Obama to Small Business Owners

Off Topic Politics & World Issues
181

Also maybe someone can put this in a different light, but isn’t a capital gains tax basically double taxation? Money invested has already been taxed at the earned income tax rate and then gains on that investment are taxed at the capital gains rate.

Why is it okay for a tax to be taken on post-tax income that is invested to provide a future benefit to the investor?

So basically you can spend your money and pay sales tax (MD is like 7% I think) or invest it and if you have a gain pay 15%. Why is that okay?

182

[quote]sufiandy wrote:
What is the deal with this?

http://www.cnn.com/2012/07/19/politics/senate-bring-jobs-home-bill-blocked/index.html[/quote]

I’d like to know more about this as well. My guess is it’s mostly a political ploy because the majority of politicians couldn’t care less about their constituents or quite frankly America.

183

[quote]countingbeans wrote:

[quote]usmccds423 wrote:

Honestly, how much more will the top earners give before they throw in the towel or simply leave the U.S.?

[/quote]

There is a significant amount of dollars going overseas now.

Not only is there actual growth in foreign markets right now, unlike the US, but the tax burdens are better. So to avoid paying US rates, they “leave the money” in the foreign markets.[/quote]

We have a 25% flat tax. For companies only, but still.

Think you need to tax anything you earn outside of our borders?

Nope.

Can you even lower your tax burden if you make a loss in another country?

Yup.

Will you get taxed if you move your money around in your group of companies, even across borders?

Nope.

Plus you can deduct stuff like crazy and we have museums and stuff.

Number one, number one!!

Well, more like 7-12 ish I guess, but still…

184

[quote]sufiandy wrote:
What is the deal with this?

http://www.cnn.com/2012/07/19/politics/senate-bring-jobs-home-bill-blocked/index.html[/quote]

Would need to see the details of the business components before I could make an intelligent comment.

Sounds like policatal BS by the right based on the CNN spin. Would like to read the spin from the right as well to gleem some sort of truth.

185

[quote]usmccds423 wrote:
Also maybe someone can put this in a different light, but isn’t a capital gains tax basically double taxation? Money invested has already been taxed at the earned income tax rate and then gains on that investment are taxed at the capital gains rate.

Why is it okay for a tax to be taken on post-tax income that is invested to provide a future benefit to the investor?

So basically you can spend your money and pay sales tax (MD is like 7% I think) or invest it and if you have a gain pay 15%. Why is that okay?
[/quote]

Well, technically, the new money you make is taxed.

There are points to be made for strict consumption taxes, because if you do not spend it you really do not gain any benefit from having money, but not as broke as the system is.

186

[quote]ZEB wrote:
Obama could also have said “teachers don’t do it alone…” but he didn’t he chose to attack business people. [/quote]

No shit. “Teachers don’t do it alone, lets start paying children $70k a year to go to school!”

187

[quote]usmccds423 wrote:
Also maybe someone can put this in a different light, but isn’t a capital gains tax basically double taxation? Money invested has already been taxed at the earned income tax rate and then gains on that investment are taxed at the capital gains rate.

Why is it okay for a tax to be taken on post-tax income that is invested to provide a future benefit to the investor?

So basically you can spend your money and pay sales tax (MD is like 7% I think) or invest it and if you have a gain pay 15%. Why is that okay?
[/quote]

Yes and no.

Yes in that the income had to be gotten some how, whether earned or unearned (investment) you were taxed on it.

But you are only paying the 15% on the gains made, if you held the investment for 366 days. Hold it less and you pay ordinary rates.

So you make 100k in OI and pay your taxes on it. Now you have 70k. You invest that 70K in Google. 366 days from now (weathering the risk of an entire year invested) you sell your shares for 100k.

You now pay 15% on your 30k gain (100k proceeds less 70k cost basis) which nets you 25.5K gain. You now have 95.5k in your hand. (100k in proceeds less the 4.5k in taxes.)

edited

188

[quote]countingbeans wrote:

[quote]usmccds423 wrote:
Also maybe someone can put this in a different light, but isn’t a capital gains tax basically double taxation? Money invested has already been taxed at the earned income tax rate and then gains on that investment are taxed at the capital gains rate.

Why is it okay for a tax to be taken on post-tax income that is invested to provide a future benefit to the investor?

So basically you can spend your money and pay sales tax (MD is like 7% I think) or invest it and if you have a gain pay 15%. Why is that okay?
[/quote]

Yes and no.

Yes in that the income had to be gotten some how, whether earned or unearned (investment) you were taxed on it.

But you are only paying the 15% on the gains made, if you held the investment for 366 days. Hold it less and you pay ordinary rates.

So you make 100k in OI and pay your taxes on it. Now you have 70k. You invest that 70K in Google. 366 days from now (weathering the risk of an entire year invested) you sell your shares for 100k.

You now pay 15% on your 30k gain (100k proceeds less 70k cost basis) which nets you 25.5K gain. You now have 95.5k in your hand. (100k in proceeds less the 4.5k in taxes.)

edited[/quote]

Gotcha, and I understand you’re paying on “new earnings”. I just think it’s interesting that if you turn around and spend your money you pay less in tax than if you patiently wait on an investment and actually gain on that investment. It’s not like the gov is giving you back 15% if you loss on your investment. Although then you get into loss deduction, which is beyond my experience.

189

[quote]orion wrote:

[quote]usmccds423 wrote:
Also maybe someone can put this in a different light, but isn’t a capital gains tax basically double taxation? Money invested has already been taxed at the earned income tax rate and then gains on that investment are taxed at the capital gains rate.

Why is it okay for a tax to be taken on post-tax income that is invested to provide a future benefit to the investor?

So basically you can spend your money and pay sales tax (MD is like 7% I think) or invest it and if you have a gain pay 15%. Why is that okay?
[/quote]

Well, technically, the new money you make is taxed.

There are points to be made for strict consumption taxes, because if you do not spend it you really do not gain any benefit from having money, but not as broke as the system is. [/quote]

Right and I get that, it just seems basically like you are being penalized because you want the money you earn to earn you more for the future.

You can spend it now and just pay sales tax, but you want to spend it later (say retirement) you have to pay tax on that gain plus you’ll have to pay sales tax in the future.

I’m not saying it’s terrible or shouldn’t exist. I’d rather pay 15% than 35%, I’m just saying is all.

190

[quote]usmccds423 wrote:

[quote]countingbeans wrote:

[quote]usmccds423 wrote:
Also maybe someone can put this in a different light, but isn’t a capital gains tax basically double taxation? Money invested has already been taxed at the earned income tax rate and then gains on that investment are taxed at the capital gains rate.

Why is it okay for a tax to be taken on post-tax income that is invested to provide a future benefit to the investor?

So basically you can spend your money and pay sales tax (MD is like 7% I think) or invest it and if you have a gain pay 15%. Why is that okay?
[/quote]

Yes and no.

Yes in that the income had to be gotten some how, whether earned or unearned (investment) you were taxed on it.

But you are only paying the 15% on the gains made, if you held the investment for 366 days. Hold it less and you pay ordinary rates.

So you make 100k in OI and pay your taxes on it. Now you have 70k. You invest that 70K in Google. 366 days from now (weathering the risk of an entire year invested) you sell your shares for 100k.

You now pay 15% on your 30k gain (100k proceeds less 70k cost basis) which nets you 25.5K gain. You now have 95.5k in your hand. (100k in proceeds less the 4.5k in taxes.)

edited[/quote]

Gotcha, and I understand you’re paying on “new earnings”. I just think it’s interesting that if you turn around and spend your money you pay less in tax than if you patiently wait on an investment and actually gain on that investment. It’s not like the gov is giving you back 15% if you loss on your investment. Although then you get into loss deduction, which is beyond my experience.

[/quote]

You can deduct your capital losses (I am talking individuals here, c-corps are different) to the extent of your gains, and in excess of your gains up to a limit of 3k a year. The losses are at 15% tax rate as well.

So:

Person A:

Has 100,000,000,000k in gains, no losses. He pays on his gains

Person B:

Has 100k in gains, and 50k in losses. He pays 15% on 50k

Person C

Hass 100k in gains, and 100k in losses. He didn’t make any money and pays no tax

Person D

Has 50k in gains and 100k in losses. He can deduct 3k from his taxable income this year and carry forward the remaining 47k of losses into next year. The 3k reduction of income will equate a $450 reduction of his tax bill. (3k x 15%)

edited

191

[quote]usmccds423 wrote:
it just seems basically like you are being penalized because you want the money you earn to earn you more for the future.

[/quote]

Now you are cooking with gas.

Welcome to moving up in the %'s.

EDIT:

I don’t know if you have kids either, but wait until you add in the desire to give them more opportunity than you had…

But nnnnoooooooo, lets make it more fair, and give away people’s stuff to other people, they didn’t build it.

192

[quote]countingbeans wrote:

[quote]usmccds423 wrote:
it just seems basically like you are being penalized because you want the money you earn to earn you more for the future.

[/quote]

Now you are cooking with gas.

Welcome to moving up in the %'s. [/quote]

That’s the goal anyway!

193

[quote]countingbeans wrote:

[quote]usmccds423 wrote:

[quote]countingbeans wrote:

[quote]usmccds423 wrote:
Also maybe someone can put this in a different light, but isn’t a capital gains tax basically double taxation? Money invested has already been taxed at the earned income tax rate and then gains on that investment are taxed at the capital gains rate.

Why is it okay for a tax to be taken on post-tax income that is invested to provide a future benefit to the investor?

So basically you can spend your money and pay sales tax (MD is like 7% I think) or invest it and if you have a gain pay 15%. Why is that okay?
[/quote]

Yes and no.

Yes in that the income had to be gotten some how, whether earned or unearned (investment) you were taxed on it.

But you are only paying the 15% on the gains made, if you held the investment for 366 days. Hold it less and you pay ordinary rates.

So you make 100k in OI and pay your taxes on it. Now you have 70k. You invest that 70K in Google. 366 days from now (weathering the risk of an entire year invested) you sell your shares for 100k.

You now pay 15% on your 30k gain (100k proceeds less 70k cost basis) which nets you 25.5K gain. You now have 95.5k in your hand. (100k in proceeds less the 4.5k in taxes.)

edited[/quote]

Gotcha, and I understand you’re paying on “new earnings”. I just think it’s interesting that if you turn around and spend your money you pay less in tax than if you patiently wait on an investment and actually gain on that investment. It’s not like the gov is giving you back 15% if you loss on your investment. Although then you get into loss deduction, which is beyond my experience.

[/quote]

You can deduct your capital losses (I am talking individuals here, c-corps are different) to the extent of your gains, and in excess of your gains up to a limit of 3k a year. The losses are at 15% tax rate as well.

So:

Person A:

Has 100,000,000,000k in gains, no losses. He pays on his gains

Person B:

Has 100k in gains, and 50k in losses. He pays 15% on 50k

Person C

Hass 100k in gains, and 100k in losses. He didn’t make any money and pays no tax

Person D

Has 50k in gains and 100k in losses. He can deduct 3k from his taxable income this year and carry forward the remaining 47k of losses into next year. The 3k reduction of income will equate a $450 reduction of his tax bill. (3k x 15%)

edited[/quote]

There’s a limit to the number of years person D can carry that loss forward though right? or maybe that’s just Corps…?

194

[quote]usmccds423 wrote:

[quote]countingbeans wrote:

[quote]usmccds423 wrote:

[quote]countingbeans wrote:

[quote]usmccds423 wrote:
Also maybe someone can put this in a different light, but isn’t a capital gains tax basically double taxation? Money invested has already been taxed at the earned income tax rate and then gains on that investment are taxed at the capital gains rate.

Why is it okay for a tax to be taken on post-tax income that is invested to provide a future benefit to the investor?

So basically you can spend your money and pay sales tax (MD is like 7% I think) or invest it and if you have a gain pay 15%. Why is that okay?
[/quote]

Yes and no.

Yes in that the income had to be gotten some how, whether earned or unearned (investment) you were taxed on it.

But you are only paying the 15% on the gains made, if you held the investment for 366 days. Hold it less and you pay ordinary rates.

So you make 100k in OI and pay your taxes on it. Now you have 70k. You invest that 70K in Google. 366 days from now (weathering the risk of an entire year invested) you sell your shares for 100k.

You now pay 15% on your 30k gain (100k proceeds less 70k cost basis) which nets you 25.5K gain. You now have 95.5k in your hand. (100k in proceeds less the 4.5k in taxes.)

edited[/quote]

Gotcha, and I understand you’re paying on “new earnings”. I just think it’s interesting that if you turn around and spend your money you pay less in tax than if you patiently wait on an investment and actually gain on that investment. It’s not like the gov is giving you back 15% if you loss on your investment. Although then you get into loss deduction, which is beyond my experience.

[/quote]

You can deduct your capital losses (I am talking individuals here, c-corps are different) to the extent of your gains, and in excess of your gains up to a limit of 3k a year. The losses are at 15% tax rate as well.

So:

Person A:

Has 100,000,000,000k in gains, no losses. He pays on his gains

Person B:

Has 100k in gains, and 50k in losses. He pays 15% on 50k

Person C

Hass 100k in gains, and 100k in losses. He didn’t make any money and pays no tax

Person D

Has 50k in gains and 100k in losses. He can deduct 3k from his taxable income this year and carry forward the remaining 47k of losses into next year. The 3k reduction of income will equate a $450 reduction of his tax bill. (3k x 15%)

edited[/quote]

There’s a limit to the number of years person D can carry that loss forward though right? or maybe that’s just Corps…?[/quote]

No, an individual can carry the losses forward until they are used up.

195

[quote]countingbeans wrote:

[quote]sufiandy wrote:
What is the deal with this?

http://www.cnn.com/2012/07/19/politics/senate-bring-jobs-home-bill-blocked/index.html[/quote]

Would need to see the details of the business components before I could make an intelligent comment.

Sounds like policatal BS by the right based on the CNN spin. Would like to read the spin from the right as well to gleem some sort of truth.[/quote]

Can’t really find much on the right based websites, kind of like when Obama does something unfavorable its never on the liberal media headlines. Only thing I could really find was republicans wanted to slip in amendments to the bill regarding Obamacare which seem completely unrelated, those were rejected by dems obviously so republicans had no choice but to vote down the bill.

196

[quote]sufiandy wrote:
Only thing I could really find was republicans wanted to slip in amendments to the bill regarding Obamacare which seem completely unrelated, those were rejected by dems obviously so republicans had no choice but to vote down the bill.[/quote]

Yup sounds about right.

Kinda like it that way sometimes. The less government can get accomplished typically ends up better for the people. I mean had we had a couple more reds Obamacare wouldn’t be.

197

8 more cities in California have inquired about bankruptcy protection, bring it to a total of 11 so far, with even more cities to come.

Hey Obama, the only thing I have seen government create is DEBT. We have the largest state government in the Union, looking at a quarter TRILLION in debt for unfunded pension liabilities, add another quarter TRILLION for that High Speed Rail, the state is so fucked we will need to be buried twice.

198

[quote]MaximusB wrote:
8 more cities in California have inquired about bankruptcy protection, bring it to a total of 11 so far, with even more cities to come.

Hey Obama, the only thing I have seen government create is DEBT. We have the largest state government in the Union, looking at a quarter TRILLION in debt for unfunded pension liabilities, add another quarter TRILLION for that High Speed Rail, the state is so fucked we will need to be buried twice. [/quote]

Yeah?

And now imagine— nah, no need to, because this is how it is.

The Fed has “printed”, for lack of a better word, an enormous amount of money.

That is out there now, but banks are afraid to lend at the moment.

What of the start again?

I mean, California, NJ, NY, and of course the federal government are broke as it is.

What if the Fed needs to hit the breaks to prevent a rampant inflation because the banks start to lend again?

If you cannot pay your debt at 0-1 % how about 6-10% ?

And that is not a pipe dream, this is what is going to happen.

199

The republicans have a very simplistic idea of how job creation works.

They think that if you tax individuals less then they will use that money to hire more people. The problem is that businesses have a lot of money right now. In fact, there is so much excess money out there right now that it is simply ridiculous. Corporations have an estimated $1.7 trillion of cash on their balance sheets.

Apple has $100 billion in cash on their balance sheet. They could probably hire 1,000,000 people right now if they wanted too. Just to put things in perspective, there are 14,000,000 people actively seeking employment. And, If Apple really wanted to, they could probably borrow 300 bil at some of the lowest interest rates in the past couple decades and hire 2-3 mil.

It is also simply a myth that tons of small businesses will just pop up out of nowhere if you reduce their taxes. New business ideas are very hard to come up with, and lenders will continue to avoid lending to small businesses because they are risky. It doesn’t matter if you help them with their tax savings as it does nothing to reduce their inherent risk.

The point is that reducing taxes is not going to change things. As taxes do nothing to change the inherent risks and deep structural issues that stagnate the economy.

We have probably 20 mil people who are unemployed or are underemployed who have immense value that has to be unlocked…and there are tons of cash and credit that are sitting idle…we need to get things reignited and taxes is not going to do that…It will only help steer things in the right direction afterwards…

It is clear that the only immediate way out of this stagnation is a very large government stimulus aimed at fixing many of the structural issues in our society. We need to borrow a very large amount of money. In the last stimulus, we used a bow and arrow when we needed to use a bazooka.

200

[quote]D Public wrote:
The republicans have a very simplistic idea of how job creation works.

They think that if you tax individuals less then they will use that money to hire more people. The problem is that businesses have a lot of money right now. In fact, there is so much excess money out there right now that it is simply ridiculous. Corporations have an estimated $1.7 trillion of cash on their balance sheets.

Apple has $100 billion in cash on their balance sheet. They could probably hire 1,000,000 people right now if they wanted too. Just to put things in perspective, there are 14,000,000 people actively seeking employment. And, If Apple really wanted to, they could probably borrow 300 bil at some of the lowest interest rates in the past couple decades and hire 2-3 mil.

It is also simply a myth that tons of small businesses will just pop up out of nowhere if you reduce their taxes. New business ideas are very hard to come up with, and lenders will continue to avoid lending to small businesses because they are risky. It doesn’t matter if you help them with their tax savings as it does nothing to reduce their inherent risk.

The point is that reducing taxes is not going to change things. As taxes do nothing to change the inherent risks and deep structural issues that stagnate the economy.

We have probably 20 mil people who are unemployed or are underemployed who have immense value that has to be unlocked…and there are tons of cash and credit that are sitting idle…we need to get things reignited and taxes is not going to do that…It will only help steer things in the right direction afterwards…

It is clear that the only immediate way out of this stagnation is a very large government stimulus aimed at fixing many of the structural issues in our society. We need to borrow a very large amount of money. In the last stimulus, we used a bow and arrow when we needed to use a bazooka.

[/quote]

You are broke now.

At interest rates of less than 1%.

Yes, please, borrow more.

If push comes to shove, you will pay more in interest than the whole tax revenue of the US.

Go for it, why dont you.