Right wingers don’t appreciate competitive open markets

[Supposn]

Right wingers don’t appreciate competitive open markets; that’s why they’re proponents of the capital gains tax discount.

This is a transcript of a letter I addressed to a U.S. Congresswomen prior to the 2010 elections.

Respectfully, Supposn
///////////////////////////////

I’m pleased that you advocate (to whatever extent possible) we receive the maximum economic stimulus from every portion of Bush’s tax cuts that the U. S. Congress chooses to retain. I agree that if we’re reducing our revenue and increasing our debt, we want maximum value for our financial risk.

I heard you speak in favor of a 15% tax rate for long term capital gains. I’m opposed to special strokes for special folks or the government determining which classification of income should be favored over other incomes.

USA’s tax discount for long term capital gains reduces government’s revenues but it does not increase the net amounts invested within the USA. It induces aggregate shifting of investments to favor one category of investment over another. The incomes of those who nurture and reinvest their efforts and wealth into their enterprises are certainly economically no less worthy than that of investors who take the money and run after some time in excess of 365 days.

I'm not opposed to speculation. I'm opposed to government favoring speculators which is not optimum economic policy (if we really trust neutral public markets and free enterprise).

Investors are pragmatists. They don’t generally spend time discussing or arguing with the financial environments governments’ create; they simply function within those environments.

 

[Wiseacre]

This makes no sense at all.

 

[rdean]

Right wingers don’t appreciate competitive open markets

The truth is, they don't understand markets or capitalism.

They go on endlessly about "rich people make jobs", when we all know "supply and demand" make jobs. And many of those jobs are created through, get this, "Bank Loans". Start with Ford and go through Gates. Or did they borrow to create a company that fed a "demand"?

Simple common sense tells you, when people have no money, there is NO demand, hence - no jobs. It's just that simple, simple enough for "simpletons". Oops, sorry. Republicans are so easily insulted.

 

[Wiseacre]

Right wingers don’t appreciate competitive open markets

The truth is, they don't understand markets or capitalism.

They go on endlessly about "rich people make jobs", when we all know "supply and demand" make jobs. And many of those jobs are created through, get this, "Bank Loans". Start with Ford and go through Gates. Or did they borrow to create a company that fed a "demand"?

Simple common sense tells you, when people have no money, there is NO demand, hence - no jobs. It's just that simple, simple enough for "simpletons". Oops, sorry. Republicans are so easily insulted.

Being an asshole does not improve your position. So tell me, how many jobs does a guy making 20k/yr create? Answer: none, unless he can get the backing of some rich guys who can get a good return on their investment if the capital gains tax is not too high. Seems simple enough, the lower the capital gains tax the more investment gets made.

There has never been a situation where a country raised taxes and spent more money and got themselves out of financial purgatory. NEVER. It doesn't work, never has, never will. How's that for understanding markets or capitalism.

 

[rdean]

Right wingers don’t appreciate competitive open markets

The truth is, they don't understand markets or capitalism.

They go on endlessly about "rich people make jobs", when we all know "supply and demand" make jobs. And many of those jobs are created through, get this, "Bank Loans". Start with Ford and go through Gates. Or did they borrow to create a company that fed a "demand"?

Simple common sense tells you, when people have no money, there is NO demand, hence - no jobs. It's just that simple, simple enough for "simpletons". Oops, sorry. Republicans are so easily insulted.

Being an asshole does not improve your position. So tell me, how many jobs does a guy making 20k/yr create? Answer: none, unless he can get the backing of some rich guys who can get a good return on their investment if the capital gains tax is not too high. Seems simple enough, the lower the capital gains tax the more investment gets made.

There has never been a situation where a country raised taxes and spent more money and got themselves out of financial purgatory. NEVER. It doesn't work, never has, never will. How's that for understanding markets or capitalism.

There is a show I like to watch starring Joan Rivers. She goes around and asks rich people where their money came from. More often than not, the person interviewed figured out something to sell. One invented a new grill. One guy made "joke teeth". They started with "bank loans", ideas and sometimes family members pitching in. This Republican idea that everything comes from "rich" people is delusional. You have to "sell something". No one "makes jobs". It's not a charity. There has to be a "demand".

You see, Republicans "skip over" the part about "making something to sell". Listen to them, they don't understand "supply and demand". They hear "tax" and "investment", but do they know what "investment" means? If they did, they would want to "invest" in America's infrastructure.

Many times, lack of imagination reflects a "lack of education" and vice versa.

 

[Mr. H.]

This makes no sense at all.

Sure it does. He wants your pot to piss in, because he doesn't have one.

 

[Supposn]

Wiseacre, right wingers often chant “Customers, not businesses pay taxes”.

This is true for all business expenditures but it is not true of income taxes. Due to its nature a tax upon net income’s not passed onto the customers but it is directly or indirectly paid by the owners of the enterprises.

FICA, unemployment, disability, casualty insurance expenditures are passed onto customers. Corporate and other income taxes are not (passed onto customers).

If the nature of competitive markets tolerated such additional charges to be passed on, business enterprises and their owners would have no reason to complain about taxes affects upon themselves.

Respectfully, Supposn

 

[Mad Scientist]

There is a show I like to watch starring Joan Rivers. She goes around and asks rich people where their money came from. More often than not, the person interviewed figured out something to sell. One invented a new grill. One guy made "joke teeth". They started with "bank loans", ideas and sometimes family members pitching in. This Republican idea that everything comes from "rich" people is delusional. You have to "sell something". No one "makes jobs". It's not a charity. There has to be a "demand".

rdean gets his economic education from Joan Rivers "Man on the Street" interviews. This explains why he doesn't ever know what he's talking about.

Do you get yer' education about the Constitution from Jay Lenos "Man on the Street" interviews deenie?

 

[Dont Taz Me Bro]

Right wingers don’t appreciate competitive open markets; that’s why they’re proponents of the capital gains tax discount.

This is a transcript of a letter I addressed to a U.S. Congresswomen prior to the 2010 elections.

Respectfully, Supposn

We don't have competitive markets in this country and the capital gains tax has dick to do with it. You don't know what the hell you're talking about so shut up.

 

[editec]

I think there is a good social benefit to taxing short term investments marginally different than long term investments.

But if I had my druthers our tax code would treat ALL INCOME the same.

I might even be interested in some of the various flat tax proposals if we did that.

But since MOST of the dollars earned in this nation are taxed at rates lower than the rates imposed on incomes from labor?

Then a progressive system of taxation is about the best we can come up with.

 

[spectrumc01]

"Right wingers don’t appreciate competitive open markets; that’s why they’re proponents of the capital gains tax discount."


Appreciating open markets? Those who believe in true capitalism and free markets forget to tell you that they only want those things in this country. When it comes to the goods and services that other companies provide to this country they want them taxed to give them an advantage. Look at NAFTA, CAFTA, and the most favored trade status given to China and listen to the bitching and outrage.

 

[rdean]

There is a show I like to watch starring Joan Rivers. She goes around and asks rich people where their money came from. More often than not, the person interviewed figured out something to sell. One invented a new grill. One guy made "joke teeth". They started with "bank loans", ideas and sometimes family members pitching in. This Republican idea that everything comes from "rich" people is delusional. You have to "sell something". No one "makes jobs". It's not a charity. There has to be a "demand".

rdean gets his economic education from Joan Rivers "Man on the Street" interviews. This explains why he doesn't ever know what he's talking about.

Do you get yer' education about the Constitution from Jay Lenos "Man on the Street" interviews deenie?

You must be right. "Supply and Demand" don't mean a thing. If you give money to "rich" people, they will make jobs. It's clear to me now.

 

[xsited1]

Right wingers don’t appreciate competitive open markets

That's not a very nice thing to say about RightWinger.

http://www.usmessageboard.com/members/rightwinger.html

 

[Supposn]

................So tell me, how many jobs does a guy making 20k/yr create? Answer: none, unless he can get the backing of some rich guys who can get a good return on their investment if the capital gains tax is not too high. Seems simple enough, the lower the capital gains tax the more investment gets made.

There has never been a situation where a country raised taxes and spent more money and got themselves out of financial purgatory. NEVER. It doesn't work, never has, never will. How's that for understanding markets or capitalism.

Wiseacre, there is no additional “capital gains tax”; There’s a tax loop hole that grants extraordinary and unjustified tax reductions for capital gain incomes.

I do not argue that incomes of those who continuously reinvest into and strive to nurture their enterprises are MORE worthy but they are CERTAINLY NOT LESS economically worthy than those who choose to “take the money and run”.

The lesser tax rates granted to commercial capital gains reduce federal revenues and increases our budget’s deficits. Tax treatment favoring any particular type of business model discourages enterprises from attempting to innovate and create other business models. This is why I’m generally opposed to government choosing winners and losers.

Many who identifyn themselves as proponents of free enterprise and open competitive markets are defenders of our reduced tax rates favoring long term capital gains. They are strong proponents of government welfare programs most favoring large scale investors and their enterprises.

The nations with the poorest economies are those in which an extremely small numbers of people proportion of the nation’s populations own extremely great proportions of the nation’s wealth and annual production. USA has sometimes experienced economic booms that were not shared by the median wage. In such cases the boons were followed by severe recessions or depressions.
A “good” economic tide raises all boats; the median wage rises (proportionate to its size), at least as high as the stock market price indexes. All tides flow and ebb but even when “good” economic tides ebb, their waters of prosperity remain further than they’ve ever remained before.
A nation that depends upon the wealthy to prop up its economy will be poorer due to that dependence.

Wiseacre, if you don’t understand that, you don’t understand the potential power of free enterprise practiced in a public, competitive, equitable market place.

Excerpted from the topic “Capital gains income’s tax discount is unjustified” posted @ 11:02PM, April 16, 2011:
"It is politically unfeasible to eliminate the tax discount for profits due to sales of residences not rolled into the purchase of another home but the amounts could be limited to the median price of a U.S. private residence when the law’s passed. That “capped” amount could be thereafter annually adjusted to the U.S. dollar’s purchasing power. Other than that the unjustified tax reduction favoring capital gains profits should be eliminated".

Respectfully, Supposn

 

[rdean]

There is a show I like to watch starring Joan Rivers. She goes around and asks rich people where their money came from. More often than not, the person interviewed figured out something to sell. One invented a new grill. One guy made "joke teeth". They started with "bank loans", ideas and sometimes family members pitching in. This Republican idea that everything comes from "rich" people is delusional. You have to "sell something". No one "makes jobs". It's not a charity. There has to be a "demand".

rdean gets his economic education from Joan Rivers "Man on the Street" interviews. This explains why he doesn't ever know what he's talking about.

Do you get yer' education about the Constitution from Jay Lenos "Man on the Street" interviews deenie?

You must be right. "Supply and Demand" don't mean a thing. If you give money to "rich" people, they will make jobs. It's clear to me now.

Corporations have been telling us they are sitting on the trillions in cash they have because there is no demand. Get it? No demand.

Point that out and Republicans laugh. Corporations make jobs. They just don't have enough money and there's too many regulations. What's funny is that corporations have so much money, many are buying back their own stock so they don't have to pay out.

 

[Wiseacre]

................So tell me, how many jobs does a guy making 20k/yr create? Answer: none, unless he can get the backing of some rich guys who can get a good return on their investment if the capital gains tax is not too high. Seems simple enough, the lower the capital gains tax the more investment gets made.

There has never been a situation where a country raised taxes and spent more money and got themselves out of financial purgatory. NEVER. It doesn't work, never has, never will. How's that for understanding markets or capitalism.

Wiseacre, there is no additional “capital gains tax”; There’s a tax loop hole that grants extraordinary and unjustified tax reductions for capital gain incomes.

I do not argue that incomes of those who continuously reinvest into and strive to nurture their enterprises are MORE worthy but they are CERTAINLY NOT LESS economically worthy than those who choose to “take the money and run”.

The lesser tax rates granted to commercial capital gains reduce federal revenues and increases our budget’s deficits. Tax treatment favoring any particular type of business model discourages enterprises from attempting to innovate and create other business models. This is why I’m generally opposed to government choosing winners and losers.

Many who identifyn themselves as proponents of free enterprise and open competitive markets are defenders of our reduced tax rates favoring long term capital gains. They are strong proponents of government welfare programs most favoring large scale investors and their enterprises.

The nations with the poorest economies are those in which an extremely small numbers of people proportion of the nation’s populations own extremely great proportions of the nation’s wealth and annual production. USA has sometimes experienced economic booms that were not shared by the median wage. In such cases the boons were followed by severe recessions or depressions.
A “good” economic tide raises all boats; the median wage rises (proportionate to its size), at least as high as the stock market price indexes. All tides flow and ebb but even when “good” economic tides ebb, their waters of prosperity remain further than they’ve ever remained before.
A nation that depends upon the wealthy to prop up its economy will be poorer due to that dependence.

Wiseacre, if you don’t understand that, you don’t understand the potential power of free enterprise practiced in a public, competitive, equitable market place.

Excerpted from the topic “Capital gains income’s tax discount is unjustified” posted @ 11:02PM, April 16, 2011:
"It is politically unfeasible to eliminate the tax discount for profits due to sales of residences not rolled into the purchase of another home but the amounts could be limited to the median price of a U.S. private residence when the law’s passed. That “capped” amount could be thereafter annually adjusted to the U.S. dollar’s purchasing power. Other than that the unjustified tax reduction favoring capital gains profits should be eliminated".

Respectfully, Supposn

Got to be dead honest here, I really didn't understand most of what you wrote here. But I did gather that you basically have a problem with the capital gains tax being at 15%, so much lower than the top marginal rate. The formula for determining GDP includes "I" for Investment, it is generally accepted that less investment means less economic growth. It is also generally accepted that of all the possible way to cut income taxes, the one that has the best bang for the buck in terms of economic growth is the capital gaines tax. And correspondingly, raising the capital gains tax is considered to be the most damaging.

Let's be honest here, capital gains tax rates is not the sole factor in economic growth. I think that CG rates were raised under Clinton with no ill effects, in fact the economy went into high gear any way. But times were different then, remember "irrational exuberance", and "let the good times roll". Okay, I made that last part up, but the thing is that the mood of the country was way more positive then and could and did absorb the tax hike without much in the way of consequences. And we didn't have the debt problem we have now.

So - it may well be that at some point in the future we can raise the CG tax rate back to what it was under Clinton, or maybe even higher. But to do so before the economy is growing at a good, sustained rate would be really foolish.

 

[Wiseacre]

rdean gets his economic education from Joan Rivers "Man on the Street" interviews. This explains why he doesn't ever know what he's talking about.

Do you get yer' education about the Constitution from Jay Lenos "Man on the Street" interviews deenie?

You must be right. "Supply and Demand" don't mean a thing. If you give money to "rich" people, they will make jobs. It's clear to me now.

Corporations have been telling us they are sitting on the trillions in cash they have because there is no demand. Get it? No demand.

Point that out and Republicans laugh. Corporations make jobs. They just don't have enough money and there's too many regulations. What's funny is that corporations have so much money, many are buying back their own stock so they don't have to pay out.

Demand and Supply. Do you understand that Demand is only one half of the equation? Honest question, do you think that redistributing the wealth from those who earned it to those who didn't is going to resolve the demand issue? Give some money to the low incomes, problem over?

I gather you believe there are no consequences, the rich guys will just pay up and make more money, no pushback. The poor guys will spend their unearned and temporary largess and presto, instant demand and a booming economy results. But there are 2 problems: rich guys don't like to pay more in taxes, and will take steps to avoid it. Most of those steps are not good for economic growth. Second problem, poor guys might not spend all that extra money. They might sock some or even all of it away, considering most of the people in this country think the economy is on the wrong track.

 

[Supposn]

Got to be dead honest here, I really didn't understand most of what you wrote here. But I did gather that you basically have a problem with the capital gains tax being at 15%, so much lower than the top marginal rate. The formula for determining GDP includes "I" for Investment, it is generally accepted that less investment means less economic growth. It is also generally accepted that of all the possible way to cut income taxes, the one that has the best bang for the buck in terms of economic growth is the capital gaines tax. And correspondingly, raising the capital gains tax is considered to be the most damaging. ...................

Wiseacre, I regret you didn’t find my message to be clear.

I do not advocate increasing a long term capital gains tax; there is no such tax. I advocate the elimination of the tax reductions granted to incomes derived from commercial long term capital gain transactions.
[It’s politically unfeasible to eliminate the reduction of taxes due to the sale of taxpayers’ owned homes that are the primary residences of the taxpayers or their dependents].

Profits due to the sale of things held by the sellers for one year or more prior to the sales are a long term capital gains subject to a deep reduction of income tax rates.

Long Term Capital Gains 2011 Tax Rates:

0% for taxpayers in the 10% to 15% tax bracket;
15% if you are in the 25%, to 35% tax bracket;
Real Estate longer than one year 5% or 15% after any exclusion amount;
Collectibles, (i.e. such as coins or art) longer than one year... 28%;
Collectibles longer than five years... 28%;
Small Business Stock Gains at least five year... 28%.
/////////////////////

We casually use the word “investment” but when economists are specifically referring to consumption or use of goods or service products with the hope of gain, that’s “investment”. Deposits or transfers of funds or financial instruments such as but not limited to stocks and bonds, are “transfers of wealth”.

If and when that wealth is used to purchase goods and service products for the benefit of an enterprise, that’s considered to be “investments” into those enterprises. Investments ARE, and transfers of wealth ARE NOT factored into the calculations of gross domestic products.

I do not argue that incomes of those who reinvest into and strive to nurture their enterprises are MORE worthy of favorable income tax considerations but they are CERTAINLY NOT LESS economically worthy than those who choose to sell portions or their entire enterprises.

Almost all transactions qualifying for favorable tax treatment as long term capital gains contribute nothing to our nation’s GDP; they are transfers of wealth rather than investment transactions.

Respectfully, Supposn

 

[Bfgrn]

Right wingers don’t appreciate competitive open markets

The truth is, they don't understand markets or capitalism.

They go on endlessly about "rich people make jobs", when we all know "supply and demand" make jobs. And many of those jobs are created through, get this, "Bank Loans". Start with Ford and go through Gates. Or did they borrow to create a company that fed a "demand"?

Simple common sense tells you, when people have no money, there is NO demand, hence - no jobs. It's just that simple, simple enough for "simpletons". Oops, sorry. Republicans are so easily insulted.

Being an asshole does not improve your position. So tell me, how many jobs does a guy making 20k/yr create? Answer: none, unless he can get the backing of some rich guys who can get a good return on their investment if the capital gains tax is not too high. Seems simple enough, the lower the capital gains tax the more investment gets made.

There has never been a situation where a country raised taxes and spent more money and got themselves out of financial purgatory. NEVER. It doesn't work, never has, never will. How's that for understanding markets or capitalism.

You FAIL. It worked here. Educate yourself on the New Deal.

What NEVER works is what Herbert Hoover and Andrew Mellon did to bring on the Great Depression...liquidate, and austerity. They listened to the 'Austrian' school. Unless you also believe Medieval blood letting save lives?

Economic Policy Under Hoover

Throughout this decline—which carried real GNP per worker down to a level 40 percent below that which it had attained in 1929, and which saw the unemployment rise to take in more than a quarter of the labor force—the government did not try to prop up aggregate demand. The only expansionary fiscal policy action undertaken was the Veterans’ Bonus, passed over President Hoover’s veto. That aside, the full employment budget surplus did not fall over 1929–33.

The Federal Reserve did not use open market operations to keep the nominal money supply from falling. Instead, its only significant systematic use of open market operations was in the other direction: to raise interest rates and discourage gold outflows after the United Kingdom abandoned the gold standard in the fall of 1931.

This inaction did not come about because they did not understand the tools of monetary policy. This inaction did not come about because the Federal Reserve was constrained by the necessity of defending the gold standard. The Federal Reserve knew what it was doing: it was letting the private sector handle the Depression in its own fashion. It saw the private sector’s task as the “liquidation” of the American economy. It feared that expansionary monetary policy would impede the necessary private-sector process of readjustment.

Contemplating in retrospect the wreck of his country’s economy and his own presidency, Herbert Hoover wrote bitterly in his memoirs about those who had advised inaction during the downslide:

The ‘leave-it-alone liquidationists’ headed by Secretary of the Treasury Mellon…felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula: ‘Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate’.…He held that even panic was not altogether a bad thing. He said: ‘It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people’.


The Federal Reserve took almost no steps to halt the slide into the Great Depression over 1929–33. Instead, the Federal Reserve acted as if appropriate policy was not to try to avoid the oncoming Great Depression, but to allow it to run its course and “liquidate” the unprofitable portions of the private economy.

In adopting such “liquidationist” policies, the Federal Reserve was merely following the recommendations provided by an economic theory of depressions that was in fact common before the Keynesian Revolution and was held by economists like Friedrich Hayek, Lionel Robbins, and Joseph Schumpeter.

 

[Wiseacre]

Sorry bfgrn, can't say as I totally understand what your saying here. The CATO Institute website has a Briefing Paper about Herbert Hoover, the following is from the execuive summary:


Politicians and pundits portray Herbert Hoover as a defender of laissez faire governance whose dogmatic commitment to small government led him to stand by and do nothing while the economy collapsed in the wake of the stock market crash in 1929. In fact, Hoover had long been a critic of laissez faire. As president, he doubled federal spending in real terms in four years. He also used government to prop up wages, restricted immigration, signed the Smoot-Hawley tariff, raised taxes, and created the Reconstruction Finance Corporation—all interventionist measures and not laissez faire. Unlike many Democrats today, President Franklin D. Roosevelt's advisers knew that Hoover had started the New Deal. One of them wrote, "When we all burst into Washington ... we found every essential idea [of the New Deal] enacted in the 100-day Congress in the Hoover administration itself."

Hoover's big-spending, interventionist policies prolonged the Great Depression, and similar policies today could do similar damage. Dismantling the mythical presentation of Hoover as a "do-nothing" president is crucial if we wish to have a proper understanding of what did and did not work in the Great Depression so that we do not repeat Hoover's mistakes today.


Herbert Hoover: Father of the New Deal | Steven Horwitz | Cato Institute: Briefing Paper