Signs of the Times - and a question

[BlueStreak]

Originally Posted by HatchetJack

I know some of you are in the Peter Pan handout camp but the American
forest is about hunted out don't ya think. This is 2012 not 1980. That's
all I'm sayin. I don't understand your logic of demonizing local businesses
and giving foreign companies a free pass.

The only person I've seen give foreign companies a "pass" here, Jack.....is you.

[merrylander]

My oh my, it is truly amazing to see how many have drunk the Kool Aid. While y'all sit there and bitch about unions and GM, Chrysler and Ford they are picking your pockets. No scratch that, you are handing the money to them with a smile.

Florence taught in Japan back in the 60s and one of her students was the grandson of a former Premier. He told her one day that they may have lost the shooting war but they were going to win the economic war.

Sure keep on buying those riceburners, and keep on giving them big tax breaks for building them in your union free states. Maybe they will be real kind and give you a free knife to cut your own throat.

Dumb and dumber.

[whell]

Originally Posted by bobabode

Whell, We can toss vapid insults back and forth till the cows come home or you can try to engage in honest debate. Your prickly vague objections to some one pointing out flaws in your logic doesn't improve your standing or bolster your argument. I pointed up your fairly quick descent towards a vacuous theory of yours and the moneyed interests in general that a reduction in capital gains would some how magically fund a these stimulus zones. It appeared to me that you were once again being convoluted at best or simply trying to come sideways at the notion that trickle down economics was not a failed doctrine. We undoubtably disagree on most things political and in regards to economics just about everything. Feel free to ignore my observations and project your feelings of persecution but don't expect me to feel sorry for you.

The way I see this thread was as a simple attempt at justfying trickle down theory with the ever present easter bunny idea that we need to eliminate the capital gains tax. All the rest seems to be window dressing or subterfuge. I don't agree with your premise in the first place, so why debate it with you? (Other than to poke the ocassional hole in a specious argument.)

Feel free to parse it and toss insults whellie, I wouldn't expect any less from you. Just don't expect me to bow out in silence from what is a very important topic. I just happen to believe you are wrong, live with it or prove me wrong with some realistic and honest approaches. Not some stale and vague understanding of the faied trickle down theory and a duplicitous contention that we need to unshackle the rich from their already all time low rate of taxes. You are a staunch anti tax for the rich proponent so where would the money come from? Cutting capital gains will not float everyones boat. It will however allow the rich to buy ever bigger yachts.

Is it just that I don't agree with your pet theory or do you have some so far hidden qualifications that I've missed? After all I'm just a dumbass nail pounder (actually I used pneumatics). I did get a chuckle out of your misspelling of rote BTW I for one don't use spellcheck because i want to be clear and do understand the particular meaning of the words that I choose to use. I've laid my cards on the table, how about you? Any schooling or on the job training that makes you an authority worth listening to?

Its your own bias that you can't escape. I've been trying to avoid the political aspects of this topic and come at it from a purely economic standpoint. Yet you can't help injecting your own well schooled biases about the "rich" and "trickle down". The fact that even in this state as well as others under Dem and Repub oversight leadership such programs have been successful - albeit in more limited / structured / targeted programs - created the framework for my question.

Also, if grading my spelling makes you feel superior somehow, I'll continue to massage your psyche and continue to offer more grist for your mill. I often post via iPad, so the small keyboard and my large fingers, as well as the iPads sometimes not so accurate auto correct will give you plenty of material.

[piece-itpete]

Ford didn't take any bailout.

Capitalism works my friends.

Pete

[whell]

Originally Posted by d-ray657

What assets are you suggesting are taxed? The only asset-based taxes on a business that I am aware of are property taxes, and perhaps vehicle taxes. The enterprise is allowed, however, to write off some of the value of those assets through depreciation. And, aren't property taxes generally local in nature - something that has little or nothing to do with the federal tax structure? If you are award of any federal tax on business assets, let us know.

I posted a bit hastily. The tax on assets is imposed when the assets are disposed of. The revenue from the sale is taxed, and the tax can be reduced by depreciation cost. Sometimes the depreciation reduces the tax to zero, sometimes not.

Originally Posted by d-ray657

As I mentioned earlier, I can see it being a potentially tax policy to at least defer some of the taxes for profits that are reinvested in the company - that are actually used for job creation. But I see no reason to make money that the owners take out of a business subject to any lesser tax than the income that the rest of us earn.

That may be the beginning of the plan. I'm not suggesting that the business's tax go to zero by any stretch. I do believe that part of the answer is reducing the tax on capital gains to incent the efficient utilization and conversion of capital.

[whell]

Originally Posted by finnbow

Once they've written off salaries, depreciation, interest expenses, etc., they are indeed taxed upon their profits (as they should be). I suspect you probably know some people with small businesses. I do. They are very adept in writing off every imaginable "expense" and keeping their tax burden low to nonexistent. In many instances, the small business exists solely to write off its expenses against their other profitable enterprise(s).

Your point?

[merrylander]

Originally Posted by whell

I posted a bit hastily. The tax on assets is imposed when the assets are disposed of. The revenue from the sale is taxed, and the tax can be reduced by depreciation cost. Sometimes the depreciation reduces the tax to zero, sometimes not.

When I ran my own consulting business our tax accountatnt managed to deduct the most amazing items, all legal

That may be the beginning of the plan. I'm not suggesting that the business's tax go to zero by any stretch. I do believe that part of the answer is reducing the tax on capital gains to incent the efficient utilization and conversion of capital.

Does not seem to be working in most cases, Berkshire is the only one investing and that mainly to buy up companies like BNSF.

[piece-itpete]

I know someone who says, if everyone is taxed individually then there is no reason to tax business at all.

It actually makes sense.

Pete

[d-ray657]

Originally Posted by whell

I posted a bit hastily. The tax on assets is imposed when the assets are disposed of. The revenue from the sale is taxed, and the tax can be reduced by depreciation cost. Sometimes the depreciation reduces the tax to zero, sometimes not.



That may be the beginning of the plan. I'm not suggesting that the business's tax go to zero by any stretch. I do believe that part of the answer is reducing the tax on capital gains to incent the efficient utilization and conversion of capital.

Aaaargh - wonk speak. See, that's where you lose me. Income is income. Capital gains should be taxed as any other income. Once it becomes income, it is taking money out of the enterprise, rather than reinvesting it. The incentive should be designed to continue to encourage reinvestment rather than conversion of assets to cash.

Regards,

D-Ray

[whell]

Originally Posted by d-ray657

The incentive should be designed to continue to encourage reinvestment rather than conversion of assets to cash.

Regards,

D-Ray

There are, of course, severe limits to this. Yes, reinvestment should be encouraged. It should be encouraged by market forces rather than tax policy however.

Also, if you're going to tax capital gains as any other income - which is the process of using cash or property to generate income - then you need to zero out other types of taxes to assure that conversion of capital isn't dis-incentivized by tax policy:

- income from sale of assets / property, since that capital has already been taxed
- business property tax, since that has already been taxed
- any other tax on income, since that will be captured by treating capital conversion as revenue.

EDIT - it may also be useful to determine what an appropriate tax bracket would be for cap gains tax if taxed at regular income levels.