy, when in reality is just raises the barrier to entry. Regulation is a dream for big business because it puts up all these roadblocks only they have the capital to navigate. Its how monopolies form, consolidate and expand power and control.
You have to be blind not to see this. EVerything from companies using lobbyists to pass laws that protect their monopolies to politicans passing into law restrictions on how you can employ people. It all works in the favour of big business.
The poor need jobs and the middle class need purchasing power. That is never going to happen with high taxes, highly regulated industry and big government. You do not empower people this way, nor do you do them any favours and no matter how many votes that may win for you it still does incalculable damage. This is not the 40's anymore, its 2012.
Compete and offer business a reason to stay or see it move abroad taking jobs and industry with them. Those are your choices. And the USA is no longer competitive, its why industry is running away and investors are fleeing in the first place.
Your solution is not to make the business environment and investment more favourable, its to punish the fuck out of them and force them to share whats left so you can prop up a growing poor and lower middle class?
This does not make you a humanitarian, it makes you a fool.
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See, I think people get misled by adopting this kind of black-and-white attitude. Just because you favor (from what I gather) what amounts to a radical libertarian view of how society should be structured doesn't mean that everyone who disagrees with you wants the government to seize control of the means of production, put everyone on collective farms, and start liquidating the Kulaks. I think you and I have different opinions on what the main goals of economic policy should be (although I suspect they're broadly similar in some respects), and it's not surprising that we subsequently favor different policies to the extent that they would have the effect of promoting those goals. I think the evidence is that the US is able to tolerate reasonably high marginal tax rates without too large of an effect on economic growth, and up to a point the social welfare benefits that can be derived from using that revenue outweigh the costs that are incurred. I wouldn't expect that argument to persuade you because you seem to see property rights as a more fundamental concern than social welfare or distributive justice. But don't go saying that people who disagree with you are being incoherent when in all probability they just don't share your priorities.
Im clearly dealing with a typical left wing, socialist academic here, and for that reason I cant take you seriously. You live in dreamland and have no idea what is really happening at ground level or in boardrooms. I have seen first hand what your sort of ideology leads to and I am not going to even bother entertaining it or respecting it.
America does not need to become more like Europe, Scandinavia, Australia or Canada. They are all on borrowed time. It needs to go back to what what made it the economic powerhouse it is and it needs to adjust for a modern global economy to make sure it remains competitive.
As for distributive justice? You are not entitled to anyones hard work, ingenuity, creativity, network, success or balls. You dont deserve any of it just because you breathe the same oxygen.