Capital Gains Tax Rate - Tax Reform
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two more contrasting interesting articles (even tho one disagrees with me haha):
http://crooksandliars.com/jon-perr/low-capital-gains-taxes-fuel-inequality-not-investment
http://www.iam1percent.com/capital-gains-tax-ignoring-the-correlation/
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"Cut this and it'll encourage investment"....
They cut it...it doesn't work....
"Well cut this and people will hire"....
They cut it....it doesn't work...
Wash, rinse, repeat -
"Cut this and it'll encourage investment"....
They cut it...it doesn't work....
"Well cut this and people will hire"....
They cut it....it doesn't work...
Wash, rinse, repeat
word...tryna tell peopleblakfyahking wrote: »desertrain10 wrote: »@blakfyahking
again it sounds good but there’s pretty much no correlation at all....investment increases over time at a steady rate regardless of what the capital gains tax rate is bruh. i know we are talking about CGTs but u have to factor in other ? as well...
i'm repeating myself but instead of more investment, what we’re getting is distorted investment not investing in ways that lead to any kind of trickling down of wealth formation to the masses. wallstreet ? the ones benefiting from low rates ain't creating jobs, again half the time the money is paid to buy stocks... whatever wealth formation we’re seeing from investment is either being sucked up in productivity, sucked up into the pockets of the wealthy, or outsourced....really i believe it’s leading to more acute globalization than our economy can handle
think, historically we have some of the lowest CGT rates yet jobs are nowhere to be found. and mainly that's because industry in the US is gone and there isn’t anything new to invest in other than technology, pharmaceuticals, and pretty much little else that would create jobs for low skilled or even reasonably skilled labor.
we could even also raise the short-term capital gains taxes to maybe 30% or more, to discourage speculation in the stock market, bond markets, commodities, property and others. years of low rates has caused bubbles and in turn busts, much higher and distorted prices for consumers, far less affordable housing, the small investor unable to really compete and means no long-term investment to keep jobs in the USA.
to me a higher short-term capital gains rate would moderate the levels of the economy, hold down real consumer prices, discourage excessive investments where not enough consumers for as well as redistribute some income to badly needed revenue to our government....
the bolded is debatable unless you saying you don't believe in basic economic theory that people are rational and expect to be compensated for risk
as far as economic bubbles, low tax rates have no impact on that at all so I don't see your argument...............interest rates are what instigate bubbles and you can blame the Fed Reserve and govt subsidies for that
I'm not saying that CGT rates should be low forever.............what I'm saying is right now in a ? economy the last thing you want to do is discourage investment...............which is essentially what you are doing by encouraging only wealthy people to invest and making it more expensive for lower income workers
I've already posted the math to show why it's a bad idea to raise the CGT at a time when you are trying to stimulate the economy.............it makes sense to increase the tax base 1st, THEN you increase the tax rate; not the other way around
what you are advocating is to basically discourage low income workers from investing and buying property, and motivating high earners to invest elsewhere outside the US
jobs are not being created because current govt programs are distorting the job market...........we basically killed our manufacturing sector, and the federal govt is subsidizing college to the detriment of the average worker
plus immigration reform is sorely needed, and our govt would rather increase welfare vs. investing in infrastructure
whether people want to believe it or not, private companies drive the economy not govt.......................more revenue for the govt may not be good for a govt that has already shown that it isn't that good at managing the money it was already receiving
a lot of well known economist would disagree w/ you bruh....yes the economy is ? but lowering taxes or keeping them as is in regards to the CGT for the "job creators" isn't working and its time to try something new like a small tax hike ( 23% is not back breaking ) especially considering we are in desperate need of revenue and tax breaks for the wealthy only has perpetuated economic inequality .... according to all the data its seems like the more the tax breaks, the more the top 1% makes, the less we 99% have to spend. which really spells doom for the economy...
and in regards to the connection between low CGT rates and bubbles, its simple. reduction to the capital gains tax rate does cause a short term surge in investments. the influx of money pushed into certain areas (typically real estate and the stock market because you obviously can't outsource jobs in real estate, America doesn't make anything etc) can happen so quickly that investment bubbles occur.... these bubbles inevitably burst sparked by a large portion of investors taking profits under the lowered long term capital gains tax rate.....
the low taxes on capital arguably largely contributed to the housing bubble of 2008
i could see if you were arguing for lower income tax for people making less than 250K, or taxing corporations that outsource jobs, or just keep after 3-5 yrs keeping long term CGT rates low .....
we need tax reform period -
desertrain10 wrote: »Cut this and it'll encourage investment"....
a lot of well known economist would disagree w/ you bruh....yes the economy is ? but lowering taxes or keeping them as is in regards to the CGT for the "job creators" isn't working and its time to try something new like a small tax hike ( 23% is not back breaking ) especially considering we are in desperate need of revenue and tax breaks for the wealthy only has perpetuated economic inequality .... according to all the data its seems like the more the tax breaks, the more the top 1% makes, the less we 99% have to spend. which really spells doom for the economy...
and in regards to the connection between low CGT rates and bubbles, its simple. reduction to the capital gains tax rate does cause a short term surge in investments. the influx of money pushed into certain areas (typically real estate and the stock market because you obviously can't outsource jobs in real estate, America doesn't make anything etc) can happen so quickly that investment bubbles occur.... these bubbles inevitably burst sparked by a large portion of investors taking profits under the lowered long term capital gains tax rate.....
the low taxes on capital arguably largely contributed to the housing bubble of 2008
i could see if you were arguing for lower income tax for people making less than 250K, or taxing corporations that outsource jobs, or just keep after 3-5 yrs keeping long term CGT rates low .....
last time I checked low interest rates would influence bubbles more in real estate since the market rate on a loan would be lower.........the stock market is a different scenario however
if you had low taxes (like mortgage deductions) but raised the market interest rate, you wouldn't see as many purchases of real estate..................
and like I said, if CGT rates were higher, you could actually discourage someone on the fence from making a sale that could marginally benefit them
IMO if a good investment is a good investment, high/low taxes aren't going to influence capital purchases and sales (real estate) for the wealthy as much as someone with less income................which is why I think raising the CGT is flawed..............because at 23% you are making transaction costs significantly higher for lower income folks
I think folks riding with Obama are willing to cut their nose just to spite their face just because the wealthy could possibly benefit.................but the wealthy are going to benefit regardless, cause well, they are wealthy already lol
discouraging low income investors from participating in the market is basically saying that they shouldn't own a piece of future profits...............so I don't see how someone interested in the average worker's well being is cool with raising taxes on a potential investment that could bring them some amount of wealth
if you are really concerned about looking out for the lower income folks, raising estate taxes may be better than raising CGT rates
and everyone cool with the govt spending money needs to really evaluate where that money is going...........we don't really get that much of a return on welfare type payments
