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Edited by Mrph1 on Nov 30th 2023 at 11:03:59 AM
Yep. Most of the superwealthy make their money of capital gains which are not taxed. As a result their tax rates tend to be at about the same rate as the poorest Americans. They have a lower effective tax rate than anyone who isn't living in abject poverty.
So we both want them to pay more taxes and to pay their fair share of taxes. The same applies to large corporations that often don't pay any taxes despite record profits thanks to creative accounting and tax havens.
In other news, here's an editorial that was in one of the local papers on What the Republican Party needs to do to get the youth vote.
edited 10th Dec '12 10:25:39 AM by shimaspawn
Reality is that, which when you stop believing in it, doesn't go away. -Philip K. Dick
The Republican Party of today is not one party but three. The first is composed of theocrats who want to impose their social values on everyone else. The second is composed of libertarian Tea Partiers who worship free markets and who wouldn't know sound economics if it attacked them in the shower and the third is composed of the old, pro-business moderates. The only one that can be reasoned with or which has a chance of being elected is the third.
Schild und Schwert der ParteiWe and everyone except the GOP and its rich sponsors agree.
edited 10th Dec '12 11:10:54 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"Tax rates act as economic incentives. The low tax rate on capital gains incentivizes the shifting of income from salaries to investment, and disproportionately benefits the top 1-2% of earners, more so as you climb up that ladder.
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
Then, presumably, it can be a tax that be increased in line with increased Capital Gains? I'm sure other countries do so...
Keep Rolling OnIt's already lower for lower income brackets, which seems somewhat akin to giving poor people tax breaks for buying gold-plated cars. Anyway, you already get incentives for putting money in retirement accounts, which are tax deferred.
edited 10th Dec '12 11:49:23 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"The loopholes, such as they are, don't mean much to individual incomes, unless you're willing to hurt a lot of poor and middle class taxpayers. Closing the capital gains "loophole", which is probably the single largest, would return a lot of money; I don't remember the exact figure but it's somewhere in the 800 billion range. The mortgage interest deduction is another doozy.
But regardless of whether you call it a loophole, a tax rate, or whatever, it's still increasing taxes. Republicans seem to have this fixation on the marginal rate, which is interesting but irrelevant — it's the effective/real rate that matters.
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"I was discussing this with Fighteer. The above comment seems to suggest that if you make over a certain amount of money, you shouldn't get to keep it.
Is this so?
It was an honorActually, all that statement really says is economists studied how high the tax rate has to go before people are discouraged from seeking wealth. Which is apparently %70, which is higher than I think a lot of people would have expected. There was no moral statement involved there.
It's basically social science and statistics. Also history, since we actually had that tax rate and higher in our past.
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Thanks for clearing that up. I'm no economist, so I tend to get confused when people talk about closing loopholes vs. raising taxes.
edited 10th Dec '12 12:33:41 PM by AceofSpades
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And yet you know what's funny, if you work in a hedge fund or equity fund, you typically get 20% of what you make over the hurdle.
If you work in a private equity fund or the like then typically how you get paid is you are given somebody else's money, you promise to make a profit on it and for making a profit up to what they call a "hurdle" (imagine something around 8% profit on the initial investment) you get paid an income. But if you make more than that then you get to keep 20% of the extra profit you make and this extra profit isn't treated as income, it's treated as the capital gains on the other guy's investment so you only get taxed 15% on it and this sort of rule works with partnerships (not corporations) so you don't pay corporation tax neither.
This extra 20% share is called carried interest, it's actually the bigger share of the hedge fund managers's incomes than the official income- it's part of why Mitt Romney had such a low tax rate- it's what motivates all those masters of the universe but it's less than the 30% that that study said would leave people not bothered to work as hard so if things worked like that you'd have thought that the number would have swung upwards.
edited 10th Dec '12 12:53:33 PM by SomeSortOfTroper
"Gospel of Wealth". If you don't know what that is you should look it up. The rich think they deserve it because they're morally superior. Or some such ridiculous nonsense that blinds the supposedly Christian majority to the idea that we're supposed to be good to our fellow man.
The current situation stands with the rich and big business doing what they can to retain truly massive amounts of wealth because they don't want to share. And politicians who want to redistribute that can only do so much without public support of the people. Politicians have to convince the people in order to get a lot of stuff done, as well as other fellow politicians.
(This is why Obama's out there talking to people about Michigan GOP's attempts to switch to Right To Work and about raising taxes. Public support or opposition to big changes is incredibly important, because it creates pressure on politicians to act in a certain way. I believe this is what's called populism.)
Not the way I was taught the concept. Maybe I'm remembering the phrase wrongly. Because the idea that the wealthy deserved it as a moral thing and that the poor deserved to be poor was definitely something that existed.
Wait, maybe it's "Prosperity Gospel"?
edited 10th Dec '12 12:50:38 PM by AceofSpades

Its kind of both.
technically they pay 35%. But after you factor in their write offs and loopholes, its more like..17%
Not to mention most economists who have studied the subject say that 70% is about the right tax rate where people still make so much money that they can easily live on, and yet also still not discourage people to seek wealth.