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(NPR)   Senator Baucus(D) and Rep. Camp(R) are asking us to go online and help them decide what should be done to simplify the tax code. This will forever be known as the Aide-de-Camp   (npr.org) divider line 81
    More: Interesting, senator, Steve Inskeep  
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419 clicks; posted to Politics » on 09 May 2013 at 9:32 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-05-09 07:58:15 AM  
Don't. Ta-dah!
 
2013-05-09 08:00:45 AM  

DamnYankees: Don't. Ta-dah!


what's wrong with simplifying the tax code so that laymen can actually do their taxes without an accountant?

I'm curious what they come up with using a "starting from scratch" concept of reforming the tax code
 
2013-05-09 08:12:24 AM  
Tax bad. Don't tax good.


/I decide
 
2013-05-09 08:13:52 AM  

somedude210: I'm curious what they come up with using a "starting from scratch" concept of reforming the tax code


Well obviously lessen the tax burden on the middle *cough 500k+* class
 
2013-05-09 08:32:43 AM  

IdBeCrazyIf: somedude210: I'm curious what they come up with using a "starting from scratch" concept of reforming the tax code

Well obviously lessen the tax burden on the middle *cough 500k+* class


I dunno, I heard the story on Morning Edition this morning and they seem to be very much against the income tax exemptions, as well as some other things that benefit the rich
 
2013-05-09 08:36:30 AM  

somedude210: I dunno, I heard the story on Morning Edition this morning and they seem to be very much against the income tax exemptions, as well as some other things that benefit the rich


Like AMT though eventually they'll hit lower classes because we can't agree on anything and no change will come on it.
 
2013-05-09 08:48:02 AM  

somedude210: what's wrong with simplifying the tax code so that laymen can actually do their taxes without an accountant?


Almost every layman can do their taxes without an accountant. It's not hard, just use turbotax. The massive complications in the tax code have very little to do with lay people - they are mostly related to corporate taxes and other rich-people stuff
 
2013-05-09 09:03:06 AM  

DamnYankees: somedude210: what's wrong with simplifying the tax code so that laymen can actually do their taxes without an accountant?

Almost every layman can do their taxes without an accountant. It's not hard, just use turbotax. The massive complications in the tax code have very little to do with lay people - they are mostly related to corporate taxes and other rich-people stuff


well yes, but in theory, you shouldn't need turbotax (a digital accountant) to do your taxes. And from what they're saying, this will go after corporate tax havens and tax breaks, as well as stop most of the rich-people stuff

The House will probably biatch and moan about it, but it sounds like they may have a good bill on their hands, and they want to get it done before the 2014 election
 
2013-05-09 09:25:22 AM  

somedude210: well yes, but in theory, you shouldn't need turbotax (a digital accountant) to do your taxes.


Why not? What theory is this?
 
2013-05-09 09:35:57 AM  
The problem is the words "simplify  the tax code" means "screw the poor and middle class".
 
2013-05-09 09:36:11 AM  
Here's an idea. Income tax should tax all income equally. Never gonna happen.
 
2013-05-09 09:37:53 AM  

jmsvrsn: Here's an idea. Income tax should tax all income equally. Never gonna happen.


Yes, because what we absolutely need in this country is for the rich to become even richer. That's the key to it all.
 
2013-05-09 09:38:11 AM  

jmsvrsn: Here's an idea. Income tax should tax all income equally. Never gonna happen.


Now now, we know that some income is more incomey than others. Because it's good, moral rich-guy income.
 
2013-05-09 09:41:18 AM  

somedude210: what's wrong with simplifying the tax code so that laymen can actually do their taxes without an accountant?


They can. 1040 EZ.
 
2013-05-09 09:43:49 AM  

jmsvrsn: Here's an idea. Income tax should tax all income equally. Never gonna happen.


Don't drink the flat-tax kool-aid.
 
2013-05-09 09:44:39 AM  

somedude210: DamnYankees: Don't. Ta-dah!

what's wrong with simplifying the tax code so that laymen can actually do their taxes without an accountant?

I'm curious what they come up with using a "starting from scratch" concept of reforming the tax code


Many people can, in fact, file their taxes without an acountant.  Are there potential simplifications of the tax code?  Yes.  Some good.  Some bad.  There is a 30+ year history of the GOP calling for "simplification of the tax code" that is coded language for "eliminate capital gains tax, and roll back the top tax bracket to 15%."  They slashed the tax rates under Reagan and we had ballooning deficits, something that they laughed off then as unimportant.  (Both parties sing different tunes about this, based on who is in the White House at the moment.)

You can simplify a problem like fire hazards in your home by knocking your home down and sealing the foundation with concrete.  Done.  No fires are possible.

The fact that there is a conservative D attached to this proposal is not enough to reassure me that the Republican "Say One Thing, Mean Another" Party is not again pushing slashed tax rates for the wealthy and damn the consequences.  They don't care about making taxes easier to file for ordinary Americans.  If they slashed the nominal tax rates and hacked out "complications" like the mortgage interest deduction (which they have pushed for recently), they would immediately then start legislating "fair and balanced" adjustments to ensure that our "job creators" can get the "tax breaks" they "need" to "keep America's economy strong."

This is a stunt.
 
2013-05-09 09:46:11 AM  

jmsvrsn: Here's an idea. Income tax should tax all income equally. Never gonna happen.


No, income tax should tax marginal utility equally. Increase both the number of brackets and the tax rates at the high end.

And in order to give incentives for constructive behavior - tie any lower capital gains tax rates directly to investments that create living-wage US jobs*. Otherwise, it's ordinary income taxed at your ordinary tax bracket.

And make sure that corporate expenditures linked to a person are counted as wages, no matter what they're for. Elaborate party? Income. Corporate jet? Income. Golf club membership? Income. Stock options? Income.

/*You have to be able to point to an increase on the number of US persons working and earning a living wage because of your investment.
 
2013-05-09 09:46:31 AM  

DamnYankees: jmsvrsn: Here's an idea. Income tax should tax all income equally. Never gonna happen.

Yes, because what we absolutely need in this country is for the rich to become even richer. That's the key to it all.


And for the poor to be taxed beyond their sustenance level.

"Oh, but we'll exempt income up to sustenance level."

Really? So you accept in principle the need for a graduated income tax?
 
2013-05-09 09:47:47 AM  

demaL-demaL-yeH: No, income tax should tax marginal utility equally. Increase both the number of brackets and the tax rates at the high end.


I honestly don't even know why we have tax brackets anymore. Taxes should be calculated according to a formula in which the rate bends upwards for every dollar more you earn. Make it a continuous function where you just plug in your number and it spits out the tax owed.
 
2013-05-09 09:48:42 AM  

somedude210: well yes, but in theory, you shouldn't need turbotax (a digital accountant) to do your taxes.


And, in theory, you shouldn't need a lawyer to navigate our justice system.

But you do.
 
2013-05-09 09:51:48 AM  

DamnYankees: demaL-demaL-yeH: No, income tax should tax marginal utility equally. Increase both the number of brackets and the tax rates at the high end.

I honestly don't even know why we have tax brackets anymore. Taxes should be calculated according to a formula in which the rate bends upwards for every dollar more you earn. Make it a continuous function where you just plug in your number and it spits out the tax owed.


Pffft. Like an accountant can't cheat at calculus, too.
 
2013-05-09 09:52:55 AM  

demaL-demaL-yeH: DamnYankees: demaL-demaL-yeH: No, income tax should tax marginal utility equally. Increase both the number of brackets and the tax rates at the high end.

I honestly don't even know why we have tax brackets anymore. Taxes should be calculated according to a formula in which the rate bends upwards for every dollar more you earn. Make it a continuous function where you just plug in your number and it spits out the tax owed.

Pffft. Like an accountant can't cheat at calculus, too.


As I'm sure you know, the cheating has nothing to do with the tax rates. All cheating and complications come from determining what your tax base is to begin with, not applying the rate to it.
 
2013-05-09 09:55:01 AM  

jmsvrsn: Here's an idea. Income tax should tax all income equally. Never gonna happen.


No, that's still not fair.  Why should the billionaire pay more dollars than anyone else?  Here is what you do.  Take last year's budget and divide it by the number of people in the country.  So if it's $3 trillion, and there are 300 million people, that's $10,000 for every person.

You're a single billionaire with no dependents?  Your tax bill is $10,000.

You're a factory worker with a wife and four kids?  Your tax bill is $60,000.

Everybody pays the same.
 
2013-05-09 09:57:09 AM  
For individuals (at least).... the IRS has already has all the info from employers/financial institutions. They should just send an a bill. Right now I would be lost without Tax Cut (now HR at Home) and the ability to import information. Access it on line with the ability to make changes... say for charitable contributions, filing a dispute, etc.

Given the amount of money tied up in Tax preparation though, the chances of this happening are pretty slim.
 
2013-05-09 09:58:29 AM  
taxreform.gov

Go there, tell them.

/and let them know they are going to need lots of luck to see any real changes.
 
2013-05-09 09:59:42 AM  

Kibbler: jmsvrsn: Here's an idea. Income tax should tax all income equally. Never gonna happen.

No, that's still not fair.  Why should the billionaire pay more dollars than anyone else?  Here is what you do.  Take last year's budget and divide it by the number of people in the country.  So if it's $3 trillion, and there are 300 million people, that's $10,000 for every person.

You're a single billionaire with no dependents?  Your tax bill is $10,000.

You're a factory worker with a wife and four kids?  Your tax bill is $60,000.

Everybody pays the same.


I love trolls who ...
 
2013-05-09 09:59:52 AM  
But I don't like their ideas.  They plan on doubling down on the policies that are causing systemic problems.  Get back to me when someone proposes a return to progressive tax rates.  This lower, flatten and broaden shiat is destroying the middle class.
 
2013-05-09 10:01:36 AM  

DrKillPatient: For individuals (at least).... the IRS has already has all the info from employers/financial institutions. They should just send an a bill. Right now I would be lost without Tax Cut (now HR at Home) and the ability to import information. Access it on line with the ability to make changes... say for charitable contributions, filing a dispute, etc.

Given the amount of money tied up in Tax preparation though, the chances of this happening are pretty slim.


"Well, for one thing, it doesn't help that [return-free tax filing] been opposed for years by the company behind the most popular consumer tax software 2014 Intuit, maker of TurboTax. Conservative tax activist Grover Norquist and an influential computer industry group also have fought return-free filing."
 
2013-05-09 10:03:25 AM  

DrKillPatient: For individuals (at least).... the IRS has already has all the info from employers/financial institutions. They should just send an a bill. Right now I would be lost without Tax Cut (now HR at Home) and the ability to import information. Access it on line with the ability to make changes... say for charitable contributions, filing a dispute, etc.

Given the amount of money tied up in Tax preparation though, the chances of this happening are pretty slim.


The IRS can and wants to do this. The actual problem here is the tax preparers like you say, but maybe more importantly Grover Norquist and his allies, who oppose any attempt to simplify filing your taxes because its in their interest to make paying taxes as horrible as possible.

http://www.slate.com/articles/business/moneybox/2013/04/automatic_ta x_ filing_readyreturn_systems_work_fine_but_intuit_and_grover.html
 
2013-05-09 10:09:42 AM  
Cut the cap gains tax in half.  Offset that with a 0.01% tax on purchases made over an exchange.  Last Check of the NYSE says that 30,786,850,000,000 shares were traded just over the NYSE in Jauary of this year. Average share price of the NYSE is about 53 bucks...Could replace the entire federal budget with just that item...Heck, instead of 0.01%, make it half that...

"Guessed at" effects:
- HFT becomes a little less profitable...volume of trading slows considerably
- Fundamental analysis of equities becomes more 'en vogue', people get back to investing in companies, and not in trend lines.
- Revenues from cap gains are less dependent on the performance of the stock market, reducing wall street's influence on the political system.
- Big banks yell and whine and scream horribly.  Raise a lot of fees to compensate for 'loss of revenue'.
- Even more people ditch their banks because of the fees, and stick their money into local & regional banks.
- Actual investors an business people end up better off, due to the lower cap gains tax.
- Companies decide that due to the resurgence of fundamental investing, people care more about the condition of their business, and less the up-to-the-second price of their stock.

Looking for a downside here........
 
2013-05-09 10:12:13 AM  

somedude210: DamnYankees: Don't. Ta-dah!

what's wrong with simplifying the tax code so that laymen can actually do their taxes without an accountant?

I'm curious what they come up with using a "starting from scratch" concept of reforming the tax code



In theory? Nothing. In reality though, it will be yet another gimme to the wealthy robber barons who run our government and control the republican party like a puppeteer. More of the tax burden will surely be shifted to the lower classes again, and more wealth will be transferred to the already wealthy.

There's a huge difference between what politicians from our current political caste SAY they are doing and what they actually end up doing once the rubber hits the road.
 
2013-05-09 10:14:06 AM  

somedude210: hat's wrong with simplifying the tax code so that laymen can actually do their taxes without an accountant?


uhhh I got some bad news for you bro
 
2013-05-09 10:16:29 AM  

DrKillPatient: For individuals (at least).... the IRS has already has all the info from employers/financial institutions. They should just send an a bill. Right now I would be lost without Tax Cut (now HR at Home) and the ability to import information. Access it on line with the ability to make changes... say for charitable contributions, filing a dispute, etc.

Given the amount of money tied up in Tax preparation though, the chances of this happening are pretty slim.


And this. There are a number of developed countries which already do this. There's no reason why we could not do that here. The IRS has all of your info already, so if you have deductions or corrections there's a form to fill out for those. For everyone else, you either just get your credit or get your bill.

But Grover Norquist and Intuit, who owns TurboTax, have blocked measures proposed to do exactly that.
 
2013-05-09 10:22:16 AM  
Dave Camp is Dow Chemical's puppet in Congress, and an utter failure as chair of Ways and Means.
 
2013-05-09 10:22:56 AM  
In my mind, the ideal goal is that both the individual and the business returns can be hosted on the IRS website, only consist of about 3-4 screens each, and can be easily understood by everyone from 15-95 years of age.  I didn't want to directly attack the accounting/preparation industry until this year, when H&R Block started running those utter BS ads about how scary the tax code and HCR laws are, and how badly you will screw things up if you dare to file your own forms. Overhearing about my otherwise-intelligent, young, single, non-homeowning Airmen taking their sole W-2 to professionals was my "red line."
My half-baked ideas for individual taxes (not for businesses):

1. Reduce to just a few tax brackets for individuals. Something like $0-$100k at 10%, $100k-$1m at 17.5%, $1m+ at 25% should work fine. This applies to all sources of income (inheritance, investments, etc) - not just wages and tips.
2. $2500 credit per dependent. Across the board. Period.  Combined with #1, this ensures that poverty-level families will always receive refunds instead of paying in.
3. Any and all expenses related to public education (pre-K through doctorate) are deductible. Any and all expenses related to private education are not.
4. Any and all co-pays for health care are deductible. Insurance premiums are not (at least at the federal level). Expenses incurred by the uninsured are not.
5. Charitable contributions are deductible; but we need a major redefinition of "charitable organization." Something like a cap of 25% for salary and overhead, with a minimum of 75% of expenditures directly supporting the state-filed purpose of said charity. That will probably remove most of the mega-churches, but not hurt things like Angel Food Ministries.

I've heard arguments both ways about the mortgage interest deduction, so I'm going to reserve judgment on that for now. Home ownership is great for the local tax bases (and especially schools), but it also motivates an awful lot of individual debt.

Less-than-half-baked ideas about businesses:
1. Compensation is deductible, including contributions to employee healthcare and retirement plans.
2. 50% of construction/upkeep of buildings is deductible, provided said buildings are used for business 51% of the time (nobody should have their house subsidized for running a part-time internet shop on the side, but something like remodeling a home into a licensed full-time at-home day care could be on the table.
3. 50% of equipment and vehicle purchases are deductible, provided said equipment/vehicles are used for business 75% of the time and are not purchased for resale.
4. Total compensation value for the highest earner must not exceed 250x the total compensation value of the lowest earner.
 
2013-05-09 10:27:36 AM  
Why do we even need taxes?  Why couldn't the federal reserve just give the federal government money as a component of managing the money supply?  They make billions appear and disappear all the time as do fractional reserves.   So the fed injects 4 trillion into the economy every year by funding the government by fiat.  is that going to matter?
 
2013-05-09 10:30:45 AM  

mongbiohazard: But Grover Norquist and Intuit, who owns TurboTax, have blocked measures proposed to do exactly that.


Can you imagine what would happen to the Republcian party if taxes weren't a pain in the ass anymore?  I don't agree with the GOP's tax policies, but it's really the only legitimate issue they have going these days, and every April 15th the whole country gets reminded they have to pay them, so its a perennial favorite the GOP can rely on to keep their message relevant. .
 
2013-05-09 10:32:54 AM  
To date, EVERY time a Republican proposes "simplifying the tax code" it's just a scheme to transfer more of the tax burden from the rich to the middle class.
 
2013-05-09 10:37:54 AM  
Treat all capital gains as income.
Treat all carried interest as income.
Remove the FICA cap.
 
2013-05-09 10:37:57 AM  

somedude210: DamnYankees: Don't. Ta-dah!

what's wrong with simplifying the tax code so that laymen can actually do their taxes without an accountant?

I'm curious what they come up with using a "starting from scratch" concept of reforming the tax code


Any layman that is not a complete dumb ass can do his taxes without an accountant.   Once you get past the "Math ... dduuuuuurrr..." reaction of your average idiot, the 1040 and schedule A is a really simple bit of paperwork.   Every line has a detailed section in the instruction book.
 
2013-05-09 10:39:11 AM  

dragonfire77: Cut the cap gains tax in half.  Offset that with a 0.01% tax on purchases made over an exchange.  Last Check of the NYSE says that 30,786,850,000,000 shares were traded just over the NYSE in Jauary of this year. Average share price of the NYSE is about 53 bucks...Could replace the entire federal budget with just that item...Heck, instead of 0.01%, make it half that...

"Guessed at" effects:
- HFT becomes a little less profitable...volume of trading slows considerably
- Fundamental analysis of equities becomes more 'en vogue', people get back to investing in companies, and not in trend lines.
- Revenues from cap gains are less dependent on the performance of the stock market, reducing wall street's influence on the political system.
- Big banks yell and whine and scream horribly.  Raise a lot of fees to compensate for 'loss of revenue'.
- Even more people ditch their banks because of the fees, and stick their money into local & regional banks.
- Actual investors an business people end up better off, due to the lower cap gains tax.
- Companies decide that due to the resurgence of fundamental investing, people care more about the condition of their business, and less the up-to-the-second price of their stock.

Looking for a downside here........


Discussion on those ideas (still a bit underinformed as to how that would work on the higher levels):
1. Most non-wealthy individuals use funds instead of direct stock purchasing. Will they also pay those taxes? Or would all those taxes be paid by the fund managers?
2. Does this do enough to stop incentivizing those types of investments for the wealthy? My understanding is that most of the nation's money is currently tied up moving from one financial instrument to another instead of going directly back into the economy. Wages, buildings, supplies, training, etc. translate directly into consumption, education, and construction. CEOs buying and selling stock does absolutely nothing for the economy at large.

This exchange tax will almost certainly offer more stimulus through domestic government spending, which is a good thing. But the economy would grow at 1990s rates if the spending was coming directly from the lower and middle classes.
 
2013-05-09 10:42:39 AM  

DamnYankees: demaL-demaL-yeH: DamnYankees: demaL-demaL-yeH: No, income tax should tax marginal utility equally. Increase both the number of brackets and the tax rates at the high end.

I honestly don't even know why we have tax brackets anymore. Taxes should be calculated according to a formula in which the rate bends upwards for every dollar more you earn. Make it a continuous function where you just plug in your number and it spits out the tax owed.

Pffft. Like an accountant can't cheat at calculus, too.

As I'm sure you know, the cheating has nothing to do with the tax rates. All cheating and complications come from determining what your tax base is to begin with, not applying the rate to it.


Out of the park! ?Care to guess which other vested interests are against true simplification of the tax code? "Charities" (sorry, "not-for-profits"), lawyers, and accountants are even more culpable than filthy rich greedy bastards.
 
2013-05-09 10:47:39 AM  

Monkeyhouse Zendo: Treat all capital gains as income.
Treat all carried interest as income.
Remove the FICA cap.


Agree on all three.

It's particularly obnoxious that I'm taxed at a higher rate for money earned through labor than I am for money earned from investments.
 
2013-05-09 10:49:16 AM  

dragonfire77: Cut the cap gains tax in half.  Offset that with a 0.01% tax on purchases made over an exchange.  Last Check of the NYSE says that 30,786,850,000,000 shares were traded just over the NYSE in Jauary of this year. Average share price of the NYSE is about 53 bucks...Could replace the entire federal budget with just that item...Heck, instead of 0.01%, make it half that...

"Guessed at" effects:
- HFT becomes a little less profitable...volume of trading slows considerably
- Fundamental analysis of equities becomes more 'en vogue', people get back to investing in companies, and not in trend lines.
- Revenues from cap gains are less dependent on the performance of the stock market, reducing wall street's influence on the political system.
- Big banks yell and whine and scream horribly.  Raise a lot of fees to compensate for 'loss of revenue'.
- Even more people ditch their banks because of the fees, and stick their money into local & regional banks.
- Actual investors an business people end up better off, due to the lower cap gains tax.
- Companies decide that due to the resurgence of fundamental investing, people care more about the condition of their business, and less the up-to-the-second price of their stock.

Looking for a downside here........


You mean other than the obvious downsides of continuing to distort the financial system in favor of market gambling, keeping real investment - you know, actually buying stuff to build stuff that people buy - unincentivized, and allowing corporations to deduct expenses related to exporting US jobs?
 
2013-05-09 10:51:31 AM  

clkeagle: In my mind, the ideal goal is that both the individual and the business returns can be hosted on the IRS website, only consist of about 3-4 screens each, and can be easily understood by everyone from 15-95 years of age.  I didn't want to directly attack the accounting/preparation industry until this year, when H&R Block started running those utter BS ads about how scary the tax code and HCR laws are, and how badly you will screw things up if you dare to file your own forms. Overhearing about my otherwise-intelligent, young, single, non-homeowning Airmen taking their sole W-2 to professionals was my "red line."
My half-baked ideas for individual taxes (not for businesses):

1. Reduce to just a few tax brackets for individuals. Something like $0-$100k at 10%, $100k-$1m at 17.5%, $1m+ at 25% should work fine. This applies to all sources of income (inheritance, investments, etc) - not just wages and tips.
2. $2500 credit per dependent. Across the board. Period.  Combined with #1, this ensures that poverty-level families will always receive refunds instead of paying in.
3. Any and all expenses related to public education (pre-K through doctorate) are deductible. Any and all expenses related to private education are not.
4. Any and all co-pays for health care are deductible. Insurance premiums are not (at least at the federal level). Expenses incurred by the uninsured are not.
5. Charitable contributions are deductible; but we need a major redefinition of "charitable organization." Something like a cap of 25% for salary and overhead, with a minimum of 75% of expenditures directly supporting the state-filed purpose of said charity. That will probably remove most of the mega-churches, but not hurt things like Angel Food Ministries.

I've heard arguments both ways about the mortgage interest deduction, so I'm going to reserve judgment on that for now. Home ownership is great for the local tax bases (and especially schools), but it also motivates an awful lot of individual de ...


Don't finish that doob, bro. You're totally baked.
 
2013-05-09 10:53:00 AM  

demaL-demaL-yeH: "Charities" (sorry, "not-for-profits"), lawyers, and accountants are even more culpable than filthy rich greedy bastards.


I'll have to dispute you on the lawyer part. I work every day with tax lawyers for major, huge corporations. We've talked about this issue, and whether simplifying the tax code is something they support or oppose. Not a single one of them has ever told me that they oppose it because it would make them out of a job. Not an issue at all. No matter what the tax code is, there will always be a need for tax lawyers.
 
2013-05-09 10:54:12 AM  

demaL-demaL-yeH: dragonfire77: Cut the cap gains tax in half.  Offset that with a 0.01% tax on purchases made over an exchange.  Last Check of the NYSE says that 30,786,850,000,000 shares were traded just over the NYSE in Jauary of this year. Average share price of the NYSE is about 53 bucks...Could replace the entire federal budget with just that item...Heck, instead of 0.01%, make it half that...

"Guessed at" effects:
- HFT becomes a little less profitable...volume of trading slows considerably
- Fundamental analysis of equities becomes more 'en vogue', people get back to investing in companies, and not in trend lines.
- Revenues from cap gains are less dependent on the performance of the stock market, reducing wall street's influence on the political system.
- Big banks yell and whine and scream horribly.  Raise a lot of fees to compensate for 'loss of revenue'.
- Even more people ditch their banks because of the fees, and stick their money into local & regional banks.
- Actual investors an business people end up better off, due to the lower cap gains tax.
- Companies decide that due to the resurgence of fundamental investing, people care more about the condition of their business, and less the up-to-the-second price of their stock.

Looking for a downside here........

You mean other than the obvious downsides of continuing to distort the financial system in favor of market gambling, keeping real investment - you know, actually buying stuff to build stuff that people buy - unincentivized, and allowing corporations to deduct expenses related to exporting US jobs?


The cap gains tax isn't the issue per se, it's what qualifies as a capital gain that is.  If I buy stock ABC from you, there is no reason at all that should count as a capital gain on your income statement.   That money isn't a capital investment for ABC to be use for capital projects, which are typically pretty good for the economy.

Limit what qualifies as a capital gain to gains on actual capital investment, and you can drop that rate to 0 for all I care.   My broker needs to be paying income rates on his dividends, though.
 
2013-05-09 11:02:27 AM  

Monkeyhouse Zendo: Treat all capital gains as income.
Treat all carried interest as income.
Remove the FICA cap.


Remove the FICA cap

FTFY.
 
2013-05-09 11:02:42 AM  

Rent Party: demaL-demaL-yeH: dragonfire77: Cut the cap gains tax in half.  Offset that with a 0.01% tax on purchases made over an exchange.  Last Check of the NYSE says that 30,786,850,000,000 shares were traded just over the NYSE in Jauary of this year. Average share price of the NYSE is about 53 bucks...Could replace the entire federal budget with just that item...Heck, instead of 0.01%, make it half that...

"Guessed at" effects:
- HFT becomes a little less profitable...volume of trading slows considerably
- Fundamental analysis of equities becomes more 'en vogue', people get back to investing in companies, and not in trend lines.
- Revenues from cap gains are less dependent on the performance of the stock market, reducing wall street's influence on the political system.
- Big banks yell and whine and scream horribly.  Raise a lot of fees to compensate for 'loss of revenue'.
- Even more people ditch their banks because of the fees, and stick their money into local & regional banks.
- Actual investors an business people end up better off, due to the lower cap gains tax.
- Companies decide that due to the resurgence of fundamental investing, people care more about the condition of their business, and less the up-to-the-second price of their stock.

Looking for a downside here........

You mean other than the obvious downsides of continuing to distort the financial system in favor of market gambling, keeping real investment - you know, actually buying stuff to build stuff that people buy - unincentivized, and allowing corporations to deduct expenses related to exporting US jobs?

The cap gains tax isn't the issue per se, it's what qualifies as a capital gain that is.  If I buy stock ABC from you, there is no reason at all that should count as a capital gain on your income statement.   That money isn't a capital investment for ABC to be use for capital projects, which are typically pretty good for the economy.

Limit what qualifies as a capital gain to gains on actual capital in ...


[standing_ovation.gif]
 
2013-05-09 11:03:59 AM  

Rent Party: Limit what qualifies as a capital gain to gains on actual capital investment, and you can drop that rate to 0 for all I care.


I like where this is going. Can we also specify that the investment, or at least a majority of it, is domestic? Starting new business overseas is almost as useless to the domestic economy as watching stock portfolios grow.

Almost.
 
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