Not always, only long term investments and since a majority of the US population benefits, what's your point? Many people argue that there should be NO capital gains tax since in many cases the investments were purchased with funds that had already been taxed at ordinary income tax rates. If you and I have $2,000 left after paying all our ordinary income taxes and I buy stock while you take a family vacation, why should I have to pay taxes if/when my $2,000 turns into $4,000? That's what many people question.

 

You still have not responded to your mixing wealth figures in with income tax figures.

 

I think I gave a rather lengthy response on why mixing the two was important. The ACCUMULATION of Wealth, not the making of money, pulls income OUT of the economy. Who controls the wealth ultimately controls income.

True. Perhaps off track of the discussion, but why is that? Is it because those folks in Congress want to take care of the "wealthy" or perhaps because Congress believes that a lower capital gains tax stimulates investment of capital in businesses?

 

I'm involved with a project in N. Ky that has raised some decent money to invest in start up businesses (an Angel Fund if you will). Under Ky law, the investors will get a pretty big tax credit to be used in reducing their overall state income tax liability. Is that state law a handout to the wealthy that are putting their money in these start ups? In the eyes of some, probably. But I can assure you that the state income tax credit was a huge factor in convincing some of these investors to put their money at risk. Without the tax credit, the risk becomes much greater and the likelihood they would have invested goes down considerably. If some of these start ups succeeds and creates nice paying jobs for N. Ky., I (and the people filling those jobs) won't care at all that the wealthy got the tax credit. Is the incentive of a lower capital gain tax rate any different? Why?

 

Should we not have any laws designed to stimulate investment in businesses if those laws benefit the investors?

 

I think the Angel Fund projects are exactly the way we should go because it is targeted investment to create jobs. I am also about tax incentives that allow more jobs to come into the community. It is the financial shenanigans on moving money around that irks me, and CEOs who don't do a great job making millions or billions in bonuses. That is extraction, that is not job creation.

Interesting article on the income inequity in the US

 

Interesting

A significant factor in the economic breakdown of the middle class in this country has absolutely nothing to do with taxes or tax policy, and cannot be corrected by shifting monies around through redistributionist legislation, no matter how well intentioned - the breakdown in traditional moral values.

 

If we take more money from the top 1% & distribute it down through the lower 50%, will that help stop the decline in marriage rates & increase in illegitimate births? These two statistics have a far greater impact on the financial well being of the lower 50% than does how much extra money Warren Buffet & any other rich guys choose to donate on their taxes this year.

A significant factor in the economic breakdown of the middle class in this country has absolutely nothing to do with taxes or tax policy, and cannot be corrected by shifting monies around through redistributionist legislation, no matter how well intentioned - the breakdown in traditional moral values.

 

If we take more money from the top 1% & distribute it down through the lower 50%, will that help stop the decline in marriage rates & increase in illegitimate births? These two statistics have a far greater impact on the financial well being of the lower 50% than does how much extra money Warren Buffet & any other rich guys choose to donate on their taxes this year.

 

Those problems have existed for quite some time so I don't think it's a direct factor. They existed when President Clinton was in office.

Those problems have existed for quite some time so I don't think it's a direct factor. They existed when President Clinton was in office.

 

But if we're talking about changing policy to improve the lot of the lower & middle classes, NO other factor has a more direct impact on the future success (measured in all ways including economically) of individuals than being born into, and growing up in an intact, two parent household. If redistributing income doesn't help this, then why are we doing it?

Those problems have existed for quite some time so I don't think it's a direct factor. They existed when President Clinton was in office.

 

True. The phenomena that was likely most responsible for a stable federal government fiscal environment during the Clinton years were a steady but strong economy.

 

The easiest measure of that - the Dow. It was around 3,000 at the start of 1993. In January of 2001 it was over 10,000. A tripling in 8 years. Had that trend continued the Dow would have been over 30,000 in 2009. And if still continued it would be at least 40,000 now.

 

Also, spending was steady during the Clinton years and the result was a surplus - a rarity since WWII.

 

The first term of Bush was marked in a dramatic lowering of receipts. Some blame the tax cuts, but it was likely much more due to the reduction in capital gains due to the down economy and associated lack of capital gains receipts that would have occurred with or without the tax cuts. The 2nd term of Bush - with the infamous 'Bush Tax cuts' still in effect looks much more the Clinton years with receipts dramatically rising - again probably not due to tax policy one way or the other - but just a strong economy - until 2008. During Bush's 8 years spending - even with the war time spending - was relatively stable.

 

The 'Bush Tax Cuts' get both too much bashing and credit for the current circumstances. If the Dow were at 40,000 no one would care about the tax cuts and the government likely be running a surplus.

 

The current problem is a combination of lack of receipts and a dramatic increase in spending. The lack of receipts is as bad as it was after 9/11 and even worse. The spending is the new and unprecedented element.

 

The following chart shows receipts vs outlays and the variance since before the Clinton years:

 

I think I gave a rather lengthy response on why mixing the two was important. The ACCUMULATION of Wealth, not the making of money, pulls income OUT of the economy. Who controls the wealth ultimately controls income.

 

Please explain.

Please explain.

 

EXTRACTION

A.K.A. Rent Seeking

EXTRACTION

A.K.A. Rent Seeking

 

This theory only works if you assume that people bury physical money in coffee cans in the backyard. They don't. You have only captured part of the supposedly evil cycle.

 

Here is the other part of the cycle. After the the money is extracted and accumulated - what do you do with it. Regardless of whether the incoming money was expense dollars or capital dollars - as incoming dollars could be either - the evil Rich guy now leverages them as 'capital' dollars. Because what good is buried in the backyard money. So you invest in things that need capital. And for bigger returns you seek out bigger risks. And sometimes that risk is a complete loss of that capital. And a good portion of that invested capital is then used to pay salaries workers at other businesses. And the cycle continues. The accumulation of wealth by itself is not the 'extraction' of monies - it is the conversion of wealth to capital that then allows for unearned income. Without this accumulated wealth we would all be poor servants - like in Cuba.

 

Remember the movie Wall Street 2 subtitle - 'Money Never Sleeps'.

This theory only works if you assume that people bury physical money in coffee cans in the backyard. They don't. You have only captured part of the supposedly evil cycle.

 

Here is the other part of the cycle. After the the money is extracted and accumulated - what do you do with it. Regardless of whether the incoming money was expense dollars or capital dollars - as incoming dollars could be either - the evil Rich guy now leverages them as 'capital' dollars. Because what good is buried in the backyard money. So you invest in things that need capital. And for bigger returns you seek out bigger risks. And sometimes that risk is a complete loss of that capital. And a good portion of that invested capital is then used to pay salaries workers at other businesses. And the cycle continues. The accumulation of wealth by itself is not the 'extraction' of monies - it is the conversion of wealth to capital that then allows for unearned income. Without this accumulated wealth we would all be poor servants - like in Cuba.

 

Remember the movie Wall Street 2 subtitle - 'Money Never Sleeps'.

 

Don't bother.

http://www.huffingtonpost.com/2012/01/13/american-social-welfare-state-mitt-romney_n_1205357.html

 

FWIW I don't consider people who are wealthy as evil. My issue is with the system, which is amoral. Folks are just playing the game within the prescribed system. Individual make persona sacrifices won't change the system, it takes people putting pressure on the people who set up the system.

 

For all of the Christians on here, what does a Christ Centered economic system look like.

http://www.huffingtonpost.com/2012/01/13/american-social-welfare-state-mitt-romney_n_1205357.html

 

FWIW I don't consider people who are wealthy as evil. My issue is with the system, which is amoral. Folks are just playing the game within the prescribed system. Individual make persona sacrifices won't change the system, it takes people putting pressure on the people who set up the system.

 

For all of the Christians on here, what does a Christ Centered economic system look like.

 

Milton Friedman reflected on this best.

 

 

 

And an interesting link that reviews the Friedman Donahue interview:

 

http://ironicsurrealism.com/2010/04/01/milton-friedman-and-phil-donahue-discuss-capitalist-greed-vs-socialist-redistribution-of-wealth-1979/

It is not a free market that has done it. It has been a mixed market with regulations. Otherwise, wealth gets accumulated in the hands of the few and they then oppress the poor. I am not saying that is what is happening now, but if the market is not regulated that is most certainly what will happen.

Most of the time when we hear someone clamoring for more money for the poor what they are really clamoring for is more control over money or more money for their particular organization. A lot of folks want to redesign the financial system of the world's economies so that the producer countries are brought down to the level of third world countries by bankrupting the producers.

Poverty will not be solved by a massive redistribution of wealth. Poverty will be eased when the root causes of poverty (ignorance, sloth, greed, personal responsibility, and immorality) are addressed by people who offer a hand up rather than a handout...