Originally Posted By fkurucz <a href="http://www.washingtonpost.com/wp-dyn/content/article/2010/01/01/AR2010010101196.html?hpid=topnewsl" target="_blank">http://www.washingtonpost.com/...topnewsl</a> "There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well." And how many people have entered the labor force since then? 10% unemployment? Yeah right. "A big part of what happened this decade was that people engaged in excessively risky behavior without realizing the risks associated," And why did they do it? Why did they start flipping houses? Might it because they kept getting laid off from their jobs? "Capital was funneled to build mini-mansions in Sun Belt suburbs, many of which now sit empty, rather than toward industrial machines or other business investment that might generate economic output and jobs for years to come." Oh capital was allocated towards industrial machines or other business investment by the Fortune 500, it was just invested OVERSEAS, where skilled college educated labor can be hired for $1000 per month and unskilled factory labor for even less.
Originally Posted By ecdc Socialist lies! This is 'Merica! The greatest country in the world! Big business will save us!
Originally Posted By Sport Goofy << And why did they do it? Why did they start flipping houses? Might it because they kept getting laid off from their jobs? >> Might it also be because we have structured our economy so that all of the incentives go towards speculation and wealth creation through capital gains? You pay far fewer taxes on capital gains than ordinary income. It doesn't matter whether it's real estate, stocks, gold, or any other asset. We've become a society that values trading things more than making things and generating steady income. All of our tax policy now favors the speculator at the expense of the nose-to-the-grindstone type of person. This is why Warren Buffet's secretary pays a higher tax rate than the multi-billionaire himself -- and why we have a nation of gamblers and speculators who believe that they will be the next Warren Buffet if they just place their bets on the next big bubble stock, tract home, or ingot of gold. One rule of gambling, though, is that the odds always favor the house -- and the ordinary American is never going to get ahead in a world that favors Las Vegas values over old fashioned work ethic.
Originally Posted By Mr X And How, Sport Goofy! Can anyone explain to me why long term capital gains is capped at 15%? FIFTEEN PERCENT!! That, folks, is how the wealthy make most of their money (cashing in their stock holdings Bill Gates style, or otherwise keeping their tax "loss" at far less than the average McDonalds worker has to shell out percentage-wise). Okay, I'll all down with working out a system where someone might rake in some capital gains a few times over their life without getting screwed financially (like, selling off their home for retirement, which I think is already accounted for but perhaps something that covers more stuff along those lines)...but when you're making the bulk of your gajillions off of these gains, why the hell aren't you paying the NORMAL 36-39 percent that all the other wealthiest folks have to pay?????????????????? Anyone?
Originally Posted By fkurucz <<Might it also be because we have structured our economy so that all of the incentives go towards speculation and wealth creation through capital gains? You pay far fewer taxes on capital gains than ordinary income. It doesn't matter whether it's real estate, stocks, gold, or any other asset.>> Quite correct. I do recall reading somewhere that profits from the sale of precious metals are taxed as earned income. Here's an even better one: lenders have been forgiving losses on recourse mortgages and under normal circumstances forgiven debt is converted into income. But last year that income was not counted by the IRS. Soooo: Buy a house, let it appreciate, take out a mongo 2nd mortgage and buy a few toys (his and hers BMW's, fancy vacations, etc.). Default on the mortgage and walk away from your now underwater house scott free. I believe this loophole has expired, however. <<All of our tax policy now favors the speculator at the expense of the nose-to-the-grindstone type of person.>> We all know that making stuff is soooo 3rd world! Funny though, how those 3rd world peons are now designing stuff too, and lend us the money to buy the toys they make for us (or at least they used to). Unless we snap out of this 30-40 year trend we are finished. We'll be bankrupt before the decade is over.
Originally Posted By fkurucz <<but when you're making the bulk of your gajillions off of these gains, why the hell aren't you paying the NORMAL 36-39 percent that all the other wealthiest folks have to pay?????????????????? Anyone?>> Simple. It's the new golden rule. Those who own the gold make the rules. Now get back to work peons!
Originally Posted By Dabob2 <but when you're making the bulk of your gajillions off of these gains, why the hell aren't you paying the NORMAL 36-39 percent that all the other wealthiest folks have to pay?????????????????? Anyone?> Because conservative economic theorists have hoodwinked us (too many of us, anyway) into believing that if capital gains rates aren't ridiculously low, it "discourages investment." Never mind that investment didn't suffer when the rates were considerably higher. The wealthy fund think tanks, including economic think tanks. These think tanks put out theories like the above that benefit the wealthy. You get an imprimatur of "wow, it must mean something" when it comes from an "institute." There are many of these wealthy-funded institutes, all saying similar things. It takes on the ring of "truth" after a while. Add to that the pressure congressmen get from wealthy interests to begin with, and voila! 15 percent capital gains rates.
Originally Posted By DouglasDubh The tax on capital gains is lower than the tax on ordinary income because capital gains are not indexed for inflation. Much of the time, a lot of a capital gain is not "real" income, it's inflation.
Originally Posted By Sport Goofy << The tax on capital gains is lower than the tax on ordinary income because capital gains are not indexed for inflation. Much of the time, a lot of a capital gain is not "real" income, it's inflation. >> When corporate CEOs are issued stock options at prices subsidized by shareholders in lieu of direct compensation and then sell those options for multi-million dollar payouts, I'd classify that as income. I don't think they're all that concerned about inflation.
Originally Posted By Mr X I understand that, but so what? Why the arbitrary 15%? Why not 5% then? Or no tax at all. Since inflation is such a bitch, I mean. The simple fact is that they find a way to tax the crap out of the rest of us, but the super wealthy skate by with even more of a break at the same time. Let's face it, most of us don't live on capital gains. But those that do, are the ones living large. Why not create a sliding scale like they do with income taxes? Preserve those gains for the middle class and increase accordingly? And why the arbitrary year and a day for long term gains, how is that reasonable? If I have gains to cash in after 11 and a half months I have to shell out according to my tax bracket, and yet if I hold it a couple of weeks longer I get the mother of all tax breaks? As you can see, it's far too simplistic to simply claim "inflation" as the sole factor in making sure the super rich pay the least of all of us.
Originally Posted By Mr X ***When corporate CEOs are issued stock options at prices subsidized by shareholders in lieu of direct compensation and then sell those options for multi-million dollar payouts, I'd classify that as income.*** Oh, absofreakinlutely it's income.
