The Glade 4.0

Yes, but what I'm saying is that to the extent the government does intervene, shouldn't the libertarian position be that it do so in a completely even-handed way that does not favor one person or activity over another?

Any taxation at all is modifying the economy.

1) You cannot assume that a 30% tax on X has the same effect as the same on Y. 30% may be tolerable for some areas and disastrous for others. The effects do not always scale lineraly
2) As Vindi pointed out, certain concessions need to be made to what is.
3) "Favoring" certain economic activity is therefore unavoidable. It makes more sense to favor the economy where it will provide the most benefit, or at least to put the taxation where it will do the least damage. Taxing savings and investment is likely to be the most harmful form of taxation.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

It's only double taxation if you're taxed on the whole amount of the savings/investment. If you're only taxed on the gains, then there's no double taxation.

Why would it be like that? The libertarian position should be to favor what taxation has the least effect on the economy.

More importantly, you are assuming that equal percentage rates are the same as being "even-handed." Why is that true, given that the nature of the activities in question are different?

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

There's no reason for capital gains income to be arbitrarily exempt or pay at a lower rate, but the way it's currently implemented, they shouldn't tax capital gains at all because you're getting taxed twice, you still have to pay income tax on that gain as well if you ever want to spend the money that you make. I don't see why it's so hard to just count capital gains as regular income and tax it as the same rate as any other income.

No. From an economic perspective, the position is one that intervenes the least, and does the least amount of real damage to the natural economy. From a philosophic perspective, the position is the one which provides one with the ability to choose his own rate of taxation, and does not assume that the government has the authority to seize the portion it deems suitable.

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Ezekiel 23:19-20 

So if I understand correctly, what you guys are saying is you start with a thought-experiment to determine what the economy would look like in the absence of any government intervention and then pick economic policies that produce as little deviation from that outcome as possible?

My guess is the poor.

RD, it's not a "thought experiment." The "experts" cannot have all the knowledge required to manipulate money and productivity in the most efficent manner. The collective knowledge, how much each little cog knows about it's own function, is what helps run an economy smoothly. All those people in Washington want control, power, and the ability to enforce their will here and abroad. Only an omnipotent being could make it work. They want that power. They want to control nothing less than the control of human development, whether they realize it or not.

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"...the line dividing good and evil cuts through the heart of every human being. And who is willing to destroy a piece of his own heart?" -Aleksandr Solzhenitsyn

That's what I believe Rynar is saying.

I don't oppose government deciding the rate of taxation, and I oppose the idea that anyone should be allowed to choose their own rate, and I do think it is the responsibility of the elected government to figure out how much it needs.

However, "what it needs" should also be limited to those things that the government must do, or is the only practical entity to do. People should not be taxed for any sort of social or economic engineering purposes,a nd the government should not spend on them. "Income inequality", "social justice" and the like are not things the Federal government should concern itself with beyond the most minimal levels. Therefore, the government should be limited to taxation on sales or consumption, customs income, and fines. It has no reason to need more money.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

It isn't a thought experiment. It's the natural state of the economy. Every single sector of the economy existed before the government interjected itself.

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Ezekiel 23:19-20 

That's not true, since some sectors were initiated by the government, such as computing.

Also, large industries such as railroad companies in almost all cases required government intervention for zoning.

While that's true, there was another government interjecting itself before that.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

So then it is also a good idea that someone who has their happy little BoA savings account and is earning their .05% APY should also be taxed at that same 30% of their interest gain? Or just those who receive a large dollar amount of interest?

.05% Figure found here.

For consistency, anyone who has savings or investment should be taxed at the same rate. Otherwise the government can choke on a fat one.

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Darksiege
Traveller, Calé, Whisperer
Lead me not into temptation; for I know a shortcut

No, it's not true. The government started some industries.

You're taxed 15% when your investment makes the gain, and then you also have to pay income tax when you sell the financial instrument. How is that not being taxed double? You get taxed 15% on the gain when it's made and then get taxed again on the same money when you take it out. With certain investments you actually get taxed triple if it's one where you can't write off the investment itself against your income, causing you to get taxed on the money you put into the investment, the capital gains, and then the whole amount again when you take it out.

It's taxed another time if you ever choose to spend it.

That's not really how the double taxation comes in X. Unrealized capital gains aren't taxed (currently). The double taxation arises because when you buy stock, you are expecting a return based on the company's future profits. Say a company is expected to earn $1000 profit in the next 10 years, the $1000 in profits is taxed twice—when the stock owners sell their shares of stock and when the company actually earns the income.

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

FTFY.

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Sail forth! steer for the deep waters only!
Reckless, O soul, exploring, I with thee, and thou with me;
For we are bound where mariner has not yet dared to go,
And we will risk the ship, ourselves and all.

Blah, blah, blah. Under the Buffet Rule can I claim uncapitalized LOSSES since I will be taxed on the GAINS? Also this is "rule" doesn't mean anythign without Tax Code Reform correct?

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This whole pay their fair share BS has been disproven so many times over its comical. Even MSNBC had to print it.

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A man who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself. ~ John Stuart Mill

You've mentioned this facet of some taxation change some time ago, well before "Buffett Rule" and I couldn't find any support for the statement then. I've tried finding an official proposal of the exact nature of the "Buffett Rule" to confirm this statement. Where can I find it?


Like Social Security... However, snide aside, what you and X and a few others miss is that those distributions/dividends which comprise part of the capital gains were already taxed at full value of 30%+ as profit made by the company before the distribution. Then it gets taxed again at 15% (its actually 18.8% with the passage of Obamacare, which makes Obama's claims of wanting to raise capital gains from 15% to 20% ambigious... is he proposing a 5% increase, or an increase to 20% from its current 18.8?) on the entire amount.

Ladas:

I mentioned taxing unrealized gains as a policy goal of the Democratic Party, and I made that statement based on legislation sent to committee (and thankfully buried there) during Pelosi's last Congress as Speaker. As for the Buffett Rule, Obama's offices don't write anything down; I'm simply going with the explanations I'm getting from investment bankers and financial services peoples.

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No, I get that, Ladas. However, I make three points in response (well, three and a half):

First, "capital gains" is a much larger universe than corporate distributions/dividends, so at most, it can be argued that one type of capital gain is subject to double taxation, but that type represents a relatively small portion of all capital gains.

Second, if people don't want to be double-taxed on business profits, they can easily choose to do business as a sole proprietorship, a partnership, etc. However, if they want the extra legal benefits of incorporation (e.g., limited liability), one could argue that it's fair to require them to pay extra to get it. Corporate personhood is a double-edged sword.

Third, if we didn't tax both corporate profits and personal income from distributions/dividends, there would be far more incentive for people to just book earnings in whichever category wasn't taxed, thus sheltering themselves from the full amount of tax they're intended to pay. Corporate profits not taxed but dividend income is? Ok, but I swear, my apartment in the city and my second car are really deductible business expenses not things I paid for with personal income. Hm, it's the other way around and corporate profits are taxed, but dividends aren't? Ok, I'll just dividend out the money I need to buy that apartment in the city and a second car. Heads I win, tails the IRS loses.

Lastly, the half point is that, having said all of that, I'm actually not sure where I come down on the issue, but I lean towards reforming the system to avoid or at least minimize the double-taxation while still protecting against the kind of income shifting I just described.

RD, all realized capital gains are double taxed, not just distributions/dividends. I understand that the area of finance is outside your realm of expertise, but even if you buy a stock and sell it for a profit, that has been taxed twice. The Gov't has had one bite at the apple when they tax the corporate income, and another when they tax the capital gain.

As I stated earlier, stock price, when purchased, is valued taking into consideration the discounted present value of all expected future earnings. Say a company is expected to earn $1000 profit in the next 10 years - that valuation is priced into the stock. The $1000 in profits is taxed twice — when the stock owners sell their shares of stock and when the company actually earns the income. Don't forget that stock ownership is equal to ownership of the company.

I know it probably doesn't seem very clear to those not fluent in the finance, and is an incomplete explanation based on the fact that I am not about to explain the concepts of "present value", "discounted valuation", but not just dividends/distributions are double taxed by a capital gains tax..

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

Fungible is a neat word to say.

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Buckle your pants or they might fall down.