25 Nov 12
Originally posted by sasquatch672"Treasury Secretary Timothy Geithner was pressed at a White House briefing on the number of millionaires who pay taxes at a lower rate than middle-income families. He demurred, saying that people who make most of their money in wages pay taxes at a higher rate, while those who get most of their income from investments pay at lower rates."
But then again, this is from an ultra-right-wing blog.
http://usatoday30.usatoday.com/money/perfi/taxes/story/2011-09-20/buffett-tax-millionaires/50480226/1
I see no reason this is not fair. There is no risk involved in wages or salaries, other than the gravy train ending. Then you get another job, perhaps a better one.
People earning from investments may lose everything, not just the earnings but the principle as well.
25 Nov 12
2 edits
Originally posted by normbenignSo there's no risk in say being a US soldier in Afghanistan (the "gravy train" might end with a bullet in your brain, of course) but its extremely risky to uopen the envelope containing a dividend check in Palm Beach such that the latter person should pay a lower tax rate for the same amount of income?
"Treasury Secretary Timothy Geithner was pressed at a White House briefing on the number of millionaires who pay taxes at a lower rate than middle-income families. He demurred, saying that people who make most of their money in wages pay taxes at a higher rate, while those who get most of their income from investments pay at lower rates."
I see no reas ...[text shortened]... earning from investments may lose everything, not just the earnings but the principle as well.
Your belief system is truly deranged.
26 Nov 12
Originally posted by no1marauderWe are talking about economic risks, silly. Of course being a soldier in a war zone is risky. Try being a night clerk in a 7-11 in almost any inner city. Lots of other dangerous jobs, all of them voluntary.
So there's no risk in say being a US soldier in Afghanistan (the "gravy train" might end with a bullet in your brain, of course) but its extremely risky to uopen the envelope containing a dividend check in Palm Beach such that the latter person should pay a lower tax rate for the same amount of income?
Your belief system is truly deranged.
26 Nov 12
Originally posted by no1marauderSure investment risk is voluntary, and calculated. Extra taxation will inevitably make some investments "too risky", as there is always a relationship between risk and reward.
Yeah unlike buying a piece a paper.
Discouragement of investment via taxation is highly likely to be felt more by those who lose jobs due to lack of capital, than by the rich who choose not to invest, or to invest elsewhere.
26 Nov 12
By putting a lower tax rate on paper investment, the system encourages speculation and gambling and discourages work. So we get a whole lot of reckless gambling and speculation (see the financial meltdown) and not enough productive work. Even someone trapped in 19th Century economics should be able to grasp this.
26 Nov 12
Originally posted by normbenign😴😴
Sure investment risk is voluntary, and calculated. Extra taxation will inevitably make some investments "too risky", as there is always a relationship between risk and reward.
Discouragement of investment via taxation is highly likely to be felt more by those who lose jobs due to lack of capital, than by the rich who choose not to invest, or to invest elsewhere.
Most "investment" which is taxed at lower rates than work is non-productive paper trading and rent seeking of no economic value. Encouraging it by giving it a lower tax rate is economically wasteful.
26 Nov 12
Originally posted by no1marauderThis excuse for logic fails on several grounds. ".....the system encourages speculation and gambling and discourages work." Poppycock! Only people with money above their subsistence can speculate and gamble, or invest. The rest have no choice but to work. I imagine there are lots of guys at the welfare and unemployment office waiting there for their dividend checks to come.
By putting a lower tax rate on paper investment, the system encourages speculation and gambling and discourages work. So we get a whole lot of reckless gambling and speculation (see the financial meltdown) and not enough productive work. Even someone trapped in 19th Century economics should be able to grasp this.
And at some point work limits itself. Work sells your time and effort. Both are limited. Capital can multiply the numbers of productive workers, as well as increase their productivity and pay.
26 Nov 12
Originally posted by no1marauderExplain then why GM required federal money to continue operating.
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Most "investment" which is taxed at lower rates than work is non-productive paper trading and rent seeking of no economic value. Encouraging it by giving it a lower tax rate is economically wasteful.
26 Nov 12
Originally posted by no1marauderOwnership is a critical component of the ability to create and grow wealth. Owners offer investors a return; investors offer owners the ability to grow at a pace more rapidly, and generate more profits, than they would have ofherwise. This in turn allows more people to be employed. They serve each other. I don't think that anyone would argue that both union and nonunion construction workers benefited in the near term from the housing bubble. They built more houses, for more months out of a year, than they had before. They therefore earned more wages.
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Most "investment" which is taxed at lower rates than work is non-productive paper trading and rent seeking of no economic value. Encouraging it by giving it a lower tax rate is economically wasteful.
Wall Street trading is an extreme example of capitalism. In general trade serves positive purposes. Taxing investment at a lower rate promotes commerce and multiplies effort.Certainly, the application of human capital toward the endeavor of financial speculation and the creatiion of extremely complex financial instruments has had its detractors. Those instruments have also served to diversify and minimize risk. It's easy to say that those people earn a sum of money disproportionate to their contribution to society. It's also easy to say they don't deserve it. Being only vaguely familiar (my wife is a banker), I don't consider myself qualified to make the value judgment and I must necessarily defer to the Efficient Market Theory.
26 Nov 12
Originally posted by normbenignWhat percentage of people in the US who are working are at "subsistence level"?
This excuse for logic fails on several grounds. ".....the system encourages speculation and gambling and discourages work." Poppycock! Only people with money above their subsistence can speculate and gamble, or invest. The rest have no choice but to work. I imagine there are lots of guys at the welfare and unemployment office waiting there for their divi ...[text shortened]... an multiply the numbers of productive workers, as well as increase their productivity and pay.
Simple economics tells you if there are incentives that favor one thing over another, you will get more of the favored thing than of the unfavored thing. The tax system favors "investment" over work, therefore you will get more "investment" and less work than you would get without that dichotomy . It also treats productive economic investment i.e. the purchasing of plant and equipment no better than, and in many cases worse then, gambling and speculation on paper. Therefore, you get more gambling and speculation and less work and economic investment.
The only reason this is maintained is because the vast bulk of capital gains and dividends go to the wealthy who have inordinate political power in the system. It is economically wasteful and inefficient. Of course, you as a sycophant for the rich are fine with economic waste so long as it favors them.
26 Nov 12
Originally posted by sasquatch672It is bizarre in light of recent history to argue that the type of rampant speculation and paper chasing (to the tune of $64 trillion in mortgage securities and related instruments), "minimized risk".
Ownership is a critical component of the ability to create and grow wealth. Owners offer investors a return; investors offer owners the ability to grow at a pace more rapidly, and generate more profits, than they would have ofherwise. This in turn allows more people to be employed. They serve each other. I don't think that anyone would argue that b ...[text shortened]... ied to make the value judgment and I must necessarily defer to the Efficient Market Theory.
26 Nov 12
Originally posted by no1marauderIt's not that I don't have my reservations, especially with CDS mechanics. Heart of hearts, I would say that this is the sort of unrestrained capitalism that should be taxed heavily so as to be discouraged. I also say that I'm not well-informed enough to pass judgment on the value to society of those devices. I certainly recognize the harm that a speculative market of a given size can do; we all saw that.
It is bizarre in light of recent history to argue that the type of rampant speculation and paper chasing (to the tune of $64 trillion in mortgage securities and related instruments), "minimized risk".
The market determines the amount of money those people should make. The market determines what I make. The market determines what teachers, nurses, doctors make. I'm simply saying that I don't profess to have the wisdom to be able to determine the ultimate value of every good and profession to society.
I would further offer that there are two types of wealth: that which is earned by providing value to society, and that which is earned without providing value to society. Activities that generate wealth, like building and running a factory, provide jobs and therefore value to society. I think that case is pretty plainly stated and hard to dispute. Other activities, like running Bain Capital, do not generate value for society, and should therefore be taxed at a higher rate, in order to discourage that activity.
But - are we sure that Bain Capital did not generate value for society? I'll research this, and the firms trading in 'swaptions' and other derivatives. I'll ask my wife as well, and I'll post her response as well. Warning you: I think my positions are pretty moderate. I cannot say the same for hers. She is a flag-waving, red meat-eating, elbows-on-the-table, look-you-in-the-eye God-Bless-America capitalist.