President Obama forces GM boss Rick Wagoner to step down

Those words convey disdain, fellers. It's a term that suggests a degree of unworthiness. Less unworthy than contempt, yet more so than indifference. Nothing envious about it. Check the dictionary.

I know the difference, obviously. I just don't see why one deserves a better tax rate than the other? Convince me.

I do not. Envy would have me praising them with covetous desire and much craving and ambition to emulate them. Defending them, in fact. Who among us is being envious here? :huh:

But it's the percentage of income that gives them the giant break. Let's say for argument that the average American makes 10% of his income from capital gains (probably it's less than that). The wealthy guy that makes 90% of his income from capital gains has paid a lower overall tax rate than the middle class working man. How is that fair?

We can make it fair by taxing capital gains up to 10% of ones income at the lowered rate and all income over that at the regular tax rate. That way everybody gets the same tax break.

 

The idea is to level the playing field so that each are paying more comparable rates on their entire income.

This is what progressive taxes are all about. Finding the fair and proper balance between income earned and tax owed. Otherwise we end up with a unsustainable system where a smaller and smaller number of people control a larger and larger portion of a nation's wealth. Throughout history this has led to discontent, coup, and revolution and the fall of many great civilizations and empires before us.

Why is this income so special over any other kind of income? It's really only special to those who make most of their income in this fashion. What a huge break for them at the expense of the middle class who end up paying a higher effective rate. What does risk have to do with it? Every financial decision involves some risk. You could invest in the market with some risk or you coud start a new business--also with great risk. You could work in the mortgage industry--a risky business. Even burying it in a tin can has a degree of risk.

Investors, big and small, make decisions every day based on risk as they see it. Nobody forces them and they need little encouragement. Those who choose to become big investors and assume that risk (for the sake of their profits) deserve no tax break that those who earn salaries and business profits can't also take advantage of.

 

OK, I'll use small words too. . . WHY does assuming risk from investments rate someone a better tax rate than someone who earns a salary or a business profit?

I challenge the need for such an incentive. It's simply not the biggest incentive to investing--the profit is the motive, not the tax break, which is an unearned bonus. People who invest for a living aren't going to take up farming or decide to sell insurance and they don't require tax incentives to invest. They are going to invest anyway and all they need is a potential avenue for profit. The tax rates were once higher, yet people always invested and made money. Why waste public money encouraging an investor to invest?

I didn't use your words or my words, I offered thesaurus words associated with envy. Why would you assume that I referred to you? :wink:

Trickle down economics never worked as described and have been generally discredited. In effect, you lobby that the middle class wage-earner should subsidize the risk that the professional investor takes, even though the investor gets all of the profits if it all works out. The common dude should just be happy that he helped that rich guy out.

Republicans get outraged at the thought of socialized income but somehow think it's proper to socialize risk. I advocate balance--earn whatever income one can, but pay a fair share of the taxes.

It's not a true flat tax if there are two tax rates. That's not a flat tax by definition. There are some flat tax models that I can and do support . . . but they only work if all of the tax breaks, "incentives", credits, deductions, depreciations, etc. disappear.

My disdain is for the notion that we can just cut taxes without regard to what we're spending. Like it or not, if we are to ever break the borrowing cycle and pay down the national debt, taxes will have to go up and services will have to be cut, too. Finding the balance point is the challenge in a polarized political environment that doesn't even recognize a middle ground.

 

That does not answer the question. Why does assuming risk deserve a tax break?

People did just that for decades. Profits are the motive, not tax breaks, which are simply a bonus.

Thank you for your opinion. Opinions differ.

It was clearly explained. What don't you understand about it?

The whole idea of a flat tax is so that everybody pays approximately the same percentage of their income. No tax breaks, no tiered percentages, just a single tax rate that everyone pays on all their income. Trying to take a piece of the current tax pie (Capital Gains) and calling it a flat tax while still envisioning a corresponding normal tax rate with all of its complications and preferences is not what a true flat tax is.

They were first cut in 2001 which was accompanied by a fall in tax revenues. The 2003 revenue increase was largely due to the economy pulling out of the 2001-2003 bear market. It was accompanied by a huge increase in the deficit because programs were expanded instead of being cut and we lost money overall forcing us to borrow.