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Participant[quote=CA renter]
edit: Wow, found this:The tax rate on long-term gains was reduced in 2003 to 15%, or to 5% for individuals in the lowest two income tax brackets (See progressive tax).
http://en.wikipedia.org/wiki/Capital_gains_tax
Still, it doesn’t seem to be 0%. Where are you getting that from?[/quote]
Here yah go: http://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_StatesParticipant[quote=CA renter]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.[/quote]
So, in essence, you are saying higher cap gain tax for EVERYONE. Those who currently make < $50k/year (those who are in the 10% and 15% tax bracket) are currently paying 0% in long term cap gain and same as their ordinary income for short term cap gain. You're punishing the investor in the 10% & 15% tax bracket, yet don't touch the day traders and the "speculators". You've been railing against "speculator", yet your proposal don't touch those guys but drastically affect those who are investors (those who hold their investments for at least a year). BTW, what's your definition of steep? Also, why stop at $500k? I'd say, we should have a billionaire tax. How about 80% tax on all time of incomes for billionaires? Is that steep enough?Participant[quote=CA renter]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.[/quote]
So, in essence, you are saying higher cap gain tax for EVERYONE. Those who currently make < $50k/year (those who are in the 10% and 15% tax bracket) are currently paying 0% in long term cap gain and same as their ordinary income for short term cap gain. You're punishing the investor in the 10% & 15% tax bracket, yet don't touch the day traders and the "speculators". You've been railing against "speculator", yet your proposal don't touch those guys but drastically affect those who are investors (those who hold their investments for at least a year). BTW, what's your definition of steep? Also, why stop at $500k? I'd say, we should have a billionaire tax. How about 80% tax on all time of incomes for billionaires? Is that steep enough?Participant[quote=CA renter]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.[/quote]
So, in essence, you are saying higher cap gain tax for EVERYONE. Those who currently make < $50k/year (those who are in the 10% and 15% tax bracket) are currently paying 0% in long term cap gain and same as their ordinary income for short term cap gain. You're punishing the investor in the 10% & 15% tax bracket, yet don't touch the day traders and the "speculators". You've been railing against "speculator", yet your proposal don't touch those guys but drastically affect those who are investors (those who hold their investments for at least a year). BTW, what's your definition of steep? Also, why stop at $500k? I'd say, we should have a billionaire tax. How about 80% tax on all time of incomes for billionaires? Is that steep enough?Participant[quote=CA renter]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.[/quote]
So, in essence, you are saying higher cap gain tax for EVERYONE. Those who currently make < $50k/year (those who are in the 10% and 15% tax bracket) are currently paying 0% in long term cap gain and same as their ordinary income for short term cap gain. You're punishing the investor in the 10% & 15% tax bracket, yet don't touch the day traders and the "speculators". You've been railing against "speculator", yet your proposal don't touch those guys but drastically affect those who are investors (those who hold their investments for at least a year). BTW, what's your definition of steep? Also, why stop at $500k? I'd say, we should have a billionaire tax. How about 80% tax on all time of incomes for billionaires? Is that steep enough?Participant[quote=CA renter]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.[/quote]
So, in essence, you are saying higher cap gain tax for EVERYONE. Those who currently make < $50k/year (those who are in the 10% and 15% tax bracket) are currently paying 0% in long term cap gain and same as their ordinary income for short term cap gain. You're punishing the investor in the 10% & 15% tax bracket, yet don't touch the day traders and the "speculators". You've been railing against "speculator", yet your proposal don't touch those guys but drastically affect those who are investors (those who hold their investments for at least a year). BTW, what's your definition of steep? Also, why stop at $500k? I'd say, we should have a billionaire tax. How about 80% tax on all time of incomes for billionaires? Is that steep enough?Participant[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.Participant[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.Participant[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.Participant[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.Participant[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.Participant[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.Participant[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.Participant[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. -
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