Clinton was a fratboy. He happened to be in office when there was a technological revolution; the internet. He does not deserve the credit for economic performance that occured during his presidency. Had the internet not changed the world, your point would be valid. Now don't retort with it's to Clinton's credit that his VP invented it.
u r amazingly reslient for someone who has progressed about 2 minutes beyond "I learned where all the letters are on my keyboard!"
Pete, the name of the site is Fair Share Taxes and the premise is that the rich aren't paying their fair share of the taxes. I'm just saying that they are. Part of the money that the Rich family made were in their 401k, a tax-free account. They are only 40 years old, so if they withdraw that money then they are subject to a penalty and taxes on it. The whole point of the 401k is that it provides an incentive to save for retirement. The other part of their investment income is presumably kept in a regular street account. I'm going to guess that this is where they withdrew the 92k that they spent. They had to sell assets to do so, and would be cap gains taxed on the difference between purchase and sell price. I believe the essay is dishonest here and not accounting for the cap gains that would have had to be paid on assets sold to fuel their withdrawal. The mythical 94k non-taxable gain that is listed for the Rich's must be unrealized. What if the market goes down the next year and they lose 94k? We have to give them some kind of credit for that, because otherwise how is that fair? How can you tax someone on an investment that goes up then back down? The fairest way is the system we have now, to tax it on realization of the gain. Investments don't always go up and stay there. The essay blends together all of the taxes that the two families pay. Gas tax, income tax, property tax, sales tax. Gas tax for example is pretty fair. If I have a big gas guzzling Escalade and drive it all the time, I pay a lot more gas tax than the granny who has a Prius and only drives it to church on the weekend. I take up more road space, add to traffic, wear and tear on the pavement itself, environmental impact, and so on. Of course small inefficiencies can occur, but generally I pay my fair share at the pump. I'm not trying to have property tax both ways either. The properties that both families live in are taxed, just once. Should we penalize those who can't afford to buy a house by taxing the landlord a property tax and the renter another property tax on the same place? I believe in capitalism, with all of its faults, I still think it is the best system man has yet devised. One of the side effects (I say its main strength) of capitalism is that people who have more money simply get to lead better lives. They drive nicer cars, live in fancier houses, eat better food, do more fun stuff, get better medical care.
To Someyoungguy: I too believe in capitalism. I believe everyone does best when market forces are allowed to work. I believe that our governments should spend less, but even so we will need to raise taxes. I believe that the most talented and hard working should do better financially. However, I do not believe that the wealthy need their investment returns supercharged by getting a lower tax rate on investment than everyone else in society pays on income from working. The are doing fine, they do not need the playing field tilted in their direction. That is simply unfair and the distortion in market forces it produces has led to multiple recessions. Again, now returns on investment are taxed in general at about one-fifth the tax rate of taxes on work. The ultrawealthy do even better, often paying a tax rate of less than 1% on investment returns. The rest of us and future generations (who will pay the bill we are allowing them to run up) don't need to be subsidizing them. Again, I do not propose taxing unrealized investment gain directly. Instead I propose a wealth tax of 1-2% on net worth over half a million, which amounts to a roughly 20-25% tax on typical average investment gains of 8% annually. Then no need to tax unrealized gains directly and realized capital gains taxes should be eliminated. The 20-25% is about what our construction worker pays on income from work. Next, the financial info for the Rich's does add up. I've checked it several times. Also, their finances are very similar to a friend's who pays no more taxes than they do, year in and year out. Roughly, they had a return of 10% on 1.27M = 127,000. In terms of their 1040 they had had about 32K in taxable investment income (their entire AGI since they had no work income), so the remainder 95K was nontaxable. They spent 92K which they took out of savings accounts and mostly out of mutual funds. They cashed in some shares with losses, some with gains, but most of these gains were offset by carryover "paper losses" from previous years. (When stock were down 40% in in 2001 they exchanged nearly everything into new mutual funds, booking substantial losses while staying in the market) Even so, the their 8300 in capital gains represent a a 10% average gain on all the shares they withdrew. My friend uses the same legitimate manuvers and has had the maximum 3000 LOSS on his 1040 capital gains entry for years. I was being generous by assigning the Riches a 8300 taxable gain. I include excise taxes in my proposal (fossil fuel, cigarettes, etc), so you you would still pay a premium for the damage your big car is doing and gas guzzlers would be discouraged. Since (when you mistakenly thought there was an error in the essay) you chose to say the essay was "dishonest" rather than "mistaken," this ends my participation of our back and forth.
This is absolutely bat shit insane. If you want a "Wealth Tax", move to France, the only country I'm aware of that actually enacted such a backwards policy. How do you even propose taxing illiquid assets >$500k? Do you realize the difficulty in even assessing the total net worth of every individual (including illiquid assets)? You're going to say to some farmer whose land has appreciated to a couple mil that he must now fork over an extra $20-40k/year in taxes due to his "wealth"? I also have to ask if you're even a trader, and if not, what exactly you're doing here? The idea of a Wealth Tax is so extremely left wing, anti-capitalist, anti-Constitutionalist & anti-American, I can't really see how an actual trader would ever support such nonsense. Oh and very clever calling your whacko idea "fairsharetaxes.org". Trying to blend in with fairtax.org? Your proposal is an abomination of the word "fair".
What a strange reason to leave an otherwise intellectually worthy discussion. I rather enjoyed our back and forth. Oh well, good day sir.
What kind of fucking insanity (pardon my french) is this idea of taxing unrealized gains? Unrealized gains can vanish in the blink of an eye. Just look at everyone who was long Accenture last Thursday. It's quite clear that whoever put that site together knows very little about investing or taxation. Taxing unrealized gains... jesus. Will the government compensate me for my unrealized losses then?
TO Specterx: You seem to have missed much of the thread. I do not propose a direct tax on unrealized capital gains. As you note it would be impractical since to be fair it would mean tax breaks for unrealized losses. That would cause massive unpredictable swings in tax revenue, depending largely on whether the stock market had a up or down year. Instead I propose a 1-2% wealth tax on net worths greater than about $500,000 (and eliminating capital gains and estate taxes). This would amount to a roughly 20% tax on typical year-in-year-out investment returns of 7%. Right now a wealthy investor pays 5-10 fold smaller tax rates on his returns (4%) than the typical middle class worker pays on his income (28%). The very wealthy (Warren Buffett 2006) paid a 0.13% tax rate on his investment returns - 200-fold lower than the typical worker. Wealthy investors should be able to compete economically with workers without this huge tax advantage. Further these tax advantages cause economic distortions with too much investment money chasing too few worthy investments. By supply and demand prices get bid up to unsustainable levels .. bubble... burst ...recession. I think you'll see in the coming years an equitable tax system will grow the economy so all will benefit. With fewer, shallower recessions th bump in investment returns for the wealthy will be greater than the extra taxes they pay. At the same time the poor and middle class will be better off. See more at: http://www.elitetrader.com