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Read the rules in the OP before posting, please.In order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a re-read to refresh your memory! The vast majority of you are contributing in a healthy way, keep it up! NOTE: When providing a source, explain why you feel it is relevant and what purpose it adds to the discussion if it's not obvious. Also take note that unsubstantiated tweets/posts meant only to rekindle old arguments can result in a mod action. |
The threat of joblessness tops the list of concerns facing American households, according to a new Al Jazeera America/Monmouth University Poll. When asked to describe the biggest concern facing their family, 16 percent of poll respondents said either job security or unemployment. The second most-cited concern was health care costs, followed by everyday bills.
Just 1 percent of all respondents cited immigration or terrorism as their primary concerns.
Although the economy has improved since the 2008 Great Recession and unemployment has declined to 5.6 percent, wages for most workers remain as stagnant as they have been for decades. The results of the Al Jazeera America/Monmouth University Poll suggest that many Americans still feel deep anxiety over their job prospects and the state of their finances.
Among people earning less than $25,000 per year, everyday bills such as rent, utilities and phone bills were by far the biggest concern. Twenty-six percent of respondents in the lower income bracket cited bills as their foremost issue.
The Al Jazeera America/Monmouth University Poll was conducted by telephone from Jan. 13 to 15, 2015 with 1,003 adults in the United States. This sample has a margin of error of + 3.1 percent.
Source
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Montana officials said Sunday that an oil pipeline breach spilled up to 50,000 gallons of oil into the Yellowstone River near Glendive, but they said they are unaware of any threats to public safety or health.
The Bridger Pipeline Co. said the spill occurred about 10 a.m. Saturday. The initial estimate is that 300 to 1,200 barrels of oil spilled, the company said in a statement Sunday.
Some of the oil did get into the water, but the area where it spilled was frozen over and that could help reduce the impact, said Dave Parker, a spokesman for Gov. Steve Bullock.
“We think it was caught pretty quick, and it was shut down,” Parker said. “The governor is committed to making sure the river is cleaned up.”
Bridger Pipeline Co. said in the statement that it shut down the 10-inch-wide pipeline shortly before 11 a.m. Saturday. “Our primary concern is to minimize the environmental impact of the release and keep our responders safe as we clean up from this unfortunate incident,” said Tad True, vice president of Bridger.
The EPA and state Department of Environmental Quality have responded to the area about 9 miles upriver from Glendive, Parker said.
Source
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Cayman Islands24199 Posts
On January 19 2015 06:19 JonnyBNoHo wrote:Show nested quote +On January 19 2015 06:01 oneofthem wrote:On January 18 2015 16:40 JonnyBNoHo wrote:On January 18 2015 12:16 {CC}StealthBlue wrote:During his State of the Union address on Tuesday, President Barack Obama will lay out a plan to extend tax credits to the middle class by hiking taxes on wealthier Americans and big banks, according to senior administration officials.
Under the plan, the capital gains tax would be raised from its current level of 15 percent up to 28 percent for couples with incomes over $500,000 a year. The plan would also strip a tax break, known as a "step-up," that allows heirs to avoid capital gains taxes on large inheritances.
In addition, the plan would institute a new tax on the biggest financial institutions, basing the fee on liabilities in order to discourage risky borrowing. The administration says the fee would hit the roughly 100 banks that have assets of $50 billion or more.
The president's plan would use revenues from those tax code changes to finance credits aimed at the middle class, officials said. That includes extending the earned income tax credits to families without children, which would benefit an estimated 13 million low-income workers, while also tripling the maximum tax credits for child care in low- and middle-income homes.
"This proposal is probably the most impactful way we can address the manifest unfairness in our tax system," an administration official said.
The tax hikes on capital gains would run into heavy opposition from Republicans in the GOP-controlled Congress. Other elements of the president's plan, however, have enjoyed some degree of bipartisan support. House Ways and Means Committee Chairman Dave Camp (R-Mich.) has proposed a similar tax on big banks, and many Republicans favor the idea of broadening the earned income tax credit.
According to officials, the capital gains tax reforms would impact "almost exclusively" the top 1 percent of earners, carving out the majority of middle-income families from the hikes.
In addition to the tax credits, the president's proposals will also include a plan to give more workers access to retirement accounts. Employers with at least 10 workers who don't currently offer their employees a 401(k) would have to enroll them in what's known as an automatic IRA, a plan that Obama has included in previous budgets he's proposed. Source The tax hikes could be structured a lot better. The tax on bank liabilities should encourage more use of equity (a good thing) but the cap gains hike does the opposite, and is more widespread than just financial firms. I'm not sure about the wisdom of raising tax rates on capital generally when the problem seems to be avoidance through loopholes, special deductions and international tax code arbitrage. I'd rather we deal with that than focus on rates, though the motivation is understandable. I don't know much about the step up, but from what I'm assuming it is off hand (cost basis change), sounds like good fix. Surprised carried interest isn't on the list, unless I'm just not seeing it. I file that one as a 'nice to have' but could do without it. Ending mortgage interest deduction, or limiting it would be good too. I'm OK with the tax breaks, but I'd rather see something more broad-based like an increase in the standard deduction. They seem reasonable though, at least at first glance. Not sure how affordable they are and to what extent the cuts and hikes match. Rhetoric like 'the manifest unfairness in our tax system' isn't necessary imo. We have one of the most progressive tax code in the OECD already, so it isn't really true and invites opposition. need for closing loopholes isn't really an argument against equalizing capital gains and wage income tax. first step and hardest step imo If you restructured along those lines I think it would be a net cut, not hike.
cutting payroll tax is fine, but capital gains tax has to go up to around the same level as the top wage bracket for an amount over say 200k.
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First let me put in context, the Huckabee's are great parents. However, Huckabee really should of left Obama's parenting out of his book. Mentioning how important healthy eating is to the Obama's (and how clearly it isn't for him and his son) probably not the best idea either. Talking about how Obama shouldn't let his daughters listen to Beyonce...
I wonder what Huckabee's son was listening to before he helped torture and kill some dog?
+ Show Spoiler +
I'm not the type to judge a book by it's cover, but I won't be one of the people who said they never would of guessed this guy was a serial killer.
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On January 20 2015 04:44 oneofthem wrote:Show nested quote +On January 19 2015 06:19 JonnyBNoHo wrote:On January 19 2015 06:01 oneofthem wrote:On January 18 2015 16:40 JonnyBNoHo wrote:On January 18 2015 12:16 {CC}StealthBlue wrote:During his State of the Union address on Tuesday, President Barack Obama will lay out a plan to extend tax credits to the middle class by hiking taxes on wealthier Americans and big banks, according to senior administration officials.
Under the plan, the capital gains tax would be raised from its current level of 15 percent up to 28 percent for couples with incomes over $500,000 a year. The plan would also strip a tax break, known as a "step-up," that allows heirs to avoid capital gains taxes on large inheritances.
In addition, the plan would institute a new tax on the biggest financial institutions, basing the fee on liabilities in order to discourage risky borrowing. The administration says the fee would hit the roughly 100 banks that have assets of $50 billion or more.
The president's plan would use revenues from those tax code changes to finance credits aimed at the middle class, officials said. That includes extending the earned income tax credits to families without children, which would benefit an estimated 13 million low-income workers, while also tripling the maximum tax credits for child care in low- and middle-income homes.
"This proposal is probably the most impactful way we can address the manifest unfairness in our tax system," an administration official said.
The tax hikes on capital gains would run into heavy opposition from Republicans in the GOP-controlled Congress. Other elements of the president's plan, however, have enjoyed some degree of bipartisan support. House Ways and Means Committee Chairman Dave Camp (R-Mich.) has proposed a similar tax on big banks, and many Republicans favor the idea of broadening the earned income tax credit.
According to officials, the capital gains tax reforms would impact "almost exclusively" the top 1 percent of earners, carving out the majority of middle-income families from the hikes.
In addition to the tax credits, the president's proposals will also include a plan to give more workers access to retirement accounts. Employers with at least 10 workers who don't currently offer their employees a 401(k) would have to enroll them in what's known as an automatic IRA, a plan that Obama has included in previous budgets he's proposed. Source The tax hikes could be structured a lot better. The tax on bank liabilities should encourage more use of equity (a good thing) but the cap gains hike does the opposite, and is more widespread than just financial firms. I'm not sure about the wisdom of raising tax rates on capital generally when the problem seems to be avoidance through loopholes, special deductions and international tax code arbitrage. I'd rather we deal with that than focus on rates, though the motivation is understandable. I don't know much about the step up, but from what I'm assuming it is off hand (cost basis change), sounds like good fix. Surprised carried interest isn't on the list, unless I'm just not seeing it. I file that one as a 'nice to have' but could do without it. Ending mortgage interest deduction, or limiting it would be good too. I'm OK with the tax breaks, but I'd rather see something more broad-based like an increase in the standard deduction. They seem reasonable though, at least at first glance. Not sure how affordable they are and to what extent the cuts and hikes match. Rhetoric like 'the manifest unfairness in our tax system' isn't necessary imo. We have one of the most progressive tax code in the OECD already, so it isn't really true and invites opposition. need for closing loopholes isn't really an argument against equalizing capital gains and wage income tax. first step and hardest step imo If you restructured along those lines I think it would be a net cut, not hike. cutting payroll tax is fine, but capital gains tax has to go up to around the same level as the top wage bracket for an amount over say 200k.
I was referring to the capital gains tax, not payroll taxes. Payroll taxes need to go up to keep entitlements funded.
I haven't checked the mats since tax rates went up, but prior to that equity was taxed at a higher rate than debt. Equity was taxed when the firm itself pays taxes and then again when dividends are distributed and capital gains are realized. I can show the math on that (again) but the proof is in the pudding - companies take on debt in place of equity to lower taxes frequently.
Capital gains for assets that are not taxed twice (real estate, collectibles) are a different story, though they're taxed at a higher rate already (max 28%).
Additionally, short-term gains are already taxed at personal income levels.
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There's new scrutiny this year on a federal program that's supposed to protect juveniles in the criminal justice system. Senate lawmakers want to pass a bill that would ensure young people are not locked up alongside adult offenders — and they're quietly investigating the use of federal grant money for the program.
Whistleblowers like Jill Semmerling are helping to drive the effort. Semmerling loved her job as a federal agent at the inspector general office's in the Justice Department, where she carried a firearm and a badge to work every day.
"We were there as a watchdog to ensure there was no waste, fraud or abuse," she recalls.
But when Semmerling started digging into allegations that Wisconsin had been cooking the books to get federal grant money, her own troubles began.
"It was pretty awful," she says, "and you know, you didn't know where to turn."
Here's the issue: A federal law called the Juvenile Justice Delinquency and Prevention Act allocates grant money to states. In return, states are supposed to protect young offenders and make sure they're not housed with adult criminals.
But Semmerling had a source who told her Wisconsin had been doing just that: Kids who were abused in foster care and who ran away were being put in jails next to adult criminals. What's more, the source said, the state was collecting federal grant money designed to protect those kids.
Source
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On January 20 2015 00:29 {CC}StealthBlue wrote:Show nested quote +The threat of joblessness tops the list of concerns facing American households, according to a new Al Jazeera America/Monmouth University Poll. When asked to describe the biggest concern facing their family, 16 percent of poll respondents said either job security or unemployment. The second most-cited concern was health care costs, followed by everyday bills.
Just 1 percent of all respondents cited immigration or terrorism as their primary concerns.
Although the economy has improved since the 2008 Great Recession and unemployment has declined to 5.6 percent, wages for most workers remain as stagnant as they have been for decades. The results of the Al Jazeera America/Monmouth University Poll suggest that many Americans still feel deep anxiety over their job prospects and the state of their finances.
Among people earning less than $25,000 per year, everyday bills such as rent, utilities and phone bills were by far the biggest concern. Twenty-six percent of respondents in the lower income bracket cited bills as their foremost issue.
The Al Jazeera America/Monmouth University Poll was conducted by telephone from Jan. 13 to 15, 2015 with 1,003 adults in the United States. This sample has a margin of error of + 3.1 percent. Source
This is a large part of the reason why Dems haven't been doing well politically. Healthcare reform looks to have put downward pressure on wages (hopefully only a short-medium term effect, source, source). Not supporting the energy sector was a mistake - lower prices help lower income households more (source), and energy jobs pay well too. Housing affordability remains a bigger issue in blue states as well (source).
That's not to say that Republicans have been doing everything right. Sequestration and the shutdown were ill conceived and executed. Continued opposition to min wage hikes is becoming problematic as well. I'm sure you guys can levy more criticisms on top of that. The point is that both parties have good and bad ideas and that good decisions, rather than party loyalty, is what will make a difference.
Job market improvements should help things along, but I doubt it will be enough on its own.
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Cayman Islands24199 Posts
On January 20 2015 05:40 JonnyBNoHo wrote:Show nested quote +On January 20 2015 04:44 oneofthem wrote:On January 19 2015 06:19 JonnyBNoHo wrote:On January 19 2015 06:01 oneofthem wrote:On January 18 2015 16:40 JonnyBNoHo wrote:On January 18 2015 12:16 {CC}StealthBlue wrote:During his State of the Union address on Tuesday, President Barack Obama will lay out a plan to extend tax credits to the middle class by hiking taxes on wealthier Americans and big banks, according to senior administration officials.
Under the plan, the capital gains tax would be raised from its current level of 15 percent up to 28 percent for couples with incomes over $500,000 a year. The plan would also strip a tax break, known as a "step-up," that allows heirs to avoid capital gains taxes on large inheritances.
In addition, the plan would institute a new tax on the biggest financial institutions, basing the fee on liabilities in order to discourage risky borrowing. The administration says the fee would hit the roughly 100 banks that have assets of $50 billion or more.
The president's plan would use revenues from those tax code changes to finance credits aimed at the middle class, officials said. That includes extending the earned income tax credits to families without children, which would benefit an estimated 13 million low-income workers, while also tripling the maximum tax credits for child care in low- and middle-income homes.
"This proposal is probably the most impactful way we can address the manifest unfairness in our tax system," an administration official said.
The tax hikes on capital gains would run into heavy opposition from Republicans in the GOP-controlled Congress. Other elements of the president's plan, however, have enjoyed some degree of bipartisan support. House Ways and Means Committee Chairman Dave Camp (R-Mich.) has proposed a similar tax on big banks, and many Republicans favor the idea of broadening the earned income tax credit.
According to officials, the capital gains tax reforms would impact "almost exclusively" the top 1 percent of earners, carving out the majority of middle-income families from the hikes.
In addition to the tax credits, the president's proposals will also include a plan to give more workers access to retirement accounts. Employers with at least 10 workers who don't currently offer their employees a 401(k) would have to enroll them in what's known as an automatic IRA, a plan that Obama has included in previous budgets he's proposed. Source The tax hikes could be structured a lot better. The tax on bank liabilities should encourage more use of equity (a good thing) but the cap gains hike does the opposite, and is more widespread than just financial firms. I'm not sure about the wisdom of raising tax rates on capital generally when the problem seems to be avoidance through loopholes, special deductions and international tax code arbitrage. I'd rather we deal with that than focus on rates, though the motivation is understandable. I don't know much about the step up, but from what I'm assuming it is off hand (cost basis change), sounds like good fix. Surprised carried interest isn't on the list, unless I'm just not seeing it. I file that one as a 'nice to have' but could do without it. Ending mortgage interest deduction, or limiting it would be good too. I'm OK with the tax breaks, but I'd rather see something more broad-based like an increase in the standard deduction. They seem reasonable though, at least at first glance. Not sure how affordable they are and to what extent the cuts and hikes match. Rhetoric like 'the manifest unfairness in our tax system' isn't necessary imo. We have one of the most progressive tax code in the OECD already, so it isn't really true and invites opposition. need for closing loopholes isn't really an argument against equalizing capital gains and wage income tax. first step and hardest step imo If you restructured along those lines I think it would be a net cut, not hike. cutting payroll tax is fine, but capital gains tax has to go up to around the same level as the top wage bracket for an amount over say 200k. I was referring to the capital gains tax, not payroll taxes. Payroll taxes need to go up to keep entitlements funded. I haven't checked the mats since tax rates went up, but prior to that equity was taxed at a higher rate than debt. Equity was taxed when the firm itself pays taxes and then again when dividends are distributed and capital gains are realized. I can show the math on that (again) but the proof is in the pudding - companies take on debt in place of equity to lower taxes frequently. Capital gains for assets that are not taxed twice (real estate, collectibles) are a different story, though they're taxed at a higher rate already (max 28%). Additionally, short-term gains are already taxed at personal income levels.
the corporate tax rate should be lowered. i think we've talked about this a number of times before.
dividends and real estate stuff are not very distortionary with respect to real economy decisions. they are passive income for rich people for the most part. double taxation or not the effective rate should be higher for this type of income. the corporate tax rate also affects workers etc receiving compensation at the corporation, so double taxation through the corporate entity isn't exclusively an effect on equity investors.
economic models that recommend low or 0 cap gains tax are pretty silly with the household picture of the economy. empirical studies show not much impact, at least within the 28% or whatever rate it was before. the distortion of corporate tax rate does matter though, particularly when it comes to driving money from traditional businesses with high effective corporate tax rates, into real estate and low effective rate corporations like tech etc.
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NEW YORK (AP) — Conservative distrust of Pope Francis, which has been building in the U.S. throughout his pontificate, is reaching a boiling point over his plan to urge action on climate change — and to do so through a document traditionally used for the most important papal teachings.
For months, Francis has been drafting an encyclical on the environment and global warming which he hopes to release by June or July. Encyclicals are written with the help of a small group of advisers working under strict secrecy. But in a news conference as he traveled last week to the Philippines, Francis gave his strongest signal yet of the direction he'll take.
He said global warming was "mostly" man-made. And he said he wanted his encyclical out in plenty of time to be absorbed before the next round of U.N. climate change talks in Paris in November after the last round in Lima, Peru, failed to reach an agreement.
"I don't know if it (human activity) is the only cause, but mostly, in great part, it is man who has slapped nature in the face," Francis said. "We have in a sense taken over nature."
Even before these remarks, several conservative U.S. commentators had been pre-emptively attacking the encyclical. At Investor's Business Daily, Forbes and TownHall.com, writers had accused the pope of adopting a radical environmental agenda.
"Pope Francis — and I say this as a Catholic — is a complete disaster when it comes to his public policy pronouncements," wrote Steve Moore, chief economist of The Heritage Foundation, a conservative think tank. "On the economy, and even more so on the environment, the pope has allied himself with the far left and has embraced an ideology that would make people poorer and less free."
At the website of the Catholic journal First Things, a blogger accused the pope of promoting "theologized propaganda" on conservation — a post the journal's editor later disavowed — and published guidance by prominent Catholic thinker Robert George about what should be considered authoritative in an encyclical and what could be ignored.
"For the most part, they are conservatives who have criticized other Catholics in the past for disagreeing with definitive statements in papal encyclicals." said David Cloutier, a theologian at Mount St. Mary's University in Maryland who specializes in the environment. "They're scared that the document is going to say something definitive that they can't agree with. That will put them in a very difficult situation."
While Popes John Paul II and Benedict XVI took strong stands in favor of environmental protection, Francis will be the first to address climate change in such a significant way. He will be doing so following a series of sermons, interviews and writings that have unsettled American conservatives accustomed to hearing many of their priorities — on abortion and marriage especially — echoed loudly from Rome.
Source
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On January 20 2015 11:03 oneofthem wrote:Show nested quote +On January 20 2015 05:40 JonnyBNoHo wrote:On January 20 2015 04:44 oneofthem wrote:On January 19 2015 06:19 JonnyBNoHo wrote:On January 19 2015 06:01 oneofthem wrote:On January 18 2015 16:40 JonnyBNoHo wrote:On January 18 2015 12:16 {CC}StealthBlue wrote:During his State of the Union address on Tuesday, President Barack Obama will lay out a plan to extend tax credits to the middle class by hiking taxes on wealthier Americans and big banks, according to senior administration officials.
Under the plan, the capital gains tax would be raised from its current level of 15 percent up to 28 percent for couples with incomes over $500,000 a year. The plan would also strip a tax break, known as a "step-up," that allows heirs to avoid capital gains taxes on large inheritances.
In addition, the plan would institute a new tax on the biggest financial institutions, basing the fee on liabilities in order to discourage risky borrowing. The administration says the fee would hit the roughly 100 banks that have assets of $50 billion or more.
The president's plan would use revenues from those tax code changes to finance credits aimed at the middle class, officials said. That includes extending the earned income tax credits to families without children, which would benefit an estimated 13 million low-income workers, while also tripling the maximum tax credits for child care in low- and middle-income homes.
"This proposal is probably the most impactful way we can address the manifest unfairness in our tax system," an administration official said.
The tax hikes on capital gains would run into heavy opposition from Republicans in the GOP-controlled Congress. Other elements of the president's plan, however, have enjoyed some degree of bipartisan support. House Ways and Means Committee Chairman Dave Camp (R-Mich.) has proposed a similar tax on big banks, and many Republicans favor the idea of broadening the earned income tax credit.
According to officials, the capital gains tax reforms would impact "almost exclusively" the top 1 percent of earners, carving out the majority of middle-income families from the hikes.
In addition to the tax credits, the president's proposals will also include a plan to give more workers access to retirement accounts. Employers with at least 10 workers who don't currently offer their employees a 401(k) would have to enroll them in what's known as an automatic IRA, a plan that Obama has included in previous budgets he's proposed. Source The tax hikes could be structured a lot better. The tax on bank liabilities should encourage more use of equity (a good thing) but the cap gains hike does the opposite, and is more widespread than just financial firms. I'm not sure about the wisdom of raising tax rates on capital generally when the problem seems to be avoidance through loopholes, special deductions and international tax code arbitrage. I'd rather we deal with that than focus on rates, though the motivation is understandable. I don't know much about the step up, but from what I'm assuming it is off hand (cost basis change), sounds like good fix. Surprised carried interest isn't on the list, unless I'm just not seeing it. I file that one as a 'nice to have' but could do without it. Ending mortgage interest deduction, or limiting it would be good too. I'm OK with the tax breaks, but I'd rather see something more broad-based like an increase in the standard deduction. They seem reasonable though, at least at first glance. Not sure how affordable they are and to what extent the cuts and hikes match. Rhetoric like 'the manifest unfairness in our tax system' isn't necessary imo. We have one of the most progressive tax code in the OECD already, so it isn't really true and invites opposition. need for closing loopholes isn't really an argument against equalizing capital gains and wage income tax. first step and hardest step imo If you restructured along those lines I think it would be a net cut, not hike. cutting payroll tax is fine, but capital gains tax has to go up to around the same level as the top wage bracket for an amount over say 200k. I was referring to the capital gains tax, not payroll taxes. Payroll taxes need to go up to keep entitlements funded. I haven't checked the mats since tax rates went up, but prior to that equity was taxed at a higher rate than debt. Equity was taxed when the firm itself pays taxes and then again when dividends are distributed and capital gains are realized. I can show the math on that (again) but the proof is in the pudding - companies take on debt in place of equity to lower taxes frequently. Capital gains for assets that are not taxed twice (real estate, collectibles) are a different story, though they're taxed at a higher rate already (max 28%). Additionally, short-term gains are already taxed at personal income levels. the corporate tax rate should be lowered. i think we've talked about this a number of times before. dividends and real estate stuff are not very distortionary with respect to real economy decisions. they are passive income for rich people for the most part. double taxation or not the effective rate should be higher for this type of income. the corporate tax rate also affects workers etc receiving compensation at the corporation, so double taxation through the corporate entity isn't exclusively an effect on equity investors. economic models that recommend low or 0 cap gains tax are pretty silly with the household picture of the economy. empirical studies show not much impact, at least within the 28% or whatever rate it was before. the distortion of corporate tax rate does matter though, particularly when it comes to driving money from traditional businesses with high effective corporate tax rates, into real estate and low effective rate corporations like tech etc.
Sure, you could lower the corporate rate to offset the higher capital gains rate. It doesn't really matter how you structure it, moving equity taxation towards wage rates seems to mean moving down, not up. Debt is taxed at normal income rates, equity is not, and the math says that equity is taxed at a higher rate. Seems pretty clear cut, unless you can offer some sort of evidence. Edit: Maybe this is true for low tax sectors? Than closing deductions / loopholes would be the way to go, no?
There's absolutely an impact. Firms take on more debt because it is tax-efficient. Tax exempt bonds are priced relatively higher than taxable bonds. Higher capital costs are a negative to investment.
If your only point is that a rise in the capital gains tax will not be significant enough to retard cap ex, than I have to ask why go after the cap gain rate rather than taxes on interest. The only answer to that I can think of is that raising cap gains taxes has more political support on the left, due to decades of misinformation.
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Cayman Islands24199 Posts
are you claiming cap gains is taxed at a higher rate than wage income? yes stuff like mortgage interest deduction should go, but i was mainly talking about equalizing capital gains income and labor income.
tax on cap gains does favor debt financing over equity financing, and that is a problem particularly for small/new businesses. but there are countervailing policies to fix that problem, such as reducing corporate rates, regulatory burden, better infrastructure etc. availability of funding for these businesses could be revived by improvement to real business environment as well. carried interest is considered as cap gains.
however, the main point of tax reform is not merely facilitate growth, it is also about equality and revenue collection. the capital gains rate is applied to more idle and wealthy people than not, and also is a source of tax avoidance. taxing this portion of national income is also less impactful on demand, unlike the payroll tax.
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On January 20 2015 13:19 oneofthem wrote:
are you claiming cap gains is taxed at a higher rate than wage income? yes stuff like mortgage interest deduction should go, but i was mainly talking about equalizing capital gains income and labor income.
tax on cap gains does favor debt financing over equity financing, and that is a problem particularly for small/new businesses. but there are countervailing policies to fix that problem, such as reducing corporate rates, regulatory burden, better infrastructure etc. availability of funding for these businesses could be revived by improvement to real business environment as well. carried interest is considered as cap gains.
however, the main point of tax reform is not merely facilitate growth, it is also about equality and revenue collection. the capital gains rate is applied to more idle and wealthy people than not, and also is a source of tax avoidance. taxing this portion of national income is also less impactful on demand, unlike the payroll tax.
It's not the tax rate on capital gains exclusively, it's the tax rate on equity (corp tax, div tax, cap gains tax). That differs from taxes on interest income, which is only taxed at the personal level. It is a mistake to only look at one of the taxes on equity with out also considering the others.
Yes, you could lower corporate taxes to offset, but that isn't what is being proposed.
Equality argument is bizarre. What you say about the capital gains tax you can also say about interest income. I don't see the distinction between the two that warrants the added attention.
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Cayman Islands24199 Posts
On January 20 2015 13:50 JonnyBNoHo wrote:Show nested quote +On January 20 2015 13:19 oneofthem wrote:
are you claiming cap gains is taxed at a higher rate than wage income? yes stuff like mortgage interest deduction should go, but i was mainly talking about equalizing capital gains income and labor income.
tax on cap gains does favor debt financing over equity financing, and that is a problem particularly for small/new businesses. but there are countervailing policies to fix that problem, such as reducing corporate rates, regulatory burden, better infrastructure etc. availability of funding for these businesses could be revived by improvement to real business environment as well. carried interest is considered as cap gains.
however, the main point of tax reform is not merely facilitate growth, it is also about equality and revenue collection. the capital gains rate is applied to more idle and wealthy people than not, and also is a source of tax avoidance. taxing this portion of national income is also less impactful on demand, unlike the payroll tax. It's not the tax rate on capital gains exclusively, it's the tax rate on equity (corp tax, div tax, cap gains tax). That differs from taxes on interest income, which is only taxed at the personal level. It is a mistake to only look at one of the taxes on equity with out also considering the others. Yes, you could lower corporate taxes to offset, but that isn't what is being proposed. Equality argument is bizarre. What you say about the capital gains tax you can also say about interest income. I don't see the distinction between the two that warrants the added attention.
well the discussion was about cap gains tax. if you want to talk about interest income we can talk about that, particularly real estate stuff.
equality was in reference to wage vs cap gains (and interest income).
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On January 20 2015 13:54 IgnE wrote:
Tax both.
We do.
My complaint is that one (equity) is taxed higher than the other (debt). That disparity creates an incentive for firms to finance more heavily with debt than they otherwise would, which increases the likelihood of financial distress.
On January 20 2015 14:01 oneofthem wrote:Show nested quote +On January 20 2015 13:50 JonnyBNoHo wrote:On January 20 2015 13:19 oneofthem wrote:
are you claiming cap gains is taxed at a higher rate than wage income? yes stuff like mortgage interest deduction should go, but i was mainly talking about equalizing capital gains income and labor income.
tax on cap gains does favor debt financing over equity financing, and that is a problem particularly for small/new businesses. but there are countervailing policies to fix that problem, such as reducing corporate rates, regulatory burden, better infrastructure etc. availability of funding for these businesses could be revived by improvement to real business environment as well. carried interest is considered as cap gains.
however, the main point of tax reform is not merely facilitate growth, it is also about equality and revenue collection. the capital gains rate is applied to more idle and wealthy people than not, and also is a source of tax avoidance. taxing this portion of national income is also less impactful on demand, unlike the payroll tax. It's not the tax rate on capital gains exclusively, it's the tax rate on equity (corp tax, div tax, cap gains tax). That differs from taxes on interest income, which is only taxed at the personal level. It is a mistake to only look at one of the taxes on equity with out also considering the others. Yes, you could lower corporate taxes to offset, but that isn't what is being proposed. Equality argument is bizarre. What you say about the capital gains tax you can also say about interest income. I don't see the distinction between the two that warrants the added attention. well the discussion was about cap gains tax. if you want to talk about interest income we can talk about that, particularly real estate stuff. equality was in reference to wage vs cap gains (and interest income).
Again, it should be wage vs equity, not wage vs cap gains.
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Cayman Islands24199 Posts
the bit about debt financing will always exist unless you are talking about no equity based tax. that does not seem realistic or desirable. interest on debt is negatively taxed, and it is the business community pushing for that. to say taste for risky financing is the fault of the tax regime is a bit disingenuous.
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On January 20 2015 14:16 oneofthem wrote:
the bit about debt financing will always exist unless you are talking about no equity based tax. that does not seem realistic or desirable. interest on debt is negatively taxed, and it is the business community pushing for that. to say taste for risky financing is the fault of the tax regime is a bit disingenuous.
I don't think anything you've written here is correct.
Equity taxation does not have to be zero to be at parity with taxes on interest. Taxes on interest are not negative, they are taxed at the personal income level... which is > 0%. The tax regime encourages greater debt financing - that's a fact!
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Cayman Islands24199 Posts
debt interest is a tax deduction. dubious about tax regime's effect on debt financing. did debt financing go down when the cap gains tax was lowered to 15%?
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Bot edit.
User was banned for this post.
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On January 20 2015 14:33 oneofthem wrote:
debt interest is a tax deduction. dubious about tax regime's effect on debt financing. did debt financing go down when the cap gains tax was lowered to 15%?
For the business it is deductible. For the bondholder it is taxable income. Deductions are not a negative tax, so it nets out to a positive - whatever the bondholder's tax rate is.
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