Biden on capital gains tax: “We should raise the tax back to 39.6 percent”

Discussion in 'Elections & Campaigns' started by Bluesguy, Aug 22, 2019.

  1. Bluesguy

    Bluesguy Well-Known Member Donor

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    Why would he or anyone want to do that?

    Clinton 29% rate peak realizations $260B peak revenue $66B
    Gingrich/Kasich 21% rate peak realizations $644B peak revenue $127B
    Bush 15% rate rate peak realizations $924B peak revenue $137B

    Why would you want to go that rate ESPECIALLY if as the Democrats are hoping we are in a recession?
     
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  2. Durandal

    Durandal Well-Known Member Donor

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    First, Democrats are not "hoping" we're in a recession.

    Second, 'cause capital gains have been soaring and the wealthy have continued to get much wealthier while the real economy has been lagging, the working class has not been getting wealthier, and Republicans under Trump have been increasing the federal deficit.
     
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  3. Distraff

    Distraff Well-Known Member

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    Correlation doesn't mean causation, and you aren't considering inflation and only cherry picking points that fits your narrative the most. Capitals gains revenue is actually tied to the state of the stock market. The stock market is tied far more to the state of the economy, the global economy, the FED, and whether people believe it will continue to rise or fall. Stock markets usually goes up because its a bubble and over-valued or the businesses they are investing in are doing well, not what the capital gains tax rate is.

    Historically there is no correlation between the capital gains tax and real investment.
    [​IMG]
     
  4. Steady Pie

    Steady Pie Well-Known Member Past Donor

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    Why stop there if it has no effect? Make it 95%.
     
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  5. Bluesguy

    Bluesguy Well-Known Member Donor

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    Of yea they are hoping for one and capital gains soared because people were willing to take more risk in a vibrant economy note the difference in realizations.

    Where would you set the rate and why?
     
  6. Bluesguy

    Bluesguy Well-Known Member Donor

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    OK then why not set the rate to 5% if it makes no difference in realizations and revenue? Why raise it to 40% like Biden proposes if it will make no difference in revenues?
     
    Last edited: Aug 23, 2019
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  7. Bluesguy

    Bluesguy Well-Known Member Donor

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    Rates, Realizations, and
    Revenues of Capital Gains
    Lawrence B. Lindsey

    2.3 Econometric Results
    The data on capital gains tax rates, realizations, and household wealth
    were analyzed statistically. The basic results showed that a one-
    percentage-point reduction in the capital gains tax rate resulted in 6.2%
    more net gains realized. The implication of this finding is that revenues
    from capital gains taxes are maximized when the capital gains tax rate
    is 16%. At higher tax rates, the revenue gained from taxing realized
    gains at higher rates is more than offset by a reduction in the amount
    of capital gains realized. At lower tax rates, the revenue lost from the
    lower rate is not recouped by the broadening of the tax base. This
    estimate of the revenue-maximizing rate is best interpreted as being in
    the center of a range of possible rates from 14.3% to 18.5%.
    https://r.search.yahoo.com/_ylt=A2K...7686.pdf/RK=2/RS=4_q.GgbyVvIdxCX1Xzht4t6B0G4-

    So why should we take Biden's advice and set them at 39%?
     
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  8. drluggit

    drluggit Well-Known Member

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    LOL.. OF course democrats are "hoping". I bet most are actually praying for a recession. The sociopaths that inhabit that party all understand that absent one, they have no hope of winning in 2020. I can add so many examples of this behavior, we could cripple this site. So, we need not do it. But this has been the message for 3 years, starting on the "fear" Trump will tank the economy, to the "economy is tanking" conversation democrats have been engaged in ever since.
     
  9. Texas Republican

    Texas Republican Well-Known Member Past Donor

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    Taxes are like an anchor on an economy.

    Dems just don't understand that.
     
  10. Distraff

    Distraff Well-Known Member

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    I didn't mean that the tax has no impact on revenue. My point was that the tax has only a small impact on the amount of stock market investment. If the Clinton tax rate had remained 29% through 2000, then the revenue would have been even higher.
     
  11. Bluesguy

    Bluesguy Well-Known Member Donor

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    You said there is no corrolation between rates and revenue. So let's cut it to 5%. And history shows the Clinton tax increase including income taxes slowed the rate of growth of federal revenues. I am dealing and citing reality you are posting unsupported conjecture.
     
  12. Distraff

    Distraff Well-Known Member

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    It has very little effect when we are talking about 15% vs 29%. But if you raise it to 95% then that will be extreme enough to discourage investment. We should tax investment income like all other income and just eliminate the capital gains tax.
     
  13. Distraff

    Distraff Well-Known Member

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    Correlation doesn't mean causation, and a lack of correlation doesn't mean a lack of causation.

    From historical data, the capitals gains tax doesn't correlate with revenue because the amount of investment jumps around so much with the market's boom and bust periods.

    But the more you tax, the more revenue you get until the tax starts to discourage the activity it is taxing. We know we haven't reached that point yet, since the total investment isn't effected by the tax rate.
     
  14. Steady Pie

    Steady Pie Well-Known Member Past Donor

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    So this "very little effect", how large is it exactly?

    Investment income is unique in that it has already been taxed when you originally obtained the capital. I oppose double taxation.
     
  15. Distraff

    Distraff Well-Known Member

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    The base money you invest is taxed, but that is previous income and not capital gains. Capital gains, from your stocks going up or interest gained, will only be taxed by capital gains tax and you won't need to pay other taxes on it.

    The gains were taxed when they were in the previous owner's hands, but thats how it is for all types of income. All income has been taxed hundreds of times as it exchanged hands.
     
  16. Steady Pie

    Steady Pie Well-Known Member Past Donor

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    I'd make a one time deal wherein the left can redistribute everything as much as they want. Bring everyone to average wealth, whatever they want...

    So long as they never touch it ever again.
     
  17. Bluesguy

    Bluesguy Well-Known Member Donor

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    Did you not read my previous cite? There IS a correlation and the optimum rate appears to be 16%. We see lower rates repeatedly spur investment and growth. Again if there is no correlation between rates and revenues then let's cut them to 5%.
     
  18. Distraff

    Distraff Well-Known Member

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    The vast majority of the left do not support communism.
     
  19. Distraff

    Distraff Well-Known Member

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    Again correlation doesn't mean causation. A lack of correlation doesn't mean no causation. Just because there is a lack of correlation between revenue and tax rate doesn't mean tax rate has no impact on revenue.

    Capital gains revenue = capital gains tax rate * total investment. So mathematically there is a causal impact on revenue.

    The reason there is no correlation between capital gains revenue and the tax rate is because the total investment is so unpredictable and moving around so wildly that we can't clearly see a trend.

    But if you then cut the tax rate to zero because you mistake a lack of correlation for a lack of causation, then we will get zero revenue, because there actually is a causation.

    Its very dangerous to look at lines moving around on stock graphs and make mistaken assumptions of causation. People have most their fortunes making this basic mistake.
     
  20. Chuck711

    Chuck711 Well-Known Member

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    During the good times in the 1960's when one persons wages paid for a family, car and house ........ our taxes were a Lot higher.

    Now it takes 2 jobs ...........

    We'll elect any idiot who runs on lowering taxes .......... and add another Trillion Dollars on America's Credit card.
     
  21. Texas Republican

    Texas Republican Well-Known Member Past Donor

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    No one actually paid the high rates in the 60's. And back then, we didn't have global competition. It was a golden era.

    It takes two jobs now for many reasons: 1) high taxes, 2) foreign competition, 3) our insatiable demand for consumer goods. But primarily it's because women entered the workforce, almost doubling the supply of labor. And when you dramatically increase the supply of something, the cost of that good will be depressed. Labor costs of all kinds (blue collar, white collar) have been relatively lowered.
     
  22. squidward

    squidward Well-Known Member

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    Let's lower the top personal rate to the current cap gains rate, then you won't have to bitch
     
    Last edited: Aug 23, 2019
  23. squidward

    squidward Well-Known Member

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    So we should raise your tax rate to the top rate and you won't need 2 jobs any more.
    See? Fixed
     
    Last edited: Aug 23, 2019
  24. squidward

    squidward Well-Known Member

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    They just support having others pay higher tax rates than themselves
     
  25. Distraff

    Distraff Well-Known Member

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    They support people poorer than themselves paying a lower rate, and people wealthier paying a higher rate. And most Republicans support a progressive tax system too, just less progressive.
     

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