Taxes!

[jstoesz]

[quote=jstoesz][quote=swave]Investing should be encouraged, but gambling should not be. A variable tax rate on capital gains would have this affect. From 99% tax rate on trades made in seconds or minutes to 0% on investments that last 50 years.[/quote]

I have thought about this very hard, but this strikes me as a solution which would result in severe market imbalances. Its ripe for unintended consequences. For example, arbitrage trading is something that has problems but also has a valid place in the market.[/quote]

I intended to say I have not thought hard…

[jstoesz]

[quote=SK in CV][quote=jstoesz][quote] little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]

This statement is just asinine. Rates change behavior…incentives and disincentives work. Small changes of the tax code are just too hard to tease out of all the other factors that go into the economy

If you tax labor at 100% you will get less labor then if you tax it at 90% and even less than if you tax it at 80% etc.

The same goes passive income and investing. Incentives work.[/quote]

We’ve never had a 100% marginal rate. At that level, I suspect you’re right. Since the middle of the last century, we’ve had marginal rates as high as 91% and for almost all of the last 50 years, the highest rate on earned income was 50% or less. During that period, there has been no empirical evidence that top rate changes, by themselves, either promote or reduce the availablity of capital or labor. Both investors and workers pursue the highest after tax income, regardless of the top marginal rates.[/quote]

It is of varying degrees. you can have the opinion that it is not a linear correlation, which is probably valid but there is a strong correlation none the less. If you have a tax on capital gains, it drives people to seek income in other fashions based on returns and loss of profit due to taxes. It is simple, the higher the tax on capital gains, the less people put money into things that accrue passive gains. If you want a nation of destitute spenders, look no further than taxing passive gains highly. Your statement about no evidence is bologna. As I stated previously, it can be hard if not impossible to tease out the effects of tax changes on the economy, but that is not the same as no empirical evidence. Anyone can plainly see that discouraging investment through increasing capital gains taxes will result in less investment. It’s not rocket science.

[jstoesz]

[quote=SK in CV][quote=jstoesz][quote] little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]

This statement is just asinine. Rates change behavior…incentives and disincentives work. Small changes of the tax code are just too hard to tease out of all the other factors that go into the economy

If you tax labor at 100% you will get less labor then if you tax it at 90% and even less than if you tax it at 80% etc.

The same goes passive income and investing. Incentives work.[/quote]

We’ve never had a 100% marginal rate. At that level, I suspect you’re right. Since the middle of the last century, we’ve had marginal rates as high as 91% and for almost all of the last 50 years, the highest rate on earned income was 50% or less. During that period, there has been no empirical evidence that top rate changes, by themselves, either promote or reduce the availablity of capital or labor. Both investors and workers pursue the highest after tax income, regardless of the top marginal rates.[/quote]

It is of varying degrees. you can have the opinion that it is not a linear correlation, which is probably valid but there is a strong correlation none the less. If you have a tax on capital gains, it drives people to seek income in other fashions based on returns and loss of profit due to taxes. It is simple, the higher the tax on capital gains, the less people put money into things that accrue passive gains. If you want a nation of destitute spenders, look no further than taxing passive gains highly. Your statement about no evidence is bologna. As I stated previously, it can be hard if not impossible to tease out the effects of tax changes on the economy, but that is not the same as no empirical evidence. Anyone can plainly see that discouraging investment through increasing capital gains taxes will result in less investment. It’s not rocket science.

[jstoesz]

[quote=SK in CV][quote=jstoesz][quote] little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]

This statement is just asinine. Rates change behavior…incentives and disincentives work. Small changes of the tax code are just too hard to tease out of all the other factors that go into the economy

If you tax labor at 100% you will get less labor then if you tax it at 90% and even less than if you tax it at 80% etc.

The same goes passive income and investing. Incentives work.[/quote]

We’ve never had a 100% marginal rate. At that level, I suspect you’re right. Since the middle of the last century, we’ve had marginal rates as high as 91% and for almost all of the last 50 years, the highest rate on earned income was 50% or less. During that period, there has been no empirical evidence that top rate changes, by themselves, either promote or reduce the availablity of capital or labor. Both investors and workers pursue the highest after tax income, regardless of the top marginal rates.[/quote]

It is of varying degrees. you can have the opinion that it is not a linear correlation, which is probably valid but there is a strong correlation none the less. If you have a tax on capital gains, it drives people to seek income in other fashions based on returns and loss of profit due to taxes. It is simple, the higher the tax on capital gains, the less people put money into things that accrue passive gains. If you want a nation of destitute spenders, look no further than taxing passive gains highly. Your statement about no evidence is bologna. As I stated previously, it can be hard if not impossible to tease out the effects of tax changes on the economy, but that is not the same as no empirical evidence. Anyone can plainly see that discouraging investment through increasing capital gains taxes will result in less investment. It’s not rocket science.

[jstoesz]

[quote=SK in CV][quote=jstoesz][quote] little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]

This statement is just asinine. Rates change behavior…incentives and disincentives work. Small changes of the tax code are just too hard to tease out of all the other factors that go into the economy

If you tax labor at 100% you will get less labor then if you tax it at 90% and even less than if you tax it at 80% etc.

The same goes passive income and investing. Incentives work.[/quote]

We’ve never had a 100% marginal rate. At that level, I suspect you’re right. Since the middle of the last century, we’ve had marginal rates as high as 91% and for almost all of the last 50 years, the highest rate on earned income was 50% or less. During that period, there has been no empirical evidence that top rate changes, by themselves, either promote or reduce the availablity of capital or labor. Both investors and workers pursue the highest after tax income, regardless of the top marginal rates.[/quote]

It is of varying degrees. you can have the opinion that it is not a linear correlation, which is probably valid but there is a strong correlation none the less. If you have a tax on capital gains, it drives people to seek income in other fashions based on returns and loss of profit due to taxes. It is simple, the higher the tax on capital gains, the less people put money into things that accrue passive gains. If you want a nation of destitute spenders, look no further than taxing passive gains highly. Your statement about no evidence is bologna. As I stated previously, it can be hard if not impossible to tease out the effects of tax changes on the economy, but that is not the same as no empirical evidence. Anyone can plainly see that discouraging investment through increasing capital gains taxes will result in less investment. It’s not rocket science.

[jstoesz]

[quote=SK in CV][quote=jstoesz][quote] little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]

This statement is just asinine. Rates change behavior…incentives and disincentives work. Small changes of the tax code are just too hard to tease out of all the other factors that go into the economy

If you tax labor at 100% you will get less labor then if you tax it at 90% and even less than if you tax it at 80% etc.

The same goes passive income and investing. Incentives work.[/quote]

We’ve never had a 100% marginal rate. At that level, I suspect you’re right. Since the middle of the last century, we’ve had marginal rates as high as 91% and for almost all of the last 50 years, the highest rate on earned income was 50% or less. During that period, there has been no empirical evidence that top rate changes, by themselves, either promote or reduce the availablity of capital or labor. Both investors and workers pursue the highest after tax income, regardless of the top marginal rates.[/quote]

It is of varying degrees. you can have the opinion that it is not a linear correlation, which is probably valid but there is a strong correlation none the less. If you have a tax on capital gains, it drives people to seek income in other fashions based on returns and loss of profit due to taxes. It is simple, the higher the tax on capital gains, the less people put money into things that accrue passive gains. If you want a nation of destitute spenders, look no further than taxing passive gains highly. Your statement about no evidence is bologna. As I stated previously, it can be hard if not impossible to tease out the effects of tax changes on the economy, but that is not the same as no empirical evidence. Anyone can plainly see that discouraging investment through increasing capital gains taxes will result in less investment. It’s not rocket science.

[SK in CV]

[quote=AN][quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]
I don’t see how that can be a straw man argument? When you retire, do you have active income or passive income? If it’s passive, then it would be tax at a much higher rate. So, if you think it’s a straw man argument, then please clarify what one’s preference is if one prefer tax investment income at a much higher rate?[/quote]

Your assertion is uses binary assumption. If tax law shows preference for earned income, that preference must prefer people work until they die. It presumes that it is impossible to retire with preferential rates for earned income. Yet we had just those preferential rates from 1965 to 1981 and millions of people retired.

[SK in CV]

[quote=AN][quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]
I don’t see how that can be a straw man argument? When you retire, do you have active income or passive income? If it’s passive, then it would be tax at a much higher rate. So, if you think it’s a straw man argument, then please clarify what one’s preference is if one prefer tax investment income at a much higher rate?[/quote]

Your assertion is uses binary assumption. If tax law shows preference for earned income, that preference must prefer people work until they die. It presumes that it is impossible to retire with preferential rates for earned income. Yet we had just those preferential rates from 1965 to 1981 and millions of people retired.

[SK in CV]

[quote=AN][quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]
I don’t see how that can be a straw man argument? When you retire, do you have active income or passive income? If it’s passive, then it would be tax at a much higher rate. So, if you think it’s a straw man argument, then please clarify what one’s preference is if one prefer tax investment income at a much higher rate?[/quote]

Your assertion is uses binary assumption. If tax law shows preference for earned income, that preference must prefer people work until they die. It presumes that it is impossible to retire with preferential rates for earned income. Yet we had just those preferential rates from 1965 to 1981 and millions of people retired.

[SK in CV]

[quote=AN][quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]
I don’t see how that can be a straw man argument? When you retire, do you have active income or passive income? If it’s passive, then it would be tax at a much higher rate. So, if you think it’s a straw man argument, then please clarify what one’s preference is if one prefer tax investment income at a much higher rate?[/quote]

Your assertion is uses binary assumption. If tax law shows preference for earned income, that preference must prefer people work until they die. It presumes that it is impossible to retire with preferential rates for earned income. Yet we had just those preferential rates from 1965 to 1981 and millions of people retired.

[SK in CV]

[quote=AN][quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]
I don’t see how that can be a straw man argument? When you retire, do you have active income or passive income? If it’s passive, then it would be tax at a much higher rate. So, if you think it’s a straw man argument, then please clarify what one’s preference is if one prefer tax investment income at a much higher rate?[/quote]

Your assertion is uses binary assumption. If tax law shows preference for earned income, that preference must prefer people work until they die. It presumes that it is impossible to retire with preferential rates for earned income. Yet we had just those preferential rates from 1965 to 1981 and millions of people retired.

[SK in CV]

[quote=jstoesz]Your statement about no evidence is bologna. As I stated previously, it can be hard if not impossible to tease out the effects of tax changes on the economy, but that is not the same as no empirical evidence. Anyone can plainly see that discouraging investment through increasing capital gains taxes will result in less investment. It’s not rocket science.[/quote]

No, it’s not rocket science. You are using intuition rather than evidence. I won’t dispute that your argument has intuitive logic. But history has provided little evidence it is accurate. To the contrary, there is strong evidence that maximum tax reveues are produced with top marginal rates above 60%, with no discernable decline in employment rates or availablity of capital.

[SK in CV]

[quote=jstoesz]Your statement about no evidence is bologna. As I stated previously, it can be hard if not impossible to tease out the effects of tax changes on the economy, but that is not the same as no empirical evidence. Anyone can plainly see that discouraging investment through increasing capital gains taxes will result in less investment. It’s not rocket science.[/quote]

No, it’s not rocket science. You are using intuition rather than evidence. I won’t dispute that your argument has intuitive logic. But history has provided little evidence it is accurate. To the contrary, there is strong evidence that maximum tax reveues are produced with top marginal rates above 60%, with no discernable decline in employment rates or availablity of capital.

[SK in CV]

[quote=jstoesz]Your statement about no evidence is bologna. As I stated previously, it can be hard if not impossible to tease out the effects of tax changes on the economy, but that is not the same as no empirical evidence. Anyone can plainly see that discouraging investment through increasing capital gains taxes will result in less investment. It’s not rocket science.[/quote]

No, it’s not rocket science. You are using intuition rather than evidence. I won’t dispute that your argument has intuitive logic. But history has provided little evidence it is accurate. To the contrary, there is strong evidence that maximum tax reveues are produced with top marginal rates above 60%, with no discernable decline in employment rates or availablity of capital.

[SK in CV]

[quote=jstoesz]Your statement about no evidence is bologna. As I stated previously, it can be hard if not impossible to tease out the effects of tax changes on the economy, but that is not the same as no empirical evidence. Anyone can plainly see that discouraging investment through increasing capital gains taxes will result in less investment. It’s not rocket science.[/quote]

No, it’s not rocket science. You are using intuition rather than evidence. I won’t dispute that your argument has intuitive logic. But history has provided little evidence it is accurate. To the contrary, there is strong evidence that maximum tax reveues are produced with top marginal rates above 60%, with no discernable decline in employment rates or availablity of capital.

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