Obama's Wonderful Disaster

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If my capital gains are taxed to the extent proposed, what's my incentive to invest in the stock market and attempt to have a higher return rate than the government's 'guaranteed' lower return rate? If I have the means to effect that outcome, don't I have a right to chose how that happens? Don't I have the right to have some control of my retirement and how and where I want that investment to go? I assume the risk by using the stock market to achieve that goal, not let the govt manage it for me. Don't I have the right to determine how I want to spend my retirement? If I know that there will be little or no gain by investing in companies, their capital avialable for investment and growth will decrease. That will shrink employment, lower corporate tax contribution putting more burden on lower income families to make up the difference, thus perpetuating the spiral. Our govt enabled the housing 'bubble' and is now poised to hand over to a 'naturally govt intensive' new administration. Remember, FDR's new deal perpetuated the Great depression and we're setting ourselves up for the same thing if we don't approach the next four years with some caution on how much interference we want to encourage. The current $700B plan was only partially necessary to prevent complete deflation, but served as a political ploy to 'show we still care'. If we return to fundamental (and ethical) lending and borrowing practices (on both sides of the table), we'll earn back some normalcy and then we can apply programmatic fixes for the rest.

top of VA 7:35AM November 06, 2008

If you want to tax capital gains at the same tax rate as everything else, then the tax rate on gains from after-tax investment should be zero.
This is easy to see. First look at the zero tax case and suppose you earn $1000 and have the choice between consuming it now versus investing for a $100/year gain.
Now suppose a 25% tax rate. Your choice should now be between $750 now version a $75/year gain.
The 25% income tax produces that result with a capital gains tax of zero, because the gain is on the after-tax income not the pre-tax income.
If you then tax the $75/year gain at 25% you will only end up with $56.25 per year, you will have taxed the gain twice.

Mazzula of VA 1:47PM October 31, 2008

You have to wonder how Pethoukis can write this with a straight face. Let me just get this clear in my mind. The Bush admin has just partially or fully nationalized large tracts of the banking and insurance businesses. It's proposing a massive bailout for the car companies, and according to the press is preparing a massive bailout of defaulting mortgage holders. In the mean time the three years of budget surpluses bequeathed to them by Clinton have been turned into the highest deficits in history and the total debt we're passing on to our children has doubled from about 5.7 trillion to 10.6 trillion. At the same time the economy is heading into what is forecast to be the worst recession since the early eighties if not the great depression and the entire financial system is hovering on the brink of collapse. Is this guy a total idiot or just so far in the tank for an ideology that has demonstrably failed that he has to pen this bs.

John of CT 7:28PM October 30, 2008

So by that same logic the War gave Republicans with their trickle-down economics that same blessing?!
Incredible! Republicans have sure become the party of the stupid and cynical.

Joe the Schmuck of NY 5:43PM October 30, 2008

I often don't agree with Jimmy P here either, but this nameless guy that posts his comments like a little stalker with a vengeance has got to be one of the most intellectually challenged people I have ever read consistently.

Danny of CA 12:42PM October 30, 2008

These pseudo-intellectuals, like Jimmie here, do not seem to know that leaving capital gains taxes too low is the CAUSE of economic problems---not the solution.
There is no reason EVER for a dollar from capital gain to be taxed lower than a dollar from work. Where do you think those "gains" come from? From the direct investment losses of other people, from the packaging of derivatives so complicated that no one can understand them, from the lost opportunities of others to buy homes and stocks at reasonable prices---that's where.

of 11:45AM October 30, 2008