Originally Posted by Malorn
1) Short-term capital gains are taxed at the normal tax rate. That means investments that you hold onto less than 1 year. Long term gains cap out at 15% because they are riskier investments. Democrats love to misrepresent capital gains by only referring to long term investment and leaving out the high short term tax rate.
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Indeed, but not many people actually keep investments less than a year. Mostly just speculators. If you receive stock options as part of your compensation package, anyone with a brain will simply not sell the stock for a year in order to avoid the extra taxes. People for whom this is a factor are not living paycheck to paycheck.
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2) Capital gains is money earned on investment, not wages. When you earn wages and then turn around and invest that money and get taxed on the investment, you were taxed twice.
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No, its not. The tax is on the gain, not the principle. If I make $20, I get taxed on it. Probably around $6-7, all told. So now we'll say I'm at $13. I buy a stock for $13. One year later, that stock has gained 10% in value, so now its worth $14.30. I sell it. I am NOT taxed on the $13, because that has already been taxed. I am taxed on the $1.30. Thats new money that I did not possess before,
which has not been taxed.
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3) Investment is not limited to the rich. Anyone can do it. Rich or poor. The lower income brackets have lower capital gains taxes to try to encourage investment, at least under the Bush cuts.
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People aren't stuffing money into their mattresses anymore. Even if they aren't specifically investing, they are keeping their money in a bank, meaning the money is being invested anyway. People will always invest their spare cash because aside from the aforementioned mattress trick, there is nothing else to do with it.
And if capital gains were simply regarded as income its already on a progressive scale. No need for additional rules regarding it.
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4) If you had ever done investment, you'd know that it is a lot of work to find good investments, and there's always risk you can lose money, unlike employment. You can invest a lot of money and lose all of it, and if you do make gains that's taxed. It's a lot of risk, and a lot of work.
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Its not a lot of work at all. Put it in an index fund. Aaaand.. You're done. Historical %10 return. Just don't panic and sell when the market crashes for a bit. If you're trying to play the markets you're either a professional(and hence its your job) or you're a fool.
Whats the big deal with risk anyway? I risk my life and livelihood when I go to work. It doesn't entitle me to a 15% tax rate. With an investment I merely risk my money.
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Only through embracing capitalism will the poor rise in wealth and our economy improve.
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Oh please. Pure capitalism is as absurd a model as pure communism. Just as communism requires a perfectly selfless person, capitalism requires a perfectly rational and informed person free of any outside influence(such as, oh, marketing).
Both systems are equally broken because humans are human. A communist citizen will cheat and be lazy to gain an undeserved advantage(less work, same money). A capitalist person will cheat/lie/obscure the truth to gain an undeserved advantage(more money for same work).
The only thing that works and is stable is a middle ground between the two, because unmoderated capitalism is every bit as evil of an idea as rigid communism. In other words, it would be quite nice if people would stop worshiping it.
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Liberals want to give out lots of fish instead of teaching those who are hungry how to fish.
Teach a man to fish and he will not go hungry for his lifetime.
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And put a man in charge of a fishing hole and he will fish and fish and fish and fish and fish and fish and fish and fish, because he feels the only right thing to do is to fish as much as you possibly can through whatever means necessary, and then he'll trade fish so his kids never have to work through school(and ensure they get into the best school with the best fish connections), and trade more fish to help them get a really nice job or maybe just give them the fishing hole, and he'll give fish to an expensive expert to make sure he owes as few fish as possible, and he'll sit on the board of another mans fishing hole and each will convince the others stockholders that they need to be able to catch even more fish because all the other fishermen are catching that many fish, and he'll threaten his fish stockers with the prospect of no fish unless they stock the pond faster because he knows that without fish of their own they will be ruined, and he'll pay a man to make sure the fish stockers don't organize so they actually have a reasonable bargaining position, or just fire the fish stockers talking about it, and pay another man more fish so that he can lobby the government to ensure his little fish empire is secure from start up competitors or get the nice fish supplying contract, and he'll pay another man fish to make sure the government doesn't take more of his fish from him, and he'll pay a last man fish to make sure the people with no fish think that somehow its right and just that he have so many fish.
This liberal wants to give out enough fish that people won't starve or be destitute, even if they aren't good or tasty fish. He'd also appreciate it if certain fishermen realized they've won after catching 1 or 2 lifetime supplies of fish from their super premium fishing holes and let others other fish from that spot, or maybe they could give the guys who stock those ponds for them more fish instead of taking as many fish as possible for themselves.