In response to:

Capital Gains Taxes

I find Sowell to be extremely sympathetic to business interests and pretty dismissive of wage-earners. As a wage earner I have risks as well. I have in fact been cheated out of pay when my employer went bankrupt. I have been laid off with zero notice. The wage-earner faces his own brands of uncertainty, no less so than the investor.
Annie-Esq Wrote: Oct 03, 2012 1:25 PM
The risk of a wage-earner is much lower than the risk of a business or investor. A wage earner may have to take a pay cut or may get fired. But he can make that up with another job tomorrow. Plus you don't necessarily create jobs with your job - other than as a consumer

An investor who puts all his earned income in a business and loses it all cannot make that up tiomorrow. He has to go earn that money as income AGAIN and then reinvest tha tnat new money and WAIT for the profit - or perhaps, again, the loss. His risk is much higher. And he creates jobs int he process.
FlamingLiberalMultiCulturalist Wrote: Oct 03, 2012 4:53 PM
"But he can make that up with another job tomorrow."

Heehee! In what country do you live? Not the USA!

And what you say of the investor's risks sounds suspiciously like what people do in Las Vegas.
FlamingLiberalMultiCulturalist Wrote: Oct 03, 2012 11:24 AM
Sowell:
"The profit that a business makes is first taxed as profit and the remainder is then taxed again...."

I have even less sympathy for this argument. It seems to me that this is Business wanting to have it both ways. Legal Corporations are citizens when it comes to "free speech" (AKA buying politicians) and enjoying the protections of the 14th amendment, but when that corporate citizen pays taxes then suddenly it's just a few lines on a piece of paper, and the stockholders are being taxed twice.

No. It doesn't work that way. If the Legal Corporation gets to enjoy the Good Stuff about being a citizen then it can d--m well pay it's taxes like the rest of us. And when money is tyransferred from the Corporation to the...
FlamingLiberalMultiCulturalist Wrote: Oct 03, 2012 11:27 AM
And when money is transferred from the corporation to the stockholder then it's income to a second citizen and should be taxed as income.
DB07 Wrote: Oct 03, 2012 11:48 AM
And then when the stockholder spends it it should be taxed again, and when the shopholder pays his employees with it it should be taxed again, and when....right?
FlamingLiberalMultiCulturalist Wrote: Oct 03, 2012 12:53 PM
Yes. That is the nature of income tax.
OneForFreedom Wrote: Oct 03, 2012 11:24 AM
I think Sowell is sympathetic to both wage earners and businesses, actually. As you move up the income ladder, progressively more of your wages (that you would've been able to invest in, say, stocks) are sucked up by the government - Sowell doesn't advocate that. Neither do most conservatives and libertarians.

Flat tax would be the best solution.
ericynot Wrote: Oct 03, 2012 11:28 AM
Flat tax doesn't solve anything. A consumption tax (such as FairTax) would. Even Paul Volcker is now advocating that approach.
FlamingLiberalMultiCulturalist Wrote: Oct 03, 2012 11:32 AM
I thought that the fair tax was a flat tax with a low-income cutoff?
Doug5049 Wrote: Oct 03, 2012 11:34 AM
No, the Fair Tax is a consumption tax with a low income cutoff.

One of the many false talking points of the Obama administration is that a rich man like Warren Buffett should not be paying a lower tax rate than his secretary. But anyone whose earnings come from capital gains usually pays a lower tax rate.

How are capital gains different from ordinary income?

Ordinary income is usually guaranteed. If you work a certain amount of time, you are legally entitled to the pay that you were offered when you took the job. Capital gains involve risk. They are not guaranteed. You can invest your money and lose it all. Moreover, the year...