Opinion Should Capital be taxed like wages?

[Gandhi]

Ideologically, I think capital gains should be taxed at a higher rate than personal wages, and certainly at a progressive rate as well. Realistically, I don't know about the distortions that would create, so I have to defer to my tax man, @Gandhi, who previously corrected me about preferring the corporate rate be lowered or held steady simultaneous to an increase to personal income rates.



Glad we got that settled.

It’s a great question.

I would break it into two parts. What kind of behavior are we trying to incentivize so that we have an optimal social/economic result and and how will people react to game the system.

The capital gains rate and then dividend rate in a non harmonized model incentivizes movements income between those two streams. So if you tax capital gains more then you motivate a movement into income or dividends. If you tax gains less then you motivate the opposite.

That’s the gaming aspect. My second question is why do we want punish savings? I think that gets into all kinds of problems and very complicated questions. I get there is a glut in savings but at the same time, investment and productivity growth is the key to supporting income growth (combined with policy of course).

So I would not tax capital gains more. Tax all income as income and tax higher incomes more. It’s simple and it will work.

 

[ultramanhyata]

Exactly! Slaveowners were well within their rights as dicated by law!

Guess when the South no longer had the "right" to hold slaves...? When the North beat them into bloody submission and outlawed the practice.

The saddest part is you actually considering your post a substantive rebuttal. As opposed to a piece of documented history that proves my point.

 

[panamaican]

until a position is closed, it's not really a gain. what you seem to be implying is taxing ownership of shares based on ??? (general market value? market value minus cost basis? other?) - which doesn't make much sense. one can be up bigly on month x or year y and still sell for a loss/less than the value at x or y.

this thread makes libertarianism look pretty good, eh?

I'm not implying anything. I'm very upfront about it.

As for the vagaries of market...who cares? That's simple simon shit.

When you have a gain, pay the tax. When you have a loss, take the deduction. So, let's say you tax the position yearly (although I don't think yearly is the best option). Year one, you're up - so you pay a tax. Your basis in the stock rises accordingly. Year two, you're down relative to year one - take the deduction. Your basis in the stock decreases accordingly. Wash rinse repeat until you ultimately sell the position.

Don't worry, it also creates jobs for accountants so win/win.

 

[Holic]

Guess when the South no longer had the "right" to hold slaves...? When the North beat them into bloody submission and outlawed the practice.

The saddest part is you actually considering your post a substantive rebuttal. As opposed to a piece of documented history that proves my point.

Right. And by that same token the countries that have slavery TO THIS DAY are well within their rights by your own logic.

Fucking ingenius.

 

[rob mafia]

I'm not implying anything. I'm very upfront about it.

As for the vagaries of market...who cares? That's simple simon shit.

When you have a gain, pay the tax. When you have a loss, take the deduction. So, let's say you tax the position yearly (although I don't think yearly is the best option). Year one, you're up - so you pay a tax. Your basis in the stock rises accordingly. Year two, you're down relative to year one - take the deduction. Your basis in the stock decreases accordingly. Wash rinse repeat until you ultimately sell the position.

Don't worry, it also creates jobs for accountants so win/win.

WAT

so you're "upfront" about your unspecified plan? that makes no sense.

wait, so is this being taxed on gains or sales? why bother to hold past your annual/whatever checkpoints, if you're going to eat another tax at sale? it makes no sense.

lolz @ jobs for accountants. this is pure keynesian madness. (ie: if you need a job, smash this glass and then clean it up).

lolz @ proposing more taxes on investments AND having to pay an accountant because of a poorly-thought taxation convolution. i can't imagine why people wouldn't just go foreign. /s

 

[A Very Serious Cat]

Taxing unrealized gains is silly. You're asking people to find cash for non cash gains and would impact people you're not targeting the most

 

[ultramanhyata]

Right. And by that same token the countries that have slavery TO THIS DAY are well within their rights by your own logic.

Fucking ingenius.

Do you or do you not believe a government has the right to outlaw slavery and thereby deny its citizens the right to own slaves?

 

[Rational Poster]

Capitol gains and corporate tax should be lower, if anything, and the death tax should be completely repealed

you don't tax societies into prosperity, period

and it basically tells me that almost everyone that is for it, has no retirement plan or savings and thus their opinion is largely irrelevant

Explain how the highest tax rates in modern American history correlate with the highest growth we've seen then?

(1950s-1960s)

 

[panamaican]

WAT

so you're "upfront" about your unspecified plan? that makes no sense.

wait, so is this being taxed on gains or sales? why bother to hold past your annual/whatever checkpoints, if you're going to eat another tax at sale? it makes no sense.

lolz @ jobs for accountants. this is pure keynesian madness. (ie: if you need a job, smash this glass and then clean it up).

lolz @ proposing more taxes on investments AND having to pay an accountant because of a poorly-thought taxation convolution. i can't imagine why people wouldn't just go foreign. /s

As I said the very first time - gains should taxed on regularly. There's nothing unspecified there except the frequency of the tax. "Gains", not sales. Nor realized vs. unrealized. Straightforward gains.

And you don't eat another tax at sale. If your tax basis is changing annually then when you sell, you'd only be taxed on changes within that last calendar year.

I'm not going to be facetious when I ask this - you understand what "basis" is? I'm asking because we adjust the tax basis in various assets in the current tax code even when the asset hasn't been sold (depreciation and stepped up basis at death being the most obvious), we already know how to do this. Shit, Subchapter K of the tax code goes into this in length, many partnerships do this math annually.

And the accountants comment was a joke.

 

[Farmer Br0wn]

My argument is that "right" is always and forever at the discretion of the state. Laws created by men determine rights. Change the laws, change the rights. A society has the "right" to do whatever its laws allow.

By your own logic, everything that happened in Nazi Germany was, as you consider it, "right".

Your perspective is pure statism.

By your own logic, you have no right to oppose the actions of any government ever.

The law doesn't necessarily reflect morality in every instance.

 

[rob mafia]

As I said the very first time - gains should taxed on regularly. There's nothing unspecified there except the frequency of the tax. "Gains", not sales. Nor realized vs. unrealized. Straightforward gains.

And you don't eat another tax at sale. If your tax basis is changing annually then when you sell, you'd only be taxed on changes within that last calendar year. I'm not going to be facetious when I ask this - you understand what "basis" is?

And the accountants comment was a joke.

i'm not facetious when i'm now asking you if you understand what a "gain" is. because stonks/etc can be manipulated/etc, and being taxed on unrealized gains that then become losses is... insane. as there would be taxes on... losses.

most notably, you never even said what this is supposed to be based on, hence "vagaries." if you can't even define this, i can't fathom how you can pitch it and think anyone else is the clueless one.

 

[panamaican]

i'm not facetious when i'm now asking you if you understand what a "gain" is. because stonks/etc can be manipulated/etc, and being taxed on unrealized gains that then become losses is... insane. as there would be taxes on... losses.

most notably, you never even said what this is supposed to be based on, hence "vagaries." if you can't even define this, i can't fathom how you can pitch it and think anyone else is the clueless one.

A gain is an increase in the value of an asset. It's a gain whether it's realized or not. Losses on assets are deducted. What part of this is new to you?

When I say "vagaries of the market" it means the changing nature of the market, sometimes it's up, sometimes it's down. When you're up -you're taxed. when you're down you take the loss. Your tax basis adjusts accordingly. "Vagaries of the market" is an idiom that's been around for years. It just means that the markets (stocks in general) move up and down, I didn't know you had never heard it.

So, again - do you understand what "basis" is? I'm asking because we adjust the tax basis in various assets in the current tax code even when the asset hasn't been sold (depreciation and stepped up basis at death being the most obvious), we already know how to do this. Shit, Sub-Chapter K of the tax code goes into this in length, many partnerships do this math annually.

When you say I didn't say what it's supposed to be based on - that's "basis". It's a foundation level tax concept. I assumed, erroneously, that anyone commenting on the step up in basis aspect and how it relates to gains, would know what "basis" means.

For example - you understand the phrase "step up in basis" and what it means within the tax code?

 

[Based and White Pilled]

I don't necessarily have an issue with the idea of taxing it as it appreciates, but what about when it depreciates? Do you get money back from the gubmint if your assets lose value?

Why not do something akin to a property tax annually?

 

[rob mafia]

A gain is an increase in the value of an asset. It's a gain whether it's realized or not. Losses on assets are deducted. What part of this is new to you?

...all of it?

if stock x gets bought for $50/share and is then 'traded at' $100/share and one's taxed on the 100% "gains"... only to end up selling at $45/share before the company tanks... the person got screwed by the company/investment, screwed by the govt, taxed on "gains" that did not exist, and has a transactional loss in addition to the taxes that never should have been paid.

do you understand what small-cap stocks are?

you're calling it a "gain" when it is not a gain, but a loss. THAT'S the point.

edit: re "basis,"

So, again - do you understand what "basis" is? I'm asking because we adjust the tax basis in various assets in the current tax code even when the asset hasn't been sold (depreciation and stepped up basis at death being the most obvious), we already know how to do this. Shit, Sub-Chapter K of the tax code goes into this in length, many partnerships do this math annually.

When you say I didn't say what it's supposed to be based on - that's "basis". It's a foundation level tax concept. I assumed, erroneously, that anyone commenting on the step up in basis aspect and how it relates to gains, would know what "basis" means.

just wow. you're not using the same "cost-basis accounting" that applies to stocks. you're applying a separate definition and pretending it magically already applies.

 

[ultramanhyata]

By your own logic, everything that happened in Nazi Germany was, as you consider it, "right".

I don't believe it's "right" for workers in a unionized shop to abstain from paying dues.

But I acknowledge that in certain states that is, in fact, a worker's "right".

I also believe that a driver should stay in the "right" lane if he's not intending to pass slow moving traffic.

Mind blown?

 

[panamaican]

I don't necessarily have an issue with the idea of taxing it as it appreciates, but what about when it depreciates? Do you get money back from the gubmint if your assets lose value?

Why not do something akin to a property tax annually?

You take a deduction.

An example of where this occurs already is depreciation on business assets. An asset decreases in value, you then take a loss on your income that corresponds to that reduced value. It's strictly an on-paper loss, when you depreciate a bulldozer, for example, you take the loss on your taxes but you don't have to sell the actual bulldozer. The bulldozer's tax value is what has changed. The next year, the bulldozer can be depreciated even further and you take another loss on your income based on that depreciation.

It's a little more complicated but you get the point. The tax value of the bulldozer changes, your taxes change, but you don't have to sell the bulldozer. It's all paper accounting.

 

[Holic]

Do you or do you not believe a government has the right to outlaw slavery and thereby deny its citizens the right to own slaves?

There is no right to own slaves. Owning slaves infringes on natural rights.

 

[panamaican]

...all of it?

if stock x gets bought for $50/share and is then 'traded at' $100/share and one's taxed on the 100% "gains"... only to end up selling at $45/share before the company tanks... the person got screwed by the company/investment, screwed by the govt, taxed on "gains" that did not exist, and has a transactional loss in addition to the taxes that never should have been paid.

do you understand what small-cap stocks are?

you're calling it a "gain" when it is not a gain, but a loss. THAT'S the point.

edit: re "basis," - just wow. you're not using the same "cost-basis accounting" that applies to stocks. you're applying a separate definition and pretending it magically already applies.

Finally. Yes, I'm applying a separate definition. I'm applying the tax code definition. We're talking about taxes so you should be thinking about the tax code. And it already applies to stocks.

It's clear that you don'tt really understand what a tax basis is and how it can differ from a book basis.

So, let's walk through this slowly. Stock X gets bought for $50/share on Jan 1, for simplicity's sake. That means that your tax basis in Stock X is $50. On December 31 it's worth $100/share. That is $50 of gain. That is taxed. Your tax basis in Stock X is now $100 on Jan 1 of the next year. That year you sell the stock for $45/share. That's a $55 loss, 100-45. You take a $55 reduction in taxable income on your taxes. Year 1 = $50 income; Year 2 = $55 loss; Net $5 loss.

As for if I understand small cap stocks, yes. I took and passed the Series 7 exam years ago. While I never applied for a license (and thus will not pretend to be a stock market guru), I'm pretty comfortable discussing this stuff at this level.

The majority of your post contains 2 things. 1) that you don't really understand tax basis beyond the basic "I bought it for X, I'm selling it for Y, I get taxed on the difference." which is fine, most people don't need to. 2) You trying to convince me that this would change things - which is odd since the point of advocating a change is precisely because it would change how people do things. You don't need to convince me that you would have to change behavior, that's the goal - changed behaviors .

 

[rob mafia]

Finally. Yes, I'm applying a separate definition. I'm applying the tax code definition. We're talking about taxes so you should be thinking about the tax code. And it already applies to stocks.

It's clear that you don'tt really understand what a tax basis is and how it can differ from a book basis.

So, let's walk through this slowly. Stock X gets bought for $50/share on Jan 1, for simplicity's sake. That means that your tax basis in Stock X is $50. On December 31 it's worth $100/share. That is $50 of gain. That is taxed. Your tax basis in Stock X is now $100 on Jan 1 of the next year. That year you sell the stock for $45/share. That's a $55 loss, 100-45. You take a $55 reduction in taxable income on your taxes. Year 1 = $50 income; Year 2 = $55 loss; Net $5 loss.

As for if I understand small cap stocks, yes. I took and passed the Series 7 exam years ago. While I never applied for a license (and thus will not pretend to be a stock market guru), I'm pretty comfortable discussing this stuff at this level.

The majority of your post contains 2 things. 1) that you don't really understand tax basis beyond the basic "I bought it for X, I'm selling it for Y, I get taxed on the difference." which is fine, most people don't need to. 2) You trying to convince me that this would change things - which is odd since the point of advocating a change is precisely because it would change how people do things. You don't need to convince me that you would have to change behavior, that's the goal - changed behaviors .

WAT

that's not how it works. by default, (ie: cap gains vs "traders" filing as ordinary income) stocks are taxed by their realized gains (after sale), on the individual lots/shares.

and... you completely missed the point regarding small cap. the "price" is just an average of the bid and ask. the "price" of low volume stocks will fluctuate rapidly and often is not an accurate representation of the actual prices.

lolz @ missing the point. i'm not pointing out that your proposed change is a change (HURR DURR). i'm pointing out that it's convoluted, senseless, inaccurate, and worse than the status quo. ie: your logical burden (change from status quo) is not being met. further, you don't seem to know what the status quo even is, as evident by the above.

 

[ultramanhyata]

There is no right to own slaves. Owning slaves infringes on natural rights.

Here is the total alpha and omega of pure, "natural" rights:

1. I have the right to do anything I so choose to you.

2. You have the right to defend yourself against anything I choose to do to you.