Tax Bill

I'm a social liberal, and in general I think we should keep taxes in check on certain items. I am though, adamantly opposed to extending tax breaks on dividends and capital gains. What say you all on this?

link (http://news.yahoo.com/s/ap/20051118/ap_on_go_co/congress_taxes)

[lehighguy]

Why?

[Kurn, son of Mogh]

Disagree. In the case of dividends, its an example of double-dipping by the government. First they tax the corporations, Then they tax the after-tax distributions. Either make dividends tax exempt, or eliminate the corporate income tax.

Capital gains taxes would be more palatable if they were indexed. For example, a person who bought a home in 1975 for $40,000 and who sells it today for $400,000 has not really made $360,000 in income. One 1975 dollar does not equal one 2005 dollar. In the case of stock and bond transactions, I see no reason why that income needs to be treated any differently than any other income.

I think your support of government-sponsored theft is morally reprehensible.

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I think your support of government-sponsored theft is morally reprehensible.

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Stop using my roads.

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I think your support of government-sponsored theft is morally reprehensible.

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I suppose given my previous snap about useless responses I owe you a bit more than that.

Let's look at this concept of distributive justice and the transfer of wealth from one angle, a similiar concept to the tournament chips being more useful in a short stack than a big stack (gold / copper).

If you have 1000 bananas and I have 0, 10 of those bananas are going to have much more use to me (fighting off starvation) than they will to you.

With money this is true as well. To a millionaire, $50 is not a lot, to someone with no money what-so-ever this is a significant amount that will bring them great happiness and has a much higher value to that person. In short, everyone should be guarenteed enough substance for a minimally flourishing life.

This costs very little for one party to provide, and gives alot to the party receiving it.

Is it "right"? For me the concept of right and wrong do not exist. What simply exists is functionality.

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I think your support of government-sponsored theft is morally reprehensible.

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Stop using my roads.

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He asked for my opinion and I gave it. If you disagree with it, I'm sure can do better than this for a response.

[Olof]

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I think your support of government-sponsored theft is morally reprehensible.

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Stop using my roads.

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If bakethejake has been freed from paying taxes by the government (which I very much doubt), and despite this still continue to use taxfunded roads you have a point. Otherwise, your argument makes no sense whatsoever.

[etgryphon]

[ QUOTE ]
I'm a social liberal, and in general I think we should keep taxes in check on certain items. I am though, adamantly opposed to extending tax breaks on dividends and capital gains. What say you all on this?

link (http://news.yahoo.com/s/ap/20051118/ap_on_go_co/congress_taxes)

[/ QUOTE ]

You do know that 3/5 of the population owns stocks in some form. So you are alienating a majority of the population people.

As it has been pointed out, these taxes are double dipping. I would have no problem if you did away with the corporate tax and then just tax dividends as straight income.

We need to go to a flax tax system if we want to be fair. I hate that BS line of "The rich should pay their fair share!". Incremental tax brackets are inherently unfair. Just admit it. If you want to tax rich people extra, Fine but be honest about it.

-Gryph

[adios]

Actually if this passes you'll see less money paid in dividends FWIW as corporations have other alternatives than paying cash dividends like buying back stock. Therefore you may actually see a decline in revenue from taxes on dividends. As Kurn mentioned it's double taxation and before we get into another argument about the ethics of double taxation, just because double taxation exists in other areas doesn't legitimize it IMO. Corporations will tend to do the "tax effecient" thing.

As far as capital gains taxes, I think you'd be likely to see less investment in economic growth but I'm sure others would reply that there's no proof of that. Depends on how much you tax something would be my response. Tax investments at double the rate of anything else and see if it leads to significantly less investment in business and thus significantly less economic growth. When does the impact on the economy become "significant" i.e. when does job growth slow by 20%?

What should the distribution of income be among the tax payers? I don't support tax increases of any kind without answering this basic question.

[SunOfBeach]

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In short, everyone should be guarenteed enough substance for a minimally flourishing life.


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why? what gives you the right to morally justify taking from me to give to someone else? why dont YOU just give something to him, and get your hand out of MY pocket?

anyway, getting to the tax issue - what about a REGRESSIVE income tax, with the marginal tax rate going DOWN as incomes go up. instead of an incentive to be a lazy bum and live off of the labor of others, it would create an incentive to actually get to work and produce something.

PS i talked to the real noam on 4 occasions while i was up there, and while hes obviously a pompous buffoon, the more annoying point is what a PHONY and FRAUD he is. whats up with all the talk of the common man and living a meager life from a guy with a $1.2 million beach house in cape cod (as his SECOND home)? or how about the bashing of the DOD that he has cashed checks of over THREE MILLION DOLLARS FROM over the last 30 years?

[SunOfBeach]

finally, a voice of reason. hallelujah.

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Actually if this passes you'll see less money paid in dividends

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What is your reasoning?

[adios]

There will be more tax effecient ways to distribute profits to shareholders.

[ QUOTE ]
Let's look at this concept of distributive justice and the transfer of wealth from one angle, a similiar concept to the tournament chips being more useful in a short stack than a big stack (gold / copper).

If you have 1000 bananas and I have 0, 10 of those bananas are going to have much more use to me (fighting off starvation) than they will to you.

With money this is true as well. To a millionaire, $50 is not a lot, to someone with no money what-so-ever this is a significant amount that will bring them great happiness and has a much higher value to that person. In short, everyone should be guarenteed enough substance for a minimally flourishing life.

This costs very little for one party to provide, and gives alot to the party receiving it.

Is it "right"? For me the concept of right and wrong do not exist. What simply exists is functionality.

[/ QUOTE ]

Whether he misses the bananas or not is moot. They're his bananas to do with what he chooses. To think otherwise is to be pro-theft and pro-slavery. Forcing me to provide for the subsistence others against my will is nothing more than economic slavery.

You say right and wrong do not exist, then talk about justice and and that everyone should be guaranteed a minimal subsistence. Why? In saying this you're making a statement about what you find moral or immoral (right or wrong), whether you choose to admit it or not. Certainly the world would be more "functional" without a bunch of deadbeats.

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There will be more tax effecient ways to distribute profits to shareholders.

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I'm not following you. If dividends aren't taxed, they would be a more efficient way to distribute profits. /images/graemlins/confused.gif

[adios]

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There will be more tax effecient ways to distribute profits to shareholders.

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I'm not following you. If dividends aren't taxed, they would be a more efficient way to distribute profits. /images/graemlins/confused.gif

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Where did I say dividends aren't taxed??????????????????????

Where did I say that if dividends aren't taxed that it's a necessarily a less efficient way to distribute profits to shareholders?

Dividends aren't necessicarily the most effecient way to distribute profits even if the current 15% on dividend distributions was removed but that's not what I'm arguing. I'm arguing that a higher tax rate that 15% on dividend distributions could very likely lead to less revenue tax revenue to the government from dividend distributions.

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Dividends aren't necessicarily the most effecient way to distribute profits even if the current 15% on dividend distributions was removed but that's not what I'm arguing. I'm arguing that a higher tax rate that 15% on dividend distributions could very likely lead to less revenue tax revenue to the government from dividend distributions.

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Settle down, big guy. I misunderstood. I thought you were saying that if dividend taxes remained low or were lowered that vcompanies would distribute less. I thought that was what your statement that I quoted in my above post meant.

But now you've peaked my curiosity as to what methods you would feel are more efficient than simply returning the excess profits in the form of cash to its owners.

[Khern]

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In short, everyone should be guarenteed enough substance for a minimally flourishing life.

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"Minimal flourishing life" seems to be an oxymoron. Where do you draw the line? And, maybe more important, who draws the line?


Even F.A. Hayek, in The Road to Surfdom, comments that our society should be able to meet that basic needs of people. This surprised me and prompted me to consider what level might represent those basic needs, and whether or not society is reasonably able to provide that. I'm interested in Libertarians feelings about Hayek in that instance. (If I can find a quote I will, but I'm not exactly sure where it was at the moment.)

John

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Disagree. In the case of dividends, its an example of double-dipping by the government. First they tax the corporations, Then they tax the after-tax distributions. Either make dividends tax exempt, or eliminate the corporate income tax.

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What about my income that I get from working at the corporation? The corporation's income is taxed, and then the money they give me for working there is taxed. That's double-dipping too, right?

I don't see a big difference between the investors in a corporation and the workers in the corporation (from a tax perspective, that is).

[ QUOTE ]
We need to go to a flax tax system if we want to be fair. I hate that BS line of "The rich should pay their fair share!". Incremental tax brackets are inherently unfair. Just admit it. If you want to tax rich people extra, Fine but be honest about it.

[/ QUOTE ]

I think the rich do pretty well with their tax shelters. I'm for a flat tax, too. I think it should be something like:

TAX = TAX% * (Income - Cost_of_Living)

Still somewhat progressive, in that someone at or below poverty level will not be paying any taxes.

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In short, everyone should be guarenteed enough substance for a minimally flourishing life.


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why? what gives you the right to morally justify taking from me to give to someone else? why dont YOU just give something to him, and get your hand out of MY pocket?

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The Constitution. That's what taxes are. They are taking people's money for the common welfare of the nation (ie: someone else).

Also: you probably don't realize it, but it's in everyone's best interest to have a low level of poverty.

[adios]

[ QUOTE ]
[ QUOTE ]
Disagree. In the case of dividends, its an example of double-dipping by the government. First they tax the corporations, Then they tax the after-tax distributions. Either make dividends tax exempt, or eliminate the corporate income tax.

[/ QUOTE ]

What about my income that I get from working at the corporation? The corporation's income is taxed, and then the money they give me for working there is taxed. That's double-dipping too, right?

I don't see a big difference between the investors in a corporation and the workers in the corporation (from a tax perspective, that is).

[/ QUOTE ]

Not quite right. You are paid for your time and effort. The cost incurred by your employer for your services is not taxed at at the corporate level. Your labor is part of the cost the corporation incurs to produce profits.

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Disagree. In the case of dividends, its an example of double-dipping by the government. First they tax the corporations, Then they tax the after-tax distributions. Either make dividends tax exempt, or eliminate the corporate income tax.

[/ QUOTE ]

What about my income that I get from working at the corporation? The corporation's income is taxed, and then the money they give me for working there is taxed. That's double-dipping too, right?

I don't see a big difference between the investors in a corporation and the workers in the corporation (from a tax perspective, that is).

[/ QUOTE ]

Not quite right. You are paid for your time and effort. The cost incurred by your employer for your services is not taxed at at the corporate level. Your labor is part of the cost the corporation incurs to produce profits.

[/ QUOTE ]

It could be argued that dividends are part of the cost of capital. A company that doesn't pay them, will find it harder to raise capital... which is a cost the corporation incurs to produce profits.

UPDATE:
Dividends:Investors :: Bonuses:Employees

[etgryphon]

[ QUOTE ]
[ QUOTE ]
We need to go to a flax tax system if we want to be fair. I hate that BS line of "The rich should pay their fair share!". Incremental tax brackets are inherently unfair. Just admit it. If you want to tax rich people extra, Fine but be honest about it.

[/ QUOTE ]

I think the rich do pretty well with their tax shelters. I'm for a flat tax, too. I think it should be something like:

TAX = TAX% * (Income - Cost_of_Living)

Still somewhat progressive, in that someone at or below poverty level will not be paying any taxes.

[/ QUOTE ]

I like it. You bring up a good point about the tax shelters. The convoluted code makes it easier for the rich to "hide" money. If we had a very simple tax code with a flat tax then people would be paying a standard rate and it would smoothing thing out. There would be no "tax shelters".

Receipts would go up for the government just like in the majority of countries that have gone to flat taxes.

-Gryph

[adios]

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Disagree. In the case of dividends, its an example of double-dipping by the government. First they tax the corporations, Then they tax the after-tax distributions. Either make dividends tax exempt, or eliminate the corporate income tax.

[/ QUOTE ]

What about my income that I get from working at the corporation? The corporation's income is taxed, and then the money they give me for working there is taxed. That's double-dipping too, right?

I don't see a big difference between the investors in a corporation and the workers in the corporation (from a tax perspective, that is).

[/ QUOTE ]

Not quite right. You are paid for your time and effort. The cost incurred by your employer for your services is not taxed at at the corporate level. Your labor is part of the cost the corporation incurs to produce profits.

[/ QUOTE ]

It could be argued that dividends are part of the cost of capital.

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Yeah but the stock holders own the corporation more or less and thus dividends are their rightfully earned profits. If dividends are paid irregardless of profits then I can see that argument. I believe companies that pay "special dividends" also can designate these dividends as long term capital gains, point being that companies do have some discretion.

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A company that doesn't pay them, will find it harder to raise capital... which is a cost the corporation incurs to produce profits.

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Why do you say this and it's irrelevant to whether or not dividends represent a corporations net profit to it's shareholders. Theoretically companies that don't pay dividends shouldn't need to raise as much capital btw.


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UPDATE:
Dividends:Investors :: Bonuses:Employees

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Totally disagree for the most part.

Shareholders == owners of the company.

Owners of the company are entitled to the companys net profits.

Net profits basically consiste of Revenue - (costs + taxes).


A companys net profits or portion thereof are paid out as dividends. For example if we look at REITs they are required by law to pay out 90% or more of their taxable income as dividends. REITS are not taxed at the corporate level. To say that dividends don't represent corporate net profits is baloney.

[SunOfBeach]

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The Constitution. That's what taxes are. They are taking people's money for the common welfare of the nation (ie: someone else).


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reread yours, tough guy. see if you find mention to an income tax, or to welfare, or to any of your other faves.

anyhow, i come out accepting of an income tax in my post: a logical, regressive income tax. as did friedman, at one time.

of course, your other baseless premises don't go into capturing the reason for any form of taxation present in 1776 - i assure you that welfare payments to the lazy arent among them.

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Also: you probably don't realize it, but it's in everyone's best interest to have a low level of poverty.

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its even more in everyone's best interest for this to be achieved by the impoverished getting a job, rather than a handout.

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Yeah but the stock holders own the corporation more or less and thus dividends are their rightfully earned profits.

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"more or less" meaning they don't really own the corporation. From a tax standpoint, the corporation is it's own entity. If the stock holders want to assume true ownership (and thus financial responsiblity) of the corporation, they should unincorporate it, and set it up as an LLC. Then they won't be taxed twice on the earnings.

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The Constitution. That's what taxes are. They are taking people's money for the common welfare of the nation (ie: someone else).

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reread yours, tough guy. see if you find mention to an income tax, or to welfare, or to any of your other faves.

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"Article XVI.

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

"Article I; Section. 8.

Clause 1: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;"

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Also: you probably don't realize it, but it's in everyone's best interest to have a low level of poverty.

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its even more in everyone's best interest for this to be achieved by the impoverished getting a job, rather than a handout.

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I completely agree. Teaching a man to fish is better than just giving him a fish. Giving him a fish is better than letting him starve. After all, a dead man can't fish.

[SunOfBeach]

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I completely agree. Teaching a man to fish is better than just giving him a fish. Giving him a fish is better than letting him starve. After all, a dead man can't fish.


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and a dead man can't take my money, either. it's almost christmas, what about ol' ebenezer scrooge? "better to let them die, and ease the excess population...". whatcha think, bond?

[SunOfBeach]

regarding your constitution, i say again - reread yours. methinks youre not understanding it all too well...

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regarding your constitution, i say again - reread yours. methinks youre not understanding it all too well...

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It says the Government can tax income. That's what I said before you said:

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reread yours, tough guy. see if you find mention to an income tax, or to welfare, or to any of your other faves.

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If you respond again, please explain yourself.

[SunOfBeach]

i think i know you, kip. am i right?

anyway,

[ QUOTE ]
"Article XVI.

The Congress shall have power to lay and collect taxes on incomes...

"Article I; Section. 8.

Clause 1: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises...

[/ QUOTE ]

the congress aren't the collectors, and the constitution doesn't say that the congress can pass on their collection duties to some guys who go by 3 initials. ironically, chomsky is the one i first heard this from when i was a grad student at MIT, and made the mistake of attending a lecture he gave to a joint linguistics/applied mathematics conference. the only thing he ever said that wasnt fake...

[lehighguy]

I'd say at least have of business in investment banking is helping companies avoid taxes. They spend so much money and do such wierd things to avoid taxes. You can't blame them, they are playing by the rules given. But the rules are pretty stupid.

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i think i know you, kip. am i right?

[/ QUOTE ]

I don't know. How do you think you know me? I have a friend who went to MIT... is that you?

[ QUOTE ]
[ QUOTE ]
"Article XVI.

The Congress shall have power to lay and collect taxes on incomes...

"Article I; Section. 8.

Clause 1: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises...

[/ QUOTE ]

the congress aren't the collectors, and the constitution doesn't say that the congress can pass on their collection duties to some guys who go by 3 initials.

[/ QUOTE ]

I'd guess the "necessary and proper" clause gives Congress the right to create a way to collect taxes -- hence the IRS was formed. Whether or not the IRS has been granted too many rights, or whether or not their existence is even Constitutional, doesn't change the fact that the Constitution does explictly state that the Government can collect taxes on income. So, unless someone shows me otherwise, I think I was right in my original statement... even if it did come off "tough guy"-ish. /images/graemlins/wink.gif /images/graemlins/laugh.gif

So, who are you? PM me if you want.