The Injustice of Obama raising the capital gains tax

[teapartysamurai]

Do you know the difference between nominal and real gdp?

I have a passing familiarity with the topic at hand.



no, it's not. By that way of thinking, all incomes should be taxed based on their previous value since GDP is a measure of income.



indeed. It's so universal that even investors are aware of it! That doesn't change the fact that a 5K investment that is now worth 6K is more profitable than a 5K investment under your mattress - though not as profitable as a 5K investment in TIPS.



The government measures real GDP in order to measure the total amount of goods and services produced. The GDP deflator is how they separate actual production from income due to changes in the money supply.



The opportunity cost of investing money in something that creates a $1,000 nominal return is the $0 return they would have made had they kept it under their mattress. Of course, another opportunity cost would be TIPS, but they didn't buy TIPS. They risked capital instead.



I had a class at the local juco once. how about you?


Oh, speaking of mindless imbeciles then: Does the IRS allow your employer to collect less in taxes and allow you to pay less in nominal taxes as the year goes on to make up for the inflationary effects on your income over the course of the year? I'm sure they do and I'm just a mindless imbecile who never noticed this.



if you had invested in, for example, June of 2008 and realized those gains today, you would need to pay additional taxes because the adjusted value of your investment has greater purchasing power now than it did then.

But with your superior intellect, I'm sure you know this already. After all, I'm just a mindless imbecile.

GET A FREAKIN CLUE!!

That's exactly what I was thinking.

The bolded part is all I need to know to realize you don't know what the hell you're talking about. Current year income, i.e. from a job, is paid in current year dollars. We're talking about comparing prior year outlays with current year receipts. They are apples and oranges. If you don't understand that, go back to school. You learned nothing. I don't have time to waste with the rest because I'm in school actually learning something, so I have other responsibilities to attend to.

I think he's like my oldest, who's in college.

She's an "adult" still lives at home and just hasn't experienced the real world of the shrinking dollar.

He is being told all this theoretical stuff about the dollar, but anyone paying bills over that 10 years would know it's BS.

That's why a lot of 20 year olds are liberal and a lot of 40 year olds are conservative.

 

[8537]

Did someone mention imbeciles? I think they did. Let's review:

The bolded part is all I need to know to realize you don't know what the hell you're talking about. Current year income, i.e. from a job, is paid in current year dollars.

I'm going to give you a free macro lesson: "current year" dollars change in value during the course of a year. The CPI and/or the GDP deflator don't magically adjust each year on January 1. They change over the course of a year. The value of a dollar in January of a year is not the same as the value of that dollar in December of that year.

that lesson, pulled from my juco education, comes free of charge. I'm sure you are getting a far superior education.

 

[teapartysamurai]

Why did you modify the post to make it look as if I posted the latter in bold?

I didn't.

As for the former, all you are saying is because he is an investor, he CHOSE to get ripped off, so he deserves all he gets.

No, he chose to take a risk. It didn't pay off. The government isn't responsible for your bad choices - heck, the government even offered you a risk-free investment with a guaranteed higher return.

That's just laughable.

The government won't take responsibility for it's own high risks, that's why they are trying to rip off everyone else.

But it isn't about risk with the investor. The investor is not responsible for the inflation rate.

Asking the investor to eat the inflation rate, because the government won't honestly deal with it, is the government self servingly taking advantage of the investor.

 

[8537]

Do you know the difference between nominal and real gdp?

I have a passing familiarity with the topic at hand.



no, it's not. By that way of thinking, all incomes should be taxed based on their previous value since GDP is a measure of income.



indeed. It's so universal that even investors are aware of it! That doesn't change the fact that a 5K investment that is now worth 6K is more profitable than a 5K investment under your mattress - though not as profitable as a 5K investment in TIPS.



The government measures real GDP in order to measure the total amount of goods and services produced. The GDP deflator is how they separate actual production from income due to changes in the money supply.



The opportunity cost of investing money in something that creates a $1,000 nominal return is the $0 return they would have made had they kept it under their mattress. Of course, another opportunity cost would be TIPS, but they didn't buy TIPS. They risked capital instead.



I had a class at the local juco once. how about you?


Oh, speaking of mindless imbeciles then: Does the IRS allow your employer to collect less in taxes and allow you to pay less in nominal taxes as the year goes on to make up for the inflationary effects on your income over the course of the year? I'm sure they do and I'm just a mindless imbecile who never noticed this.



if you had invested in, for example, June of 2008 and realized those gains today, you would need to pay additional taxes because the adjusted value of your investment has greater purchasing power now than it did then.

But with your superior intellect, I'm sure you know this already. After all, I'm just a mindless imbecile.

GET A FREAKIN CLUE!!

That's exactly what I was thinking.

Look, your desperate spin to ignore the reality of inflation is laughable.

You think people who are now paying more for their house than it's worth can ignore such realities and inflation and deflation?

Valeyard,

Housing purchases are considered an investment and are therefore not part of the calculation for inflation. I figured your superior education would have told you that already.

 

[G.T.]

If your investment isn't covering the inflation rate, you should study harder in investing.

 

[teapartysamurai]

The Koch brothers campaign to lower taxes for the rich and deregulate the oil and petro chemical industry is working perfectly thanks to dupes like the Tea Party.

Tax cuts for the "rich."

Man liberals just HATE the idea of people keeping more of what they earn, don't they?

This is a perfect example of a Tea Party member who has been duped by corporate interests.

If you want to know the real story behind the scenes go to...

The Center for Public Integrity

What is it with you liberals that you just HATE people making money?

How am I being "taken advantage" of, if say Dow chemicals or Sony makes money?

Will you explain that?

Why is it liberals really have the attitude that's their money to do with as they wish, and that money is being "stolen" from them, if corporations keep more of what THEY EARN????????

 

[8537]

I didn't.




No, he chose to take a risk. It didn't pay off. The government isn't responsible for your bad choices - heck, the government even offered you a risk-free investment with a guaranteed higher return.

That's just laughable.

The government won't take responsibility for it's own high risks, that's why they are trying to rip off everyone else.

Which high risks are those?

But it isn't about risk with the investor. The investor is not responsible for the inflation rate.

The investor is responsible for understanding the impact of inflation. And that investor can protect himself from that inflation if s/he is willing to exchange risk for return.

 

[8537]

If your investment isn't covering the inflation rate, you should study harder in investing.

The government and financial institutions offer several risk-free opportunities to invest in assets that guarantee a real return. But cons can't be held accountable if they don't take that opportunity, ya see.

Makes no sense? Of course not. What would you expect?

 

[teapartysamurai]

I have a passing familiarity with the topic at hand.



no, it's not. By that way of thinking, all incomes should be taxed based on their previous value since GDP is a measure of income.



indeed. It's so universal that even investors are aware of it! That doesn't change the fact that a 5K investment that is now worth 6K is more profitable than a 5K investment under your mattress - though not as profitable as a 5K investment in TIPS.



The government measures real GDP in order to measure the total amount of goods and services produced. The GDP deflator is how they separate actual production from income due to changes in the money supply.



The opportunity cost of investing money in something that creates a $1,000 nominal return is the $0 return they would have made had they kept it under their mattress. Of course, another opportunity cost would be TIPS, but they didn't buy TIPS. They risked capital instead.



I had a class at the local juco once. how about you?


Oh, speaking of mindless imbeciles then: Does the IRS allow your employer to collect less in taxes and allow you to pay less in nominal taxes as the year goes on to make up for the inflationary effects on your income over the course of the year? I'm sure they do and I'm just a mindless imbecile who never noticed this.



if you had invested in, for example, June of 2008 and realized those gains today, you would need to pay additional taxes because the adjusted value of your investment has greater purchasing power now than it did then.

But with your superior intellect, I'm sure you know this already. After all, I'm just a mindless imbecile.


That's exactly what I was thinking.

Look, your desperate spin to ignore the reality of inflation is laughable.

You think people who are now paying more for their house than it's worth can ignore such realities and inflation and deflation?

Valeyard,

Housing purchases are considered an investment and are therefore not part of the calculation for inflation. I figured your superior education would have told you that already.

Then explain WHY since the housing crash people are paying more for their houses than they are worth?

Education your way out of that.

Besides, I wasn't given that as an example of investments, but of how the dollar is losing value.

Your inability to accept that inflation and buying power should be taken into account for capital gains amounts to nothing more than just spinning for the Obama admin.

Let's put it this way. Explain why revenue to the governnent went up so much during the Clinton admin (when they cut capital gains), that they supposedly balanced the budget?

 

[teapartysamurai]

That's just laughable.

The government won't take responsibility for it's own high risks, that's why they are trying to rip off everyone else.

Which high risks are those?

But it isn't about risk with the investor. The investor is not responsible for the inflation rate.

The investor is responsible for understanding the impact of inflation. And that investor can protect himself from that inflation if s/he is willing to exchange risk for return.

Let me get this straight.

The investor is responsible for all risks and the government ISN'T when figuring tax rates?

 

[uscitizen]

Bingo, you would lose money.

Same thing if you make 20% on an investment but the inflation rate is 27+%, you lost money.

Just as I pointed out with the simple example of mac and chees and a candy bar.

If you dollar bought two boxes of mac and cheese in 2000 and now it only can buy one, then you have lost buying power, you essentially have lost money.

But if you are being taxed as IF you can still buy two boxes of mac and cheese, refusing to take into account inflation, then you are going to get ripped off.

Bottom line.

On the other hand I bought gold eagles at about $550 and put them in a "lockbox".

You do realize that the value of gold is different from the value of the dollar don't you? For one, the dollar is no longer backed by gold, and hasn't been for years.

Duhhh! that is why I bought gold. I knew what was coming.

 

[CrusaderFrank]

I'd repeal all capital gains taxes and would exempt any new business from paying income taxes for 5 years.

 

[boedicca]

I'm not sure how you can be taxed 100%, turd.

Because you have no intelligence that's why.

It's very EASY to understand if you OPEN YOUR MIND to reality.

If you buy a stock at 5,000 dollars in 2000, and sell it in 2010 for 6,000 (but with inflation you really lost money).

You lose money, thus they are taxing 100% of the suppsed "gain." Watch the video.

if you took that $5000, 5 years ago, and put it in a lock box, how much money would you have in 2010 when you opened it????

In nominal or constant dollars?

That $5,000 would have lost close to $600 of purchasing power due to inflation.

 

[teapartysamurai]

I'd repeal all capital gains taxes and would exempt any new business from paying income taxes for 5 years.

Remember what happened to revenues to the government just CUTTING capital gains back in the Clinton admin? (but it was the republicans that forced Clinton to do it)

It would be a BOON to the economy, which is WHY liberals are so against it.

They just can't STAND the idea of anyone making more money than they think they should make.

All money belongs to them, to be "distributed" as they see fit.

Of course they get the first skim off the top.

 

[boedicca]

Yeah, the only problem is 2010 dollars BUYS less than did the 2000 dollar because of the 27+% inflation that's tacked onto those 2010 dollars.

That is not at all relevant. The person was paid a return over the course of the investment. The total value of that return was equal to $1,000. The person buying the stock is - or should be - well aware of the changes in purchasing power, yet that person still made a decision to allocate the resources towards the investment. They should have chosen TIPS, it appears, but their stupidity is not the government's concern. The Government offered the person a better opportunity with less risk, which they declined.

Thus if you are taxed as if your dollar still can buy .50 mac and cheese you are going to get ripped off.

You're taxes on Mac and Cheese based on the nominal value of the dollar. You're taxed on capital gains based on the nominal value of the appreciation.

Should someone who realizes a $1,000 loss in 2010 only be able to claim 700 of that against gains?

Inflation is not relevant??????????

Then explain why other taxes have inflation indexing, if it is not relevant?

What a joke!

This is akin to you stating 1000 dollars never changes in value!

You could practically buy a car in 1960 (you sure could in the 1950s) with 1000 dollars.

CAN YOU NOW???????????

1000 bucks MIGHT be a downPAYMENT on some cars (and on other cars, they would LAUGH at you, if you tried to use a 1000 as a down payment)

So, if you are taxed as IF that 1000 bucks can still practically buy a car, how fair is that?

How obtuse do you have to be not to see this?????

Inflation isn't relevant only to those who are ignorant of the economic fracas of the 1970s.

 

[KissMy]

I'm not sure how you can be taxed 100%, turd.

Because you have no intelligence that's why.

It's very EASY to understand if you OPEN YOUR MIND to reality.

If you buy a stock at 5,000 dollars in 2000, and sell it in 2010 for 6,000 (but with inflation you really lost money).

You lose money, thus they are taxing 100% of the suppsed "gain." Watch the video.

if you took that $5000, 5 years ago, and put it in a lock box, how much money would you have in 2010 when you opened it????

If inflation follows the trend of the past 25 years your $5000 would only be worth about half what it was 5 years ago. Real inflation was running 8.5%

In order to keep your savings from depleting your investments would have to exceed 8.5% for which the government would tax you again ensuring you lose your savings value. Luckily for savers, inflation for the past 2 years have been down.

 

[boedicca]

If your investment isn't covering the inflation rate, you should study harder in investing.

That's a very naive comment.

Investment goals vary based upon the wealth, age, earning power, responsibilities, goals etc. of the investor.

Somebody who is retired and living off of modest amount of savings is going to have far lower risk tolerance than someone much younger with years of earning power ahead of him.

One of the more devastating aspects to Obamanomics is the near Zero Interest Rate policy which is evaporating the interest income upon which many seniors use for living expenses. All to benefit the expanse of Big Government. Happy Happy Joy Joy All Hail The Ominpotent State.

 

[8537]

Then explain WHY since the housing crash people are paying more for their houses than they are worth?

that has nothing to do with inflation.

and by nothing, I mean zilch, zero, nada.

Let's put it this way. Explain why revenue to the governnent went up so much during the Clinton admin (when they cut capital gains), that they supposedly balanced the budget?

Government revenues went up for a host of reasons. The biggest reason was a tremendous expansion in production and services in the technical / computing sector. incentivizing short-term gains in tax policy played a roll as well. More broadly, revenues increased because incomes increased and tax revenues are a function of incomes.

 

[8537]

Let me get this straight.

The investor is responsible for all risks and the government ISN'T when figuring tax rates?

What a cute little statist you are.

Why should the government be held responsible for an individual who is too stupid to account for the quite-predictable low levels of inflation the US has experienced for 30 years?

 

[McDowell's]

Did someone mention imbeciles? I think they did. Let's review:

The bolded part is all I need to know to realize you don't know what the hell you're talking about. Current year income, i.e. from a job, is paid in current year dollars.

I'm going to give you a free macro lesson: "current year" dollars change in value during the course of a year. The CPI and/or the GDP deflator don't magically adjust each year on January 1. They change over the course of a year. The value of a dollar in January of a year is not the same as the value of that dollar in December of that year.

that lesson, pulled from my juco education, comes free of charge. I'm sure you are getting a far superior education.

So you get paid once a year at the end of the year? Is that what you're telling me? No, you get paid most likely, biweekly. What is the biweekly inflation rate? Next to nothing. And technically, you owe the taxes as soon as you're paid as noted by FIT withholding. So the inflation between when you earn the money and owe the taxes is negligible. So please tell me how that compares to a capital gain which has accrued over a 20 or 30 year time frame. It doesn't. People do not owe taxes on capital gains until the gain is realized. You realized your income every two weeks, the realization time frame on a capital gain is potentially indefinite. Technically should your salary be adjusted for inflation. In a perfectly fair world, yes. Is it even remotely feasible. Not in the least.

The fact you bring TIPS in to try and bolster your argument is kinda funny. TIPS are a direct admission by the federal government that inflation reduces the realized returns on bonds. Please take that into consideration while you spin your wheels some more - you're basically arguing Samurai's point for him.