What should be taxed higher: wages or capital gains?

[Craig234]

Most Americans receive most of their income from wages. A few wealthy Americans receive most of their income from capital gains, i.e., passive investment income.

What should be taxed higher, income from wages, or income from investments?

I'd argue that income from investments should be taxed higher. Remember, this is not about what amount the total taxes should be, just how much to tax different income types.

I think someone who is earning a wage should pay less tax than someone who can earn the money sitting at the beach.

Yes, some people get both; what they pay more in investment tax, they get as a reduction in the wage tax.

Currently, it caries, but many wage earners pay a higher rate in the 20's or 30's than the capital gains tax of 15%.

The nation has had periods of very good economic progress while the capital gains tax was much higher; lowering it merely increased the wealth of the rich and raised taxes.

I think there is a justice in taxing passive income at least as highely as wages, and a benefit in preventing the excessive concentration of wealth.

 

[ntdz]

Discourage investment...pure genius from the libbies.

Very good article about capital gains here

Currently, Capital Gains are taxed the same as your income if you're in the upper bracket if your investment is less than one year. Greater than a year and your capital gains tax goes down.

Link

 

[Craig234]

Originally posted by: ntdz
Discourage investment...pure genius from the libbies.

Very good article about capital gains here

Ya, it discourages investment, because I know that if my tax rate increases, I'm going to keep the money in a mattress and earn nothing instead of investing it with a 28% tax.

Have any hard facts to back up your 'discourage investment' line? Since the tax has been much higher, you should find it easy to show me how the US lacked investment during those periods. Or, are you just an ill-informed ideologue spouting the simplistic propaganda you are fed?

Instead, we should 'discourage labor' by shifting the taxes to wages as you suggest.

 

[jrenz]

Originally posted by: Craig234

Originally posted by: ntdz
Discourage investment...pure genius from the libbies.

Very good article about capital gains here

Ya, it discourages investment, because I know that if my tax rate increases, I'm going to keep the money in a mattress and earn nothing instead of investing it with a 28% tax.

Have any hard facts to back up your 'discourage investment' line? Since the tax has been much higher, you should find it easy to show me how the US lacked investment during those periods. Or, are you just an ill-informed ideologue spouting the simplistic propaganda you are fed?

Instead, we should 'discourage labor' by shifting the taxes to wages as you suggest.

You ask for viewpoints, and then you erupt into sarcastic partisan name calling. Why did you even bother making this thread?

 

[Genx87]

Originally posted by: jrenz

Originally posted by: Craig234

Originally posted by: ntdz
Discourage investment...pure genius from the libbies.

Very good article about capital gains here

Ya, it discourages investment, because I know that if my tax rate increases, I'm going to keep the money in a mattress and earn nothing instead of investing it with a 28% tax.

Have any hard facts to back up your 'discourage investment' line? Since the tax has been much higher, you should find it easy to show me how the US lacked investment during those periods. Or, are you just an ill-informed ideologue spouting the simplistic propaganda you are fed?

Instead, we should 'discourage labor' by shifting the taxes to wages as you suggest.

You ask for viewpoints, and then you erupt into sarcastic partisan name calling. Why did you even bother making this thread?

Standard for Craig234. I think he has a form letter where he plugs his thought in. It always starts with namecalling and then into endless blathering about nothing and ends with an insult.

As for taxing capital gains at a higher rate than income. One of the biggest drivers in this country is investment. You tax capital gains high enough and the money will simply move offshore. Leaving our industry with a lack of capital.

Income is much easier to predict when it comes to budgets.

 

[CPA]

Neither. Goods should be taxed, not production nor investment.

 

[Jhhnn]

Whether or not I agree with Craig234's rhetorical methods, his point, and his questions are quite valid...

Much of anti-tax rhetoric is apparently based on assumptions that feed into the rhetoric w/o having any basis in fact... So if there are facts, trot 'em out...

So far as the question of capital flight is concerned, any smart investor balances risk against return in a competitive marketplace. Given the relatively safe investing climate in the US, it seems to me that we don't need the lowest tax rates, merely ones that aren't too high to push investors elsewhere...

 

[nullzero]

Wages should be taxed definately over capital gains.

 

[Harvey]

Originally posted by: ntdz
Discourage investment...pure genius from the libbies.

Thanks for the informed and informative comment. The actual mechanics of the market have little to do liberal or conservative financial policies.

Government can and does use tax policies to influence the market, hopefully to the benefit of the majority of our citizens. When it's determined that more investment is needed, government can lower taxes on the returns on those investments. When the nation needs investment in specific areas or industries, they can create tax advantages for those purposes. For example, if we want to encourage investment in alternative fuels, the government could lower taxation on the returns from those investments.

The Federal Reserve may be a better tool because it can respond a lot faster to changing market conditions.

Now, if you want to get into slamming "libbies," try to explain the wisdom of cutting taxes for the wealthiest one or two percent of the population while starting a useless war based on lies that, so far has cost over 3,100 American lives, wounded and disabled tens of thousands more Americans and killed or wounded possibly hundreds of thousands of other innocent civilians while squandering billions of dollars your great grand children will still be repaying. :thumbsdown: :frown: :thumbsdown:

If you think that's "conservative," I'll be wearing the "libbie" label proudly for a long time to come. :roll:

 

[TipsyMcStagger]

The investments grow businesses which in turn pay wages. Take away the incentive to invest and watch the wages drop. Then what would you do?

 

[Harvey]

Originally posted by: TipsyMcStagger
The investments grow businesses which in turn pay wages. Take away the incentive to invest and watch the wages drop. Then what would you do?

Blah, blah, blah... BS!

Higher wages stimulate spending on goods and services which, in turn, stimulates more production and greater returns to those who invest in creating them.

Investment is a legitimate way to earn money. So's fixing your leaky faucet, servicing your car and assembilng, packing, shipping, selling and marketing every product you buy. On one level, capital and labor are both investments. The only difference between them is whether the asset being invested is cash or labor.

Income is income. In the absence of some overriding benefit for promoting one over the other, they should be taxed the same. When such a benefit exists, government should use its power to promote the form of investment that offers the best return to the entire society, not just the wealthy. Then, any such tax benefit should finely tailored to promote the specific targeted goal, not broadly spread across one privileged segment of the population.

 

[Rainsford]

The argument that taxing some form of income takes away the incentive to obtain that income is stupid, whether we're talking about wages or capital gains. No tax is 100% of the additional income earned, so there is still plenty of incentive present. Any argument to the contrary is pretty much a red herring from the folks making the argument, folks who clearly didn't pay too much attention in Economics class...or Math 101 for that matter.

Tax policy is not a matter of choosing what we want to "encourage", wage earning work or capital investment, the argument should really be about where we can take the money without hurting the group we're taking it from. And I think some pretty basic math says that the income margins on the capital gains end of the spectrum far outpace those at the wage earning end of things.

 

[her209]

Originally posted by: TipsyMcStagger
The investments grow businesses which in turn pay wages. Take away the incentive to invest and watch the wages drop. Then what would you do?

Similarly, labor generate revenue which in turn grows businesses. Take away the incentive to work and watch revenue drop. Then what would you do?

 

[ProfJohn]

umm several countries in Europe have NO capital gains taxes, if there is a holding period of over a year.

Since we seem to love the way Europe does everything else why not follow them when it comes to this?

 

[ntdz]

Why not just have 100% tax on capital gains, just like the death tax? Man, having 100% on both would be a liberal's dream.

 

[Bowfinger]

Originally posted by: Craig234
Most Americans receive most of their income from wages. A few wealthy Americans receive most of their income from capital gains, i.e., passive investment income.

What should be taxed higher, income from wages, or income from investments?

I'd argue that income from investments should be taxed higher. Remember, this is not about what amount the total taxes should be, just how much to tax different income types.

I think someone who is earning a wage should pay less tax than someone who can earn the money sitting at the beach.

Yes, some people get both; what they pay more in investment tax, they get as a reduction in the wage tax.

Currently, it caries, but many wage earners pay a higher rate in the 20's or 30's than the capital gains tax of 15%.

The nation has had periods of very good economic progress while the capital gains tax was much higher; lowering it merely increased the wealth of the rich and raised taxes.

I think there is a justice in taxing passive income at least as highely as wages, and a benefit in preventing the excessive concentration of wealth.

It's all about greed. There's no objective, rational reason why capital gains should receive preferential tax treatment compared to ordinary income. It's clearly another example of people with deep pockets buying themselves favorable legislation, using a persuasive marketing campaign to convince the wannabe-wealthy to vote against their self-interest.

 

[Phil21]

it should simply be the same? duh?

According to YOUR points you state that investment and labor our two equally valid means to make money. If the value is the same, then they should be taxed at the same rate.

Put another way..

Why do you care HOW I make $150,000 in 2007? Do you care if I made that by passively tossing some money into an investment account somewhere, or if I actively manage an investment portfolio 12 hours a day? How about if I made it simply working tons of overtime at my landscaping job?

In my opinion, the "how" I made the money should be absolutely immaterial. I made $150k, tax me on what I made at whatever my bracket is. Done. Simple, and doesn't try to create ill-fated "this work is more valid than others" type of judgements that may be well intentioned but doomed to failure.

Or are you saying the way you make money is somehow "better" than those people managing investments as their full time "job"? I bet many of those folks work much harder than you ever will, and the same goes for myself.

People should do what they are good at - if you're good at investing then do it! If you're good at making a sweet widget, do that instead! Why do you have to value one person's contribution over the other? Business couldn't function without either...

 

[dmcowen674]

Originally posted by: Craig234
I think there is a justice in taxing passive income at least as highely as wages, and a benefit in preventing the excessive concentration of wealth.

But that is the master plan.

 

[Mardeth]

I can invest in American stocks and not pay your taxes. So what stops people going abroad and still invest in America without the big capital gain tax? Hmm, can I invest in RE without paying the the tax? Just wondering...

 

[ntdz]

Originally posted by: Mardeth
I can invest in American stocks and not pay your taxes. So what stops people going abroad and still invest in America without the big capital gain tax? Hmm, can I invest in RE without paying the the tax? Just wondering...

Yes, you can invest and not pay the capital gains, but we pay capital gains, whether it's in the US or not.

 

[senseamp]

Hard work should be taxed higher than income from investments and inheritances. Another bright idea from the right.

 

[B00ne]

Originally posted by: TipsyMcStagger
The investments grow businesses which in turn pay wages. Take away the incentive to invest and watch the wages drop. Then what would you do?

Why are you taking the incentive to invest away, if you tax capital gains higher than wages?
Does this mean in turn, there is no incentive to work right now because wages are taxed higher than capital gains? Then why are most ppl working?

 

[BoomerD]

Wages should not be taxed at all. PROFITS, including capital gains should be taxed.

 

[Shortass]

You'd think that people would just give a reasonable answer.

Nobody from the "right" has given even a remotely adequate response, instead saying "lol nobody'd invest if it were equal to wages there'd be NO reason whatsoever" which of course makes no sense. Or just the ridiculous response by ntdz

"Why not just have 100% tax on capital gains, just like the death tax? Man, having 100% on both would be a liberal's dream."

Great job, you've got it right on the spot! Wow! That must have taken all of 1 second to think of and it's so accurate! Winnar!

Investment obviously is important, as without investors there is no spine to business, and we all know that we need labor, as obviously we need people to push around and make our fortunes for us. So we should tax investment lower than wages because the wage earners wont complain cause they don't have a fvcking choice.

mirite?

 

[dphantom]

Neither. Some form of a consumption tax would be best IMO. The more one spends, the higher the tax rate. Would need some offsets for low income people, but imminently doable.

Automatically progressive in nature as wealthier individuals spend more so they pay more taxes. Below a certain income level, one pays no consumption tax. Simplifies the tax code enormously.