Obama's State of the Union Address

[eeyore1954]

No. He's proposing this minimum 30% apply only to people with a total income of $1 million or more. He's not proposing a change to the capital gains tax rate at all.



Exactly! The problem is, people in certain financial jobs who earn $1 million or more are able to treat some of that income as capital gains and thereby get away with paying a much lower tax rate on their income. The idea of this proposal is to make sure that doesn't happen.

And in fact, it's a conservative approach. There are probably people who earn *only* $500,000 who do this as well (treat what should be considered to be salary or earnings as capital gains), and they'll continue to get away with it. The idea is that whatever source the income is, if you make $1 million, you can afford and should pay at least 30%.

But there are many people with large legitimate LTCG and from what I understand these are targeted. People who are using loopholes to avoid paying at the ordinary income level can be addressedseperately. There is already the AMT at 28% for other than cap gains and a few other exceptions.
I am refering to people with LTCG and total income greater than 1,000,000.
I do not see this as anything other than raising LTCGs rate 15% and AMT by a couple %.

 

[Cl1mh4224rd]

I'm actually speaking about the Warren Buffet rule. It really doesn't apply to CEOs, at least not in most industries. CEOs normally get a salary and other compensation. If they get a million or more and they're able to treat some of it as capital gains (such that they end up paying under 30% all around), then it would apply to them.

OK. I really don't know anything about that, so I'll just leave it alone. It's just that when you brought up the "job creators" argument, it reminded of it's use as an argument against higher taxes in general on the wealthy.

At any rate, the supply side argument is that they are creating jobs with their personal fortunes. That is, they either buy stuff or invest the money. (Even money in CDs, the theory says, is money that is loaned out or otherwise re-invested in ways that can stimulate the economy.)

Right. And that still doesn't make sense as an argument to me. Technically, those things make me a "job creator", too, and I make nowhere near even $100k/yr. I doubt these same people would be arguing to lessen (or not increase) my tax burden by referring to me as a "job creator".

But my response to that argument is what I said above. Basically, we don't know for sure that it will be spent in ways that stimulate the economy. (It could be invested outside the U.S. or spent on imported products, or given to the Mormon Church.) If the government doesn't collect a fair share of taxes from these people earning over a million dollars, then that money is still theirs (the millionaires, that is) to do with as they please with absolutely no conditions or oversight.

I agree.

 

[Richard Masters]

Obama's only part way through, but already I'm thinking, why on Earth are any of you skeptics rooting for the corrupt Republican clowns?

They all (democrats and republicans) have very similar policies, but Ron Paul favors less government, and although he is a bit extreme, it's a step in the right direction even if only for 4 years.

 

[theprestige]

I'd rather hear the whole speech than just the broadcast news soundbites. And I'm talking about the narrative, not the supposed promises.

The Republican 2012 Presidential candidates currently have the narrative that it's class warfare if you think the richest among us are under-taxed. It's socialism if you think society needs to build infrastructure and fund education. Obama is a food stamp President because wages in the private sector have been cut so low, full time workers qualify for food stamps. Homeowners who are having trouble should be foreclosed on so investors can buy up their houses and rent them out. The deficit is our worst economic problem but taxing the wealthiest 1% at the same rate as those who earn less is somehow going to eliminate jobs.

Obama's narrative is everyone should be paying their fair share, our infrastructure investments are seriously underfunded, investing in education is needed, it's in all our interests to help responsible homeowners who are in economic trouble rather than continuing to evict them all from their houses.


I don't buy the Republican narrative, and I do buy Obama's.

You say "narrative". I say "campaign speech." "Propaganda." "Bedtime story."

It seems like an odd thing for a skeptic to base their political preferences on a bedtime story. On propaganda. On a campaign speech.

Why should Obama's ability to tell a good bedtime story be a good reason to vote for him? That seems like a trick only a brainwashed sheeple would fall for.

And speaking of narratives, how do you know you've got the real Republican narrative, and not accidentally internalized the Democratic false consciousness about the Republican narrative?

 

[JoeTheJuggler]

People who are using loopholes to avoid paying at the ordinary income level can be addressedseperately.

How? I'm certainly open to other ideas. (I've already pointed to one drawback of the Warren Buffet rule*: it misses a lot of other people doing this who make less than $1 million). It seems to me it should be done by not letting people who work as brokers treat their fees as capital gains. (Honestly, I'm not very knowledgeable of how this done, so I have no idea how difficult it would be to tease those apart.)

*[ETA: And I partly think the million dollar cut off is a bit of playing to the crowd. That's partly why I don't understand why there could be much opposition the GOP could sell to the masses. How do you defend the idea that Warren Buffet shouldn't pay at least as high a tax rate as his secretary?]

There is already the AMT at 28% for other than cap gains and a few other exceptions.

But that doesn't address capital gain tax abuses, does it?

I am refering to people with LTCG and total income greater than 1,000,000.
I do not see this as anything other than raising LTCGs rate 15% and AMT by a couple %.

Yes, for only those people earning at least $1 million it would have the same effect as raising the capital gains rate to 30% (or whatever such that their overall tax rate is 30%). But it wouldn't do so otherwise. The proposal isn't a proposal to raise the capital gains tax rate. My understanding is that it's trying to target those who are treating earnings as capital gains and thus avoiding their fair share of taxes. People making the occasional profit on the sale of an asset should still be able to pay the capital gains tax rate.

(Frankly, I'd rather an overall high capital gains tax rate--such that it's taxed just like income--with special exceptions carved out for people making profits on the sale of assets other than what they do for a living, selling a house or cashing in some stocks or whatever. Then, there would be no incentive for brokers to treat their earnings as capital gains.)

 

[JoeTheJuggler]

Why should Obama's ability to tell a good bedtime story be a good reason to vote for him?

Assuming "a good bedtime story" is just a pejorative way of talking about his speechmaking abilities. . . .

Why shouldn't it be? The ability to communicate and persuade--good oratorical skills--has long been considered a big plus for the job of POTUS. (What was it they used to call Ronald Reagan?)

 

[Jrrarglblarg]

This.

Why on earth do people waste time listening to this or the debates?

For the same reason I read conspiracy fora. And, frankly, in much the same frame of mind.

 

[MattusMaximus]

This.

Why on earth do people waste time listening to this or the debates?

Scrut, you're so cynical... I'm shocked.

 

[tyr_13]

The CEO and the owner can be one and the same.

Seeing as that's the only nit you decided to pick from my post, I can assume you at least grudgingly agree with the rest.

 

[theprestige]

Assuming "a good bedtime story" is just a pejorative way of talking about his speechmaking abilities. . . .

My apologies. For avoidance of doubt, I intended it to be a pejorative way of talking about the SOTU address in general, consistent with my earlier characterization of it as being like the Superbowl halftime show.

Why shouldn't it be? The ability to communicate and persuade--good oratorical skills--has long been considered a big plus for the job of POTUS.

Oh, no doubt the ability to sway the non-critically-minded with appeals to emotion and various other rhetorical tricks and sophistries is a valuable contribution to the electability of a politician.

Kennedy's endorsement of the Apollo Program in the Rice Speech is a powerful and moving thing indeed. But it is not an appeal to reason. So when a person styles themselves "Skeptic" and comes to a skeptical forum proclaiming how they think Obama's ability to craft an appealing narrative is a good reason to vote for him, I'm naturally curious: What is the skeptical justification for voting based on candidate's speech-making ability?

I mean, isn't it the point of skepticism to look past the personality cult and the appeals to emotion and the confirmation bias, and find truly rational reasons to support this or that policy, this or that candidate?

I guess the tl;dr summary would be, "Show me someone who's voting for Obama because they like his narrative, and I'll show you someone who probably isn't all that skeptical about politics."

(What was it they used to call Ronald Reagan?)

("The Great Communicator." Which I'm sure is all the reason you needed to approve of his policies, am I right? Or did you form your opinion of Reagan and his policies based on something other than his ability to tell a good bedtime story? Why on earth would you do that?)

 

[trvlr2]

Isn't it in effect just raising the cap gains rate. People with ordinary income above 1,000,000 are probably in the 30%+ range already. If there is a problem with carried interest that should be addressed separately.

Unfortunately, your scenario does not seem to exist; how else a 13% effective rate on Mitt?

 

[trvlr2]

Assuming "a good bedtime story" is just a pejorative way of talking about his speechmaking abilities. . . .

Why shouldn't it be? The ability to communicate and persuade--good oratorical skills--has long been considered a big plus for the job of POTUS. (What was it they used to call Ronald Reagan?)

Ooh! OOh! "Jellybrain", wasn't it?
Mr. Kotter?

 

[eeyore1954]

Unfortunately, your scenario does not seem to exist; how else a 13% effective rate on Mitt?

It does exist Romneys income is from LTCGs not ordinary income. I know there is dispute about whether carried interest should be capital gains. That is a different subject.
It is my opinion 30% is too high for the top CG rate. I posted a table earlier that seems to suggest that high CG rates lower taxes from them.

 

[tyr_13]

My apologies. For avoidance of doubt, I intended it to be a pejorative way of talking about the SOTU address in general, consistent with my earlier characterization of it as being like the Superbowl halftime show.


Oh, no doubt the ability to sway the non-critically-minded with appeals to emotion and various other rhetorical tricks and sophistries is a valuable contribution to the electability of a politician.

Kennedy's endorsement of the Apollo Program in the Rice Speech is a powerful and moving thing indeed. But it is not an appeal to reason. So when a person styles themselves "Skeptic" and comes to a skeptical forum proclaiming how they think Obama's ability to craft an appealing narrative is a good reason to vote for him, I'm naturally curious: What is the skeptical justification for voting based on candidate's speech-making ability?

I mean, isn't it the point of skepticism to look past the personality cult and the appeals to emotion and the confirmation bias, and find truly rational reasons to support this or that policy, this or that candidate?

I guess the tl;dr summary would be, "Show me someone who's voting for Obama because they like his narrative, and I'll show you someone who probably isn't all that skeptical about politics."



("The Great Communicator." Which I'm sure is all the reason you needed to approve of his policies, am I right? Or did you form your opinion of Reagan and his policies based on something other than his ability to tell a good bedtime story? Why on earth would you do that?)

Skeptics aren't straw Vulcans unable to see the benefit of an ability they don't advocate be used as a basis for decision making. Being able to influence people who don't think critically is a benefit when attempting to persuade those people to come to conclusion that the skeptic came to through critical thought. A skeptic is perfectly able to see that not everyone is a skeptic or can be made a skeptic, especially by someone in politics.

No one is saying that Obama should be elected only because of his oratory skills or that they support his positions because his positions are good bedtime stories.

 

[thaiboxerken]

It's funny how it's always the other guy who makes too much.

If you feel that your CEO makes too much money, then find another job if it bothers you that much.

I did. It still bothers me that my last company laid people off while giving the CEO several million dollar bonus.

 

[thaiboxerken]

That's nonsense. The CEO isn't the owner of the business, he or she is just the one empowered by the owners to make operating decisions. If those decisions isolate him or her from their bad choices and let them not have to make sacrifices for bad business, bad business choices, or the like, that's normally detrimental to the company and share holds can and should object. When the problem that lets CEOs (or others) game the system is more, well, systemic, rules and regulations that address the destructive abuse are necessary. Anyone sharing the same business environment has a right to object and advocate.

You don't understand. In the Conservative world, workers simply obey and never question their bosses decisions.

 

[RandFan]

It seems like an odd thing for a skeptic to base their political preferences on a bedtime story. On propaganda. On a campaign speech.

Non sequitur. I don't base anything on a single speech. I've no plans of voting republican but I watch some of the GOP debates. I've never found ignorance to be a great tool for critical thinking. If that works for you great. But don't assume that just because a skeptic watches a speech that he or she will give unreasonable weight to that speech.

 

[RandFan]

My "argument" would be 30% (or doubling) is too high for a capital gains tax.
At a glance it appears tax revenue is higher when the rate is lower. Of course this could also have more to do with stock market movement than the rate?

Realized LTG Taxes on LTG Effective %of GDP Max Rate
1991 98,363 21,581 21.9 1.64 28.93

The tables did not appear the way I would have liked?

Thank you. I've been asking for this for some time and people just ignore me. Could you provide a source?

 

[Travis]

I dont plan on voting for the President, my taste in a candidate is one more in favor of Austrian Economics, of which this President is Not.

Yeah post apocalyptic waste lands are pretty cool and a completely dysfunctional economy is good way to get there.

 

[thaiboxerken]

Yeah post apocalyptic waste lands are pretty cool and a completely dysfunctional economy is good way to get there.

Austrian economics does seem to be a sure path to Australian science fiction. Thunderdome!!!!!