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65 Years of Data Indicates: Tax Breaks for the Wealthy Don't Create Jobs


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#16 Inimicus

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Posted 02 November 2012 - 10:32 AM

1. Wealthy is defined (in my book) as having self sustaining assets that would, in leiu of any other income, afford you a "middle class" life.

Like my grand parents who live on past investments that were made with after taxed dollars?


If they are indeed living solely on the proceeds of those assets then yes like them. The fact that the money they invested was already taxed is immaterial, the income generated from those investments should be taxed as income. It shouldn't get taxed at a reduced rate simply because it doesn't come as compensation for work done.


2. Reduce the number of ways that people can reclassify income to reduce the number of shelters. Not a flat tax per se but something closer to it.

Explain in detail. Do you mean that you would just have a tax on what you spend, not what you earn?

Well since I'm not an economist or a tax professional I'm sure my "detail" will leave a lot to be desired. Ill do the best I can though and we can talk through the murky parts.

Right now with the admittedly limited assets that I posses there are a dozen or more ways for me to take money I earn and funnel it into things that either reduce or eliminate the taxes I pay. And that's on my households very modest income. By contrast my grandfather who has considerably more assets has a proportionately increased number of options for deferring or eliminating the tax burden of his various incomes.

I would like to see the system simplified to eliminate these various ways to reclassify income into things that allow the individual to avoid paying tax. Income should be income regardless of its source and that income should dictate your tax burden.



3. Enough what?

How much is enough....like where does the tax stop. How much should one person pay regardless of income?

I think that with a reduction in the ways people can reclassify income a cap of 20% would be sufficient for an upper limit. I could be wrong there but I believe it wouldn't need to exceed our current top bracket and should actually be less.

#17 pstall

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Posted 02 November 2012 - 11:00 AM

Your grandparents investments would not be taxed as they are but if they recognized a profit on them that profit should be taxed. Just as they can write off a loss if the investment turns south.



This depends all on the type of investment. If it's say dividends, those are just considered ordinary income. If stocks, captial gains, either short or long term depending on how long they held the stocks before selling.

The profit being taxed also depends. From buying a home at one price and then selling higher and being able to roll over some into another home to starting a biz and it growing.
I think someone who is investing and taking on risk etc should be rewarded for that. Now I'm not saying they don't pay cap gains or taxes but being sensible on how much they are taxed is important.

As for the write off the loss part. That too depends as well as WHERE it is invested. If within a retirement acct or IRA, they do NOT get to write a loss. They have to eat it.
If it's a loss due to a stock dropping, they still fall under short or long term cap gain but are only allowed x # of dollars to wash out. Which I think now is between 3 and 3500k. It's not much. So for that, a person might have sunk 10k into a stock and if it all went south, they are only able to do the 3k.

If it's in an LLC or DPP or some exotic program, they may be able to write off the loss. This is why some rich people are advised to start a certain type biz etc to use the loss to counter a profit elsewhere for tax advantage purposes.

#18 pstall

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Posted 02 November 2012 - 11:02 AM

*non edit point to make on my last post*

I shouldn't just say rich people about being advised for tax advantages. An everyday small biz owner can also be in this category.

#19 thefuzz

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Posted 02 November 2012 - 12:10 PM

Your grandparents investments would not be taxed as they are but if they recognized a profit on them that profit should be taxed. Just as they can write off a loss if the investment turns south.



Not true, at least as far as the write off's.

These are folks who have had very little their entire lives, but invested in the stock market when they could...for over 50 years in the hopes of having some money when they were too old to work.

They don't have a ton, but I can't stand to see the government get their hands on dollars that would not have been there originally if they had not taken the risk.

#20 Mr. Scot

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Posted 02 November 2012 - 12:39 PM

I don't care if they tax the Mark Cubans of the world. I want them to lessen the burden on all the small business owners who are making 100-200 G a year but working 60-70 hours to do so. Let these people breathe. If you want to tax the doctor who plays golf 20 hours a week, more power to you. But leave the guy who is running the only hardware store (other than Lowe's or Home Depot) in a 10-mile radius alone. And ease the burden on companies that have large warehouses so that they can hire 100 new workers a month as their online business grows. Don't keep those 100 jobs from happening because of regulations that really only benefit a handful of people. An imperfect job is better than no job at all.


That's not how you create jobs.

You create jobs with government stimulus packages.

Get with the times, man.

#21 thefuzz

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Posted 02 November 2012 - 01:47 PM

I think that we should start taxing social security payments......

#22 pstall

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Posted 02 November 2012 - 02:17 PM

i have often thought about this but imagine the # of people who have retired at one job and while getting that pension, go work elsewhere. now that is not illegal but it seems there is some loss wage opp somewhere because of the carrying cost for that person.

you do want to reward loyalty someone has shown and pay them accordingly. i still say due to automation and advancing tech there is more being done with less people and that creates an unsustainable legacy costs in many ways.