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Demo tax plan question

While anyone can invest in stocks, lowering capital gains taxes principally favors the top 5% of the population. Most of us regular working people own stocks in 401Ks, IRAs, Keoghs, etc., which pay taxes at ordinary income tax rates, not at capital gains tax rates.

At first one may be misled into believing that lowering capital gains taxes only helps rich people. These cynical, covetous, haters want to derail the part of the train that the rich are riding on and have convinced many that the entire train will not be derailed. Ask yourself have you ever gotten a great job from a poor person? Under Democrat Jimmy Carter the stock market was at 800 points, high capital gains taxes stops the creation of jobs, hurts the economy and causes poverty. This idea is brought to you by the same people who want you to pay $10 a gallon for gas

How much of your annual income did that Electra represent in '64? How much does the 30G represent today?

Because the republican plan of just letting your children (and grandchildren) pay your taxes is SOOOOO much better.

Everyone with 401ks iras and pension accounts are in for a shock if Obama is elected and the dems keep control of congess.

This is an interesting topic of discussion.

Normally, investments return a rate higher than the rate of inflation over the long term. If we want to only tax the "real" return, we would need to determine the gain that was realized above the rate of inflation for all investments. This seems the most fair thing to do but it only makes the tax code and calculations more difficult.

Also, this same principle should apply to interest and dividends. They should not be taxed at all unless they exceed the rate of inflation for the time the money invested.

There was a CNNMoney article I read just yesterday that compared McCain and Obama tax plans and outlined the details. It was put together by the nonpartisan tax center in DC. Might want to read up on that to understand exactly how each of these candidates' plans will affect us.

McCain's was worse off giving us a greater defecit. The tax increases were those who earned $600K or more and the middle class benefited most by Obama's plan. McCain's plan, the benefit was towards the wealthy.

The letter writer is correct that liberals (I am one, but not a Democrat) want to increase the paltry (by comparison) tax on capital gains to a fair amount.

Unfortunately, yes, that would hit everybody that invests in stocks. But if we can get the ultra-wealthy, who avoid paying their fair share of taxes by utilizing loopholes and low capital gains taxes, then it is good for the country.

By the way, this is not an attack on the rich. Some of my heroes are Bill Gates and Warren Buffett. I don't wish to steal all their money and give it to everybody else, just that they are forced to carry the same weight percentage-wise as the middle class.

And someone else would agree with me, including Warren Buffet himself.

Last I checked, Robin Hood was hero to the poor, and an evil to the rich. Seems times haven't changed much.

Anytime Government thinks that it has a mandate to provide services not allowed by the Constitution, someone has to find a way to pay for those services. What follows is always a variation of Class Envy, where the President or Congress finds a way to pit the job provider against the worker. In other words, strip the job provider from his ability to create jobs so that everyone looks to the Government for their salvation.

Government will find a way to strip every dime from anyone as long as the citizens allow it to happen.

Today they say the top 5%. Tomorrow, after the top 5% have nothing more to offer, the Government will expand the criteria to the top 10%. They will continue until they have ensnared the top 100%. Somewhere along the way, YOU will be part of the targeted group, and YOU will be "invited" to give everything you own to the Government - for the good of the people.

But Mike, if the top 5% are gone, then the top 10% would necessarily become the top 5%, after which the top 5% wouldn't be gone after all, which would leave only 95% left out of the total, which makes 95% the total, which makes it 100%.

Regardless, I just don't see the percentage in it. :)

On a serious note, though, I think you're mistaken. Increasing capital gains taxes, which is what the subject is about, would hit only those who invest in capital gains, primarily affecting the rich the most as they make most of their money through such investments.

10% or even 100% of American citizens do not fall in that category.

I bet the 2008 Buick has a lot more cup holders.

Not authorized by the Constitution? I disagree since Congress has the authority to enact laws. The Constitution CAN change. Unless you are one of the types who stick to the original Constitution. There is room for change, an often misunderstood concept by people like yourself.

Although, I agree with your premise that the "mandate" by government is unnecessary. I don't like the shift of responsibiliyt of Uncle Sam taking care of me from cradle to grave. But that's not necessarily prohibited by the Constitution.

When a capitalist buys a Buick for $20K on Tuesday and sells it for $30K on Wednesday, he hasn't added one iota of value. Tax the capitalists, please!!!

Dave 8:03... Do you know that capital gains have nothing to do with IRAs, 401Ks or pensions? They are all taxed as ordinary income. So the "shock" you mention "when the Democrats keep control and Obama is elected" might be not as bad as you think. Whoops, your slip is showing (old joke).

To DBG 9:53,

I am one of those 'types' who sticks to the Constitution. There is a provision in place to modify the Constitution, but, until it is modified, its original content is still the Supreme Law of the Land.

Many believe that a 60 MPH Speed Limit is just a 'suggestion', that 60 MPH could mean anything, depending on how fast you want it to mean. You're late for a meeting? Then drive 120 feet per second and call it 60 MPH. Eighty-eight feet per second is such a random number anyway, why should anyone believe that it really defines 60 MPH?

If you want a rubber Constitution, just be aware that someday that rubber Constitution is going to bounce in a way that destroys you.

To me, the Constitution is a steel ruler against which all laws are measured, not something to stretch and bend until it fits the dogma of the day.

Allowing Liberals to redefine the "General Welfare" statement to mean "Individual Welfare" has not only bent the Constitution, it was reversed its meaning. The Democrats are only too happy to seize on that opportunity to tax and spend.

The writer hits on the dirty little secret of capital gains taxation: Because of inflation, a good part of it is not truly income taxation, but wealth taxation.

Inflation is largely a result of the government's regulation (read: mismanagement) of the value of the currency. The Federal Reserve's primary mission is supposed to be maintaining price stability -- but in practice, its policy has been consistently inflationary. Inflation runs from around 2% in a "good" year to 10% or more, depending on how much the government manipulates statistics to make the number seem low.

It follows that if inflation is running at 10% annually, you need to be getting a 10% return on your money just to keep up and break even, in terms of real purchasing power. However, *the government taxes you on the 10% that you earn* -- even if, in real terms, inflation means you are no better off. Since the "income" isn't real, you're effectively being taxed at 15% on your *wealth*, not your income.

Wealth taxation is generally seen as the Holy Grail of socialism -- but because of inflationary currency manipulation and capital gains taxation, we've actually had it for decades already.

For tax year 2007 a household earning 45k would have paid $0 in income tax, and yet would still have gotten $2400 back. In 1999 that same household would have paid $950.

The top 0.1% of US earners pay 17.4% of the total taxes. The top 1% pay 36.9% of the total tax. In contrast, the bottom 50% pay only 3.3% of the total tax.

Why is it the the have nots want what those who have have?

Go out and work if you want more. The only way to make it fair would be to do a flat tax and get rid of all the loop holes.

If the poor paid 5% of their income, it would equal out to the 5% paid by the rich. The "poor" can sometimes get more back at tax return time than they actually paid into it. Level the playing field and do a flat tax and get rid of the rest.

"DBG @ Mike Richards | 9:53 a.m. June 18, 2008
Not authorized by the Constitution? I disagree since Congress has the authority to enact laws. The Constitution CAN change. Unless you are one of the types who stick to the original Constitution. There is room for change, an often misunderstood concept by people like yourself. "

And this pathetic understanding of our government, ladies and gentlemen, is why the US is no longer a free nation, a Constitutional Republic, but a Monarchy.

Imagine if when you get up in the morning, the speed limit is 65, but as you are driving 65 to work, the law changes to 55 because the "law can change" and there is "room for change"

Have a nice ticket, and a nice day.

To Cameron:
Your statistics are valid only if you count nothing but the income tax. If you count the total of all taxes paid you will find that the very rich pay about the same percentage of thier income in taxes as the middle class.