I was always a little pissed when Jimmy Carter upset the busines lunch freeby and cut back on the 3 martini routine even fleetingly feeling guilty that our busboy making less than minimum wage had his lunch charged against him as taxable income. Then reasoning "what the hay I am really forced into this lunch in order to make a sale that will somehow benefit mankind" why should I pay for it out of pocket ?

Another joyfull event was the ability as a business owner was to escape payroll taxes (after complying with the IRS need to pay a reasonable taxable salary) paying only FIT on "profits"

Below is an article about Obama's plan to raise taxes on capital gains along with an argument that it will curtail investment and lower the value of stocks.

Currently a Sub S Corp. does not directly pay FIT on profit as it is passd through and apportioned by stock ownership and paid at the regular rate of an individual based on such ownership.

The article:


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Obama: Huge Capital Gains Tax Increase Needed


Monday, March 31, 2008 2:01 p.m. EDT

Citing advice from the sage of Omaha, Warren Buffet, Democratic presidential contender Sen. Barack Obama has called for a massive increase in the capital gains tax.
No word from the billionaire investor Buffett in reaction to Obama’s policy proposal — aired first on MSNBC by the Democratic presidential contender in an interview with Maria Bartiromo – but many other investors are already responding.

Currently, the capital gains tax rate is 15 percent.

"When I talk to people like Warren Buffet, or others, and I ask them, you know, how much of a difference is it going to be if it’s 20 or 25 percent, they say, ‘Look, if it’s within that range then it’s not going to distort, I think, economic decision making,” said Obama in an interview on March 27 on CNBC’s Closing Bell program.

Sen. Obama, who also favors letting the Bush income tax cuts expire in 2010, added that he would not like the capital gains tax rate to go up to "confiscatory rates.”


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"I certainly would not go above what existed under Bill Clinton, which was the 28 percent ... my guess would be it would be significantly lower than that. I think that we can have a capital gains rate that is higher than 15 percent,” said Sen. Obama.

Some economists tell MoneyNews that it is not a wise tax policy decision to raise capital gains tax rates in the middle of an economic downturn and possibly a recession.

"I think it's a fairytale to tell people that appreciably raising taxes on voluntary investment activities would not have an effect in the market. Of course it would,” Matthew Conrad, managing director of Complete Wealth Management, Orange, Calif., tells MoneyNews.

Conrad, who is a licensed CPA, does not believe that Obama would stop at 25 percent for a cap gains tax, however. He thinks it could go much higher to"65 percent. That would sure distort my economic decision making, and that of my clients.”

Also taking on Obama is the Republican National Committee (RNC), which issued a statement quoting several financial experts, including Martin Sosnoff, chairman and founder of Atlanta/Sosnoff Capital, The Tax Foundation's Scott Hodge, and the U.S. Congressional Joint Committee On Taxation, which indicated that "higher tax rates for capital gains and dividends are bound to dampen the stock market.”

But, Obama seems confident that an increase in capital gains rates will do much to help an economy in crisis.

"What it will also do is first of all help out the federal Treasury, which is running a credit card up with the bank of China and other countries,” said Obama. "What it will also do, I think, is allow us to make investments in basic scientific research, in infrastructure, in broadband lines, in green energy and will allow us to give some relief to middle class and working class families who have been driving this economy as consumers but have been doing it through credit cards and home equity loans. They're not going to be able to do that.”


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It always seemed wrong to me that income earned by working is taxed at a higher rate than income you receive for already being wealthy. But w and the republicans have made it clear they regard income derived from already being wealthy like capital gains and dividends to be somehow "better" than income derived from working for a living.

__________________
A nation of slaves is always prepared to applaud the clemency of their master who, in the abuse of absolute power, does not proceed to the utmost extremes of injustice and oppression.
Edward Gibbon

To live comfortably in a Capitalistic Society requires "Capital"

For the average workaday person this is a hard to aquire commodity.

For those not born to wealth it means long hours and sacrifice to attain it.

The at risk funds of an investor in the stock market would of course not be subject to a "Payroll tax" upon sale and gain realized,. nor would a sub chapter S stockholder be subject to "Payroll Tax" on profit however if the business or stock is sold and produces a gain it would be taxed as a capital gain at a current 15% rate. This IMO is low and could stand an increase.
as Obama suggests. Investment of Capital IMO needs no incentive because standing still it decays with inflation. Money has to be kept moving with or without extra incentives.

Thats odd, because it seems unfair to me that no matter how you slice taxes, the rich end up paying nearly all of them, while the majority of americans pay none.

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http://www.fairtax.org

Elminate all taxes on income and replace with a national sales tax.

It seems odd to you because you refuse to acknowledge that the rich could not be rich without the infrastructure and society those taxes pay for and because you continue to fantasize about the benefits of a mythical "free market".

__________________
A nation of slaves is always prepared to applaud the clemency of their master who, in the abuse of absolute power, does not proceed to the utmost extremes of injustice and oppression.
Edward Gibbon

And so if they pay for all that infrastructure, why shouldnt they benefit the most from it?

__________________
http://www.fairtax.org

Elminate all taxes on income and replace with a national sales tax.

They do. The infrastructure and society that exists in this country today allows for the accumulation and maintenance of riches unparalleled in history. A citizen whose income is $1 million a year after taxes benefits more from that tax supported environment than a person who receives 15k in welfare and food stamps. They benefit $985,000 more.

__________________
A nation of slaves is always prepared to applaud the clemency of their master who, in the abuse of absolute power, does not proceed to the utmost extremes of injustice and oppression.
Edward Gibbon

So you define rich as making over 20,000 a year?
Most Americans pay plenty of taxes, sales taxes, gas taxes, telephone taxes, excise taxes on tires, income taxes, payroll taxes.
So yeah, when you pick out the tax on income and complain that the people who have most of the income pay most of the income tax, it's not a big revelation, and it really doesn't strike many people as unfair.

Thanks to the lunatic tax cuts of Reagan and Bush, this country has effectively loaned the wealthy 8 trillion dollars.
because thats where the taxes that should have been collected to balance the budget should have come from.
After all, you can't tax the poor.

__________________
“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address

Not seeing the problem with that.

Big income = big gratitude = big taxes.

It is an honor to be able to give back to the nation that enabled the riches. Those who hide and evade their tax duty, or scheme to get it reduced, I find morally reprehensible, greedy and self-centered. No other country in the world allows such amazing upward mobility, and everyone reaps far more intangible benefits than what their taxes are worth, no matter their rate.

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"My opinions may have changed, but not the fact that I am right." - Ashleigh Brilliant(?)
(Voting for None Of The Above, so far...)

Actually, upward mobility is higher in europe.

__________________
“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address

And thats a difference of opinion I doubt we can overcome. I beleive that people own their wealth, not the govt.

__________________
http://www.fairtax.org

Elminate all taxes on income and replace with a national sales tax.

The taxation system is designed primarily to generate revenue for the government while setting specific spending or investment attitudes among the taxpayers. For instance, short term capital gains is taxed at the ordinary income level, while certain specific capital gains is taxed either at 5% or 15% for 2007. However, collectbles or small buisness stock is taxed at 28% while 1250 gain, unrecaptured depreciation is taxed at 25%. Additionally, certain losses are allowed while certain losses are not allowed.

Wages can be used to purchase capital. It not has important how much you are taxed or which credits you can take, but what choices you make. That is how wealth is generated. The taxation system is one avenue to help you make that choice, but it is not the only avenue.

I know someone who makes over $100k, but lives in a trailer, has no savings, and two ex-wives (Hint, my friend does not live in California, New YOrk, Florida, or any other state that has a high standard of living). The choices my friend has made is why he has no savings and always in debt. I also know people who have very little income, but a host of friends, family, and a general positive attitude. Being rich is how you define it, not how much material yo may have or want to have. And as soon as you have that material, you seen to want more and more,

The point of this is that wealth and taxation are two different things. Wealth is defined by the choices you make, taxation of your income is based on the pre set laws already in place. A wise person is one who will use the tools and knowledge easily accessible to accomodate one's goals while a poor person would easily blame others for something that they failed to choose in the first place.

Actually, no it is not, at least in old Europe. There are trade off between a European system and the American system and I will take the American system hands down.

Well, if it is all interest, dividends, net rental income, or other passive income, you might say that. If it is net self employment, you might say that. If it is wages, probably not. It depends on the income. But again, taxatiion and wealth is two separate ideas, Goober.

you can always divide people who compain about taxes into two groups men and women.



What I really feel sorry is the students you teach or use to teach. This is the most inaccurate statements about taxation I have ever read. Huffington will be very proud you just do not know what the frak you are talking about. The 1986 Tax Reform Act was a masterpiece in taxation reform. It went from short term thinking to long term thinking. It is complicated, but you need to have that complication to meet or predict most circumstances when applying the code. It took millions off the rolls while lowering the tax burden on most taxpayers. But because of the tax law changes that occur three times a year, the code has moved from its premise to something more convoluted than anyone in the 1980's can imagine.