Top 1%

[Midpack]

The money used to earn capital gains and dividends has already been taxed as income before it is invested. It's unfair to tax capital gains/dividends at all.

Warren Buffett disagrees...

 

[donheff]

Usually IME when people say "average", they are thinking of the mean.

Hey, I resemble that remark. But aren't we correct to do so? The "mean" is the arithmetical average isn't it?

 

[W2R]

Hey, I resemble that remark. But aren't we correct to do so? The "mean" is the arithmetical average isn't it?

Makes sense to me, too, although there are always those who have to complicate things... I prefer to just say "mean" because it seems clear to everyone.

 

[obgyn65]

I guess many - if not most - of the participants on this website are part of the 1%. Nothing wrong with that if it is earned legally.

Who is the top 1%? Any ideas?

 

[figner]

The money used to earn capital gains and dividends has already been taxed as income before it is invested. It's unfair to tax capital gains/dividends at all.

I've seen this viewpoint several times. Can someone explain why this double taxation is unfair for dividends, as opposed to money which I earned as a paycheck (already taxed) and then put into a saving account (taxed on interest) or other investment vehicle such as real estate (gains taxed upon sale)?

 

[Spanky]

The money used to earn capital gains and dividends has already been taxed as income before it is invested. It's unfair to tax capital gains/dividends at all. But I agree with simplifying the tax code. Flat tax, no deductions, and eliminate capital gains and inheritance tax.

The proposal sounds good with the exception of flat rate for everyone. The biggest question is "what is that rate?".

 

[M Paquette]

I for one look forward to the day when the current social aberration of a "middle class" withers away, and we can return to a proper landed gentry, with supporting professional class and military, built on the solid foundation of the peasantry. I might be accused of pining for the good old days, but it was a solid, stable system that lasted for far longer than our so-called "modern" society. With modern technology, a small professional engineering population, and the combination of robots and semi-skilled peasant labor such as we currently employ across Asia, this seems like it should be readily achievable.

With modest effort, we should be able to transition to such a social structure within thirty years. The old impediments to this, such as the various "workers" movements, have been largely dismantled, and the remaining tasks really aren't much more than ongoing campaigns to repeal existing laws and convince the proletariat (soon to be peasants) that this is in their best interest.

 

[clifp]

I for one look forward to the day when the current social aberration of a "middle class" withers away, and we can return to a proper landed gentry, with supporting professional class and military, built on the solid foundation of the peasantry. I might be accused of pining for the good old days, but it was a solid, stable system that lasted for far longer than our so-called "modern" society. With modern technology, a small professional engineering population, and the combination of robots and semi-skilled peasant labor such as we currently employ across Asia, this seems like it should be readily achievable.

With modest effort, we should be able to transition to such a social structure within thirty years. The old impediments to this, such as the various "workers" movements, have been largely dismantled, and the remaining tasks really aren't much more than ongoing campaigns to repeal existing laws and convince the proletariat (soon to be peasants) that this is in their best interest.

+1
I'd also like to bring back debtors prison. It is entirely unfair that some of the prole believe that can discharge their debt with the only consequence being a lower FICO score.

Debtor prisons are essential for recolonizing area rich in exploitable natural resources like the American Plains (Dakotas) and Serbia, Mongolia but harsh climates.

As an added advantage, these are fine places to send the various protestors. We certainly can't have any more years like 2011, where this rabble is named persons of the year!

 

[Ronstar]

Warren Buffett disagrees...

Yes he does. I respect his opinion. But I think a flat income tax combined with a consumption tax would be better. The 1%ers would probably end up paying more overall tax through a consumption tax/flat income tax combo than under Buffett's proposal.

I've seen this viewpoint several times. Can someone explain why this double taxation is unfair for dividends, as opposed to money which I earned as a paycheck (already taxed) and then put into a saving account (taxed on interest) or other investment vehicle such as real estate (gains taxed upon sale)?

The true flat tax would not result in tax on dividends, interest, or real estate gains.

The proposal sounds good with the exception of flat rate for everyone. The biggest question is "what is that rate?".

First get the sum of expenses. Then subtract all govt revenues aside from income tax. Then divide by the sum of all incomes. The result would be the rate. Something tells me it's not that simple though.

 

[Nemo2]

+1
I'd also like to bring back debtors prison. It is entirely unfair that some of the prole believe that can discharge their debt with the only consequence being a lower FICO score.

Debtor prisons are essential for recolonizing area rich in exploitable natural resources like the American Plains (Dakotas) and Serbia, Mongolia but harsh climates.

As an added advantage, these are fine places to send the various protestors. We certainly can't have any more years like 2011, where this rabble is named persons of the year!

LOL yeah..and what about those damn 12 year olds complaining about 14 hour days in the mines.....and a bowl of thin gruel isn't enough for them? The very idea!

Where's Mr Bumble,the Beadle, when you really need him?

 

[photoguy]

The money used to earn capital gains and dividends has already been taxed as income before it is invested. It's unfair to tax capital gains/dividends at all. But I agree with simplifying the tax code. Flat tax, no deductions, and eliminate capital gains and inheritance tax.

You are only taxed on the profit and not the base amount you put into the investment. So it seems fair to me that it should be taxed along with all other sources of income. (Note: I would agree with adjusting the cost basis for inflation).

I certainly agree that the tax code should be simplified, but I can't see myself signing on to a flat tax (although that would probably benefit me). I strongly prefer a progressive tax system where the higher your income, the higher rate that is paid.

 

[nun]

The money used to earn capital gains and dividends has already been taxed as income before it is invested. It's unfair to tax capital gains/dividends at all.

You're taxing the gains so I don't agree with you at all in the case of CGs, with dividends there is an argument to be made if the company also gets taxed on them before they are distributed to the shareholder. But I see that as just taxing 2 parties once.

Money is taxed more the once all the time, we pay income tax and in many states when we spend the money we pay sales tax, that's a double tax...I see tax as the price you pay to live in a civilized society, the Romans and Jesus understood that and I'll go with them over the Chicago School

 

[chris2008]

Acc. to Global Rich List I am among the top 0,41 % of the world.
It all depends on with whom we compare ourselves.

 

[donheff]

I see tax as the price you pay to live in a civilized society, the Romans and Jesus understood that and I'll go with them over the Chicago School

+1. Gotta remember that riposte.

 

[target2019]

Acc. to Global Rich List I am among the top 0,41 % of the world.
It all depends on with whom we compare ourselves.

I have been looking for such a web app, and I thank you for finding it. The answer others get will be humbling, too.

 

[GrayHare]

Money is taxed more the once all the time, we pay income tax and in many states when we spend the money we pay sales tax, that's a double tax...

The distinction is as follows. Your example includes two separate taxable persons: the wage earner, then the business at which the earner spends.

Contrast that with dividends. The stockholders own the corporation, and thus before dividends of corporate earning are distributed, the stockholders have, via the corporation, already paid tax on those corporate earnings.

 

[gerntz]

Money is taxed more the once all the time, we pay income tax and in many states when we spend the money we pay sales tax, that's a double tax...I see tax as the price you pay to live in a civilized society, the Romans and Jesus understood that and I'll go with them over the Chicago School

Then I'd prefer we become a somewhat less civilized society.

 

[target2019]

The distinction is as follows. Your example includes two separate taxable persons: the wage earner, then the business at which the earner spends.

Contrast that with dividends. The stockholders own the corporation, and thus before dividends of corporate earning are distributed, the stockholders have, via the corporation, already paid tax on those corporate earnings.

I am an individual taxpayer in the U.S. I invest $100 in a stock. I am taxed on the dividend payout. I do not pay on the $100 investment.

When I sell the stock, I pay tax on the difference between my original investment and the selling price, or I take a loss.

The argument that I invest money and somehow become the corporation isn't sustainable, says the I.R.S. They take. Case closed.

 

[Finance Dave]

I've not seen a single 99% badge either, where are you seeing them?

The Occupy Wall Street folks...some of them are wearing the badges...see them on the news sometimes.

 

[Koolau]

You're taxing the gains so I don't agree with you at all in the case of CGs, with diI see tax as the price you pay to live in a civilized society, the Romans and Jesus understood that and I'll go with them over the Chicago School

Couple of points. Jesus said to pay your taxes because it is the law, not that they are "fair" or made any sense or that they are used for your benefit. He wasn't that concerned about such temporal things which are man made. I suspect the Chicago School is more interested in those things than Jesus was. So am I.

I would agree with you about taxes being the price of living in a civilized society. My problem is that I can look around and see dozens of places that my tax dollars are wasted (at all levels of gummint). Gummints not only spend tax dollars but they use taxes as incentives to do certain things (like, for instance, investments). When taxing business profits twice (through corp. tax and taxing dividends) we can argue all day about whether that is "right" or "fair", but I don't see any argument about it being a disincentive for investing in stock (over NOT taxing dividends). Naturally, YMMV.

 

[nun]

Couple of points. Jesus said to pay your taxes because it is the law, not that they are "fair" or made any sense or that they are used for your benefit. He wasn't that concerned about such temporal things which are man made. I suspect the Chicago School is more interested in those things than Jesus was. So am I.

Agreed about the "fair" comment, the sensible debate is what is the right level of taxation....I'd like to see Grover et al come up with that number rather than simply demonizing all taxation.

However, Jesus had plenty to say about temporal things and was concerned with how they could corrupt people, Chicargo School aren't concerned with people at all, just markets. They are amoral. I go with Jesus and Marx as their philosophies put the welfare of people above capital.

I would agree with you about taxes being the price of living in a civilized society. My problem is that I can look around and see dozens of places that my tax dollars are wasted (at all levels of gummint). Gummints not only spend tax dollars but they use taxes as incentives to do certain things (like, for instance, investments). When taxing business profits twice (through corp. tax and taxing dividends) we can argue all day about whether that is "right" or "fair", but I don't see any argument about it being a disincentive for investing in stock (over NOT taxing dividends). Naturally, YMMV.

I agree, I see plenty of spending that I don't much like.....but that's why we have elections. The problem I have is that I believe the system has been corrupted by money and that a small number of people have undue influence over the system. That might be corporations or any number of pressure groups across the political spectrum. So the views of the majority of the electorate are seldom converted into legislation.

 

[nun]

The distinction is as follows. Your example includes two separate taxable persons: the wage earner, then the business at which the earner spends.

Contrast that with dividends. The stockholders own the corporation, and thus before dividends of corporate earning are distributed, the stockholders have, via the corporation, already paid tax on those corporate earnings.

The wage earner is taxed on income and then is taxed again when they buy something. I pay income tax and sales tax

 

[ERD50]

...Chicago School aren't concerned with people at all, just markets. They are amoral. ...

Wise choice of words (assuming it was intentional, and I think it was), as amoral does not imply immoral.

But so what? When I think of the Adam Smith story of the butcher, baker, brewer providing services for their own welfare, not the welfare of others, I think it is an amoral system that works pretty well.

I actually have more 'faith' in that system, then I do in a system where we simply rely on 'faith' that people will do the 'right thing'. Esp in a world where we may not agree on what the 'right thing' is. But in a free market transaction, both parties feel they are getting a fair deal, or they simply move on.


-ERD50

 

[eridanus]

Wise choice of words (assuming it was intentional, and I think it was), as amoral does not imply immoral.

Amoral | Define Amoral at Dictionary.com

"Synonyms
See immoral. "

Wait, now I'm confused. What did nun mean?

 

[Texas Proud]

Agreed about the "fair" comment, the sensible debate is what is the right level of taxation....I'd like to see Grover et al come up with that number rather than simply demonizing all taxation.

This was awhile back.... and might not be online anywhere... (and I do not have time to search.... maybe you can)....


Reader's digest actually did do a survey of what was 'fair'.... and to their surprise the number was 25%.... that includes all level of gvmt... all taxes...

The most interesting part was that this number seemed to be over almost all demographics... all races, all levels of income, democrats and republicans... IOW, this was the national concensus.... I could agree on that amount... can you?


Since our national gvmt is spending at the 25% level, that would leave nothing for state and local gvmt to spend... so something has to change...