Blogcritics: Comments on Aren't you glad most of your income comes from investments?

Comment by JR

Fri, 7 Jan 2005 09:31:34 EST

If Bill Clinton had pushed such self serving policies, it would all be pretty obvious wouldn't it? That's because we all expected him to understand the consequences of his policies. Bush can plead ignorance and he will always get away with it.

Comment by bhw

Fri, 7 Jan 2005 00:35:40 EST

would argue that if George Bush paid 25% taxes on a 50 million dollar inheritance (minus the first 1.5 million or so), that would add up to a lot more money than a 25% tax on a 1.75 million dollar house (probably not even as much as the value of a waterfront house in the Seattle area) after you take out the 1.5 million. I think what you're saying is that George would pay more in total tax dollars than the family with the house. That's true. But since that family has less money to play with, it hurts them far more. George could live quite well on the $35 million he'd have left over in your scenario. I don't disagree that Bush's priorities are mixed up. He's spending money at a breakneck pace while giving tax breaks that largely benefit more wealthy people. But I still think the inheritance tax exemption needed to be increased, which it has, and that it should continue to be increased. Let Bush leave his kids $5 or $6 million tax-free, and then tax the rest of his estate at a reasonable rate. In 2002, the highest estate tax rate was 50%. It's been decreasing and will decrease to 45% in a few years until it's phased out in 2010 [if that actually happens]. I don't think 45-50% is a reasonable rate, no matter how valuable the estate.

Comment by Big Time Patriot

Fri, 7 Jan 2005 00:01:32 EST

"Right now, the inheritance tax hurts working families more than it hurts people like George Bush." I think that the rates on which inheritance are taxed might be ready to be adjusted, inflation affects all set rates after all. I would argue that if George Bush paid 25% taxes on a 50 million dollar inheritance (minus the first 1.5 million or so), that would add up to a lot more money than a 25% tax on a 1.75 million dollar house (probably not even as much as the value of a waterfront house in the Seattle area) after you take out the 1.5 million. I have read (sorry I can't find the reference right off) that the Republicans have a had a hard time actually finding a single family that had to sell their farm due to the inheritance tax. But anecdotes sure beat statistics any day. And the fact that George Bush, Jr. is pushing at the top of his domestic agenda some tax issues that will put money in his OWN pocket, and letting other things like Head Start and college grants slide, I think that says pretty loudly just what values George has. If Bill Clinton had pushed such self serving policies, it would all be pretty obvious wouldn't it?

Comment by bhw

Thu, 6 Jan 2005 23:33:05 EST

While I think we should retain some form of an inheritance tax, I think that the current exemption should be raised even higher. Right now, only the first $1.5 million is tax exempt. Believe it or not, that's not that much money when you're talking about an entire estate that was "grown" over a lifetime: house, insurance policies, savings/investments, autos, and other typical assets. Middle class families -- not mine, mind you -- can accumulate that amount of value in their estates fairly easily without inheriting a dime, particularly if the parents die and their life insurance policies are cashed in. Why should a hard working family be taxed on money that was a) already taxed a few times and b) that was saved and invested expressly for the purpose of providing security for the family down the road and/or in case of a tragedy? Right now, the inheritance tax hurts working families more than it hurts people like George Bush.

Comment by Big Time Patriot

Thu, 6 Jan 2005 23:13:12 EST

I pay income tax on my income. Then if I buy something in Washington State I pay sales tax. So my income is being "double taxed". Why should dividend owners NOT get double taxed? Money gets taxed all around the economy, it's pretty much a question of semantics at what points the money gets double or triple taxed. The biggest thing I have trouble with is the loss of the estate tax. Which American value are we saving by allowing wealth to accumulate over generations? It just seems more like a feudal value system. After all, this is America, if someone only inherits half of the 100 Million dollars their parents owned, surely they could pick up their shattered lives and create a new fortune with their money? (This reminds me of the story of how George Bush, Sr. became a millionaire in the Texas Oil Business, his parents started him out with an 800,000 dollar investment, that helps.) Particularly this irks me because George Bush has such an obvious conflict of interest in his own situation. George is willing to bust the budget to make this inheritance tax break permanent that will pay HIMSELF a bundle when his folks die. But there is just not enough money available to fully fund home security, and college grants have to be cut. Now George Bush sure knows what HIS values are, doesn't he?

Comment by Eric Olsen

Thu, 6 Jan 2005 16:53:40 EST

I think Willie Nelson got roughed up a bit

Comment by JR

Thu, 6 Jan 2005 15:17:41 EST

Still waiting for gunpoint stories. I'm really disappointed; we've all paid taxes, right? So who's had a gun pulled on them? Do tell.

Comment by P6

Thu, 6 Jan 2005 13:10:45 EST

I am saying if you complain about tax code that benefits one group you have to acknowledge the tax breaks/benefits to another group.

The only group I've complained about is corporations, because they are not human. Other than that, I'm saying unearn income is taxed at a different rate than earned income, which privileges it in the tax code. The privilege is unearned. Go back, read what I'm saying.

Comment by Maurice

Thu, 6 Jan 2005 12:48:22 EST

"Frankly, the EIC is not a mirror image. It's a necessary component of the American economy" This is wrong. It does not help the American economy. I am not saying that helping the poor is wrong. I am saying if you complain about tax code that benefits one group you have to acknowledge the tax breaks/benefits to another group. To sum it up, Welfare should take care of poor people not the tax code.

Comment by Steve S

Thu, 6 Jan 2005 12:15:29 EST

In regards to comment 53, about the mirror image of unearned income (and the link provided): The link points out that to take advantage of the EIC is difficult and usually requires a tax accountant. I cannot imagine someone who lives below poverty affording a trip to H&R Block. While it might give a 'refund' to someone who payed no taxes, just by reading the link, it's pretty obvious that it would be on a MUCH smaller scale than the 'unearned income' is, only a handful of people would even know how to use it. for the benefit of a select group of society This is another thread that is using key phrases like 'redistribution of wealth', 'socialism', etc. What is ultimately the key point in these debates is exactly how much help do we want the government to give the poor. I mean if someone earned 10k in one year and paid NO taxes but got a refund, how much could that refund be? Worth one trip to the grocery store? And we are bitching about a redistribution of wealth? Geez. People on the conservative/libertarian side just need to come out and say it, 'we don't want to help just anybody who needs it, except only voluntarily (by private donation, no goverment). We should get to choose who we help and if that means millions will suffer and go hungry, so be it. That's the American Dream.'

Comment by Maurice

Thu, 6 Jan 2005 11:16:22 EST

"Frankly, the EIC is not a mirror image" They are not a perfect mirror image. One is a tax break for the rich (over 30K) the other is a wealth redistribution scheme for the poor (less than 30K). Both manipulate the tax code for the benefit of a select group of society. Both are wrong. Which is more wrong depends on your point of view.

Comment by P6

Thu, 6 Jan 2005 09:37:55 EST

If we allow that this is a valid bitch then we must also be upset about its mirror image which is the 'Earned Income Credit'.

Why? Frankly, the EIC is not a mirror image. It's a necessary component of the American economy...otherwise all the people (waitstaff, migrant workers, the upcoming visiting workers) that work at below surviavl rates to keep prices where you like them would starve to death.

Comment by Eric Olsen

Thu, 6 Jan 2005 09:32:34 EST

thanks Maurice, from a "conservative" perspective, the EIC could be viewed as a really hardcore form of tax reduction

Comment by Maurice

Thu, 6 Jan 2005 09:11:49 EST

First I want to say how fun this site is. Second I want to say to those that just discovered the term 'Unearned' - why don't you do your own taxes this year and learn a little about what your government thinks about you? Third I think it is important to have a balanced point of view. In this case the complaint is about the Unearned income tax rate. If we allow that this is a valid bitch then we must also be upset about its mirror image which is the 'Earned Income Credit'. The EIC is a tax break for the 'poor'. At the rish of boring everyone here is a quote: A single filer's adjusted gross income must be less than $11,490 if he or she has no children; $30,338 with one child; and $34,458 with two or more kids. Here is the website:http://www.bankrate.com/brm/itax/tips/20010130a.asp This is worse than the Unearned tax rate because it gives people money they never earned. Wealth redistribution is Socialism!

Comment by Shark

Thu, 6 Jan 2005 08:44:38 EST

P6: "..C'mon, man. They already see socialists in every shadow and around every corner. You really want to feed into that?" P6, despite the futility of your garrulous pissing in the wind, I do admire your efforts to illuminate right-wing blowhards with your 'golden shower' of words and essays. I love you, maaaaan. (ditto, BigTimePatriot!) ============ Just for the record, Shark (being anti-delusional) lives by the following rule when it comes to logic and debate: "Philosophy is the question: from which side shall we look at life, God, the idea or other phenomena. Everything one looks at is false. I do not consider the relative result more important than the choice between cake and cherries after dinner. The system of quickly looking at the other side of a thing in order to impose your opinion indirectly is called dialectics, in other words, haggling over the spirit of french fries while dancing the method around it." --Tzara ======= Oh, and did I mention: "Storm the Gated Communities & EAT THE RICH!"--?

Comment by P6

Thu, 6 Jan 2005 04:13:55 EST

You seem to be a little slow on the uptake of what Libertarians propose. It's that there would be far less taxes to be paid by anyone. We propose to eliminate the income tax, and replace it with NOTHING.

I know.

P6, you're arguing about who to screw how hard. I'm saying we shouldn't be screwing anybody.

No, I'm arguing about being fair since we must pay our bills and can't repudiate our international debt. You're saying we should do something that will leave us in no position to do anythng else for anyone, including ourselves, ever again. No serious economist takes it seriously. I don't take it seriously. It would only work is EVERYONE bought in, and given that capital-L Libertarians are a small enough fraction of the population to be written off as a statistical anomaly, that ain't gonna happen. We're sitting on the a HUGE disaster in Asia, HUGH outpourings of good will from around the world...and mother fuckers get up in there and sell children. Humans are an unstable mixture of great good and great evil. Your politics and "economics" requires everyone to be unalloyed good. It's proof capital-L Libertarians have NO understanding of human nature and the history and development of societies, no interest in participating in them, ...or their bullshitting. In no case to I see any need to hear them out anymore.

Comment by Steve S

Thu, 6 Jan 2005 03:02:47 EST

We propose to eliminate the income tax, and replace it with NOTHING. America is the most generous nation on the planet. If we scaled the gov. back so much, imagine if a tsunami hit us. Who would be there for us? While I don't care for the 78% tax rate of European nations, at the same time, I take comfort in the fact that we as a nation have made our government capable of being the one to step in, during such times of crisis. Some point in the middle. It's like insurance, we pay premiums with the hope of never having to use the money, but it's there when we need it. Should something as big as that tsunami hit, our insurance companies couldn't handle it all. Most could be wiped out themselves. I take comfort in knowing the scope of our government right now, and can only hope the rest of the country does too. P6, you're arguing about who to screw how hard. I'm saying we shouldn't be screwing anybody. one tsunami, one earthquake, one hurricane, one terrorist attack of nuclear proportions and we'd all be screwed.

Comment by Al Barger

Thu, 6 Jan 2005 00:07:06 EST

You seem to be a little slow on the uptake of what Libertarians propose. It's that there would be far less taxes to be paid by anyone. We propose to eliminate the income tax, and replace it with NOTHING. P6, you're arguing about who to screw how hard. I'm saying we shouldn't be screwing anybody.

Comment by P6

Wed, 5 Jan 2005 22:32:16 EST

That's what I call the Libertarian delusion, by the way...that if you got your way you'd wind up paying ALL the taxes.

Comment by P6

Wed, 5 Jan 2005 22:30:35 EST

But those capital gains are after taxes already paid by the coroporation whose stock I sold,

Etc. And the tax I pay on shoes is paid with money I paid taxes on already, and on up the line. If you want single taxation, then those who create the wealth must pay enough taxes to support the society...and no one else would pay any taxes at all.

Comment by P6

Wed, 5 Jan 2005 18:27:52 EST

Here comes the Libertarian delusion.

Comment by Al Barger

Wed, 5 Jan 2005 18:19:40 EST

Meanwhile, I still question the morality of presuming to take people's money at gunpoint. And make no mistakes, corporations are just a bunch of people. Of course, the truly moral thing would be to do away with income taxes and repeal the 16th Amendment.

Comment by P6

Wed, 5 Jan 2005 17:59:31 EST

Meanwhile, I still question the morality of letting something that isn't even human keep more of every dollar it earns than a hard-working (or even a stank, lazy-ass faking) person with everyday responsibilities can keep.

Comment by Dave Nalle

Wed, 5 Jan 2005 17:59:04 EST

>>Then it should be taxed at the same rate as other earned income, right?<< As I read my tax form there are two ways I make money from investments, dividends and any profit I make on the sale of stock which has increased in value. Dividends are already taxed at the same rate as other earned income. Profit from the increase in value of the stock is taxed at the Capital Gains rate which is indeed lower than my general tax rate. But those capital gains are after taxes already paid by the coroporation whose stock I sold, and in addition, if I take a loss I don't get to take full loss value on the stock beyond a limit of $3000, so I have a lot more at risk if I lose money on my investments. In addition, since I'm self-employed the stock in question was bought with money that I kept after paying the most rapacious of all taxes the self-employment tax, so I deserve any breaks I can get. That being said, I'd still be willing to have my entire income taxed at the capital gains rate. That would be just fine with me. Dave

Comment by P6

Wed, 5 Jan 2005 17:57:25 EST

Marvelous theory Aaman. Now, in practice there's a far more powerful stimulus at work. I quote a source I'm sure you trust implicitly:

Excellent citation - care to explain how pyramidal, interlocking corporations formed since the 1930s despite laws such as the above? Case in point - Enron. There are many more.

It's often said capitalism is the ideal economic system because ittakes advantage of human greed. And incorporation is the only way to become wealthy in this economy other than by accident (like gee, you lucked into the Amazon.com initial offering). You need to understand humans are not point particles moving frictionlessly in Euclidean space. Wikipedia has a nice layman's introduction to Behavioral Economics that will give you an idea why the predictions of in your extensive quotation have never quite panned out.