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« QC overturns 4th Amendment | Main | Yeah »

Jan 24, 2012

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cheripickr

" Look, my little friend, When I point out that is ridiculous, you needn't offer anything beyond "exactly," except maybe a polite thank you for the correction."

Roch, The other day you finally contributed something to a thread that I found a very original and fitting moniker which I will proudly add to my vocabulary: the term "smarmhole" . It literally oozes from your pores.

polifrog

Another thought that I should have previously incorporated. The idea that corporations should pay taxes is based on treating corporations as people...

cheripickr

Roch, your "arguments" are never arguments. They boil down to:

1) Haranguing commenters with name-calling and comments about how stupid their comments are.

2) Trivializing real racism with trumped up self-righteous race-baiting of white people interacting with each other in chat-rooms in unsuccessful attempts at shaming them or heightening your own self-esteem while your intended targets work harmoniously with people of varying ethnicity every day. You're too wrapped up in it to even realize when people are pulling your strings to provoke you to mock your own pomposity.

3) Neurotically nitpicking some tangential point to someone's position to preserve your anal-retentive avoidance of engaging in debate via the tired trademark oft-regurgitated "straw man" cop-out. What would you do without it? The sound you emit would be the same as that of one hand clapping.

It's not my fault your comments keep getting the same criticisms.

michele

Paging Dr. Brod... I'm trying to follow along here (not the schoolyard taunts, but the economic discussion) and the extent of my education on this subject is Econ 101, during my early college days. Can you suggest some reading material, please? The equivalent of Econ for Dummies, maybe? Seriously, though? I need to know more than I do.

Ed Cone

Wait, only Romney pays capital gains taxes?

A lot of people are due for a refund, then.

If this thread doesn't convince you at long last that Frog is yanking your chains, y'all are truly humorless.

Roch101

Dr. Hayes, I do not consider it trivial when someone reveals their strong opinions to be founded on fallacies. You and I disagree on that.

polifrog

Ed Cone:

If this thread doesn't convince you at long last that Frog is yanking your chains, y'all are truly humorless.


Is valuing the success of others so foreign a concept that you default into viewing it as a joke?

cheripickr

"Is valuing the success of others so foreign a concept that you default into viewing it as a joke?"

Yes, at least in obvious smarmy (love that word) pretense. Or when they decide that expressing their visceral anger toward you isn't working and is about to boil over. Witness nearly every liberal commenters' reception of you here. Liberals' vaunted celebration of diversity is once again exposed as a complete farce, especially when it comes to the arena of ideas. That you present yours respectfully, unemotionally and without personal attacks makes no difference whatsoever to them. In fact, their inability to fluster you only intensifies their own determination to malign you personally.

polifrog

cheripickr

...determination to malign you personally.

Won't work either. I am beholden to no one, not for housing, not for job security, not for anything.

Ed Cone

I'm fine with success, and work pretty hard at it myself.

The joke was Romney somehow paying more than everyone else, and then "Capital Gains rate around 15% - Only Romney."

That's not intellectual diversity, that's just silly. And I'm not angry (much less viscerally angry!), just amused and wondering why everyone doesn't get the joke.

polifrog

The discussion was about Romney relative to everyone else, no?

michele

OK, since Prof B apparently isn't going to respond, who else wants to recommend some books on economics for me, so that I can keep up with you guys at some point in the future? And I have a book recommendation for you, too, so you can stop fighting. It's called The Bible. I love it. I hope you will, too. ;)

cheripickr

Michele, I just read a great great book on the 2008 crash. Hits on topics oft-discussed here. I even understood some of it. Not sure if that's what you had in mind or something more generic/encyclopedic. Would be happy to loan you mine.

Marshall

Economics for Dummies
can be bought on Amazon here

http://www.amazon.com/Economics-Dummies-Business-Personal-Finance/dp/0470879483/ref=sr_1_1?s=books&ie=UTF8&qid=1327533348&sr=1-1

michele

Marshall, seriously? There actually is one? Should have looked... ;)

John, yes, please.

Ed Cone

Gretchen's book is a good one. Lisa and I worked with her a million years ago, she's always been a badass.

On the topic of the recent unpleasantness, I'd also recommend Michael Lewis' The Big Short, which I'd be happy to lend you as well, Michele.

Neither of those deal directly with the essentials of this post, though.

cheripickr

Mich, check FB. The "great great" was accidental redundancy, so don't expect "Grapes of Wrath'. Maybe somewhere between very good and great.

michele

Thanks, John.

Ed, I'd like to borrow that one next, please. Maybe AB has a fundamentals book for me, in addition to (better than?) the Dummies book, if he ever checks this thread...

Andrew Brod

And this is the point where Brod feels that "capital gains should be taxed as ordinary income" at which point Romney's taxes would include both a 35% corporate tax plus his personal 35%.

I already explained this. Please try to keep up. Most of Romney's capital-gains income is not actually capital gains. On that majority of his earnings, there's no double-taxation. (And the whole double-taxation argument is bogus on the other portion, but that's a discussion for another day.)

There are two issues raised by Romney's taxes... well at least two. One is the reasonableness of favoring capital gains in the tax code. The conservatives here like that, evidence of its ineffectiveness be damned. So it goes.

The second is the ability of private-equity folks like Romney to classify their special category of earned income as capital gains.

The first issue is a matter of policy, while the second is an obvious money-grab by influential Wall Streeters, which as I noted previously is the kind of thing that's opposed vehemently by our conservative friends when it's a Democrat who benefits from it.

Andrew Brod

Michele, let's talk offline and I'll give you a few suggestions. It'd help if I were sitting in front of my bookshelf at home, and I'm not there right now.

One of the lessons in basic economics is that while we can best understand economic principles when we hold all other factors constant and analyze them in isolation, in reality all other factors are almost never constant. So yes, when isolated in a theoretical vacuum, lowering capital-gains tax rates has a identifiable and positive effect on investment. It might or might not be big (theory is generally bad at nailing down magnitudes of effects), but it's there.

However, economic data are generated by a maelstrom of factors all happening at once, and often the one factor we've drawn out so painstakingly on a blackboard is effectively drowned out by the others. That's what appears to be the case with capital-gains rates. So many other things are at work that giving preferential tax treatment to that one form of income does little or nothing to spur investment, employment, or any of the things that most people care about.

Consequently, the main reason people support capital-gains preferences is ideology. The evidence to support it isn't there, so what else could it be?

Well, there's another reason, for some people at least: self-interest. It's perfectly understandable for someone whose earnings are primarily capital gains to argue that capital gains should be taxed at a lower rate. That doesn't make it a good argument, but we can understand why it's made.

Ab

Do you folks realize you are not accounting for Social Security?

Ends at $106,000 I believe.

Meaning everyone making under $106,000
effectively is paying another 12% plus more,
than everything above $106,000 for Mitt.

meaning if most are at "25%",
they are really at about 37%.

meaning Mitt is more closer to 15%,
to most everyone else's 37%.

Funny how the news outlets
won't let everybody in on that?

Treason some would say?

polifrog

We have been ignoring estate taxes (whatever the rate is this year) as well.

Andrew Brod

George, you're saying that the news media are downplaying the extent to which Romney's tax rate is lower than most middle-class people? So the media are protecting Romney?

Also, no one says that bad media coverage is treason.

As always, you're a trip, man.

Ab

Brittany Spears made an extra $6 million
over the two year extention of the Bush tax cut.

Limbaugh will make another $15 million.

The executives of the TV networks,
couple million a piece.

All the big CEOs the same.

Let's not kid ourselves.

It pretty much is treason
for not informing the public
what they should know
as those who didn't report what they should have
didn't.

Ask anyone making more than $3 million per year.

Most got hosed.

Ab

Prove me wrong.

polifrog

Brod:

So many other things are at work that giving preferential tax treatment to that one form of income does little or nothing to spur investment, employment, or any of the things that most people care about.


I suggested earlier that beyond the stimulative effect of investment there is also a fairness associated with low, preferably zero, capital gains tax rates. When one first suffers from corporate tax rates should they subsequently be penalized with an additional 15% capital gains tax? Additionally, should that individual be penalized for making the moral choice of investing in our community's future when they could have made the less moral choice of satiating personal desire and spending those dollars?

As I have said previously, those who choose to spend rather than invest in our collective future engage in a form of tax avoidance by dodging the 15% tax rate Romney is burdened with.

Note the choice of "choose". I am mindful that not all individuals have a choice in this matter, but of those who do have a choice government financially sides with those who choose personal gluttony over investing in our collective future by punishing the generosity of investment rather than gluttony.

Andrew Brod

Frog, your communitarianism is showing. A real libertarian would say there's nothing "less moral" about using one's money as one wishes. A real libertarian wouldn't be extolling our "collective future." (I mean, seriously, what a commie this guy is!)

Your argument amounts to a denial of libertarian principles. Interesting how that happens when you really, really want to justify something.

Whether one "suffers" from corporate tax rates is debatable. In an earlier comment you noted the corporate tax rate of 35%. That's the statutory rate. No corporation with halfway-decent attorneys and accountants (i.e. none of the corporations in which Mitt has stock) pays 35%. The average is more like 12%. So even if one accepts this argument (and I don't), the total tax rate is hardly unfair.

Why I don't accept that argument is a discussion for another day. But in brief, I'll note that I got double-taxed just today. I had to pay a hotel tax, but the money I used on the hotel is money on which I already paid income tax. Double taxation! It's all around us!

In any case, this is largely irrelevant for Mitt, a majority of whose "capital gains" aren't really capital gains. They're earned income.

Fred Gregory

Brod if you were to invest in money markets today , for the forseeable future your earnings would be no better than stowing cash under you mattress,, i.e the cube root of zero and consequently negligible tax events

Andy it is an almost indisputable truth that each time capital gains rates are lowered revenues increase.

Fred Gregory

Michele for starters, since I am in front of my book case at the moment, I would highly recommend Robert Heilbroner's
The Wordly Philosophers

Then try this by Milton and Rose Friedman
Free To Choose

I am sure both these volumes can be found at the GSO Public Library.

Enjoy

Andrew Brod

Fred, your belief that something is indisputable doesn't actually make it so. There is this thing called evidence that you might want to look into.

Here's what the data say. Yes, you often see tax revenues increase when capital-gains rates fall. But it's right after they fall; it's not sustained. The reason is that investors choose to realize gains they wouldn't otherwise have realized, just to take advantage of the rate decline. But as I said, it's not sustained. Non-partisan estimates show that we've foregone a whole lot of tax revenues thanks to our recent decision that they need to be low, low, low. Once again, dropping tax rates doesn't pay for itself.

But that's not even what's most important. Did dropping the capital-gains tax rate increase employment? Did it create jobs or spur investment? The answer is no. The rates were dropped near the beginning of the 2001-07 expansion, which just happened to have the lowest rate of job creation and investment of all 10 post-WWII expansions to date.

The proof's in the pudding, and this pudding sucks.

But hey, if you believe, and I mean really, really believe that the opposite is indisputable, maybe it'll come true. C'mon, click your heels a few times.

Andrew Brod

Michele, I agree with both of Fred's book suggestions. Perhaps I'll come up with another one or two.

cheripickr

All I know is that, while I can lose up to my entire investment in the stock market, I can only deduct $3000 a year. I may have already lost enough that I will never be able to write it off in my lifetime even if I lose no more. On the contrary, There is no limit to the gains I can be taxed on. If somebody decides to double that, to say 30%, the risk/reward of investing doesn't exactly make me want to open my wallet. But then I'm just a country doctor. I don't always know what the evidence and data say I should do.

Otherwise, what Marshall said.

Roch101

Michele, if you follow Fred's recommendation to read Milton Friedman's book, I'd suggest you follow it with The Shock Doctrine, The Rise of Disaster Capitalism by Naomi Klein, a good book in it's own right, it examines Freidman-inlfuenced theories in modern practice (among other things). It's $10 on Amazon, library probable has it, but you are welcome to borrow my copy as well.

Roch101

"I don't always know what the evidence and data say I should do." -- CP

Maybe that explains your stock market losses.

polifrog

Andrew Brod:

Frog, your communitarianism is showing. A real libertarian would say there's nothing "less moral" about using one's money as one wishes. A real libertarian wouldn't be extolling our "collective future."


I enjoy using terminology that is "owned" by wrong thinking ideologies in more enlightened ways. It seems to irritate the socialists among us when they are confronted with their ideology decorating a framework of liberty. Lastly, I am not a "real libertarian" whatever that is.

and:

The [capital gains] rates were dropped near the beginning of the 2001-07 expansion, which just happened to have the lowest rate of job creation and investment of all 10 post-WWII expansions to date.
How are these two things related? Could other issues could have influenced job creation? Yes. Could the numbers of other influences approach infinite? Yes. Are they considered? Who knows. Are these two measures cherripickred for a desired outcome? Seem to be. Does measuring two tangentially related things over varying time periods produce a valuable third measurement? No. Does your sentence have any value? No.
michele

Thanks, Fred, Professor B, Roch. And yes, please, Roch, I would like to borrow your book after I read the others. I'll email you when I'm ready. :)

bubba

"I enjoy using terminology that is "owned" by wrong thinking ideologies in more enlightened ways. It seems to irritate the socialists among us when they are confronted with their ideology decorating a framework of liberty."

Sarcasm is lost on certain people, pf. Sometimes, in order that they might understand, you just have to bludgeon them with it to get the message across.

bubba

"Meaning everyone making under $106,000
effectively is paying another 12% plus more,
than everything above $106,000 for Mitt."

Why didn't you mention that Mitt's SS benefits are capped? He won't receive any higher SS benefit than someone who averaged 70K per year during their basis years.

When a client comes to you to invest, do you tell him/her that there's a maximum benefit he/she can expect to draw out, regardless of the total investment?

Somehow, in the rush to demagogue the so-called "rich", little facts like the above are never discussed.

Why is that?

Ed Cone

"...the ability of private-equity folks like Romney to classify their special category of earned income as capital gains."

This deserves more attention.

All the back and forth about cap gains obscures the fact that a few people get a very nice break on this front.

polifrog

Ed:

All the back and forth about cap gains obscures the fact that a few people get a very nice break on this front.

We all have the choice to partake; that most do not says little of those who do.

bubba

"All the back and forth about cap gains obscures the fact that a few people get a very nice break on this front."

So do middle class homeowners with a middle class mortgage, something "rich" people don't share on their "rich" people mortgages.

Foreclosure Attorney

Bubba is absolutely right. The rich are the victims here; can't you feel their pain? They have to run the world and still get screwed! We don't deserve their largesse.

bubba

"They have to run the world and still get screwed! We don't deserve their largesse."

Let us know when you have something of value to contribute here, would you, please?

Marshall

I guess if capital gains are bad and worthless then tax free bonds and munis are worse...right?

cheripickr

Marshall,
Please, too much independent thinking,

hurts people's heads.

cheripickr

...what I meant to say...

Ed Cone

Who thinks capital gains are "bad and worthless"?

I did see some discussion of appropriate tax rates on capital gains, and some comments on the misclassification of other forms of income as capital gains -- the latter serving a tiny elite of very wealthy people very well, while other Americans pay full freight on their earned income.

Marshall

Ed--- "while other Americans pay full freight on their earned income."

....and nearly 1/2 of all Americans pay zero on their earned income

Why not make the earned income tax similar to social security...after you pay in a maximum amount you don't pay more?

I really do think you already knew the above. If you did already know the above why would you continue the thread....

Ed Cone

I continued the thread to refute the false implication in your comment that anyone was arguing that capital gains are "wrong and worthless."

That's something you just made up.

A lot of people don't by federal income tax because a lot of people don't make enough money to reach the threshold at which federal taxes begin.

Some people see that as a sad commentary on our tax code, others see it as a sad commentary on the earning power of half the country.

Marshall

Whatever Ed.... my opinion of several comments in this thread caused me to believe that their opinion was "wrong and worthless" with regard to capital gains. You think otherwise...good for you.

Is it the responsibility of the other half to improve other's earning power? (so much for the land of the free...)

I think I recall that 5% of the taxpayers pay 85% of the total...somehow this seems fair and right?

How about a flat tax rate with no deductions for anyone? (I like this.)
How about a percentage tax similar to social security where there is a cap? (I like this.)

Our president said he wants to decrease to tax on corporations....really.. all sub-s corporations share one common rule....profit passes through the corporation to the owner to be taxed the same as everyone else. Of course we might want to consider that the owner of corp paid double social security for himself and matched everyone else.

I know..I know...the thread is about capital gains...

I think the folks that follow our current code and pay millions in taxes should be complimented and not be asked to pay more. I think the millions that pay zero in taxes should pay a little... $500 to 1000 dollars a household...something..

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