DagNabbit wrote: "No, the 15% is taxed only on the PROFIT he made from the original money he earned and invested."
This is such utter nonsense (as is so much of what DagNabbit writes) that it's difficult to respond. But it demands a response.
DagNabbit, you have made a statement that is wrong at the most basic level, i.e., the definition. By definition, capital gains are NOT profit. If they were the same thing, how could different rates even be charged?
I suggest you re-read Thomas Sowell's article, read all the comments, go to school for at least two, maybe four, years and study economics, then come back and comment.
But don't come back before you are ready, please!
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...
Again, Dag, you are so utterly wrong it's amazing to me that you have the courage to approach the keyboard. Hasn't anybody ever given you a clue as to how ignorant you are? They'd have done you a favor.
Interest income is not profit. And it is not capital gains. It is interest income.
Perhaps being young and unemployable you have never filed an income tax return?
And WRTO Nabbit's quote with which you started this thread, Nabbit is using the common english-language meanings of words like 'profit', not the precise accountting definitions (which, I assume, differentiate between 'profit' and 'capital gain').
Is it actually the case that the person would pay 15% on $120, or $18? That seems unreasonable. That would mean that back when the Capital Gains rate was over 20% our investor would've paid $24 in tax, actually losing money.
If you have read my comments, and all comments from the beginning of this thread you know that my criticism of DagNabbit is justified. If you haven't, I encourage you to do so, just as I encouraged DagNabbit to read both the article and the comments. Otherwise, we just get caught in blog hell going around and around, covering the same irrelevant points.
The precise word, not an "accounting term" as there is nothing arcane or unfamiliar about it, is "gain," as in "capital gain." The points are many, including those made by Thomas Sowell and also the point he did not make in this particular article but that I did make that the gain includes an inflation...
Why do you object to an attempt to use precise language so the discussion can advance? Without precise language we can't understand each other.
DanNabbit is spouting nonsense. Do you wish to join him?