I asked that question from a smart (if politically flawed) friend of mine and he pointed out that a lot of stocks are managed by mutual funds and that trying to tax individual sharesholders would be a nightmare for every transaction. Sounds like a sillly argument to me, but that might be because I don’t understand how all that stuff works. But it seems to me they do a pretty good at figuring how much I should be taxed on my savings account, and that thing fluctuated more than the tide on the beach. (My point is… an idividual is taxed on individual sales of stock for profit, what’s so different about taxing dividends? Or are capital gains not dividends? Are they increases in stock value?
Is it just me, or do you see a not-so-subtle mindset when you read the example of how large the tax code is?
http://www.rickperry.org/cut-balance-and-grow-html/
(Fifth Graphic)
“The U.S. tax code has over one million more words than the Holy Bible, Atlas Shrugged, and War and Peace combined.”
Interesting choice of reading material to compare it against. I guess it sounds better than “It’s almost twice as big as the average Stephen King novel!”
That’s a long sentence 
Capital gains are tax-deferred compared to income and dividends. So until the owner sells the stock they are not taxed on it so the government does not get any money until several years down the road, so I wouldn’t mind too much if they get bumped into a higher tax bracket if they choose to dump a whole bunch of stock at once.
And at any rate I also wouldn’t mind tax vehicles which would allow lower-income people to spread out outsized capital gains over several years so as to not take a disproportionate hit. I understand such vehicles are already available for one-hit-wonder style artists but I might be mistaken. But I would fear that those shelters if you will would be mainly abused by those with millions rather than those with a working class job who hold on to good investments for years.
And don’t forget eliminating the estate tax altogether. “Sure it’s a well known and statistically proven that the top 1% is getting wealthier and the middle class is falling closer to the lower income bracket; And most people will admit that it’s easier to make money when you have money… and the more money you have, the easier it is to make… but really, if you want to give people a chance to make more money in this country we have to let the rich keep more of their wealth!” :smack: How can people say such things with a straight face?? If one person out of 10 gets 80% of the pie, and is going to get a larger percentage of the next pie… and a larger percentage of the NEXT pie…etc..etc.. pretty soon they are going to get all of the pie! What’s left for the other 90%? (Or 99% as the case may be.) This isn’t exactly calculus… it’s simple enough math that even the underfunded public school graduates can see where it’s going. And now you want to eliminate the estate tax… one of the few methods of reclaiming (and yes, redistributing) wealth from a small fraction of the population. Maddness. It’ll lead to bloodshed.
Well an outright flat tax is something I’m opposed to although I’d tolerate it if those say making under a certain income was excepted. I support flattened taxes (preferably with roughly three brackets as Huntsman proposes) with elimination of loopholes and alternative minimum/estate/capital gains taxes and a lowered corporate tax rate.
You forgot the part about claiming that liberals are the ones wanting big piles of money that they did nothing to earn, and how the only way someone could possibly be wealthy is if they earned it through their own hard work.
Not to mention that a lot of estates are in the form of capital investments (Stocks, real estate, etc.) and not cash, so all the capital gains are never taxed. If Warren Buffet died and left everything to his family they could sell all his Berkshire Hathaway stock and not pay any capitol gains at all (or at least only the gains from when they gained ownership).
That’s pretty reasonable.
The really stupid part is, the reason the tax code is so long, and the size of a typical tax return have nothing to do with bracketed rates. Yet conservatives keep trying to pretend like having a flat tax will magically make everyone’s returns easy enough that they won’t have to hire CPAs and, in Perry’s words, “allow Americans to file their taxes on a postcard”.
Careful, sonny boy. Fifty years from now I’ll be gone, and you’re gonna have to live in this world. Probably thinking about retirement along about then, too.
Wait, how witll they know which plan is more beneficial to them if they don’t hire CRAs?
Quick, somebody check to see if Perry has recently received a campaign donation from the American Institute of Certified Public Accountants. This could be a full-employment-for-CPAs proposal.
You are correct. Mutual funds already have to keep track of capital gains and losses resulting from the trading of stocks that they do. If there are net gains, they distribute them to the fund holders annually. The fund holders must declare the distribution and pay tax on it. So there would be no change from what happens today, other than the individual calculating tax at his income rate rather than CGT rate.
In a way it would be simpler than now. Right now, when they distribute you get two amounts, long term and short term. Short term are added to gross income like interest and long term are taxed at the lower rate.
This looks like a desperate attempt to throw something together as quickly as possible to steal the thunder from 9-9-9. Are there any details out there showing how all the numbers work???
Next he’s going to come out with “Shake, Rattle, and Roll.”
not now but there was a time when top marginal rates were 92%. A lifetime of savings would end up getting taxed at 92% because they cashed out all at once.
Yeah, its called the installment payments or annuities.
Folks can sorta do it now.
Its an alternative maximum tax. The AMT rate is 28% for people who make more than some threshhold amount. So people who make at least a thereshhold amount would have to pay at least 28% of their below the line income
You are now saying you can opt to pay 20% of your below the line income, you have given up HUGE revenues.
Capital gains weren’t ever taxed at 92%.
Additionally, the marginal rates of 90%+ of the 1950s only applied to income over $400,000 - around 3 million in today’s dollars.
Actually, this seems rather progressive for Qin. It shows he’s putting thought into things instead of repeating party talking points and taking things he was previously taught at face value.
He may never be liberal, but a thinking conservative is nice addition to the ranks.
Yeah, that statement is so flawed you have to wonder if anyone proofs these ideas, or if he just has a group of “yes” men hanging around. Within hours someone pointed out (as was done here a few posts ago) that if the flat 20% is optional, you won’t know if it works in your favor unless you do the new “postcard” form AND the old forms. And since the majority of people would pay more under the flat 20%, they will most certainly choose the old system and still have to use the old form.
The more truthful claim would be that under the flat 20% tax “The wealthy will be able to do away with expensive CPAs and file their taxes on a postcard!”