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Merged Economics, politics and the election

The Don said:
Even measures like the total size of the economy aren't good indicators when wealth and income inequality is high - and increasing.

If the economy grows by £10 and the top n% take £15 of that growth the 100-n% are splitting a smaller stake. :mad:

Whilst it can be argued that Democrats aren't doing enough to reverse the inequality, President Trump - the champion of the underclasses :rolleyes: - wants to exacerbate it.
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One problem we have with this is the word games on measurements. Each side can pick a phrase that is accurate but doesn't really say much. Want to attack someone? Find out if average wage increases or median increases are lower. Use that parameter. If income increases across the board, focus on wealth. Or chop that into percentages of the population. Top 10% increased by 30% while bottom 10% did not increase at all. If the bottom has no investments or home ownership, they have no assets to grow in a good economy. These are made up numbers but the situation probably mirrors current trends.

With that in mind what is the best way to gage inequality? Knowing where to tackle the problem from and sticking to some specific avenue of measurement would give us a better policy plan, and a better idea of when it works or doesnt.
 
theprestige said:
Nonsense. You pay capital gains tax when the potential gain is made real, at the sale of the stock. Nobody "makes" 10 percent every year in revenue from unsold stock.
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If I make an income from salary in year one. I'm taxed at the appropriate rate that year. If your stock increases in value the same amount that year but you don't sell it, you're not being taxed that year. You made that much. But you defer those taxes. Not even close to being the same. And if you die before you sell it. You don't ever pay taxes on that income.
 
TragicMonkey said:
Look, hate "the rich" all you like, but you need to understand how things work before you reform them. Taxing capital gains as regular income is infinitely more sensible than your suggestions of taxing unrealized gains and flat taxing transactions -- and would bring in lots more money than your suggestions would. That's why it's so controversial: it's a proposal that could actually work, and would be a huge bite from the wealthy while not regressively hurting the middle class as much.
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I don't hate the rich. I don't hate anyone. I just know they are constantly gaming the system. I also didn't say I wanted to tax unrealized gains. I was pointing out the advantages of wealth and stock investing.
 
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acbytesla said:
If I make an income from salary in year one. I'm taxed at the appropriate rate that year. If your stock increases in value the same amount that year but you don't sell it, you're not being taxed that year. You made that much. But you defer those taxes. Not even close to being the same. And if you die before you sell it. You don't ever pay taxes on that income.
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So would you have me pay taxes on my 401k in a good year? If it drops the next year without me realizing the gains, I just got totally screwed.
 
acbytesla said:
If I make an income from salary in year one. I'm taxed at the appropriate rate that year. If your stock increases in value the same amount that year but you don't sell it, you're not being taxed that year. You made that much.
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No, you haven't. You haven't made anything until you sell it.

But you defer those taxes.
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Until it's sold. Then you pay.

Not even close to being the same. And if you die before you sell it. You don't ever pay taxes on that income.
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Because you're dead; whoever inherits those holdings will pay taxes when they sell them.
 
Disbelief said:
So would you have me pay taxes on my 401k in a good year? If it drops the next year without me realizing the gains, I just got totally screwed.
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If they're taxing unrealized gains then logically they must refund unrealized losses.
 
Disbelief said:
So would you have me pay taxes on my 401k in a good year? If it drops the next year without me realizing the gains, I just got totally screwed.
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No, you weren't. You made income in year one and lost income in year two. I think taxes should at least be measured against the year it was earned. Not wait for the year the Republicans lower or eliminate those taxes.
 
TragicMonkey said:
No, you haven't. You haven't made anything until you sell it.

Until it's sold. Then you pay.

Because you're dead; whoever inherits those holdings will pay taxes when they sell them.
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You made my point. It's like the difference between simple interest and compounded interest.
 
acbytesla said:
No, you weren't. You made income in year one and lost income in year two. I think taxes should at least be measured against the year it was earned. Not wait for the year the Republicans lower or eliminate those taxes.
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I made nothing, because I never sold. If my 401k increases 10k and I have to pay 2500 out of pocket, I am out 2500 of real money. If the following year there is a downturn and I lose 20k, how am I compensated for that?
 
Disbelief said:
I made nothing, because I never sold. If my 401k increases 10k and I have to pay 2500 out of pocket, I am out 2500 of real money. If the following year there is a downturn and I lose 20k, how am I compensated for that?
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The point is the advantages of deferring taxes is huge.
 
acbytesla said:
The point is the advantages of deferring taxes is huge.
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Capital gains are taxed when they occur. That's not deferral, that's occuring exactly when they are possible.

The problem is that you think capital gains are occurring before they occur. I suppose you also pay taxes on lotteries you haven't won, and on houses you may some day inherit?
 
TragicMonkey said:
Capital gains are taxed when they occur. That's not deferral, that's occuring exactly when they are possible.

The problem is that you think capital gains are occurring before they occur. I suppose you also pay taxes on lotteries you haven't won, and on houses you may some day inherit?
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Every year he pays tax on the money he would have received, if he'd sold his car at its KBB value for the year.
 
theprestige said:
Every year he pays tax on the money he would have received, if he'd sold his car at its KBB value for the year.
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If you're referring to property taxes, I think that's distinct and separate from income taxes. Not everywhere has both.

My point is that income has to occur in order to be taxed as income. We aren't taxed on hypothetical income; at least with property tax there is a physical property that exists, so the taxpayor at least has something. Taxing nonexistent income leaves the taxpayor with literally less than nothing, it's a complete loss.
 
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