15% income tax? How is that possible?

[asterism]

That's true.

But back to the bullshit line that the capital gains rate is too low at 15% and Buffett saying he is taxed at a lower rate than his Secretary.

Buffett is a hypocrite.

Most of his wealth is already shielded from taxes via charitable trusts. He thinks he know how to use his wealth better than does the government (and he's correct). But he wishes to deny the rest of us the same freedom.

Also, his advocacy of inheritance taxes benefits the insurance companies in which he has significant investments. Proceeds from Life Insurance policies are not subjected to punitive inheritance taxes.

Yup. He's brilliant and those who wish to be like him should do what he does, not what he says.

 

[asterism]

um no.

one does not have to be a corp to pay capital gains.

Capital Gain Definition

Corporations do not pay capital gains tax. They pay income tax.

http://www.irs.gov/pub/irs-pdf/f1120.pdf

A corp would pay capital gains if a asset sold by the corp was sold for more than it was purchased.

If a corp bought a building for 1 million and sold it years later for 2 million, then there would be a capital gains tax on 1 million plus any depreciation claimed on the property. It has nothing to do with corporate income tax.

I'm not sure about that. Can you show me some documentation?

 

[asterism]

I've been hearing more and more of this nonsense that "the rich" only pay 15% of their income due to the low capital gains tax rates. Barring specific rare loopholes, how does someone who earns the bulk of their money through investing pay only this rate?

I think the talking point is bullshit, but I'll gladly admit I'm wrong if someone has some actual facts.

They only pay this amount if all of their income is long term capital gains...or they are hedge fund managers.

At the personal level. However, the profits are taxed at the corporate level also.

If I come up with an idea that I think will make $100,000 profit and I incorporate to separate the company finances and liability from my personal situation until I realize a gain, my corporation will have to pay 39% tax on that $100,000 that I (through the actions of my corporation) have generated. I am then taxed at 15% when I personally use that money.

$100,000 - 39% = $61,000 (corporate profit)
$61,000 - 15% = $51,850 (money I can spend)

That's an effective tax rate of 48.15%.

 

[Paulie]

If you earn your income from investing you pay a lower rate than if you earn your income by laboring.

Not sure why people don't see the inherent unfairness of that.

Earning a living from investing requires much more output risk than just driving to work everyday and putting in your 8 hours.

Why should someone who risks 6 or 7 figures each day to earn income pay as much as someone who simply filled out a job application, got a phone call that they were hired, and then showed up everyday to clock in and provide labor?

 

[Paulie]

Not to mention Rav, people who make a living off investing are capitalizing many of the companies who are providing people with jobs to make a living off of their labor.

That shouldn't be considered in the tax rate issue? What would happen to these companies if people stopped risking investment in them?

 

[Ravi]

Not to mention Rav, people who make a living off investing are capitalizing many of the companies who are providing people with jobs to make a living off of their labor.

That shouldn't be considered in the tax rate issue? What would happen to these companies if people stopped risking investment in them?

People won't stop risking investing in something they believe will make them money. Ever.

I'm not talking about taxing them until it hurts. I'm talking about all income being taxed equally.

 

[editec]

If you earn your income from investing you pay a lower rate than if you earn your income by laboring.

Not sure why people don't see the inherent unfairness of that.

Sounds like the work of lawyers to me. Take out all of the deductions and let it roll.

What an incredibly ignorant POV.

Do you hate all businesses?

Their deductions are the cost of doing business.

If we taxed businesses on GROSS INCOME rather than allowing them to deduct the cost of doing business, there'd be no point in doing business at all !

 

[Paulie]

Not to mention Rav, people who make a living off investing are capitalizing many of the companies who are providing people with jobs to make a living off of their labor.

That shouldn't be considered in the tax rate issue? What would happen to these companies if people stopped risking investment in them?

People won't stop risking investing in something they believe will make them money. Ever.

I'm not talking about taxing them until it hurts. I'm talking about all income being taxed equally.

I never said anything about anyone actually stopping investing because of the tax rate. I just pointed out why I don't see investment income and labor income as being equal in terms of taxation, and pointed out the reason why investing can be considered more important.

Labor needs investors. But investors don't necessarily need labor, as we've been seeing with the stock market during this period of high unemployment.

 

[code1211]

Not to mention Rav, people who make a living off investing are capitalizing many of the companies who are providing people with jobs to make a living off of their labor.

That shouldn't be considered in the tax rate issue? What would happen to these companies if people stopped risking investment in them?

We don't need to wonder about this. We only need to wait and watch the effects of the economic plans of the Big 0.

Has he raided the plants of any other non-union job creators since Gibson?

Has he granted any more waivers to the unions to help them avoid the wasteful and punitive measures of Obamacare?

 

[code1211]

If you earn your income from investing you pay a lower rate than if you earn your income by laboring.

Not sure why people don't see the inherent unfairness of that.

Sounds like the work of lawyers to me. Take out all of the deductions and let it roll.

What an incredibly ignorant POV.

Do you hate all businesses?

Their deductions are the cost of doing business.

If we taxed businesses on GROSS INCOME rather than allowing them to deduct the cost of doing business, there'd be no point in doing business at all !

Gross income is not net profits. A cost of doing business is removed from profitablity before the money is subject to taxation.

This pretty basic stuff.

Earnings is earnings and that is the number after after all of the expenses have been removed. EBIT, EBITDA and all the rest are accounting devices to help justify burowing.

A deduction occurs because some beaurocrat or politician decided that the particular use of a particular commodity or service needs to be encouraged. As a result, if a little bio diesel is added to a whole tanker of bio diesel, then the taxes on the whole tanker full is reduced.

Entire tankers make a quick stop in New Orleans, add a little squirt of bio diesel and, presto, the tanker's contents are sold with a tax deduction to a different country and the tanker sails away with the diesel and our money for the good people of Europe to burn in their Volvos. That's a Deduction.

Buying the equipment to drill, the tanker to ship, hiring the people to work or create advertising or buying goods or services to do business are all expenses and therefore are deducted from Gross Revenue before the Earnings line is ever reached on the P&L. Expenses are not deductions and vice versa.

A cost of doing business and a deduction to comply with the engineering desired by the government are very different things.

Eliminating the deductions eliminates the ability of the government to dictate or influence the way a business is run and that is abhornet to any Liberal. Eliminating all deductions AND lowering the Corporate tax to the lowest in the world would induce internationals to declare profits in the USA rather than Belieze.

Here are some aids for you:

Read An Income Statement

A Dirty Secret: U.S. Taxpayers footing bill for “Splash and Dash”, Dumping subsidized Biodiesel in Europe | Chemically Green

 

[code1211]

Not to mention Rav, people who make a living off investing are capitalizing many of the companies who are providing people with jobs to make a living off of their labor.

That shouldn't be considered in the tax rate issue? What would happen to these companies if people stopped risking investment in them?

People won't stop risking investing in something they believe will make them money. Ever.

I'm not talking about taxing them until it hurts. I'm talking about all income being taxed equally.

I never said anything about anyone actually stopping investing because of the tax rate. I just pointed out why I don't see investment income and labor income as being equal in terms of taxation, and pointed out the reason why investing can be considered more important.

Labor needs investors. But investors don't necessarily need labor, as we've been seeing with the stock market during this period of high unemployment.

Also, the money that is used to make the ivestment has already been taxed. I know it's not taxed a second time, but it's still a consideration. A bird in the hand...

I'm always a tad amused when I hear the critics complain bitterly that the business people are not investing the Trillions that they are currently sitting on. Those who complain about this never seem interested in why the investments are not happening. They only know that the evil rich are not investing and that is hurting them.

Why are the investments not being made? That is the question that might lead to a good outcome. Cause-effect.

It seems this is a link that never seems important to Liberals.

Me-Me is the only link a Liberal can grasp.

 

[Ravi]

Also, the money that is used to make the ivestment has already been taxed.

And it isn't taxed again. Only the profits are.

 

[code1211]

Also, the money that is used to make the ivestment has already been taxed.

And it isn't taxed again. Only the profits are.

Exactly what i said in the part you edited out.

 

[Care4all]

That's the capital gains rate of a personal realization of a long term investment. Corporate taxes are also paid on the gains but are paid before the investor is paid. The other way is to files as an S-Corporation where all income passes through to the owners and those earnings (even if left in the company) are all taxed at the personal income rate.

But the investor doesn't pay the corporate taxes, they only pay taxes on the income that is distributed to them via a realized gain.

True, but as has been shown there's more to the story (and much more in taxes) than just the money that Buffett or the Koch brothers collect as dividends. Warren Buffett never mentioned that besides his personal income tax rate of 17% there were all the corporate tax rates he paid through the various corporations that he owns.

nope.

the customers who bought his corporation's products paid the BULK of the corporate tax because it is always incorporated in to the price of the product's Mark Up.

 

[asterism]

But the investor doesn't pay the corporate taxes, they only pay taxes on the income that is distributed to them via a realized gain.

True, but as has been shown there's more to the story (and much more in taxes) than just the money that Buffett or the Koch brothers collect as dividends. Warren Buffett never mentioned that besides his personal income tax rate of 17% there were all the corporate tax rates he paid through the various corporations that he owns.

nope.

the customers who bought his corporation's products paid the BULK of the corporate tax because it is always incorporated in to the price of the product's Mark Up.

Then by that logic the price also includes taxes due to be paid by investors. That doesn't change the amount of money generated by economic activity that goes towards taxes. In the above example that's 44.75%, not 15%.

 

[Paulie]

Here is the main reason why capital gains and dividend tax rates should not be any higher:

Corporations have their income taxed at up to 35 percent. While shareholders are not directly taxed on the corporation's income, they are indirectly. For the sake of argument, if that 35% was removed or even lowered, the company's share price would go higher because earnings have increased. So the corporation's tax rate certainly has an effect on share holders and their potential capital gains, for starters. And then share holders are taxed on their stock sales at whatever their corresponding capital gain tax rate is. For someone who makes their living trading stocks short term, they pony up their regular income tax bracket rate. And finally, share holders are taxed 15% on their dividends to boot.

There's PLENTY of investment taxation. And more than enough justification for not raising the rates any higher.

 

[Ravi]

Also, the money that is used to make the ivestment has already been taxed.

And it isn't taxed again. Only the profits are.

Exactly what i said in the part you edited out.

Ah, so you admit that you're stupid.

Got it!

 

[jillian]

Nobody has any facts?

seriously?

 

[PLYMCO_PILGRIM]

If you earn your income from investing you pay a lower rate than if you earn your income by laboring.

Not sure why people don't see the inherent unfairness of that.

1) The issue here is that Obama and Buffet both misrepresented the truth about what warren buffet pays in personal income taxes. He claims 15% but buffet was lying with this claim as that is his capital gains tax rate not his personal income tax rate

2) if you keep the taxes high on capital gains it negates the reason people invest money into business, to make capital gains on their risk. By having the capital gains tax high you make the risk/reward ratio too low on the reward side to spur investment. If people aren't investing in american businesses, guess what, we lose american jobs and don't create jobs.

 

[asterism]

Some people don't get that corporations are collections of people engaging in commerce. It's disingenuous to discount the hefty taxes paid by the corporation before the benefit of the commerce reaches the investors.

$100 Million in corporate profit distributed to investors is taxed at 44.75% .