It's simple human behavior: if you want more of something, you lower taxes on it. If you want less of something, you raise taxes on it. Apply that to anything you want. Drugs, investment capital, health care, traffic, whatever.

Dougwithau: You are missing the point. I am saying that labor SHOULD NOT be taxed. I consider it immoral to foricbly tax labor. In a world where we do not tax labor, your point no longer stands; the money invested has no longer "already been taxed once." I suppose you could say when you reinvest and earn a second gain, you've been taxed twice, but that's happening now anyway, so there would be no net difference in that regard under what I described.

As far as foreign investors, if there is no capital gains tax, they can just as easily invest, pull out their profits, and TAKE THEM OVERSEAS with them - it won't necessarily get reinvested. That's why you can't have a 0% tax on investments. As much as I can't stand the Democrats (their merger of progressivism and corporatism scares me more than just about anything), the 0% tax on investments is the stupidest thing I've ever heard Republicans argue for since Terri Schiavo. Even 401(K)s have deferred taxes, not zero taxes.

I advocate for using technology to create multiple U.S. currency systems. Then sign up under the set of rules you want. Laissez-faire, social safety net, some hybrid system, whatever. Each managing its own way. That would keep things more honest than the current unsustainable system of the Fed running QE, inflating the currency, and eroding consumer purchasing power.

As a Presidential Candidate, Scott, when are you going to reveal *your* effective tax rate?*

*Use any hypnotic, weasily technique to "answer" the question without actually answering the question you wish. This is an important skill for a politician!

@EMU: "That's a mighty statement"

Yes, it was a parody.

@EMU - I was only arguing that the MAJORITY of Americans (let's say 99%) get about the same benefits from government. My example used a 20k and 70k income neither of which would be considered wealthy. All income tax systems--current or proposed--charge a higher TOTAL tax amount for taxpayers who earn more money in the previous year. While no system is going to be perfect, the idea that a flat tax is somehow more fair than a bracketed system is absurd. If you support a flat tax, you support higher taxes based on income because that's how all income taxes work. Don't even get me started on the "fair" tax (national sales tax)...

As for the land value tax system, you should take the time to look at it further. Most people use land wither they rent or own and it's likely to be propositional to their income (the rich tend to own more valuable property). It's also far less burdensome to calculate given that the property tax infrastructure is already in place, very difficult to cheat since housing is public record, and doesn't stifle the economy as a high national sales tax would likely do.

If Gingrich's flat tax plan was passed, most people would be paying 15% of their income while Mitt Rommey's income would be taxed at 0% since it's all capital gain. Under a land value tax, Romeny would pay taxes on his six expensive homes while ordinary people would pay taxes on their single home. Then just get rid of income, corporate, and investment taxes all together. That's about as fair as I can make it. The only way to "cheat" such a tax system is to become homeless.

It likely is not true that Buffett and his secretary receive the same benefits from the government. He probably flies more, using more FAA services. She probably barely uses the judicial system, even as implicit threat, to enforce contracts. If one allocates the value Berkshire Hathaway (spelling?) companies receive from public infrastructure of all sorts, he receives far more. And so on.

Also, nice hypnosis in implicitly assuming as a given that benefits received is the relevant measure in estimating fair share of tax burden.

1. Jon stewart was a little miffed about the president opening with killing bin laden, so I guess that is part of the hypnosis part... lull them into a false sense of happiness and security right off the bat instead of working the crowd.
2. Drudge found a link showing the secretary makes between 200-500k a year. So if she's being paid in traditional wages, she will probably be getting the top tax rate.
3. I didn't watch the thing because I was watching kung fu panda with a family member. KFP beats the same old recycled speech.


Now I've got an honest question:

Why in the bleeping, bloody world haven't we completely redone our educational system, including the colleges if politicians have to code speak like Obama did? Seriously why are we throwing money down the drain and why is the Teleprompter's Minon in Chief even considered a serious candidate for reelection by his own party? Especially considering gas is about double what it was when he took office, 25% of the US is on food stamps, the unemployment rate among blacks is actually higher now than it was when he was elected (as an aside, if Obama was a republican, this last point would have gotten him called uncle tom to no end if nothing else did), he's got little hope of reelection, and you've got Hillary who is fundamentally the same kind of politician waiting in the wings.

If Obama was half as smart as people people say he is, he should have read the tea leaves, protected his own party, and been able to leave office on his own terms with as much of his reputation intact as possible.

That's just common sense. ;)

Politicians who start out respecting the intelligence of voters quickly discover that they have to compromise or lose out to opponents who profit from cheap shots.

The press perpetuates the problem. When given a choice between highlighting carefully articulated, well researched positions or gimmicky, emotionally-charged sound bites, the press will go with the viewer-bait sound bites.

Then again, voters "elect" both the press with their attention and politicians with their votes.

Conservatives whip the electorate into googly-eyed rage over greedy, lazy welfare queens !$%*!$% hard working Americans dry with their insatiable demands for tax-funded entitlements. Liberals counter with images of a coddled elite, reaping vast profits from a rigged investment system and from corporations that keep wages of down and shift jobs overseas - who then refuse to contribute their fair share to the system that allowed them to acquire their wealth in the first place.

Words like "Fair" "Confiscatory" "Entitlements" "Redistribution" dominate the debate - because they are easily imbued with whatever meaning the speaker wants to give them in the moment.

None of it matters in the end. If the economy picks up, Obama will win. If it remains stagnant or declines, the republican candidate will win.

I'd like to see a discussion centered around how to achieve an optimal balance of incentives (things that contribute to a sense of imperative to: work, save for the future, behave responsibly, make a positive contribution to society, etc.) and social investments in education, infrastructure, health care, etc.

That isn't going to happen any time soon, because the current "intellectual" climate rewards strongly-held, emotional opinions (e.g. "Taxes destroy wealth", Incentives to work = blame the victim, etc.) - not thoughtful discourse.

parawing742:
I don't think your assumtion that everyone gets the same benefits out of the government and therefore should pay the same amount of tax is true.

If I'm rich, the courts and the army (in case of foreign investments) protect me from much higher losses than if I'm poor.

If I own a company the government takes care of skilled workers (education), infrastructure (roads, zoning), enforces contracts and so on.

So, in my opinion, a proportional tax is more fair.

As for the land tax, "size of owned land" is a totally arbitrary measure. It might have made sense to tax the landed gentry 100 years ago, but today land as a factor of production simply isn't important anymore.

Drazen, you missed one point about capital gains taxes. Yes the rate is much lower. That is because the tax is on gains from an INVESTMENT.
The money that was invested should have already been taxed once when you earned it. That money was then put back into the economy as an investment in stocks or venture capital or interest. The gain on the investment is then taxed. This is an incentive to get the rich to put their money back into the economy, not build giant Scrooge McDuck style gold coin filled swimming pools.
Tax investment returns more, and those with money to invest will no longer put that money into US markets. Not exactly a good idea.

Has anyone considered what Debbie Bosanek's (Warren Buffet's secretary) true motives are in this whole charade? Has she somehow manipulated Warren Buffet's tax numbers to look artificially low? Did she provide false numbers to TurboTax to bump up her own tax rate?

Does she have a book on class warfare coming out? Does she have an appearance on Oprah soon, or even her own show on Oprah's Network?

She has who-knows-how-many Twitter followers, and I suspect Dr. Oz and Dr. Phil are getting ready to make her the next big thing -- maybe bigger than Newt's first wife.

Side question, a lot of folks on the right have been mentioning that 47% of Americans "don't pay taxes," (meaning they don't pay income taxes, so they only pay 5.45/7.45% of their pay in FICA/FICAMED taxes, plus employer matching, plusgas taxes, sales taxes, state taxes, etc...)
Has anyone looked at what that says about what has happened to American wages? The income tax system is designed to not tax the poor. Has the gap between the rich and the poor gotten so huge that half our population are too poor to tax?
If so, what can we do to give people a fair wage for their work, and keep the CEO's from voting themselves raise after raise for laying off workers and losing money?

http://c2.com/cgi/wiki?UnskilledAndUnawareOfIt

My idea is for a mandatory logic / basic politics test be given to each voter when registering. The results would then be sent to each person before voting with the hope that a very low score would discourage that person from voting.

Maybe I'm just too optimistic about the intelligence of Americans, but I can't imagine anyone thinking that Warren Buffett's secretary paid more in "real dollars" than he did.

bobNL:"I am a Libertarian, and I know for a fact, as you know yourself, that everything that the government touches, goes down the drain sooner or later."
"For a fact" is a mighty statement, isn't it?
There are areas on this world without a government. Afghanistan and Somalia spring to mind but I'm sure you don't plan to move there.
As for one of the economic jobs governments are supposed to do (that is, jobs no one is prepared to do for a profit), have a look at the 2009 economic nobel prize.
And if mackarels could talk, they might have a tale or two to tell as well. While some are still left.

Arguing about the specific rates of income tax gets a bit silly, because the rich don't really PAY income taxes. They largely pay capital gains taxes. Now, there is a good argument and a bad argument here. The good argument is this: if you have a real job (accountant, janitor, whatever), and you are investing after-tax income (other than 401(K)/IRA), you are effectively being taxed twice, because you have to pay taxes on the same money twice. Granted, we already double pay due to lots of things (gas tax, property tax) but that doesn't make it right.

Where it gets sketchy is that hedge-fund managers are taxed at the capital gains rate, which is just weird. The people who labor and sweat and toil pay a higher percent of their labor, and the people who play with other peoples' money pay a lower percent. I'm pretty libertarian, and that sounds like a crazy system even to me.

The correct answer is to eliminate income taxes on labor, raise them on capital gains (there is a point the tax and interest rates are so low that they cause weird distortions, like banks making money for free off the government right now without actually lending) and change capital gains taxes to be proportional to the period of time an asset is held. 10-15% is nice for long term, but not so much for ultra-short-term speculators who are manipulating prices. Those people should be paying WAY more, because their actions are affecting everyone else.

One nitpick: the average Joe doesn't pay $100 a month in gas. He commutes. I track all my expenses. Last year I paid over $4,000 total in gas costs for driving. That's $333/month. It USED to be $100 a month, 10 years ago. The catch is that since everyone's salary is largely stagnant or receding, when adjusted for inflation, the amount of DISCRETIONARY income (a huge driver of our consumer economy) has sunk like a stone. They just had an article on this a couple weeks ago, in the NYT, I think.

Obama's plan, however, addresses exactly zero of these problems. It effectively taxes small businesses more, further driving them out and consolidating power for his corporate puppeteers. This is why I've always said replace the income tax with some sort of resource/consumption tax (then even when companies get, say, mineral/drilling rights, they still have to contribute to the country instead of just turning a huge private profit). The net effect to ordinary people would be about zero (keep more money but pay more for things), but the rich use more and buy more and thus would pay more and no longer be able to hide in tax shelters.

P.S.

And I also think that a system where somebody who makes 10k a year and somebody who makes 400k a year both have to pay 8k in taxes is really fair and totally awesome.



(wink, wink)

Hello Scott,

I am the viewer that called in on CNN yesterday. Don't be so quick to judge me. I am a Libertarian, and I know for a fact, as you know yourself, that everything that the government touches, goes down the drain sooner or later. When the government subsidises a company, it falsifies its competition-position. The company no longer has to be cheaper then its competitors, because it will make a profit anyhow. Especially when the competition is subsidzed as well. That leads to what we call a cartel. And that's why prices rise when the company is subsidized.




(wink)