Stop Coddling the Super-Rich

[Admiral Yi]

If you read the article, you realize that the real culprit isn't that the tax rates need to be raised, but that there are too many tax breaks available to the super-rich.

I thought it was the fact that capital gains are taxed at a lower rate than earned income.

[crazy canuck]

If you read the article, you realize that the real culprit isn't that the tax rates need to be raised, but that there are too many tax breaks available to the super-rich.

I thought it was the fact that capital gains are taxed at a lower rate than earned income.

More of a question of what can qualify as a taxable gain.  I am not sure how parking money for a few minutes can turn it into a taxable gain in your current tax code but that seems to be what Buffet is talking about.

[Admiral Yi]

More of a question of what can qualify as a taxable gain.  I am not sure how parking money for a few minutes can turn it into a taxable gain in your current tax code but that seems to be what Buffet is talking about.

I think he was using the example of the 60 second position to suggest that whereas there might be a rationale for taxing long term holdings at a lower rate, this very short term position recieves the same benefit.

[crazy canuck]

More of a question of what can qualify as a taxable gain.  I am not sure how parking money for a few minutes can turn it into a taxable gain in your current tax code but that seems to be what Buffet is talking about.

I think he was using the example of the 60 second position to suggest that whereas there might be a rationale for taxing long term holdings at a lower rate, this very short term position recieves the same benefit.

I agree.  Arent we saying thing - ie the question of what should be considered a taxable gain and obtain preferential tax treatment and what should not.

[Admiral Yi]

I agree.  Arent we saying thing - ie the question of what should be considered a taxable gain and obtain preferential tax treatment and what should not.

Sounds like we are.  I was thrown off by your phrase taxable gain; I interpreted it to mean the alternative is non-taxable gain, whereas it seems now that to you the alternative is to tax it as income.

I'm familiar with the arguments for encouraging long term ownership of stock by employees of the company--fosters loyalty and producitivity--but less so with the arguments on a macro level.  Anyone care to explain them to me?  Why do we as a nation care if someone buys and holds stocks for years or turns around and dumps it at a profit?

[DGuller]

I'm familiar with the arguments for encouraging long term ownership of stock by employees of the company--fosters loyalty and producitivity--but less so with the arguments on a macro level.  Anyone care to explain them to me?  Why do we as a nation care if someone buys and holds stocks for years or turns around and dumps it at a profit?

I would imagine that long-term ownership encourages stability, since you can't have flash crashes without excessive short-term trading.  Another reason is that maybe we as society don't want to encourage day-trading as a career, since ultimately it's as productive as professional poker playing.

[viper37]

In Canada the first 500,000 irc was excempt from capital gains tax.  Personal residences have always been excempt and were not counted in that figure.  The 500,000 exemption was removed sometime in the early 90s as part of the push to put our finiancial house in order.  Given that the 90s became a boom period of investment I doubt very much that removing the exemption had any adverse effect.  As Buffet said, people will invest if they see a good deal whether or not the money they make from that investment is taxed.

It was 100 000$ exemption, and it was from 1985 to 1994.
500 000$ was and still is for SMB's owners (up to 1 000 000$ for farm owner).
The tax rate for capital gains was for 50% of the profits up to 1988.  By 1990 we were in recession and it was jacked up to 75%, than lowered to 2/3, than to 50% by '97.

Imho, that has to change too.  We have to differentiate legitimate capital gains (from stock transactions) from stock options given as a form of wage.  Imho, stock options given from a company to an employee as a bonus should be considered as regular wage and taxed 100%.

[DGuller]

Imho, stock options given from a company to an employee as a bonus should be considered as regular wage and taxed 100%.

Yikes.  Even I think that tax rates of over 95% are just unreasonable.

[Berkut]

Imho, stock options given from a company to an employee as a bonus should be considered as regular wage and taxed 100%.

Yikes.  Even I think that tax rates of over 95% are just unreasonable.

I've heard that even at 100%, tax revenues are still going to go up as rates go up.

Personally, seeing as how the Laffer Curve has been so conclusively proven incorrect, we should go ahead and go for about 120% or so on those rich pricks.

[HVC]

you guys are mean. you know what he's saying.

[DGuller]

you guys are mean. you know what he's saying.

When has knowing what the other guy meant ever stopped us? 

[Admiral Yi]

you guys are mean. you know what he's saying.

Right, stick up for the Canadian. 

[HVC]

you guys are mean. you know what he's saying.

Right, stick up for the Canadian. 

I don't know if he considers himself canadian. quebecers are tricky that way

[HVC]

you guys are mean. you know what he's saying.

When has knowing what the other guy meant ever stopped us? 

grumbler has been rubbing off on you

[The Brain]

You know Swedish author of children's books Astrid Lindgren?

From Wiki:

In 1976, a scandal arose in Sweden when Lindgren's marginal tax rate was publicized to have risen to 102%. This was to be known as the "Pomperipossa effect" from a story she published in Expressen[7] on 3 March 1976. The publication led to a stormy tax debate. In the parliamentary election later in the same year the Social Democrat government was voted out for the first time in 44 years, and the Lindgren tax debate was one of several controversies that may have contributed to this result.