Opinion Should Capital be taxed like wages?

[ultramanhyata]

So before there was a government

Nobody ever gave their opinion.

Tribal societies held opinions on right/wrong conduct within the group from the very beginning of human cooperation. And a lot of these opinions have varied wildly from tribe to tribe throughout history.

 

[Holic]

Tribal societies held opinions on right/wrong conduct within the group from the very beginning of human cooperation. And a lot of these opinions have varied wildly from tribe to tribe throughout history.

A tribe is a form of government. Rights existed before tribes.

 

[Gandhi]

"excellent"

it was probably worse than someone just holding SPY.

Unless you are too poor to afford admiral it’s the exact same thing and in either case it’s better for automatic investments.

 

[rob mafia]

Unless you are too poor to afford admiral it’s the exact same thing and in either case it’s better for automatic investments.

yeah, not a fan of admiral/vanguard, either.

 

[ultramanhyata]

A tribe is a form of government. Rights existed before tribes.

I have already explained the full extent of the "rights" that exist for individual organisms in the natural world.

Can you offer a rebuttal other than simply repeating your claim?

 

[Holic]

I have already explained the full extent of the "rights" that exist for individual organisms in the natural world.

Can you offer a rebuttal other than simply repeating your claim?

Repeats his claim. Asks me to stop repeating my claim.

 

[ultramanhyata]

Repeats his claim. Asks me to stop repeating my claim.

You are entitled to your article of faith. Just understand that it stands in direct contradiction to the function of nature and the observable universe.

 

[Hollywood Jack]

wtf are you talking about? btw, i'm actually ok with single-payer, genius. but the proposed m4a plans are silly. btw, we spend "MORE" on healthcare because insurance/red tape make up nearly half of all healthcare costs - despite having nothing to do with healthcare.

When you say you support single payer. And anyway, that's just all the more reason to get rid of private insurance.

 

[Holic]

You are entitled to your article of faith. Just understand that it stands in direct contradiction to the function of nature and the observable universe.

When you try to silence the opposition and fail despite having the capability to do so, you will quickly see otherwise.

 

[rob mafia]

When you say you support single payer. And anyway, that's just all the more reason to get rid of private insurance.

...that's my point. insurance companies are basically a glorified scam. you're essentially betting against yourself... and add in the fucktons of needless staff/lawsuits/etc, and it's a bloated monstrosity that eats up a ton of (healthcare) costs while providing no actual healthcare. and it's why obamacare is awful.

and i'm 100% for single-payer, as long as it's opt-in (vs mandated) and streamlined.

 

[panamaican]

Yeah but basis is a lot different than valuation.

Basis for tax purposes results from tax income being earned, distributed, depreciated. Step ups can happen in then tax code but it does involve subjective valuations on unrealized gains.

I still contend that subjective valuation of subjective future earnings don’t need taxation. We solve much of the problem by ensuring all income earned gets taxed at the same rate. In reality we could use the average top marginal rate for investors at the corporate level and tax all personal income sources the same.

My point, simplified, is that we can do the basis valuation more frequently and tax it more regularly. It keeps things more honest and more regular. Yes, it's speculative but since it's speculative all the way through the lifetime of the investment, I'll consider it washing out over time.

 

[ultramanhyata]

When you try to silence the opposition and fail despite having the capability to do so, you will quickly see otherwise.

You should write for fortune cookies.

 

[Hollywood Jack]

...that's my point. insurance companies are basically a glorified scam. you're essentially betting against yourself... and add in the fucktons of needless staff/lawsuits/etc, and it's a bloated monstrosity that eats up a ton of (healthcare) costs while providing no actual healthcare. and it's why obamacare is awful.

and i'm 100% for single-payer, as long as it's opt-in (vs mandated) and streamlined.

Assuming Bernie is elected, that might end up being the compromise. However, the other Democrats who come in already with a public option compromise will NOT get a public option. Single payer is better than public option by far, though.

 

[rob mafia]

My point, simplified, is that we can do the basis valuation more frequently and tax it more regularly. It keeps things more honest and more regular. Yes, it's speculative but since it's speculative all the way through the lifetime of the investment, I'll consider it washing out over time.

...so you're unfamiliar with the wash-sale rule, then?

 

[Holic]

You are entitled to your article of faith. Just understand that it stands in direct contradiction to the function of nature and the observable universe.

You should write for fortune cookies.

Again. Wow.

 

[Gandhi]

My point, simplified, is that we can do the basis valuation more frequently and tax it more regularly. It keeps things more honest and more regular. Yes, it's speculative but since it's speculative all the way through the lifetime of the investment, I'll consider it washing out over time.

I hear ya. I think of you tax incomes correctly when they are made this problem kinda goes away. If you look at income streams from a harmonized point of view then there is no logic in taxing an implied gain.

Investments make income and income gets taxed as it is earned. If you sell the investment then someone has just paid you present value of those earnings so you need to pay your tax on that as well.

But paying tax on the earnings of the investment and then paying taxes on the increased value of the investment because it’s earning more does not make sense.

If I have a sole proprietorship am I supposed to pay increase tax on my earnings and pay tax on the implied value increase of my business?

The real issue here not being addressed is that investments are acting as tax shelters (lower corporate rates on income) and then begins sold at the lower effective capital gains rate. This effectively shelters vast amount of income into lower taxation streams. The solution is not to effectively tax income twice but to harmonize the rates.

I think of we sort that out then the issue of taxing unrealized value for expected future earnings is less of an issue.

 

[TeTe]

Most savings accounts are garbage.

They're good for holding liquid funds that you won't get taxed on for using.

 

[TeTe]

I agree that it should be taxed as wages. The step up in basis should be eliminated. Gains should be taxed on a regular basis, although I'm not sure if yearly is realistic or fair.

That's what's best for the nation. I don't see the value to the nation of continuing to treat long term cap gains like something special. Maybe IPO level investment but not the generic 3rd party investment in the stock market.

Tax capital gains, stop taxing income.. at least Federal income tax

 

[panamaican]

I hear ya. I think of you tax incomes correctly when they are made this problem kinda goes away. If you look at income streams from a harmonized point of view then there is no logic in taxing an implied gain.

Investments make income and income gets taxed as it is earned. If you sell the investment then someone has just paid you present value of those earnings so you need to pay your tax on that as well.

But paying tax on the earnings of the investment and then paying taxes on the increased value of the investment because it’s earning more does not make sense.

If I have a sole proprietorship am I supposed to pay increase tax on my earnings and pay tax on the implied value increase of my business?

The real issue here not being addressed is that investments are acting as tax shelters (lower corporate rates on income) and then begins sold at the lower effective capital gains rate. This effectively shelters vast amount of income into lower taxation streams. The solution is not to effectively tax income twice but to harmonize the rates.

I think of we sort that out then the issue of taxing unrealized value for expected future earnings is less of an issue.

On the partnership side of things, you pay the tax annually whether you get a distribution of the earnings or not. At least with pass through partnerships. So, you have scenarios where partners are paying tax on investment gains, while the gains themselves remain within the control of the partnership. It's no different, in my opinion. It's not a double tax, since you're resetting the tax basis every year (or 5 years since I might agree that yearly is too frequently).

I agree with the second to last paragraph, except I don't think the last line is accurate.

 

[Gandhi]

On the partnership side of things, you pay the tax annually whether you get a distribution of the earnings or not. At least with pass through partnerships. So, you have scenarios where partners are paying tax on investment gains, while the gains themselves remain within the control of the partnership. It's no different, in my opinion. It's not a double tax, since you're resetting the tax basis every year (or 5 years since I might agree that yearly is too frequently).

I agree with the second to last paragraph, except I don't think the last line is accurate.

I think the partnership example is perfect for what I am getting at and was what I was thinking about (also LLCs).

I think we are definitely getting somewhere here. The income is taxed at the individual level right away and it increases the tax basis of the investment so if the Individual later gets a distribution of said dollars he won’t get taxed again.

That’s it is exactly how is SHOULD work. No taxation sheltering of income in a corporation and then flowing it out at the capital gains rates.

Now imagine if the dollars remained at the Corp level and you then told the investor that you were going to tax him again on the increase in value of his investment? That would work as long as his tax basis was increased for any taxable income declared by the investment. So I agree that IF you step up tax basis for income declared by the investment then you don’t have double taxation.

The problem is that unless you are an LLC or partnership that is not how it works now. There is no basis step up to my investments for taxable income declared by a corporation. Now if we layer on an individual tax for unrealized gains, the individual is getting taxed for increases in value of his share above his cost basis. That value will be increased for undistributed earnings which have already been taxed at the corporate level (double taxation albeit at a lower rate) and expected future earnings which have not.

To make sense of this, corporate taxes need to be aligned with individual taxes (again I would use the average top marginal rate of the broad investor class) and investment cost basis needs to be increased for income tax declared at the corporate level. Then I think you could maybe argue for an unrealized gains tax, but at that point I am not sure how necessary it would be.

Again that’s because all the sheltering of actual realized value is gone and what is left is bets on the future and until someone is willing to make a real exchange of assets based on that value, it remains just that, a bet.