Thread: Huntsman's Jobs Plan

Originally Posted by Lost Time

What are you taxing when you are taxing capital gains?

A tax on the sale of an asset that you bought at a lower price than you sold it for, IIRC, was the definition of the capital gains tax. Most commonly applied to the sales of stocks, property, bonds, etc etc.

Do you even understand why it has a lower rate?

I'm not sure I understand your question.

Originally Posted by Hoplite

A tax on the sale of an asset that you bought at a lower price than you sold it for, IIRC, was the definition of the capital gains tax. Most commonly applied to the sales of stocks, property, bonds, etc etc.


I'm not sure I understand your question.

What was the justification used for a lower Capital Gains Tax? Why is it separated from being applied as income?

Originally Posted by Lost Time

What was the justification used for a lower Capital Gains Tax?

It's supposed to encourage investment.

Why is it separated from being applied as income?

Off the top of my head, I'm not sure.

Originally Posted by Hoplite

It's supposed to encourage investment.

Off the top of my head, I'm not sure.

You came close actually. It is to spur investment because investment involves RISK. Without investment or risk taking you do not have new businesses or ideas. So a lower flat rate for investment is a reward for risking capital. One will note that investments which result in losses are not made up for by the government.

Originally Posted by Lost Time

You came close actually. It is to spur investment because investment involves RISK. Without investment or risk taking you do not have new businesses or ideas. So a lower flat rate for investment is a reward for risking capital. One will note that investments which result in losses are not made up for by the government.

So how does lowering the capital gains tax affect risk?

I saw Ben Stein on some news program here recently, and he made the point that tax rates on the big boys and job creation has not shown any correlation. He challenged someone to prove that it does. He mentioned of course the high tax rates post ww2 and the economy at that time, etc.

With that said, the Repubs are real big on tax breaks for the richer folks. It makes me rather suspicious as to their real agenda, which I think is to enrich the rich, period. And I think they really know that the average guy isn't gonna reap the job benefits they always lay claim to.

Corporate globalization has hurt many working people here, and it has taken away one of the really good leg ups for the poor. I still feel that the gov't of 1960 would have stopped this fucking offshoring of manufacturing jobs, since this was the part of the economic model to build the middle class, and of course the success of that model cannot be refuted.

So to me these tax breaks for the rich is just more of the same old shit coming from the pro business Repubs. The financial deregs they got through created too big to fail banks, and turned a sound banking system into something that has crashed and caused a recession. But of course, the bankers became much richer with those deregs, which was the reason they wanted them to start with.

Since business, big business has pretty much fucked the average working guy, we need much higher taxes on the rich, to help pay for the damage they have done to the American working folks. And higher taxes to invest in our piss poor infastructure. We need 20 years of rebuilding America by higher taxation.

But we need to make it easy for small business to be created, and run as opposed to the big business who get most of the perks from gov't. And we sure need to take a look at regulations that are crazy and unnecessary.

I am pro business, as I owned one. But enough is enough! We have moved from a model that emphasized building and servicing a huge consumer base, to one that only helps the elites in any large manner. Trickle down, which is insane if you want to have a healthy middle class. I am a demand side guy, because I saw that model work, and work better than the current one for millions of average Americans who work for a living. To me, this is blaringly obvious, and I don't buy in to the propaganda coming from the Right.

Hoplite
Why shouldn't we tax capital gains? We had a tax on capital gains that no one seemed to mind when our economy was doing well so it obviously didnt hurt or crash the economy.

Why are lefties so utterly incapable of recognizing impact of degree? FIRST, for the record, the "Clinton" boom in the late 1990s followed a signficicant reduction in the capital gains rate, which unleased significant capital and the results were an even stronger economy, and solid increases in productivity.

The point is that ALL taxes have a negative impact on economic growth. Anyone that tells you otherwise is a complete fool or liar. Further, each additional marginal dollar in taxes taken out of the economy has a greater marginal negative impact on the economy than each of the preceding ones (which hurts more if you have $100 dollars..when they take away the first one, or the last one?). Now, not all taxes have the same negative impact dollar-for-dollar. Consumption based taxes have far less negative impact on economic growth long-term than taxes on income and investment, for example. In otherwords, if taxes are 10% of GDP and you increase them to 15%, that 5% increase will not harm the economy as much as if you are at 20% already and you boost it to 25%.

The question then becomes, do the benefits to which those tax dollars are put towards through government spending equal or exceed the negative long-term costs of extracting those taxes from the productive sectors of society. Taxes at a relatively low level, funding the basic legitimate and essential functions of government, this is largely a no-brainer. Yes, the relatively small share of GDP required to fund basic services (courts, police, fire departments, education, etc...--when not obscenely overfunded for their respective outputs). Once you get into less essential, if not downright frivolous and counterproductive (particularly those which create long-term distortions in responsible behavoir through moral hazzard).

Unlike taxes, were increasing them causes geometric increase in harm to the economy for each additional dollar collected, the spending side of the government ledger is quite the opposite. Given the propensity to fund the most basic and beneficial things first, each additional dollar spent, and each additional thing it is spent on is likely to have decreasing marginal benefit over the earlier spending. So, as the things we are spending each additional dollar on decrease in their relative benefit to the society, the funding for it inflicts increasing marginal harm.

Now, all that said, not all types of taxation have the same dollar-for-dollar negative impact. For example, over the long term, consumption-based taxes and direct user fees have far less negative impact on growth than do taxes on income, savings and investment. Capital gains is, as I said before, as direct a tax on job creation as you can get.

What does all of this mean? If you are facing a "Jobs Crisis", any fool would say that the best thing to do is to eliminate government imposed drags on job creation

Hoplite
There are many other nations with much higher taxes, a much more stable economy (relatively, due to current economic conditions), and a much better standard of living. Taxes give you money to pay for these things, that's the main job of taxes.

First of all, they do NOT have "much more stable economy", unless you define long-term economic growth and prosperity dragging behind us, with unemployment rates almost permanently at levels that we in this country deem a "jobs crisis".

What you are in essence doing is saying that always being crappy is preferable to sometimes having rough times but also having boom times, where the overall long-term impact is quite significant in terms of the relative disparity in growth. Germany, for example, unemployment routinely running 3-5 point hire than ours for a couple of decades. It decline dramatically from 2005-2008 as a result of significant tax reform and reductions (they took their corporate tax rate from 25% to 15%, reduced tax brackets, and reduced taxes overall). In three years their unemployment rate went from 10.6 to 7.3% in three years and has stayed relatively low, whethering the 2008 financial crisis quite well. It should also be noted that those nations which had smaller fiscal "stimulus" in 2008-2009 have rebounded both in terms of growth rates and employment much better on average than those with larger fiscal stimulus.

Politicians are desperate for you to believe that they are absolutely essential to getting us out of problems (that they will never acknowledge their part in creating in the first place). The truth of the matter is that the best thing for government to do in response to an economic downturn is not to do anything, save for fixing long-term drags on growth. This is why all of the temporary tax "cuts" and rebates and spending simply aren't getting things moving. If Obama had used the stimulus bill funds to fund a ten year extension of the existing tax rates, unemployment would probably be much lower than it is today. Hell, if they had just extended the tax rates for two years back in early-2009 rather than late-2010, THAT would have been a better stimulus (since businesses simply cannot make long-term investment decisions and plans with a tax code subject to annual whims of Washington).

Hoplite
Is it better to have people die waiting for a treatment or have them die from a treatment that was not properly evaluated for safety?

That is a tremendously stupid question. THAT is the friggin' point is that people who die wating for treatment is just as bad an outcome as people who die from what you feel is insufficient evaluation prior to release of treatments. My point is that in determining the cost/benefit of the current regimine for approval, the FDA does not take into account AT ALL those who will die waiting for treatment.

A SENSIBLE approach is to ask whether a particular change in policy will do more harm than good. You are clearly the type of person who would say that if streamlining and reducing the cost of clearance resulted in a single additional death as a result of less saftey in treatments it is not worth it, without even thinking to ask if it might save two or more lives among those who would otherwise die waiting for new treatments. To answer your question, it is no better or worse whether someone dies because government held up treatment potential treatments than if they did insufficient review. The question we should be asking is when does the emphasis on the later begin to save fewer lives result in that many and more lives being lost among the former.

If someone told you that if we made all new drugs pass some new test, it would save 1,000 lives a year from bad drug reactions, most people would assume that is a no brainer. IF on the otherhand you are told that, while it will prevent 1,000 deaths from bad reactions, the resulting delays in all future drug treatments would result in 1,500 people who would otherwise have lived dying to do the longer lag time before new treatments are available, do you think it is worth letting 1,500 people die to prevent 1,000 from dying?

Originally Posted by goober

In my quest to debunk what passes for truth on the right, I would like to ask you to retract this statement

OR

Show that it isn't just right wing wacko hyperbole. Maybe link to where Obama is quoted saying he "guarantees no more than 8% unemployment"



You see, I find that when people live in a world where they believe things that just aren't true, their "rational" decisions look like insanity to the reality based community.

The fact is, although it wasn't a promise, the administration sold the stimulus with their handy chart showing that unemployment would be below 8% if they passed it, above 9% if they didn't.

Kinda reminds me of the President's claim about keeping your health insurance. The White House issued a statement later saying the claim was not meant to be taken literally. Guess that's how the unemployment estimates were supposed to be taken. Or anything else the President says.

adaher
The fact is, although it wasn't a promise, the administration sold the stimulus with their handy chart showing that unemployment would be below 8% if they passed it, above 9% if they didn't.

They made those claims as statements of FACT, that is as close as you get to a flat out promise in politics.

And there claims that it would have been worse without it, you know what they base that on? The same econometric models they used to come up with their 8% predictions, they merely run the models in reverse, with the flawed assumptions of job creation and low and behold, when you put the same data, with the same assumptions in, you get the same results.