Income is Income

Discussion in 'Politics' started by OldRegular, Nov 16, 2012.

  1. OldRegular

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    The current Federal Tax Code applies a progressive rate to "earned" income, that is income one gets from working. The more money one makes the more he pays in income tax, unless he makes enough to hire an accountant to take advantage of the numerous loopholes built into the Code.

    Then there are taxes paid on investment income.
     
  2. InTheLight

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    It's simple. If investment income were taxed at ordinary earned income rates there would be less investment. Less investment in entrepreneur's inventions. Less investment in expanding businesses via stock offerings. Less risk taking overall. You want to kill job creation? Tax investment income as regular income.
     
  3. OldRegular

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    So what are those people with all that money going to do with it, hide it under the bed? Economist Ben Stein disagrees with you by the way!



    I have noticed that job creation has been great the last 4 years, particularly since the rates were extended in 2010. As a matter of fact it was not that great under Bush2.
     
  4. Crabtownboy

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    Income for a salary is income for a service performed. There is no risk on the part of the employee.

    Investment income is money put at risk as the investment may reduce in value. In fact it can become worthless. On the other hand it may increase in value. That is what the investor hopes for.

    As someone pointed out if the income were taxed at the same rate fewer people would be willing to put their money at risk.
     
  5. OldRegular

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    Tell that to the four oil rig workers injured in the explosion in the Gulf! Tell that to the two who are missing if they are ever found! Tell that to the coal miners, the steel workers, the military, who daily risk their life in performing their service.

    Strange coming from a left wing ideology. Now if you were a "capitalist pig" I could understand. You are just being contentious Crabby.

    That is a common argument but not necessarily true. People who have money are going to put it to work, not hide it under the bed. But again Crabby you are making the argument that those "crazies on he right" make.
     
  6. InTheLight

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    You've got your facts reversed, or you're talking about a different country than the USA. Job creation has been great the last four years? Pshaw!!
     
  7. saturneptune

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    If we had normal interest rates, employment rates, and other parameters say of the late 50s and early 60s, then basically, if taxes are lowered, then more economic activity is generated, more jobs, and more tax revenue comes back into the Federal treasury. With unemployment sky high, and interest rates at artifically record low levels, and low inflation, that rule does not always work that way.

    Personally, I think income and investment taxes should be lower. I think pastors should be exempt from all taxes.
     
  8. billwald

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    It's very simple. If the people who depend on hourly wages to pay the routine bills pay up to 35% BUT the people who DON'T KNOW HOW to spend as little as 20% of their annual capital gains and they can pass their excess funds on to the next generaation THEN sooner or later the top 10% will own EVERYTHING worth owning. Then what happens?
     
  9. saturneptune

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    The reason I have problem with taxes on risk investments like equities and bonds, is that, unless it is in a 401K, the principle has already been taxed. The investor is taking a risk in so and so company, mutual fund, or bond. Lets face it, lower income workers (like me at times in my life), will have income from investments in the form of savings interest or CDs, which is next to nothing now. I can remember when the older generation survived off of interest income on CDs without any risk.

    Anyway, for someone willing to take a risk for a better return, higher taxes are not an incentive. If one makes a better return, it is lost in taxes. So why risk anything if you are going to net about the same regardless of return?

    Although it is not the entire equation, investing in good quality companies over the long haul indirectly leads to a healthy economy. Of course, jobs and consumer spending also make for a good economy.

    I wonder when the interest rates on CDs will go back to say a 4 or 5% level.
     
  10. Salty

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    Then we drastically cut goverment spending
    Of Course the Republic of Texas need not worry
     
  11. saturneptune

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    Salty,
    IMO Texas would have the best shot at sustaining itself, maybe followed by New York and California. Do you agree and what other states do you think would do well if it actually happened?
     
  12. OldRegular

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    Actually I doubt that anyone who works for hourly wages pays at the top rate.


     
  13. billwald

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    IN WA any one with a 40 hour/week job would have a 15% marginal tax rate and anyone with at least median wage, 25%.

    When the top 10% owns 90% of everything at least half of everyone else will own nothing+be in debt. Recently read that less than 35% of the adults in the US could quickly get their hands on $500 cash.
     
  14. OldRegular

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    No wonder Boeing is trying to get out of Washington!

    I don't like the income inequality either but it is not the task of the Federal government to redistribute it. In fact I believe that government policies have contributed to the income inequality.
     
  15. Salty

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    I agree that Tx would be best at sustaining itself. Other states or commonwealths would have a problem, unless they are contiguous to Texas. For example, Kansas is a red state, but they would have a tough time unless Oklahoma joined with Texas. Then if La, Miss, Ark, and Tn went with the group - they would have a good portion of the Mississippi.
    As far as NY and Calif, they would not want to leave - as they are the seat of liberalism and need DC. In addition, NY, Ohio and the West coast would be cut off from each other if all the red states/commonwealths were to secede.

    Lets go back into history. England passed the Molasses of 1733, then the proclamations of 1763 and ect. Think of it, 43 years to start the American Revolution. Lets us go back 43 years - 1969 -Hmmmm
     
  16. OldRegular

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    Very interesting S/N and Salty but this is the "Income is Income" threat. I believe there are two succession threads, one started by yours truly and the other by some guy named Salty!
     
  17. billwald

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    >I don't like the income inequality either but it is not the task of the Federal government to redistribute it.

    AGREE! It is the task of labor unions. It will be a cold day in hell before before the corporations give a rat's tail about their serfs.
     
  18. Salty

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    Guilty as charge
    But why should a person pay a higher % just because they make more money.

    Like Bill said: " but it is not the task of the Federal government to redistribute it."

    Can you imagine if sales tax worked that way?
    and when it comes to property tax, if you make an improvement on your house- your taxes go up (and thats after you paid sales tax on the purchase you made for materials, ect.)
    As far as Romney paying such a small %, look how much he gave to charity. (actually, I would like to see all tax payers allowed to deduct charity gifts - as it was years ago.)

    Folks are getting up set about supporting the 47 %. Its bad enough some pay no federal income tax ( remember federal withholding is only a {forced} loan to the govt) but many actually get back more than was withheld.

    Salty

    no wonder some states/commonwealths want to secede (sorry, I couldn't resist:tongue3::saint::saint: )
     
  19. OldRegular

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    If you read the OP again you will note that I made no defense of progressive tax rate. I did the same in an earlier thread about taxing the rich. In my opinion the 16th Amendment put us on the road to an oppressive Federal government.

    In past years I have leaned toward a flat income tax rate similar to that of Steve Forbes. In later years I have leaned toward a sales tax {Alan Keyes noted it was none of the government's business how much money one made as long as it was honest.}. I believe it would be almost impossible to implement. It would have to be phased in some way. Frankly in recent rears I have leaned toward a progressive income tax. Philosophically I am opposed to such but it is a fact that more and more wealth is being accumulated in the hands of the elite few. The low tax on unearned income is a big contributer to that trend.

    The tax code is a monstrosity and should be canned. Those with the money to take advantage of the loopholes and subsidies in the code can seriously reduce their tax rate as did GE. Now personally I doubt that corporations really pay any income tax. It is passed on to the consumer just as all ther costs of operation.

    The libertarian streak in me asks:

    1. Why should there be an exemption for charitable contributions. The tax paid by the uncharitable is increased because of this deduction.

    2. Why should there be a deduction for contributions to the Church. Those who don't go to or give to a Church pay higher tax because of this deduction.

    3. Why are there special tax rules for those in the ministry of the Church. Others pays a higher tax because of these rules.

    4. Why is there a deduction for mortgage interest. The renter pays a higher tax because of this deduction.

    I am sure there are many others but the fact is some ones deduction results in a higher tax for those who can't claim that deduction.
     
  20. Salty

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    I was just posting that I am in agreement with you

    Fully agree

    because they help those in need.

    Because in the past, those in the ministry have been paid less
    It encourages home purchases - not defending, just explaining

    May I add one more item - the military - those who receive BAQ and Sep Rations do not pay tax on those allowances. An E-5 at Fort Drum, NY is given 1275 a month for housing. If that amount was taxed - that would be nearly 200 dollars a month. So should the military be taxed on all pay and allowance? And remember in a combat zone All pay is tax exempt including basic pay , re-enlist met (in the thousands of dollars)

    As a comparison, in 1972, my basic pay was $240 and my BAQ was about $120
     

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