The US fiscal cliff - would it really be a bad thing?

[Tyrannical]

.

Taxes should only be applied on things that move:

1. Income
2. Point of Sale
3. Transfer of Ownership

Like a sub 1% tax on every share transaction? That would go a long way towards fixing a lot of things. I wonder why it doesn't happen

Probably because capital gains are already taxed at the same rate that the vast majority of middle-class taxpayers pay on their earned income: 15 percent, and because it would be a costly and cumbersome task to assess and collect the tax when it's far easier and cheaper to simply tax the capital gains at the end of the year, and because the Congress wants people to invest in the economy by buying stocks because it's highly beneficial to the nation, so they want to make it as easy as possible for everyone, including middle income taxpayers, to invest part of their disposable income in the markets, which ends up generating far more wealth, and therefore taxable income than hammering investors with niggling taxes just because a bunch of greedy, jealous, envious boobs think it's not fair that people get to make money without punching a time clock.

I would say it is worth considering because it would heavily tax short term stock speculation and automated trading and would affect long term investors little. Financial institutions can make a lot of money on short term buys designed to take advantage of small ups and downs in market prices, and I do not think that is good for the market or small investors.

Collecting a tax would be easy since virtually all trades go through a single system; the stock exchange where they are listed.

[Cormac]

.

Taxes should only be applied on things that move:

1. Income
2. Point of Sale
3. Transfer of Ownership

Like a sub 1% tax on every share transaction? That would go a long way towards fixing a lot of things. I wonder why it doesn't happen

They already tax capital gains. I.e. when you make money, you pay a tax on the capital gains.

A tax on every share transaction would fuck up the private equity market, mostly for the small time player. Those of us toying around in the area of thousands of dollars would have to weigh whether to sell or buy a stock against the additional factor of 1% immediate loss. So, I want to invest $1000 in my Scottrade account and buy a few shares of Widget Corporation, which is selling at $10 a share. I buy it, and immediately am down $10. Now, it has to go up $10 just for me to break even. If it goes down or stays the same, I lost money.

There is far more to be gained in terms of revenue to encourage personal investing in stock trading accounts than by discouraging it via a transaction tax. I'd prefer the government kick in 1% - such that if you invest in the market or in a 401k or something, that the government will give you $10 for every $1000 you invest, or even $100. I think I just hit on a great idea. For people making under $50,000 per year, the government should match X% of the investment (maybe provided the money is not cashed out until retirement, or something like that).

Yep.

[Tero]

Just the fact that you have to list all stock on capital gains form complicates things for the low end stock dabblers.

I play with stock occasionally but only in the IRA. No forms to fill out every year.

[Ian]

Methinks there might be more to it than this.

Like?

Like this: http://www.cnn.com/2012/12/07/politics/ ... hpt=hp_bn3

[amused]

My read is that the Democrats first want to raise rates on the 2% of high income earners now, and then also close the loopholes later as part of tax reform.

Works for me.

[Ian]

Some of those deductions (if those are the loopholes you're talking about) would hit the middle class especially hard. Mortgage and child care tax credits are worth a lot to my household. Part of what we use that money for is saving for college - and the college tuition tax credit is going to be another one that will be extremely useful when I've got three kids going to university.

[amused]

I'm thinking more along the lines of capital gains on stocks and other investments.

It's crap that 'unearned' income is taxed at a lower rate than earned income.

[Ian]

Ah. In that case, I pretty much agree.

[Seth]

I'm thinking more along the lines of capital gains on stocks and other investments.

It's crap that 'unearned' income is taxed at a lower rate than earned income.

No it's not. It's a deliberate decision by Congress to use low capital gains tax rates to stimulate investment in the nation's economy. Companies need capital sources, and the majority of stocks are actually owned by the "small investor" either directly or through things like pension funds and 401K's.

Tax passive investment income too heavily and people will just sit on their money rather than investing it and you'll end up with all that capital sitting in banks and under mattresses and the economy stagnating and unable to expand because capital for expansion is unavailable because those with the cash don't want to give it to the government, so they withdraw it from the markets and sit on it.

Oh, wait, that's exactly what happened when Obama first took office and created a climate of tax and regulation uncertainty for business. Derp!

"The wealthy" did exactly what I recommended they do when Obama was first elected, and what I'm still recommending they do for his lame-duck administration; withdraw all capital from the markets, sit on reserves of cash, and refuse to invest in the economy until the Marxist in Chief is gone. It'll be a tough four years, but the wealthy can certainly afford to live off their principle and wait for another, more rational and reasonable administration to come along in 2016.

Fucking nitwits thought re-electing Obama was going to change anything? Sheesh, they're just too stupid to live I'm afraid.

[aspire1670]

I'm thinking more along the lines of capital gains on stocks and other investments.

It's crap that 'unearned' income is taxed at a lower rate than earned income.

No it's not. It's a deliberate decision by Congress to use low capital gains tax rates to stimulate investment in the nation's economy. Companies need capital sources, and the majority of stocks are actually owned by the "small investor" either directly or through things like pension funds and 401K's.

Tax passive investment income too heavily and people will just sit on their money rather than investing it and you'll end up with all that capital sitting in banks and under mattresses and the economy stagnating and unable to expand because capital for expansion is unavailable because those with the cash don't want to give it to the government, so they withdraw it from the markets and sit on it.

Oh, wait, that's exactly what happened when Obama first took office and created a climate of tax and regulation uncertainty for business. Derp!

"The wealthy" did exactly what I recommended they do when Obama was first elected, and what I'm still recommending they do for his lame-duck administration; withdraw all capital from the markets, sit on reserves of cash, and refuse to invest in the economy until the Marxist in Chief is gone. It'll be a tough four years, but the wealthy can certainly afford to live off their principle and wait for another, more rational and reasonable administration to come along in 2016.

Fucking nitwits thought re-electing Obama was going to change anything? Sheesh, they're just too stupid to live I'm afraid.

It's about time you dismounted from you one trick pony, Seth; you need new troll fail material. Perhaps you should give Wiki a rest and widen the terms you use to search on google?

[amused]

Plus, Seth's argument is just fucking too stupid. People put their money in banks. Banks immediately invest that money. Money is ALWAYS invested in something.

[Tero]

[Seth]

It's about time you dismounted from you one trick pony, Seth; you need new troll fail material. Perhaps you should give Wiki a rest and widen the terms you use to search on google?

And once again, devoid of rational argument or reasoned rebuttal, you resort to ad hom. Typical Netwit behavior.

[Seth]

Plus, Seth's argument is just fucking too stupid. People put their money in banks. Banks immediately invest that money. Money is ALWAYS invested in something.

Seen the yield rates on money markets accounts lately? Mine's at 0.5 percent. That doesn't even keep up with inflation, but it creates enough interest that I have to file a tax return, so I'm taking my cash out and putting it in my safe. At least that way the bank can't prevent me from withdrawing it (as all banks can) and I don't have to file an income tax return.

[laklak]

Your cash won't be worth a damn, Seth, if the Fed keeps printing 400 billion a month in new, baseless "money" and the debt ceiling is raised to "infinity". Ain't gonna be worth the paper it's printed on.

What a spectacle, eh? The (formerly) Greatest Republic On The Planet down on it's collective knees, sucking China's cock for enough money to keep the havenots in free cellphones and birth control pills and the corporate haves in Mercedes and Beluga. It would be funny if it wasn't so goddamned tragic. All the while patting ourselves on the back for being so fair and compassionate, and saving penguins by driving our Prius down to Starbucks for a cup of overpriced pumpkin latte. Time for an asteroid strike, it's the only solution.