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View Full Version : Low Capital Gains Taxes Fuel Inequality,



Qtec
02-02-2012, 02:29 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"><span style='font-size: 14pt'>Low Capital Gains Taxes Fuel Inequality, Not Investment</span>

<span style='font-size: 11pt'>Behind almost all of the disturbing issues raised by Mitt Romney's jaw-dropping tax returns stands one largely unchallenged conservative article of faith. Much lower tax rates for capital gains than income earned through labor, conservatives claim, spur investment, catalyze economic growth and fuel job creation. <u>But if that Republican theology isn't true, then the United States has for decades done nothing more than deliver a massive windfall to the wealthiest Americans needing it least. Unfortunately, that's precisely what the data show.</u> As it turns out, lower capital gains taxes increase income inequality - and not investment - in America.</span>

As Paul Krugman recounted two weeks ago, the historically low capital gains rate enjoyed by Mitt Romney hasn't always been 15 percent. In the not-too-distant past, it reached 39.9 percent and with the Reagan tax reform of 1986 was briefly the same as the top tax rate on income. But successive presidents of both parties lowered the capital gains rate on investment income because they believed, the Washington Post explained, "it spurs more investment in the U.S. economy, benefiting all Americans."

http://crooksandliars.com/files/vfs/2012/01/bernstein_cap_gains.jpg

But as Jared Bernstein demonstrated with the chart above, there's no evidence to support that claim. Bernstein found that the business cycle, not acts of Congress, drive investment in the U.S.

Hard to see anything in the picture supporting the view that either the level or changes in cap gains taxes play a determinant role in investment decisions.

Remember, the ostensible reason for the favoritism in tax treatment here is to incentivize more investment and faster productivity growth. But that's not in the data and the reason it's not in the data is because investors aren't nearly as elastic to cap gains rates as their lobbyists say they are (more precisely, they'll carefully time their realizations to maximize their gains around rate changes, but that's not real economic activity-that's tax planning).

Reviewing other analyses, Brad Plummer of the Washington Post concurred with that assessment that low capital gains taxes don't necessarily jump-start investment in the economy:

The top tax rate on investment income has bounced up and down over the past 80 years—from as high as 39.9 percent in 1977 to just 15 percent today—yet investment just appears to grow with the cycle, seemingly unaffected...

Meanwhile, Troy Kravitz and Len Burman of the Urban Institute have shown that, over the past 50 years, there's no correlation between the top capital gains tax rate and U.S. economic growth—even if you allow for a lag of up to five years.

Billionaire Warren Buffett, the inspiration for the "Buffett Rule" advocated by President Obama and his Democratic allies, couldn't agree more. As he told The New York Times last year:

"I have worked with investors for 60 years and I have yet to see anyone -- not even when capital gains rates were 39.9 percent in 1976-77—shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off."

But if lower capital gains tax rates have had little impact on investment, they have had an outsized impact on income inequality in the United States. </div></div> link (http://crooksandliars.com/jon-perr/low-capital-gains-taxes-fuel-inequality-not-investment)

http://farm7.static.flickr.com/6166/6140483585_bc1d1d7430.jpg


Trickle down????????????????






Q

LWW
02-02-2012, 04:03 AM
So your answer is for everyone to be poorer?

http://seattlesportsinsider.com/sites/default/files/styles/large/public/GuinessBrilliant.jpg

Qtec
02-02-2012, 04:39 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">So your answer is for everyone to be poorer? </div></div>


Eh no! That's yours and eg8r's and the GOP position.

Q

LWW
02-02-2012, 05:03 AM
Not even close ... but we have an advantage in that we have a clue.

Your village called again.

Qtec
02-02-2012, 05:26 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body">Not even close ... but we have an advantage in that we have a clue.

Your village called again. </div></div>

So you have no answer, no argument against, so I will accept that as a 'Yes you are correct Q'.

Q

Qtec
02-02-2012, 05:38 AM
http://farm7.static.flickr.com/6166/6140483585_bc1d1d7430.jpg

As the wealth of the 90% goes down, the wealth of the 1% goes through the roof.

The now totally debunked 'Trickle Down' theory has been shown to be a disaster for MC America. The idea that jobs and decent wages rely on giving the rich more money is a huge scam.
The state of America and the World is testament to that.

The GOP solution??????????????...more of the same ,but on steroids.

Q

LWW
02-02-2012, 06:01 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Qtec</div><div class="ubbcode-body"> http://farm7.static.flickr.com/6166/6140483585_bc1d1d7430.jpg

As the wealth of the 90% goes down, the wealth of the 1% goes through the roof.

Q </div></div>

And there we have it ... you don't understand what you are viewing.

Capitalism increase the wealth of all, but unequally ... meaning that even tough all segments of society prosper, some will prosper more.

Fascism OTOH insures that only a select elite prosper while the masses suffer in equal misery.

You support an ideology that is counter to what your stated goal is.

Qtec
02-02-2012, 08:01 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Capitalism increase the wealth of all, </div></div>

No it doesn't you brainless moron.!

Geez.

Q

Qtec
02-02-2012, 08:04 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">meaning that even tough<span style='font-size: 23pt'> all segments of society prosper,</span> some will prosper more. </div></div>

<span style='font-size: 26pt'>Are you AWAKE?</span>

Have you seen what's happened in the last 10 years?

Go back to sleep. <span style='font-size: 26pt'>Everybody is just doing fine,</span> no need to bother yourself.

<span style='font-size: 26pt'>'There's no place like home.'</span>

Sleep Dorothy, sleep....

Q

eg8r
02-02-2012, 10:18 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Behind almost all of the disturbing issues raised by Mitt Romney's jaw-dropping tax returns </div></div>Why would this be considered jaw dropping? Hasn't your author ever heard of a man named Warren Buffett? He has been talking about this for years. Everyone else pays even less than Romney.

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Bernstein found that the business cycle, not acts of Congress, drive investment in the U.S.
</div></div>By not agreeing or disagreeing with this statement the question comes to mind...Does Bernstein not believe acts of Congress drive the business cycle through legislation and regulation? Ultimately Congress does have influence on business cycle and investment. Congress can stifle or invigorate equally.

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">"I have worked with investors for 60 years and I have yet to see anyone -- not even when capital gains rates were 39.9 percent in 1976-77—shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off."
</div></div>Ok, so I absolutely do not disagree with this at all but really shouldn't the qualifications be stated when making a statement like this. Seriously, do you honestly think Warren Buffett is going to consult with the "little guys". He is referring to the "big guys" when he talks about working with "investors". Every "investor" has to look out for the bottom line, meaning will this endeavour bring in money at a level that can be sustained over time. They all make determinations based on the margins which get squeezed when tax rates go up. The uber rich like Warren Buffett can absorb smaller margins over the long run because they have extra money to do more things. Smaller investors who don't have the same capital tend to pay more attention to the margins out of necessity rather than future potential.

eg8r

eg8r
02-02-2012, 10:27 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The GOP solution??????????????...more of the same ,but on steroids.</div></div>As opposed to the Dem solution which is similar to black market liposuction at a Mexican donkey show.

eg8r