Matt Davies for October 28, 2010

They did that to themselves, Fairportfan, with a little help from the GOP…

So if you work for GM, ATT, Microsoft, Exxon you are not human and certainly not part of the people.

Well there goes tens of millions of Americans. But I guess not everyone can be a tenured professor.

Homework for the weekend: Go see “Inside Job”. Think about the Republican’s promise to undo the new regulations of Wall Street. Then think about how you want vote Tuesday

Is this elephant a socialist, wanting to give the banks, insurance companies & energy conglomerates to the people? Root causes. If they’d focused on why people can’t afford a home, rather than how to juggle the papers to put them in one… Why do the working poor have to be poor?

Good ‘toon. This are the sources of jobs, jobs drive the economy, etc. The only way out of the economic drought and the teerible unemployment is through the creation of jobs. Government only creates dependance on government.

fennec

40% of union members vote Republican. 99.9% of their forced contributions go to Democrats. Does that bother you?

No differences between tenured professor and tenured government worker. Never had to meet a payroll and so have no idea whatsoever about the business world. All theory.

Yes, but those are not the ones you wish to tax. You hit it perfectly. Tax the rich, Those who actually know how to create jobs. Very self-defeating. Tax those who have the experience and show how to do it.

Churchill Thanks for your comments. Fennec has realized he has spent his life as a parasite on the truly productive and didn’t know how to respond. If he didn’t push papers the US would collapse.

I have had to make payroll even when it hurt my own family income. I have had to make payroll tax payments even when it went on a credit card. Having run a couple of small businesses I am aware of how hard it can be. I do not believe that the wealthiest Americans are small business owners, nor do I believe they have had to scrap by to make payroll. Some may have paid payroll taxes. Maids, chauffeurs, gardeners and pool boys may have to be paid legally sometimes. The people who are the CEO’s of Large corporations do not deal with payroll. The Wall Street Bankers are not innocent tax payers and know the tax codes better than most CPA’s. These are not the people that are creating jobs in the USA. By the time you run your small business well enough to be making more than $250,000 Taxable Annually you are already savvy enough about taxes and business that you already have many, many perks and bonuses and probably a pet politician in your pocket.

@church, then isn’t it amazing that the GOP has already said it wants to repeal the very weak financial reform bill … too much of that bad old regulation on good old free enterprise

@lib 1, folks who make their billions from hedge funds have never created a job in their life. You assume that the wealthy create jobs. Not always so. CEOs get wealthier by getting big bonuses for cutting cost centers like employees when they ship jobs to Panama, China, India and Uruguay.

You also assume that the very wealthy earn it in some productive fashion. Not so, some inherit it and have never contributed anything to society; some gamble on Wall St. and the only thing they create is wealth for themselves and their trader.

You still write as though Wall St. is related to something in real life. It’s not. Stocks (somewhat representing an investment in a company) is now only a small part of what Wall St does, much less than half of its activity. Stocks are passe. That’s not where the real money is anymore.

You also mistakenly assume people who agree with higher tax rates on wealthy do so because they hate them or are jealous of them. Not so, with tax breaks and shelters the wealthy pay a lower tax rate than wage earners. Remember Buffett? He said his tax rate was about 17.7% but his receptionist paid 30%. Yes, his friggin receptionist pays a higher tax rate than he does. You refuse to acknowledge the disparity and seem to want to increase it.

^ BCS So you endorse my flat tax concept? Solves the problem you are offended by.

BTW, you obviously understand for each and every action there are reactions. Re- Buffett. He pays way more than 30% on earned income. He makes much of his income via capital gains. Both Democrats and Republicans realize that we need investment to create jobs. If you raise capital gains taxes you will reduce capital investment and decrease jobs. That is obviously exactly what is needed with a 15% unemployment rate- fewer jobs Please ask Obama to raise capital gains taxes- one term Obama.

Sorry, lib1, you don’t get to rewrite what Buffett said.

He said his overall tax rate is 17.7%; his receptionist’s overall tax rate is 30%. He thinks it’s unfair. I agree.

You still apparently do not understand the difference between capital gains on an investment and the bonanza “earned” from hedge funds and non-investment activity on Wall St. You are way behind in understanding what Wall St. has become. The GOP agrees with you. They don’t want to define it more accurately either. By your definition, anyone who wins the Lotto should be taxed 15% as a capital gains investment. Except of course, they’re not powerful and influential, so they get the max tax. Hypocrisy by definition.

Your flat tax? No thanks, I don’t want to regress to the 19th century.

BCS

For one of the very few times your logic has failed you. I explained Buffett but you missed the point. I will try it again.

I am making up numbers to get to the point. I have no real idea how much Buffett earns.

Berkshire pays him salary of $10M. He pays taxes on that. I think the rate is 38%. His secretary pays less on a smaller salary. He also sells some of his stock and earns $1B from the sale. He pays capital gains on that. Capital gains tax is 15%. OK so far? If you combine earned salary and stock sale income and figure out overall taxes paid it comes to 17%. So because of capital gains tax structure his overall tax rate is less than his secretary’s because 100% of hers is based on earned income.

the only way around that is to change the capital gains tax rate. Fine with me but realize you will have fewer jobs. Even the justice seeking Dems don’t want that hence no clamor for raising the capital gains tax to that of earned income. Understand?

BTW, to get capital gains you must hold an asset for 12 months. Lottery tickets don’t qualify.

BTW, read somewhere where Governor Brown was a flat tax advocate. Not certain of that.

lib1 and church, you either deliberately misunderstand my comments or I’ve not been clear. I don’t want to eliminate the capital gains exemption, or tax rate. We need to limit it to gains that represent an actual investment, which was the intent of the capital gains lower tax rate. Hedge funds are NOT an investment in anything, nor were CDOs and CDSs. This is not a difficult concept. Understand?

Actual investments deserve the lower tax rate, not side bets divorced from any interest or ownership of the underlying activity. Understand?

I’ll let Warren Buffett’s own words speak for Warren Buffett. You still don’t get his point.

You weren’t clear. I have no desire to deliberately misunderstand.

My son had a hedge fund which he owned. On the money he earned from the fund he paid the full earned tax rate, not capital gains.

Why do you say earnings from hedge funds are taxed differently.?

Re your question on CDOs and in general ABSs. Should they be taxed differently from I want to buy 100 shares of GM or Microsoft etc?

Profits from hedge funds are taxed at capital gains rates. Hedge fund managers “income” is taxed at capital gains rates, not income rates. You can look this up. It’s a fact. Obama proposed to change that, but it went nowhere. He has indicated he will try again, and he should, because that “income” doesn’t meet the definition of capital gains investment income.

“Capital gains are generally taxed at a preferential rate in comparison to ordinary income. … This is intended to provide incentives for investors to make capital investments and to fund entrepreneurial activity.”

“Capital gains may refer to “investment income” that arises in relation to real assets, such as property; financial assets, such as shares/stocks or bonds; and intangible assets such as goodwill.”

It’s the definition of “intangible assets” that includes leverage activities and hedge funds and should be redefined.

What came to be called “synthetic” financial securities or CDOs weren’t backed by any underlying assets, thus no investment. Thus profits gained shouldn’t be considered investment quality capital gains.

^ Because they just spent $100M+ trying to elect politicians who put the best interests of the 8% over the 92%.