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Merged Economics, politics and the election

JoeMorgue said:
They why isn't Capital Gain just income tax?
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Because rich people would need to pay more.

TragicMonkey said:
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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Why does it matter that physical property exists for property taxes? The tax man doesn't come and hack off a slice of your lawn. It's an asset valued at a certain amount, a percentage of which must be paid each year. If its value rises you pay more. If its value falls you pay less. If you don't have other funds for the tax you may be forced to sell that asset to pay the tax on it. All of that can apply just fine to intangible assets.
 
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TragicMonkey said:
If you're referring to property taxes, I think that's distinct and separate from income taxes. Not everywhere has both.
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Shares are property. Cars are property. All property has a market value, a price offered to purchase that property. In the case of stock, acbytesla wants to tax stockholders on the current buying price offered for that stock, whether the stockholder decides to sell it or not. This is transactionally identical to taxing a car owner for the current KBBV of their car, whether they sell it or not.

If you're talking about real estate taxes or similar land ownership taxes, that's a special case for me that I would debate elsewhere, and not take as a model or standard for the kind of property taxation we're talking about here.
 
JoeMorgue said:
They why isn't Capital Gain just income tax?
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Capital gains are taxed at a lower rate than regular income in order to encourage people to invest. Short term capital gains are taxed higher than long term capital gains to encourage people to not only invest, but invest long-term. Some people have indeed proposed that capital gains be taxed at the same rate as ordinary income. This is controversial because a) it reduces some of that encouragement to invest and b) it would be a huge increase for those paying it. (I'm not saying I disagree with the proposal, I'm just saying that's why it's controversial. I see some upsides to it because it would encourage people to live reasonably off their investments instead of wallowing in pointless luxury.)

The issue that's showing up here (frequently) is people thinking the timing of the tax ought to change. And instead of paying the capital gains tax when the capital gains occur, they want to tax it before it occurs, even when it never does end up occurring. (I wonder how they plan to calculate the percentage of a difference between one known value and one unknown value! What is 28% of the difference between 420.2 and X, when nobody knows what X is?)
 
theprestige said:
Because the government for whatever reason wants to address capital investment as a separate tax matter from wages for labor.
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Exactly. The fat cats get to walk away from paying their fair share. This is how people like Trump avoid paying taxes every year.
 
theprestige said:
Shares are property. Cars are property. All property has a market value, a price offered to purchase that property. In the case of stock, acbytesla wants to tax stockholders on the current buying price offered for that stock, whether the stockholder decides to sell it or not. This is transactionally identical to taxing a car owner for the current KBBV of their car, whether they sell it or not.
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Even if there were a tax on owning shares that would be different from taxing capital gains, wouldn't it? Because you'd be taxed on the actual current selling price of the share and not the difference between your own purchase price and your own selling price of that share.

Anyway I disagree that shares and property are the same and should be taxed in the same manner. I think you'd have an uphill battle changing the law on that one.
 
TragicMonkey said:
A hybrid, obviously, taking the best elements of each theoretical economic system. And adjusting things practically as we go, not insisting we lay down principles that cannot be deviated from no matter what the actual real-world effects are.
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Well if we're going for a hybrid model (which we realistically are), I wouldn't be looking to capitalism for contributions from the for profit side of the scale. Capitalism has only one rule "the owner of capital cannot be restrained in how they use their capital", and as a result died as an economic system during the long depression of the mid 1800's.
 
acbytesla said:
Good question. And the first $44,625 isn't taxed at all. The $44,625 to $492,300 is taxed at 15%. $492,300 + is 20 percent.
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Where are you getting that? I didn't get exemption when I sold some mutual fund shares. The gains were taxed at a lower rate than my normal income but there certainly wasn't an exemption applied.
 
acbytesla said:
Not always. But that is kind of my point. Is free markets stop being free when competition declines. Business people call competitive free markets "destructive capitalism." When competition drives down profits.

I worked for a company called ADIC in the 1990s. We were a smaller but profitable player in the tape back up market. Quantum was the big player in the market. They bought our company. We were told how exciting it was. 6 months after they bought us they closed the company down. Which was always the intent. They didn't want our company. They didn't want competition. No longer a free market. I worked for another tech company where almost the same thing happened. That was a little different because while they didn't close us down, they did increase the prices we sold our products at. It was all about market manipulation.

Markets are truly only free when there is competition. And yet a frequent goal in business is to destroy competition as it has a negative impact on profits.
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Only when an outside body imposes rules on the market. People understand the meaning of the term "free market". The free doesn't relate to ease of entry into the market, nor to freedom of customers, but the freedom of the players in the market to set their internal rules (including making it virtually impossible for an outsider to break in).
 
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 don't think you know what 'income' means.
 
TragicMonkey said:
Where are you getting that? I didn't get exemption when I sold some mutual fund shares. The gains were taxed at a lower rate than my normal income but there certainly wasn't an exemption applied.
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Quick google:
https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates
In 2024, single filers making less than $47,026 in taxable income, joint filers making less than $94,051, and heads of households making $63,000 or less pay 0% on qualified realized long-term gains.
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acbytesla's figure was the 2023 limit.
 
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Beelzebuddy said:
Quick google:
https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates
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That's total income. Anybody making 44K total income isn't taxed on whatever percentage of that happens to be from capital gains. Somebody bringing in $44K from investments and nothing else doesn't pay tax on that. Somebody bringing in a million a year doesn't get the first $44k of their capital gains exempted from tax.

Spent a fun few minutes pouring over Schedule D on that one, I can tell you!
 
TragicMonkey said:
That's total income. Anybody making 44K total income isn't taxed on whatever percentage of that happens to be from capital gains. Somebody bringing in $44K from investments and nothing else doesn't pay tax on that. Somebody bringing in a million a year doesn't get the first $44k of their capital gains exempted from tax.

Spent a fun few minutes pouring over Schedule D on that one, I can tell you!
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I just googled it. And that's what it said, Damn, can't trust the damn interweb.
 
Fast Eddie B said:
This theoretical has one glaringly obvious flaw.

Care to take a stab what that might be?
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None.
It's a Model to judge the workings of the current economy against, not one anyone actually ever expects to achieve.

High Profits are a clear indication of things going Wrong, not right.
 
The Great Zaganza said:
Taxing wealth is something Societies have always done.

It's pure propaganda that this has become a taboo.
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Slavery is s thing that societies have always done. Taxing wealth is taboo because it's a bad way for states to increase revenue. It's far too easy to hid and obscure or even move wealth. Which is why they never really raise as much money as they are projected too. Then there's theres the issue of valuation, is that painting worth 50 dollars or 50000 IDK, you don't know, at least not until I sell it. And with stocks its even worse. If I own stock that I'm sitting on and today its worth $100 but next year its worth 50 on account of a crash, does the government then owe me a refund or something? Do I get taxed last year on the value of 100 and this year on the value of 50, that's fair.

https://en.wikipedia.org/wiki/Wealth_tax

There is probably a reason that only 5 countries currently have a wealth tax.
 
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