luckydevil Posted June 16, 2003 Share Posted June 16, 2003 One of the biggest reasons if not the biggest reason China is the fastest growing economy in the world is, because they do not have a capital gains tax. Link to comment Share on other sites More sharing options...
aREDSKIN Posted June 16, 2003 Share Posted June 16, 2003 One of the biggest reasons if not the biggest reason China is the fastest growing economy in the world is, because they do not have a capital gains tax. Could it be really that the Chineese just rip-off all other patents, reverse engineer it, copy it, produce it with .25 an hour labor and sell real cheap? Similar to the formula the Japaneese used in the 50's-60's. Too bad we don't play hardball with them. Link to comment Share on other sites More sharing options...
Larry Posted June 16, 2003 Share Posted June 16, 2003 Yeah, the growth of the Chinese economy couldn't possibly be because: Their economy was so rotten that "in the toilet" looked good. And, The vast number of international corporations who think that closing their factories, and replacing them with (government-enforced) slave labor, (and doubling the CEOs pay), is a great idea. Link to comment Share on other sites More sharing options...
joe Posted June 16, 2003 Share Posted June 16, 2003 I am certainly not opposed to tax cuts in theory, but the problem that I see with this one is that by altering the treatment for capital gains and dividends, the administration is attempting to stimulate the economy through manipulation of the tax code. Nothing new about this, of course, but I have always been opposed to using the tax code in such a manner. To me, the sole purpose of taxes should be to accumulate money for the operation of the government. It should not be utilized to stimulate a particular industry or the economy in general. Things such as accelerated depreciation for oil drilling to stimulate more oil drilling have no place in the tax code. Ditto the deductiblity of mortgage interest. This is why we could never truly have a flat tax. The pols could just not leave it alone. Link to comment Share on other sites More sharing options...
Prosperity Posted June 16, 2003 Share Posted June 16, 2003 Well if the Gov doesnt reduce taxes they should atleast try to make everything more clear cut and simple Link to comment Share on other sites More sharing options...
Riggo-toni Posted June 16, 2003 Share Posted June 16, 2003 ASF, How about increased revenue during the Carter administration following the Steiger amendment (which cut capital gains), or increased revenue following the the capital gains tax cut during the Reagan administration. 3 out of 3. Hmmm, could I be on to something? (Even with the collapse of the tech bubble, I'm guessing the stock market is still considerably higher than it was in '94. Anyone have any data to confirm/reject that?) Most of the OECD countries have eliminated long term capital gains taxes. At the very least, we should index ours to inflation. And yes, I agree cutting red tape for hiring employees would be a tremendous boost. Same with increasing depreciation allowances. You're preaching to the choir. Interestingly, many hardcore Dems deride treating depreciation as an expense as a loophole for wealthy corporations. Go figure. As the late great Paul Tsongas once pointed out, "You can't say your pro-employment if you're anti-employer" Finally, Lincoln instituted an income tax to pay for the Civil War, but it was unconstitutional, just as was his suspension of the writ of habeas corpus. These measures, along with the institution of military tribunals were implemented as emergency measures during time of war, and ceased when the war ended. Woodrow Wilson had to get a constitutional amendment in order to be able to implement the income tax. This is why in the Beatles' song Taxman, you hear the background vocals singing "Taxman, Mr. Wilson..." Link to comment Share on other sites More sharing options...
luckydevil Posted June 16, 2003 Share Posted June 16, 2003 "Yeah, the fact that their country is most famous for building their economy on pattent and copyright infringment had nothing to do with their growth." Are you talking about Hong Kong. We and the rest of the world have a lot to learn from Hong Kong Link to comment Share on other sites More sharing options...
Atlanta Skins Fan Posted June 16, 2003 Share Posted June 16, 2003 Originally posted by riggo-toni ASF, How about increased revenue during the Carter administration following the Steiger amendment (which cut capital gains), or increased revenue following the the capital gains tax cut during the Reagan administration. 3 out of 3. Hmmm, could I be on to something? Riggo, you're playing footsie with the numbers. Cutting capital-gains taxes *should* increase short-term revenue, because the change provides an incentive for investors to cash out. In this way, the cut is actually an incentive for short-term disinvestment, unless the cut is applied only to future investment. So, the logical effect of the Bush cap-gains cut is a depression of stock prices in the immediate period after the cut takes affect. (The market might rise, but the cut exerts a short-term depressing effect, which is one of many factors in stock prices.) The Bush cap-gains cut is thus a windfall to existing investors to lock in their gains by cashing out as soon as the cut takes effect. In terms of its future effects, the cut allows capital to move more freely, which helps mainly brokerage firms who make money on transactions. The free movement creates more market instability, creating artificial bubbles (e.g., techs and dot-coms in the 1990s) and quick flights from stocks during worrisome times (which can turn glitches into major downturns). Arguably we've seen both sides of this phenomenon during the Clinton boom/bust years. A more sound approach to increasing investment would be to stop taxing all income and start taxing all consumption. This would create profound incentives to save and invest. But Republicans aren't interested in fundamental structural changes to increase investment -- otherwise they'd immediate change our tax system in the way I indicate. (They have the unique power to do so, as they control Congress and the presidency.) Instead, they are interested in tax changes that mainly benefit wealthy investors, which they sell as a broad-based structural improvement. The improvement they cite is highly debatable, and if they were serious about that goal, they'd just shift the whole tax system to consumption. Link to comment Share on other sites More sharing options...
JackC Posted June 16, 2003 Share Posted June 16, 2003 Revenue gets increased by increased government spending. I am always surprised when people think it's tax cuts? Link to comment Share on other sites More sharing options...
Darth Tater Posted June 16, 2003 Share Posted June 16, 2003 Growth in GDP is the only way to achieve real growth in govenment revenue (of course, you can continue redistribution of what you got). If the government needs to increase revenue, the only available avenue is to cut tax rates. Of course, better, they could just start revamping it. For example, dividends should not be taxed while cap gains should at least be indexed. Link to comment Share on other sites More sharing options...
Prosperity Posted June 16, 2003 Share Posted June 16, 2003 Or maybe the government can just stop wasting money on useless programs then they can cut taxes with no negatuve consequences Link to comment Share on other sites More sharing options...
chiefhogskin48 Posted June 17, 2003 Author Share Posted June 17, 2003 Originally posted by Equality 7-2521 Or maybe the government can just stop wasting money on useless programs then they can cut taxes with no negatuve consequences Bingo. Start with farm and industrial subsidies, then the lumbering, money-pit we call "Amtrak". It would save about 30 billion a year, effective immediately. Link to comment Share on other sites More sharing options...
Riggo-toni Posted June 17, 2003 Share Posted June 17, 2003 Originally posted by Atlanta Skins Fan Riggo, you're playing footsie with the numbers. Cutting capital-gains taxes *should* increase short-term revenue, because the change provides an incentive for investors to cash out. In this way, the cut is actually an incentive for short-term disinvestment, unless the cut is applied only to future investment. So, the logical effect of the Bush cap-gains cut is a depression of stock prices in the immediate period after the cut takes affect. (The market might rise, but the cut exerts a short-term depressing effect, which is one of many factors in stock prices.) The Bush cap-gains cut is thus a windfall to existing investors to lock in their gains by cashing out as soon as the cut takes effect. In terms of its future effects, the cut allows capital to move more freely, which helps mainly brokerage firms who make money on transactions. The free movement creates more market instability, creating artificial bubbles (e.g., techs and dot-coms in the 1990s) and quick flights from stocks during worrisome times (which can turn glitches into major downturns). Arguably we've seen both sides of this phenomenon during the Clinton boom/bust years. A more sound approach to increasing investment would be to stop taxing all income and start taxing all consumption. This would create profound incentives to save and invest. I AM NOT PLAYING "FOOTSIE" with numbers. You asked for real life examples - I gave them to you! Yes, the Capital Gains tax cut allows capital to flow more freely- that's the whole fvcking point!!!! It's called "market efficiency'! It allows capital to flow more freely into better investments. People who sell a stock that's a "dog" don't just "cash out" as you believe - they invariably reinvest the money, allowing businesses with greater potential better access to capital. Even if such an investor were to pull out of the stock market entirely, the funds would then almost invariably go into the bond market, which makes it easier for firms to borrow - again, reducing the cost of capital. Lower capital gains encourages more investment in capital intensive high growth industries, which are exactly the kind of businesses that bring growth and technological progress needed for a country to stay competitive in today's global markets. This is why even tax-loving countries like Sweden and Italy have cut or eliminated their taxes on long-term capital gains. But hey, don't take my word for it. Have you ever heard of this economic guru, uh, a guy named Alan Greenspan. I realize since he doesn't technically work for you, his name might be slightly beyond your experiences as an entrepreneur. Greenspan has on numerous occasions expressed to Congress that the ideal tax rate for long term capital gains should be ZERO!! The tech bubble can't be blamed on lower capital gains. More like, stupid is as stupid does. ON the other hand, the decade did see some of the biggest productivity gains in years, and saw America vaunt back to the leader of world industry, particularly in high tech industry. On the other hand, the 70s had the highest taxes on capital gains in history, thanks to tax loving Presidents Nixon and Carter. The result - the decade where the Stock Market when adjusted for inflation LOST significant value (Even in the 30s, by the end of the decade, the DOW had averaged about a 3% per year increase). The worst Stock Market crash since the depression was in 1987, shortly after we raised the capital gains tax (though I will grant you, there were numerous other factors involved in that). Would I rather see taxes shifted from income and investment over to consumption. Absolutely! I think that's quite obviously my sentiment to anyone who has read my posts here. But you demanded some actual data on results from cutting the capital gains tax, and I provided it. Your attempts to dismiss it without providing any substantive proof to support your opposition is in my view, quite telling! By the way, I respect you as a successful business owner. That is a terrific accomplishment in my view. But your own experiences in that endeavor are not necessarily a true representation of all our business world's issues. Originally posted by JackC Revenue gets increased by increased government spending. I am always surprised when people think it's tax cuts? No offense Jack, but I can't disagree with this more. And just to show you it's not about politics, for my example let me use the records of 2 presidents, Bush 41 and Bill Clinton. Bush 41 was an absolute failure economically, with economic growth averaging 1% during his tenure - the worst since Herbert Hoover. He also increased peacetime spending more than any President in history (so much for GOP being the party of fiscal restraint) However, tax revenue stagnated during his administration, despite passing the 2nd largest Post-WWII tax increase. Clinton, by your own measure I'm sure, was quite successful economically the last 6 years of his administration (after spending the first 2 in the doldrums). Revenue increased dramatically, but per capita spending adjusted for inflation actually decreased for the first time since Eisenhower. Gov't spending slows economic growth, because the government doesn't add wealth to the economy. It only wastes or redistributes it from the most efficient users of capital to the least efficient. Thus, it chokes off the sectors of the economy which produce real growth, which is what ultimately feeds the tax revenue base. All the Keynesians out there have got it wrong, and there's decades of proof in countries all over the world; but that doesn't stop academics from insisting what works on a graph works in real life.... :doh: Link to comment Share on other sites More sharing options...
luckydevil Posted June 17, 2003 Share Posted June 17, 2003 This is a bit old, but it is a pretty good link on capital gains tax http://www.cato.org/pubs/pas/pa-242.html Link to comment Share on other sites More sharing options...
The Evil Genius Posted June 17, 2003 Share Posted June 17, 2003 Originally posted by riggo-toni These measures, along with the institution of military tribunals were implemented as emergency measures during time of war, and ceased when the war ended. Not entirely true - the income tax wasn't thrown out until, I believe, 1872... http://www.taxhistory.org/Articles/civilwar.htm Link to comment Share on other sites More sharing options...
luckydevil Posted June 18, 2003 Share Posted June 18, 2003 Revenue gets increased by increased government spending. I am always surprised when people think it's tax cuts? Sigh, sadly this type of thinking is still strong and alive. Gov't spending slows economic growth, because the government doesn't add wealth to the economy. It only wastes or redistributes it from the most efficient users of capital to the least efficient. Thus, it chokes off the sectors of the economy which produce real growth, which is what ultimately feeds the tax revenue base. All the Keynesians out there have got it wrong, and there's decades of proof in countries all over the world; but that doesn't stop academics from insisting what works on a graph works in real life.... It truly is amazing the amount of influence Keynes still has on this country and the rest of the world. I wonder how Keynes would explain Japan Link to comment Share on other sites More sharing options...
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