The question becomes, is the 15% tax rate on capital gains fair? Mitt Romney says yes, because it is all investment money which has already been taxed. For instance, if you own stock in Exxon, and you get a dividend, it was $.57 on each share you own. Supposedly, that money has already been taxes. But has it? I thought the oil companies were always slithering out of paying taxes. How about your dividends on GE? Last year it supposedly didn’t pay corporate taxes.
Mitt Romney doesn’t have an income. He isn’t paid a salary. He lives off his investments. He pays taxes on other things…like capital gains from dividends and from profit made on sale of investments. So is it fair?
I say yes. We all pay what Mitt pays on capital gains. Now he can do fancier things to protect his assets than I can. He has more to play with by about a million billion times. But I am going to defend him…mainly because *I* don’t want to pay more. I wouldn’t have a problem bumping up the rich cats a percent or two once they hit $500,00 but I don’t think Mitt has cheated us.
What say you?
Who are you and what have you done with Moonhowler?
Ha!!!!!
Since I pay capital gains why would I want them to get more expensive? Yes, I am a fair weather hypocrite.
Now for the ultra rich, bump them up a point or 2.
If someone wanted to be god for a day, they could make taxes on 401k or 403b taxed at capital gains rate rather than at an earnings rate. That would encourage people to invest in their own retirement more.
I pay 24% on anything I cash in. Disgusting ! That is standard for everyone.
If you are too young to be cashing them in, you pay even more unless you go hardship.
No. It’s not fair.
It should be 0%.
“It’s fair, Romney said, for people like him to pay rates below 15%
on investment income. ‘I think it’s the right way to encourage
economic growth – to get people to invest…”.
Politico(9-24-2012) report on 60 Minutes segment.
Agree with M-H and Romney on this point. Many of us Boomers,
nearing retirement, would be deeply hurt by raising the investment
income tax rate.
The good news is Obama only wants to increase taxes on the rich.
The bad news is he thinks we are rich.
@Cargosquid
I agree. Moonhowler and I often disagree, but I like her and she is a friend. I want her back. What have you done with her?
@Steve Randolph
Your investments must be doing much better than mine. Obama does not think I am rich.
That Obama is a smart man.
Kill ALL income tax. Go to straight national sales tax. Not a VAT tax.
So explain the difference to us,Cargo, in NST and VAT.
Convince me of your ways.
The “twice taxed” argument is a red herring. Corporations also pay tax on profits before paying employees, so does that mean employees shouldn’t pay tax?
SOMEBODY please explain to me why cap gains should be taxed at a lower rate than earned income. Romney has stated that he would eliminate the cap gains tax. If the argument is that this tax stifles investment, then give a rebate if the money is used for investment, but a lot of it isn’t.
Why should a younger person who is living off the family investments pay a lower tax rate than a family of four with both parents working every day? Talk about class warfare…
I think the word “live off of” might have something to do with how I feel. I do think investment earnings like dividends or profits from the sale of stock or a house should be taxed at less than income tax. I dont even have a real reason other than because I reap the benefits. However, I think after a certain point, like half million or million, those who have acquired income from those sources should have their rate go up.
I do think middle class people who invest should be encouraged to do so. How else can you save for retirement? Obviously a passbook savings account pays nothing. If I had to pay earnings at 25-30% I might not be willing to play the equities game since investing in companies is not without risk.
So, I will say paying 15% is fair for less than a half million. After that, there needs to be a gradual scale. That’s just my hypocritical opinion.
So why am I still paying twice on a car. I don’t think the real Mitt is a cheater. He’s become pals with them though and that’s troublesome
15% is fair.
@Lyssa
Worse than that. Imagine how much tax goes into your car.
Sales tax on purchase
Property tax for at least 20 years
Stickers depending on county (emissions)
Safety inspection
Gasoline
Replacement or modification parts (labor excluded)
Sales tax on sale
Probably a few more I’m missing..
Thats of course on top of a persons earned/investment income that’s taxed.. Makes me sick.
When Kaine said he’s open to a minimum tax for everyone — while I think some people cheered and some people were angry — I think he misses the point. We should all pay something but it ought to BE the minimum.. Rich or poor, homeless or in a mansion – we all pay the same.
We are or ought to be equal.
All this yackety-yack from both parties just distracts from the fact that the federal tax structure (to say nothing of state and local taxes – don’t even get me started on that) is a completely outmoded way of raising government revenue.
M-H, with your view (#11) on this matter.
@marinm
Marin, I am going to agree with some of what you are saying about cars. They are tax magnets. I wouldn’t care as much IF and ONLY IF all taxes collected dealing with cars went into in new roads or road improvements. But they aren’t.
You left out all the special taxing on tires, including federal taxes.
@Scout
Scout, how should it happen? You could probably easily convince me since you have special status around these parts.
My friends in Washington State beat the system just a little. They live in the south western tip of the state, along the shore. Washington State has a real hefty sales tax but no state income tax. Washington State is real nazi about collecting their state taxes though. The property taxes are fairly low.
Now, my friends are right across the Columbia River from Oregon. Oregon has high property taxes, state income tax but no sales tax.
My friends take their shopping right across the river into Astoria. I think it is probably illegal but whose going to catch them.
School me a little, please. Does a disbursement from an IRA get taxed at the “normal” rate? Does a Social Security payment get taxed at the “normal” rate? If so, why should someone using investment income to live on in retirement be taxed at a lower rate? I admit I don’t really even begin to understand the tax code, but I think that’s by design…
If the theory behind capital gains being taxed lower than other income is to spur investment and business creation, why don’t we require that? If you get a break on taxes compared to the break-less wage earner, you have to invest it or otherwise use it as “capital,” not income.
@middleman
$01k/403B disbursements get taxed at 20% federal and 4% state in Virginia. Now, is that the actual rate? No. That’s just what is taken out and it isn’t negoiable to my knowledge. IRA I think you can choose how much to take out.
Social security checks don’t have any taxes taken out but…you are taxed on the amount April 15. There is no FICA taken out or state tax. No medicare either.
Pension checks are taxed normally but no FICA.
To answer your other question, that is just how capital gains are handled. When people over 55 sell a house and don’t reinvest the money, they get a one time forgiveness on the capital gains taxes or at least they used to. That might have all changed.
I pay to have my taxes done. I could never keep up with all the rules. Each rule gets its own page and each page is ker ching ker ching.
What I would like to see is a tax break for those people who are taking IRA or 401 disbursements. Those are taxed at normal rate come April 15. No breaks there. Yea yea I know it was tax deferred but even so! Not THAT much.
The Romney problem (if it is a problem – it certainly creates optics issues for him) is that his income is largely from investments and thus is taxed at lower CG rates. A good start would be to eliminate the CG/earned income distinction, but move the entire rate structure down closer to current CG rates. I personally have never understood why we can’t have an intelligent conversation about a Value Added Tax or other consumption taxes IF it is embarked upon in a spirit of replacing income taxes, as opposed to layering on on top of them. Corporate tax rates are too high compared to other world norms. That tax could be eliminated if one had a simplified tax structure (including the elimination of the CG/earned income distinction) that captured the tax function at the individual recipient level.
On Moon’s last paragraph, we do get a tax break on your 401K disbursements in the sense that, by the time we start drawing them, our income probably will put us in a lower bracket. I take the point that that might not be enough of a break, but that’s the reason that 401K’s are very attractive.
I would like more of a break on the IRA/401K/403Bs. I want a special lower tax bracket for those. I know I know…I ask for too much.
@Moon-howler
Kill the income tax and you get a great tax break on that.
National sales tax = tax at the final retail sale.
VAT = tax at every stage of development.