Replace Capital Gains Tax. What do you think?

[Bern80]

The only problem with the capital gains tax is that it is only 15%.

Since we already have 401K and other retirement account tax shelters capital gains, even those realized via exercising stock options, should be more in line with the levels of the graduated income tax.

People who buy recycled stock aren't actually priming the pumps of investment in innovative start ups, so why grant them an eternal grace period?

That said a graduated annual capital gains tax is not a bad idea. Perhaps a 15%- 75% range is more appropriate for investors who don't participate in a retirement income tax shelter.

Goldman Sachs profited $100 million/day on their day trading ventures 81 out of 90 days in 2009. During an economic contraction.

Perhaps they should have been taxed 90% on that income. For the good of the nation and the economy. Some profiteering deserves to be discouraged.

What about Madoff, should he be taxed disproportionately, after the fact?

Your's truly,

Doctor Clawback.

WOW. Do you know that politicians in washington look at people like you and laugh their asses off? "Look at this dumbass, here. Not only are we taking 30-40% of people's income, spending it incredibly innefficiently, but have constituents that are actually arguing that we take more of it."

You're playing their game cannon. Shouldn't the idea be to figure how we can get government what it needs and have people keep as much of their own money as possible?

Not.

If you redistribute the tax burden you aren't increasing taxes.

In my foolish fantasy world all taxes would be eliminated and replaced with user fees, ambitious nationalization of essential industry and a one time 100% death tax. Freeing the living and working from all other taxes.

The % of tax we pay as a whole is a function of services we receive, and any agreed amount is fine with me; 1% tax for miniscule service or 75% tax for nearly complete services. it makes no diff to me. Whatever we agree to is fine.

What bothers me is disproportionate taxation of surplus income.

You don't care about your level of freedom? Because it is directly related to how much you pay in taxes. The more taxes you pay it means the more government is trying to get involved in your life and the less free you are. By the very essence of having less money you are less free. I don't want that and neither should you.

Why in god's name should we become a more socialist country by nationalizing industry? It doesn't work. It creates even more inefficiency. And why should people have to pay taxes upon death? It's still their money that they earned before they die, they have the right to distribute their wealth however they see fit upon their death. I would recommend the fair tax personally. It would greatly simplify things. No more income taxes, just a sales tax on every good and service sold.

 

[Jersy]

Madeline makes a good point that all income is taxable. But congress has the power to exempt income from being taxed (i.e. gains in a Roth IRA). My suggestion is make all investment income tax exempt and then impose a fee (like a sales tax) on the investment itself. This type of arrangement allows non resident aliens to participate as well as bringing money into the treasury at the time the investment is initiated.

By changing the law on capital gains, the government would be implementing the beginning steps to convert our income based tax system to a transaction based tax system.

Unlike the flat tax (estimated at 15%), a transaction based system of 3%-5% can replace all the income from the income tax.

Changing the capital gains is a start. If the grass roots power of the people really exists, this change could happen.

 

[The Rabbi]

Non-immigrant aliens already pay income tax here.

Again, if you tax something you get less of it. Taxing transactions has been the bureaucrats' wet dream, an almost unlimited supply of money.