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the Fet
climber
Tu-Tok-A-Nu-La
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Oct 25, 2011 - 05:35pm PT
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If there are crooks, they should (and, believe me, they will) be prosecuted. Any prosecutor I know would give his or her eye teeth to go after a big shot -- particularly a rich and unpopular one. The fact that there haven't been prosecutions means -- to the anti-capitalists -- that the rich gamed the system. It means, to those familiar with American prosecutors, that they don't have the goods.
They won't get prosecuted if it not illegal. That's the point. Just because it's unfair doesn't make it illegal.
Some in the 1% have gamed the system by getting politicians to create conditions favorable for them to accumulate or hold wealth without contributing enough to the society that allowed them to get that wealth. It's not illegal, it's just unfair to the 99%.
Capital gains tax is a great example. Very rich people, some who don't work at all, pay less % tax on the money their money makes than % middle class people working for their money.
Then you have politicians like Cain and Perry who want to eliminate ALL capital gains tax. So a very rich heir like a Walton or Hilton pays NO tax on the money their moneys makes, yet the enjoy the defense, infrastructure, etc all our taxes pay for. While middle class people pay.
This is a big thing that concerns OWS, and should concern everyone. You have very rich people bankrolling the campaigns of people like Cain and Perry who if they get into office will give them tax breaks. The rich get richer and the poor and middle class get poorer until the whole economy is in the crapper, because consumer demand drives the economy and eventually it will be reduced. That's a big part of the current economic downturn. 99% of the people don't have money for cars, houses, etc. Trickle down / supply side economics is B.S., if everyone does well then the economy does well and everyone prospers. But we're in a period of greed where the rich are doing well and everyone else isn't and our economy sucks. It's easy to see this unless you don't want to see it.
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 25, 2011 - 05:44pm PT
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Capital gains tax is a great example. Very rich people, some who don't work at all, pay less % tax on the money their money makes than % middle class people working for their money.
Then you have politicians like Cain and Perry who want to eliminate ALL capital gains tax. So a very rich heir like a Walton or Hilton pays NO tax on the money their moneys makes, yet the enjoy the defense, infrastructure, etc all our taxes pay for. While middle class people pay.
They are not getting off as easy as you think though. Capital gains are a double tax. Warren Buffet pays little income tax because he makes most of his money in capital gains on his stock. But stock is company equity - and the price is based on profits. But profits are already taxed at the corporate level. If instead Buffet chooses to take his money as income, it would be taxed at the highest level.
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TomCochrane
Trad climber
Santa Cruz Mountains and Monterey Bay
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Oct 25, 2011 - 05:45pm PT
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Every "alternative currency" has flopped so far, unfortunately. Bitcoins are the latest example.
i am not advocating an alternative currency...not practical
there is far too much social inertia involved with the dollar; even an overinflated dollar
as with many things in our society, it is a matter of centralized monopolization vs local control
i advocate a restoration of local monetary control through personally encrypted exchanges over the internet on a bypass of the banks and brokers
this is already happening on a significantly large scale; it is just not fully within the general public's awareness i.e. paypal, ebay, craig's list, second life, etc
note that it is also possible to perform such exchanges without the aid of these popular sites
there can actually be a significant advantage to the general population in allowing the fed to keep diluting the dollar currency through bailouts and inflation
that is the public can pay off their debts to large institutions using greatly devalued dollars; while potentially maintaining a private economy of online exchange with dollars maintained at a higher agreed upon value
if the public fully realizes the potential here and gets serious about migrating their commerce towards private person-to-person exchanges on the internet; then the large institutions can just get starved down to a more appropriate size in money and power
a lot of this just has to do with communication, knowledge, and making contact with the right people who want to do business together...all on a bypass of the banks and brokers and regulators
we need to recognize that there are people who think they are only able to feel good about themselves based upon greedily collecting personal wealth and power
by my personal observation that often doesn't work out well for them
however we are not born with a requirement to flow wealth and power and admiration towards such
we do have choices in life
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Gary
climber
From the City That Dreams
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Oct 25, 2011 - 05:47pm PT
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That evil, evil Alice Walton. She presides over millions of employees who can barely afford IPhones. What is she worth, a few Billion? So let's take her money, and give it to all the Walmart employees. That will give them a few thousand each.
She might be the biggest welfare queen in the nation. Their employees make such a poor wage, that the tax payers have to subsidize their wages with food stamps, housing subsidies, health care, etc. That of course, translates into bigger profits for the Waltons.
But welfare for the rich is A-OK!
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the Fet
climber
Tu-Tok-A-Nu-La
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Oct 25, 2011 - 05:48pm PT
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What % people pay.
Rich people pay less than upper middle class.
This is my favorite. It shows that well off people do pay more taxes, BUT they also have more income. I wish it was broken down for top 0.1 and 1% as well. To me this shows things are pretty fair, but could use a few tweaks to keep income inequality to keep from getting totally out of hand and really screwing up the whole economy.
http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 25, 2011 - 05:49pm PT
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The problems and complexities you describe are real, certainly, but things have to change, and less regulation isn't going to solve the problem. The bush admin eased regulation, and look what happened.
How did they "ease regulation". The number of laws regarding the Financial industry doubles approximately every 10-15 years, and this is still true of Bush's presidency.
Regulation goes hand in hand with corruption. The only regulation that works is competition. Create a level playing field, that's it.
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the Fet
climber
Tu-Tok-A-Nu-La
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Oct 25, 2011 - 05:55pm PT
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Capital gains are a double tax.
Utter B.S. that you need some twisted logic above to support. Corporate tax on profit isn't the same as profit on some individual's investments.
Your investment makes money, your principal is not taxed again. Just the increase in value when you cash out.
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 25, 2011 - 05:56pm PT
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What % people pay.
Rich people pay less than upper middle class.
I don't see that at all. The richest 1% pay about 1% less IN PERCENTAGE TERMS than the richest 4%. So what?
So someone who makes 1 Billion in a year pays $300,000,000. where someone who makes 1 Million in a year pays 310,000. How is the Billionaire not paying his fair share? Liberals should be ecstatic for all the social programs the person funds.
The curve in the graph is deceptive though because the x-axis is not to scale. The last 4 columns should be aggregated into 1. If you do this, the tax system looks very progressive.
The second graph is more instructive, and it shows by definition that the rich pay MORE than their "fair share" of taxes.
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 25, 2011 - 06:00pm PT
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Your investment makes money, your principal is not taxed again. Just the increase in value when you cash out.
Yes, and the increase in value is decreased by corporate taxes, which cut into profits. I am not sure why this doesn't make sense to you.
Double tax.
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 25, 2011 - 06:06pm PT
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She might be the biggest welfare queen in the nation. Their employees make such a poor wage, that the tax payers have to subsidize their wages with food stamps, housing subsidies, health care, etc. That of course, translates into bigger profits for the Waltons.
But welfare for the rich is A-OK!
Actually, no, the tax payers do NOT have to subsidize their wages with food stamps, housing subsidies, health care, etc. - Democrats CHOOSE to do this, and FORCE us to pay for it. I for one don't want to do this.
Walmart sounds so terrible. I must be missing something, but why don't those people just get high paying jobs that PROVIDE health care, retirement, etc.? Oh yeah, Alice Walton is holding a Walmart gun to their heads, I forgot.
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John Moosie
climber
Beautiful California
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Oct 25, 2011 - 06:06pm PT
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If you are against every double taxes, then you should be against all sales taxes. why don't you rant about that?
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JEleazarian
Trad climber
Fresno CA
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Oct 25, 2011 - 06:08pm PT
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Tom,
I have a great deal of respect for your intellect and both your climbing and your life. I nonetheless strongly disagree with your characterization of the "unfairness" of the tax base. In what way are mutual funds tax exempt? How do they differ from any other capital investment? You can't depreciate them, and if their value increases at exactly the rate of inflation, you nonetheless get taxed on the amount of that increase of you sell your interest in them.
Capital gains get special rates precisely because they differ from other income in at least the following ways:
They come from earnings that are already taxed at least once (if wages or other capital gains) or twice (if dividends);
They may represent no real gain considering inflation, and yet are considered to generate "income" when sold; and
They tend to get sold less frequently than once a year, thus distorting their tax incidence because of increasing marginal rates.
I could think of plenty of other ways to deal with this other than a special rate, but almost all of them would result in virtually the same result, namely an adjustment for capital gains that someone on one side of the issue (and we know which side it will be) claims is unfair.
John
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the Fet
climber
Tu-Tok-A-Nu-La
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Oct 25, 2011 - 06:09pm PT
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Crack, Because it doesn't make sense.
First of all a lot more goes into stock price than profit.
But more importantly you can't just add taxes for different sources and call it a double tax. The corp pays corp tax on profits, the investor pays tax on the increase in value of their investment.
If you just start adding taxes where does it end? I bought gas and paid tax, the station pays tax, the refiner, the driller, the tanker, and all the employees working for them pay tax so is my gas tax a quintuple tax?
Is income tax from a corp a double tax too?
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 25, 2011 - 06:10pm PT
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If you are against every double taxes, then you should be against all sales taxes. why don't you rant about that?
If you remove income, capital gains, corporate taxes, then income taxes would not be a double tax, would they?
Seriously though why not just tax based on spending? FairTax subsidizes the poor by giving them tax credits, so it can still be a progressive system.
Like I say, all money is earned to be spent, eventually. Why tax money that goes to production and jobs when the person who holds the money is not getting any benefit from it? Tax them when they spend it. If they spend it we get the benefit, if they don't spend it, who cares? It makes everyone else's money more valuable.
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 25, 2011 - 06:13pm PT
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But more importantly you can't just add taxes for different sources and call it a double tax. The corp pays corp tax on profits, the investor pays tax on the increase in value of their investment.
The flaw in your logic is that the corp and the investor are the same entity. That is capitalism.
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John Moosie
climber
Beautiful California
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Oct 25, 2011 - 06:14pm PT
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If you only taxed sales tax, then you would certainly help drive savings, which would decrease sales.
But I still don't know why you rant against the double taxation of capital gains, yet don't complain about the double taxation of a sales tax.
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JEleazarian
Trad climber
Fresno CA
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Oct 25, 2011 - 06:15pm PT
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Crack Addict,
Remember that the allegation of the rich not paying their fair share largely comes from the Social Security wage cap. Those who point that out forget that Social Security payments also depend on how much you put it. Thus, while those whose incomes exceed the cap pay a decreasing percentage of their income in FICA, they also receive a decreasing percentage of their income in benefits. The "Rich Don't Pay Their Fair Share Because Warren Buffett Even Says So" crowd uses an economic and mathematical red herring because they ignore the benefits side of the equation.
John
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the Fet
climber
Tu-Tok-A-Nu-La
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Oct 25, 2011 - 06:17pm PT
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They come from earnings that are already taxed at least once (if wages or other capital gains) or twice (if dividends);
They may represent no real gain considering inflation, and yet are considered to generate "income" when sold; and
They tend to get sold less frequently than once a year, thus distorting their tax incidence because of increasing marginal rates.
The 2nd and 3rd points are valid and there should be adjusments for them.
But the first isn't true. They "come from" principal not earnings. Who knows what tax was paid on the pricipal. It could be inheritance under $5 million, it could be from cash deals, etc. And so what, you aren't paying tax on the pricipal again, only in the gain.
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John Moosie
climber
Beautiful California
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Oct 25, 2011 - 06:21pm PT
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Remember that the allegation of the rich not paying their fair share largely comes from the Social Security wage cap.
I disagree. I think it comes from the capital gains tax being low. The complaint is that corporate taxes hurt the income of those who own the corporation, ie stockholders, yet it also hurts those who work for the corporation, since they can't make as much from the company. So both sides of the equation take a penalty. Yet the side that only works for the company can end up paying a higher tax rate on their earnings then those who sell stock and make their earnings on capital gains. which was Warren Buffets point.
....
But the first isn't true. They "come from" principal not earnings. Who knows what tax was paid on the pricipal. It could be inheritance under $5 million, it could be from cash deals, etc. And so what, you aren't paying tax on the pricipal again, only in the gain.
+1
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Gary
climber
From the City That Dreams
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Oct 25, 2011 - 07:48pm PT
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