Dow falls below 10k

Would stock purchases be taxed the same 22%? (i.e. a 22% front-end load?) That would hurt... It would certainly force a long-term investment strategy I guess! (All traders would be forced out of work, not sure if that is a good or bad thing!)

 

i dont think a blanket tax (fair tax whatever) would have anything to do with that, i think its more on the sort of publicly purchased commerce stuff. and besides.. The sales charge on mutual funds and stock share classes (A front end load, B cdsc, C level load etc...) has nothing whatsoever to do with tax. Sales charge is comprised of payments to the underwriters, custodian and others. It's not taxed like that since you aren't actually buying goods, you are "purchasing" equity and in essence giving someone a loan.

 

progressive tax is probably the best bet out of all the options i have heard. (as long as it doesn't get out of hand like the %50 someone mentioned) eg. %20 to someone making 50K is 1/5 of earned income leaving them with 40K. ouch! %20 to someone pulling 2 million is still 1/5 of earned income, leaving them with 1.6 million dollars. sounds reasonable. lol progressive tax is a good idea. tax lower income less tax.

 

not to get into this discussion but the tax increases mccain is attacking obama on are tax inceases on the wealthy that will not even touch people with income under 180K/yr or something. gogo taxes lol

Hey now. Bush Sr., Reagan, and Bush Jr. believed in Reaganomics and in each three presidencies we had huge deficits... and now McCain wants to run the same economic standard?

 

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I'm from Ny and Reaganomics had people living in Central Park. Not a fan.

Yeah - Who is being taxed is an important consideration. There's fair, and then there's practical/effective. When considering any tax reform idea you need to consider how it will shift the overall tax burden. The top 10% in the US pay 90% of the tax, or something like that - Let's use that for simplicity. So those cats pay a lot of tax, and of course anyone would love to pay 10% less... But if they did, it would double the burden on the lower income earners, and that isn't practical.

 

About fair tax vs stock purchases: if one person makes their money working their butt off, and another makes it on the stock market... Would it be "fair" not to tax the capital gains from the stock? Rich dudes are always pushing lower or eliminated capital gains taxes, and believe me, it's not because they want to help out the middle class!

 

srsly. how the hell is that fair? Why should someone be penalized for being productive?

 

What a great reward for hard work, education, and intelligence. We take your money and give it to other people!

Wealth is usually not related on any of those things - It's inherited.

 

At some point Paris Hilton is going to grow up and get a job, probably in some sort of marketing capacity for one of her daddy's companies, probably making $500k or so. And when he kicks it, she'll inherit more money than all of us together will ever make in our lifetimes.

 

"Fair"?

 

A different term that's often used when discussing redistribution of wealth is "fortunate". Ms. Hilton was fortunate to be born wealthy. As such, some would argue that she should be grateful to the country that provided the situation where that money could be accumulated, and give back accordingly.

 

If you don't subscribe to that whole line of thinking, look at it from the other side - Take a 40-yr-old couple with three kids, two in university, a 200k mortgage outstanding, two car payments, both working... They are pretty cash-strapped, so it's very hard for them to bear more taxation.

Whatever arguments you want to make (not that the arguments are invalid)... The Hiltons can bear increased taxation more easily.

Edited October 7, 2008 by Fatherpeteus

About fair tax vs stock purchases: if one person makes their money working their butt off, and another makes it on the stock market... Would it be "fair" not to tax the capital gains from the stock? Rich dudes are always pushing lower or eliminated capital gains taxes, and believe me, it's not because they want to help out the middle class!

Dude, the people that make their livings on the stock market work like 80 hours a week. Just because it isn't physical labor doesn't mean they aren't working hard. Secondly, lowering the capital gains tax is proven to spur both domestic and foreign investments which strengthen the economy and provide a stable environment for businesses to operate and in return creates jobs. Hence the incredibly low jobless rate we've all taken for granted most of the last 8 years (yes, now it's going up, but still it was at all time lows most of W's two terms in office). Sure, they wan't to keep more of their money, but the result is your ass having a job so I wouldn't knock it. All the marxist class warfare bullshit I've seen/read recently is getting a bit old. Can't you just leave that crap in the 19th century where it belongs?

Edited October 7, 2008 by Hykos

lol yeah.. they should be happy with the long term capital gains tax. (maxxed at 15%).. imagine if they got taxed at non preferential rates? eg.. their %30+ tax bracket lol owned.

 

my reply earlier was in response to the your statement about stock purchases and "sales charge/loads" that will remain the same regardless of tax laws. so kinda off the topic.

 

As far as your new comment about the sales and profits of these stocks.. capital gains should absolutely remain taxed. richies are getting a break that long term cap gains are capped at 15% tax. lol sqeakin' by on that one. lol

Dude, the people that make their livings on the stock market work like 80 hours a week. Just because it isn't physical labor doesn't mean they aren't working hard. Secondly, lowering the capital gains tax is proven to spur both domestic and foreign investments which strengthen the economy and provide a stable environment for businesses to operate and in return creates jobs. Hence the incredibly low jobless rate we've all taken for granted most of the last 8 years (yes, now it's going up, but still it was at all time lows most of W's two terms in office). Sure, they wan't to keep more of their money, but the result is your ass having a job so I wouldn't knock it.

We're thinking of different things here. Maybe traders work long hours, but I'm talking about wealthy people who can just hire someone to manage their portfolio. They don't have to work at it at all.

 

As for changing the capital gains tax and its income on the economy - Suffice it to say how much is debatable. Lower capital gains (or any form of tax) would be nice, sure... But it means less money for the government to use to balance the budget.

Say the government needs to raise $850 billion (just picking a number out of the air ), that money has to come from somewhere. You can tax capital gains more, income tax, sales tax, whatever - It's all on the table.

 

I'm not sure how you got "Marxist class warfare" from what I wrote... I meant that rich dudes get richer by acting in their own best interest, and when a millionaire proposes a "tax reform" you can pretty well guarantee he's looking to shift the burden from himself to others. I'll stand by that.

Edited October 7, 2008 by Fatherpeteus

Wealth is usually not related on any of those things - It's inherited.

 

At some point Paris Hilton is going to grow up and get a job, probably in some sort of marketing capacity for one of her daddy's companies, probably making $500k or so. And when he kicks it, she'll inherit more money than all of us together will ever make in our lifetimes.

Oh yeah, cuz every rich person is just like Paris Hilton. Great example dude! Seriously, come off it man. The majority of "the rich" are doctors, lawyers, small business owners, investors, and any number of other professionals all of which almost always require a degree if not post-graduate degrees and 12 hour a day jobs. Don't demonize these people because you don't like the fact that they earn six or seven figures a year. Penalizing them for this is asinine.

We're thinking of different things here. Maybe traders work long hours, but I'm talking about wealthy people who can just hire someone to manage their portfolio. They don't have to work at it at all.

The majority of stocks aren't owned by those super wealthy people, though. They're owned by retirement plans mostly and savings investments. Capital gains tax penalize the middle and upper middle classes savings. Increasing that tax only hurts them.

 

At lease in a fair tax plan, if a wealthy guy wants to buy a yacht, he pays out the ass for it in taxes. The difference in something like this and income/capital taxes is that he has a choice. If he wants to live like a quaker he doesn't pay taxes and more power to him.

Edited October 7, 2008 by Hykos

Oh yeah, cuz every rich person is just like Paris Hilton. Great example dude! Seriously, come off it man. The majority of "the rich" are doctors, lawyers, small business owners, investors, and any number of other professionals all of which almost always require a degree if not post-graduate degrees and 12 hour a day jobs. Don't demonize these people because you don't like the fact that they earn six or seven figures a year. Penalizing them for this is asinine.

Dude, I've made six figures, putting my two degrees to work. That isn't wealth. Doctors and lawyers (and pro athletes) aren't in that stratosphere - Hilton and Gates are.

 

PS: I grew up on a dairy farm: work, eat, sleep, no vacations, no weekends. (I got time off for school, but dad was working while I was taking it easy there!) Discussing hard work with me will always be a tough sell.

 

PPS: Take it easy man, you sound stressed!

 

I have absolutely nothing against wealthy people, so set that misconception aside. Debate my actual point - When you need more money to balance the budget (a necessary evil), an average middle class person can't afford to pay more taxes as easily as a wealthy person can.

the thing mentioned about reagan and bush terms is the fact that policies put into play are not immediate, and the effects seen in those times were caused by the previous policies and laws put into place. So if you really want to blame someone for the economic issues seen "during" those times blame carter. Things did start to get better in the late 80's when reagans reforms started to take effect.

Dude, I've made six figures, putting my two degrees to work. That isn't wealth. Doctors and lawyers (and pro athletes) aren't in that stratosphere - Hilton and Gates are.

When politicians talk about the rich, they're typically not talking exclusively of people in the upper 1% of income earners, because purely taxing so few people still won't cover the bills. They're talking about Mrs. Smith the lawyer and Dr. Smith her husband with a combined income of over $200k.

 

PPS: Take it easy man, you sound stressed!

Just tired of a lot of things I've read regarding the economy on the internet recently. Sorry if I took it out on you

 

When you need more money to balance the budget (a necessary evil), an average middle class person can't afford to pay more taxes

Well, thankfully, no one running is talking about doing that. But that's not to say they won't. Edited October 7, 2008 by Hykos

An interesting aside to this whole bailout thing (well, kindof)... Someone tossed out yesterday that (I gathered the total consumer debt, i.e. credit cards and such) in the US was $880 billion dollars. I though that amount was an amusing coincidence.

 

So what if the bailout money was used to pay off people's credit obligations instead? Certainly it would rescue a lot of people from bad situations... Generally of their own making... And then I bet they'd get right to the business of running up those credit cards again.

 

Some parallels there, for sure! ^^

As an aside, I'm all for a new form of government in America, I think ours is borken.

As an aside.

 

Mind your tones.

The majority of stocks aren't owned by those super wealthy people, though. They're owned by retirement plans mostly and savings investments. Capital gains tax penalize the middle and upper middle classes savings. Increasing that tax only hurts them.

I haven't seen numbers that would support that, but in any case... I don't know exactly how 401k plans and Roth IRAs work in the US, but Canadian retirement plans (RRSPs) don't pay any capital gains at all. The whole point of the plan is to be a tax shelter. When you retire, you convert the plan into a retirement income plan, and pay income tax based on how much you withdraw from it each year. Pension plans and their associated investments work the same - You pay income tax based on your pension payout, and never file a capital gains claim.

 

So, I don't see where capital gains taxes impact anyone's retirement plan unless they are affluent enough to cap all of the registered retirement vehicles and make significant investments outside of those plans - That isn't the case for Joe and Jill working class folks.

 

When the investment community talks about capital gains taxes hitting your pension fund, I think they mean indirectly, under the assumption that any increase would be a catastrophic blow to the stock market and all of the investments in the funds would become worthless. I find those arguments alarmist and sketchy.

Heck, Canadian capital gains rates are ~2x yours I gather, and our stock market has been outperforming yours - Well,, up until the last couple of days anyway. People want the stuff our companies make (potash, oil, Blackberries), so they buy the stock regardless of whether they get to keep 70% of the profits or 85%.

this thread is silly

agreed. And for more silly: Sad Guys on Trading Floors blog

 

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An interesting aside to this whole bailout thing (well, kindof)... Someone tossed out yesterday that (I gathered the total consumer debt, i.e. credit cards and such) in the US was $880 billion dollars. I though that amount was an amusing coincidence.

 

So what if the bailout money was used to pay off people's credit obligations instead? Certainly it would rescue a lot of people from bad situations... Generally of their own making... And then I bet they'd get right to the business of running up those credit cards again.

 

Some parallels there, for sure! ^^

 

 

I've got a big problem with a solution like that. All that does is encourage people to be irresponsible with credit cards because there are no consequences. I've never missed paying off my whole balance every month on any credit card I've owned. If all the sudden, the government paid off the balance of everyone that owed money on their credit cards I would be furious. That's not to say that I don't feel for people that are in debt, but everyone knows deep down what their means are, and need to learn how to live within those means. At least if it was something like outstanding hospital bills or something like that I wouldn't feel as bad

Me too (paying off my full balance every month) - Anyone who doesn't is in deep, deep financial trouble on that issue alone!

 

That was my point Shad - The bailout kindof encourages banks to make the same mistakes again. Not in the next couple of years, but give it a few decades and someone will be saying "Hey, let's loosen up the credit restrictions so people can buy nicer homes! Yeah, it was a little rocky last time, but the gov't took care of us...!"