Taxes!

[CA renter]

[quote=bubba99]IMPORT Tax, or Tariff.

In 1789 the U.S. did not need income taxes because all was paid for with tariffs on imports.
America’s strength is consumption. Unless we are willing to compete for $1.00/hour manufacturing jobs, we must go with our strength – consumption. Add $1,000/container import duty and kill all the other taxes.
Yes, other countries will also add tariffs, but we are a net importer and need to offset Chinas currency manipulation.[/quote]

Yes!!! X a billion!

We should engage in **fair** trade, not “free” trade. We should only import things that we cannot make for ourselves, and we should only trade with other countries that have the same environmental and labor standards as we do.

[CA renter]

[quote=SK in CV][quote=AN][quote=SK in CV]
Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]
Are you sure nobody has suggested such a preference? Here, I’ll help you out:

[quote=CA renter]IMHO, we need to discourage gambling and encourage work. That’s why I would lower the rate on **earned** income, and tax investment income at a much higher rate, with steeply progressive rates.[/quote]
[/quote]

I understand the confusion. It was the other preference you suggested that was straw.

[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][/quote]

Let me clarify this a bit. I would tax passive income at around the same rate as earned income up to a certain amount (maybe up to $50K/year). After that, it graduates, and at some point, it would begin to get steeper (perhaps above $200K/yr, but this could be smoothed to avoid extremely high taxes on one-time sales, etc.). Passive income above $500K/yr would be taxed at the highest marginal rate. I’m pulling these levels out of thin air, and would want to do a more detailed analysis before determining the exact rates and income levels, but these numbers are probably pretty close to what I’d call optimal. Of course, I would allow for some smoothing, maybe over three years, so that windfall events don’t trigger the highest rate if most years only see very low returns.

[CA renter]

[quote=SK in CV][quote=AN][quote=SK in CV]
Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]
Are you sure nobody has suggested such a preference? Here, I’ll help you out:

[quote=CA renter]IMHO, we need to discourage gambling and encourage work. That’s why I would lower the rate on **earned** income, and tax investment income at a much higher rate, with steeply progressive rates.[/quote]
[/quote]

I understand the confusion. It was the other preference you suggested that was straw.

[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][/quote]

Let me clarify this a bit. I would tax passive income at around the same rate as earned income up to a certain amount (maybe up to $50K/year). After that, it graduates, and at some point, it would begin to get steeper (perhaps above $200K/yr, but this could be smoothed to avoid extremely high taxes on one-time sales, etc.). Passive income above $500K/yr would be taxed at the highest marginal rate. I’m pulling these levels out of thin air, and would want to do a more detailed analysis before determining the exact rates and income levels, but these numbers are probably pretty close to what I’d call optimal. Of course, I would allow for some smoothing, maybe over three years, so that windfall events don’t trigger the highest rate if most years only see very low returns.

[CA renter]

[quote=SK in CV][quote=AN][quote=SK in CV]
Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]
Are you sure nobody has suggested such a preference? Here, I’ll help you out:

[quote=CA renter]IMHO, we need to discourage gambling and encourage work. That’s why I would lower the rate on **earned** income, and tax investment income at a much higher rate, with steeply progressive rates.[/quote]
[/quote]

I understand the confusion. It was the other preference you suggested that was straw.

[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][/quote]

Let me clarify this a bit. I would tax passive income at around the same rate as earned income up to a certain amount (maybe up to $50K/year). After that, it graduates, and at some point, it would begin to get steeper (perhaps above $200K/yr, but this could be smoothed to avoid extremely high taxes on one-time sales, etc.). Passive income above $500K/yr would be taxed at the highest marginal rate. I’m pulling these levels out of thin air, and would want to do a more detailed analysis before determining the exact rates and income levels, but these numbers are probably pretty close to what I’d call optimal. Of course, I would allow for some smoothing, maybe over three years, so that windfall events don’t trigger the highest rate if most years only see very low returns.

[CA renter]

[quote=SK in CV][quote=AN][quote=SK in CV]
Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]
Are you sure nobody has suggested such a preference? Here, I’ll help you out:

[quote=CA renter]IMHO, we need to discourage gambling and encourage work. That’s why I would lower the rate on **earned** income, and tax investment income at a much higher rate, with steeply progressive rates.[/quote]
[/quote]

I understand the confusion. It was the other preference you suggested that was straw.

[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][/quote]

Let me clarify this a bit. I would tax passive income at around the same rate as earned income up to a certain amount (maybe up to $50K/year). After that, it graduates, and at some point, it would begin to get steeper (perhaps above $200K/yr, but this could be smoothed to avoid extremely high taxes on one-time sales, etc.). Passive income above $500K/yr would be taxed at the highest marginal rate. I’m pulling these levels out of thin air, and would want to do a more detailed analysis before determining the exact rates and income levels, but these numbers are probably pretty close to what I’d call optimal. Of course, I would allow for some smoothing, maybe over three years, so that windfall events don’t trigger the highest rate if most years only see very low returns.

[CA renter]

[quote=SK in CV][quote=AN][quote=SK in CV]
Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]
Are you sure nobody has suggested such a preference? Here, I’ll help you out:

[quote=CA renter]IMHO, we need to discourage gambling and encourage work. That’s why I would lower the rate on **earned** income, and tax investment income at a much higher rate, with steeply progressive rates.[/quote]
[/quote]

I understand the confusion. It was the other preference you suggested that was straw.

[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][/quote]

Let me clarify this a bit. I would tax passive income at around the same rate as earned income up to a certain amount (maybe up to $50K/year). After that, it graduates, and at some point, it would begin to get steeper (perhaps above $200K/yr, but this could be smoothed to avoid extremely high taxes on one-time sales, etc.). Passive income above $500K/yr would be taxed at the highest marginal rate. I’m pulling these levels out of thin air, and would want to do a more detailed analysis before determining the exact rates and income levels, but these numbers are probably pretty close to what I’d call optimal. Of course, I would allow for some smoothing, maybe over three years, so that windfall events don’t trigger the highest rate if most years only see very low returns.

[an]

[quote=SK in CV]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.[/quote]
I never said it was impossible to retire.

[an]

[quote=SK in CV]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.[/quote]
I never said it was impossible to retire.

[an]

[quote=SK in CV]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.[/quote]
I never said it was impossible to retire.

[an]

[quote=SK in CV]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.[/quote]
I never said it was impossible to retire.

[an]

[quote=SK in CV]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.[/quote]
I never said it was impossible to retire.

[an]

[quote=swave]Obviously, there would be other rates between these extremes. Perhaps 1% at 40 years, 2% at 30 years, 5% at 10 years, 10% at 5 years, 20% at 1 year, 30% at 6 months, 50% at 1 month and 70% at 1 week.[/quote]
Isn’t the current tax rate doing something similar? Currently if you hold a stock for at least a year, your cap gain tax is 15% (if your ordinary income tax rate is 25% or higher) and 0% (if your ordinary income tax rate is <25%). If you sell before 1 year, then it's being taxed at ordinary income rate. So, although currently, it doesn't punish those selling before 6 months as much as your plan. However, your plan punish those who sell between 1-5 years more than the current tax rate. This is also if you're in the 25% tax rate or higher. If you're in 10% or 15% tax bracket, your long term cap gain is already 0%. So, under your plan, those in the 10% and 15% tax bracket would be punished much more than the current tax rate.

[an]

[quote=swave]Obviously, there would be other rates between these extremes. Perhaps 1% at 40 years, 2% at 30 years, 5% at 10 years, 10% at 5 years, 20% at 1 year, 30% at 6 months, 50% at 1 month and 70% at 1 week.[/quote]
Isn’t the current tax rate doing something similar? Currently if you hold a stock for at least a year, your cap gain tax is 15% (if your ordinary income tax rate is 25% or higher) and 0% (if your ordinary income tax rate is <25%). If you sell before 1 year, then it's being taxed at ordinary income rate. So, although currently, it doesn't punish those selling before 6 months as much as your plan. However, your plan punish those who sell between 1-5 years more than the current tax rate. This is also if you're in the 25% tax rate or higher. If you're in 10% or 15% tax bracket, your long term cap gain is already 0%. So, under your plan, those in the 10% and 15% tax bracket would be punished much more than the current tax rate.

[an]

[quote=swave]Obviously, there would be other rates between these extremes. Perhaps 1% at 40 years, 2% at 30 years, 5% at 10 years, 10% at 5 years, 20% at 1 year, 30% at 6 months, 50% at 1 month and 70% at 1 week.[/quote]
Isn’t the current tax rate doing something similar? Currently if you hold a stock for at least a year, your cap gain tax is 15% (if your ordinary income tax rate is 25% or higher) and 0% (if your ordinary income tax rate is <25%). If you sell before 1 year, then it's being taxed at ordinary income rate. So, although currently, it doesn't punish those selling before 6 months as much as your plan. However, your plan punish those who sell between 1-5 years more than the current tax rate. This is also if you're in the 25% tax rate or higher. If you're in 10% or 15% tax bracket, your long term cap gain is already 0%. So, under your plan, those in the 10% and 15% tax bracket would be punished much more than the current tax rate.

[an]

[quote=swave]Obviously, there would be other rates between these extremes. Perhaps 1% at 40 years, 2% at 30 years, 5% at 10 years, 10% at 5 years, 20% at 1 year, 30% at 6 months, 50% at 1 month and 70% at 1 week.[/quote]
Isn’t the current tax rate doing something similar? Currently if you hold a stock for at least a year, your cap gain tax is 15% (if your ordinary income tax rate is 25% or higher) and 0% (if your ordinary income tax rate is <25%). If you sell before 1 year, then it's being taxed at ordinary income rate. So, although currently, it doesn't punish those selling before 6 months as much as your plan. However, your plan punish those who sell between 1-5 years more than the current tax rate. This is also if you're in the 25% tax rate or higher. If you're in 10% or 15% tax bracket, your long term cap gain is already 0%. So, under your plan, those in the 10% and 15% tax bracket would be punished much more than the current tax rate.

[Author]

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