Taxes!

[an]

[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]How many companies have been around for 50 years and how many have come and gone in less than 50 years? How many of those who survive actually beat the rate of inflation? For those who want to retire at 65, they would have to invest all their money they would retire with at 15. If they invest when they’re 40-50, which is usually one’s best earning year, you either have to pay HUGE taxes when you retire @65 or just pass it on to their heir (unless they live until 90-100 years old).

[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.

[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.

[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.

[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.

[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.

[an]

[quote=SK in CV]
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]
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?

[an]

[quote=SK in CV]
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]
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?

[an]

[quote=SK in CV]
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]
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?

[an]

[quote=SK in CV]
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]
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?

[an]

[quote=SK in CV]
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]
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?

[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=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=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=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…

[Author]

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