- Sep 19, 2011
- 28,429
- 10,015
- 900
- Thread starter
- #61
There is no reason for that tax preference, if there is no Jobs Boom for the rest of us. It really is that simple.It is not treated as ordinary income, for a reason. Job creating investment, is usually the reason. If that is not the reason; there really is no reason for that tax preference.Your point? The rich already get a capital gains preference to create Jobs Booms.A consumer economy works best with people working and consuming, thus circulating capital in the economy.
Do you understand what "capital gains" tax is?
Here is some help...
A capital gains tax (CGT) is a tax on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a cost amount that was lower than the amount realized on the sale. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property
Capital gains tax - Wikipedia
Capital gains tax - Wikipedia
So where does "SELLING" an asset create jobs?
I mean using your perception of the evil rich capitalist, you most likely think they bury that money left after paying the capital gains tax in the back yard or most likely
you think they put it under their mattress. Is that your perception of the evil rich capitalist? Buries the money or hides it under the mattress. Right???
Where in my comment was any mention of "ordinary income"?
NOW here is the reason for "capital gains" NOT taxed as ordinary income! NOT ME but the experts explain. OK???
But it’s not that simple. There are compelling reasons to treat capital gains differently than other earnings.
For one thing, taxes on investment earnings effectively double-tax that income.
Labor income is taxed when it is earned, and investments are generally made out of after-tax earnings—
so capital-gains levies represent another bite out of an investor’s money.
In effect, the system punishes those who put their money to work. Raising the capital-gains tax rate would just make the punishment that much more drastic.
Is It Fair to Tax Capital Gains at Lower Rates Than Earned Income?
NOW let me explain that cause in appears it might be too complicated for you.
How did the person who has a capital gains tax GET the money that was invested in the first place?
Almost all of it comes from the person who WORKED first, then paid taxes on the income as "ordinary income".
Then what was left the person invested.... again after having paid the "INCOME" tax.
So it was not fair for the person who already paid a tax on their wages to then pay a tax again on capital gains where the person had invested AFTER tax savings!
Now another reason:
Labor income is taxed as it is earned, so there’s no meaningful difference between your nominal and inflation-adjusted earnings. With a capital investment held over time, though, there can be a big difference between the nominal and real capital gain, with much of the nominal gain simply reflecting inflation.
So the "gains" were over time when a portion of the "gains" were from inflation.
Do you understand?
Finally NO where in the above experts explanation of the reason for lower capital gains tax was there any mention of encouraging job building!
Again... do a little research as I did and you'll have a better understanding and not make such hyperbolic, anxiety driven statements!
NO it is grossly unfair to do double taxation.
Do you comprehend this?
A) The person paying a capital gains tax is being taxed on money that the person already paid income taxes.
Here let me make simple for you.
Step one. You get paid a salary of $100,000 out of which you pay income taxes.
Now after spending money on living expenses you have $5,000 left over. Again you've already paid INCOME taxes.
So you invest these AFTER income tax paid dollars into a mutual fund. Over the years you continue to pay in.
At some point you sell the fund shares. For say $10,000 appreciation.
So it is NOT fair to consider the $5,000 gain as ordinary income because you already paid income taxes.
Therefore it was FAIR then to pay on the $5,000 gain the capital gains tax.
Also remember that "gain" of $5,000 over what you paid in also includes inflation NOT true gain in value.
So again is it fair to pay a tax on an investment that was paid with say 1990 dollars and cashed out with inflated 2017 dollars?
I know,I know... this is WAY to complicated for you to comprehend. But hey you keep bringing up the nonsensical argument about "Jobs Boom"????
Please don't embarrass yourself!