Why capital gains should be taxed as income.

[Rune]

Not true... jobs come from people (not just rich)

Thank you.

who invest their own capital and take the risk to start a business. Google, Microsoft, Wal Mart, Apple etc... all of them began in such a manner.

Would you say that four startups you mentioned (all pie in the sky, against the odds superstars) are typical of the companies which create the majority of new jobs?

Without the investments of large investors either directly or through bank loans, hedge/VC funds etc...

Yes?
What about them? There would be no new business without them? Or there would be no Gordon Gecko type job destroyers without them? Is that why you left the sentence unfinished? Face it, private equity and hedge fund capital is used to eliminate jobs not create them.

As they have grown, they have continued adding jobs as they have expanded. Granted, as companies mature to the point that future expansion is not economically viable, they will stop adding jobs.

In this country. They move the jobs to foreign countries as soon as possible.

Then their new goal is to maintain profitability and productivity.

And hoard capital? What is the corporate balance sheet these days? Last I heard it was 2 trillion and growing. I guess that proves the need for reduced capital gains tax is completely false, wouldn't you say? In fact, big business has more than enough capital on hand to finance it's own growth.
Capital gains rates have one function and only one; to reduce the tax burden of the very wealthy.

Not sure how it is you think private sector job growth occurs... but would be interested in your counter points.

Most new jobs are created by small businesses as you know. Businesses financed by savings, family and friends, credit cards/vendor credit, sweat equity and small local bank loans. Reduced capital gains rates do nothing to aid any of these scenarios, yet the VAST majority of new jobs are created there.

 

[cawacko]

Well in the past that is why we had such tax rates for the very wealthy. That exception was intended to create a use it or lose situation for businesses that kept money in circulation. Money is of little value to an economy if it is not used.

Not following. Are you talking about marginal taxes on the wealthy?

 

[cawacko]

I can read your words too. They tell what you think I want.
1. You think I am being dishonest (Just be honest)
2. You think I want more tax money ( I want parity)
3. You think I don't care how.

4. Clearly we are not taxed enough already or there wouldn't be a deficit, and we wouldn't be cutting food stamps during a time of historically high unemployment.

Did you purposefully leave spending out of the equation? If we raise taxes yet continue to spend more wouldn't we be in the same situation we are today?

 

[Rune]

Did you purposefully leave spending out of the equation? If we raise taxes yet continue to spend more wouldn't we be in the same situation we are today?

It's complicated. You are trying to simplify it to a single sentence.
Before I bother, why don't you reply to the post you bumped for me, which I generously answered just for you.

 

[cawacko]

It's complicated. You are trying to simplify it to a single sentence.
Before I bother, why don't you reply to the post you bumped for me, which I generously answered just for you.

I must humble myself to say I was remiss in not thanking you for taking the time you did to reply.

Considering we had a massive recession I don't think it surprising that capital investment has taken time to recover. Here's an article showing VC investments are growing.

http://www.mercurynews.com/business...-investing-continued-its-recovery-2013-report

 

[Rune]

I must humble myself to say I was remiss in not thanking you for taking the time you did to reply.

Considering we had a massive recession I don't think it surprising that capital investment has taken time to recover. Here's an article showing VC investments are growing.

http://www.mercurynews.com/business...-investing-continued-its-recovery-2013-report

1. Thank you for your humility. From anyone else it would be considered sarcasm.
2. You are welcome.
3. You didn't address any of my points in my rebuttal to Superfreak, which you requested.
Can you show whether or not I proved that reduced rates for capital gains are nothing but theft perpetrated by the wealthy?
4. Actually VC has profited from day one of the "recession". That being the case, the author of the article is talking out his ass.
Since you are likely to doubt this statement, I will explain; VC ends up owning the majority of any company they back. Productivity has risen at the same time employment has dropped, which is why Corps are sitting on so much capital. They have become more profitable during the recession. Furthermore, those still employed have encountered downward pressure upon their wages, and many jobs have been shipped to China, again enhancing the profit of the VC investors.

What your link is really saying is that VC is becoming more active, not "recovering".
5. There is no relevancy whatsoever between your link and the topic at hand.

 

[Rune]

Did you purposefully leave spending out of the equation? If we raise taxes yet continue to spend more wouldn't we be in the same situation we are today?

Ok let's look at this issue now. Why is the debt so high? What happens if we raise spending yet cut taxes? That is what happened from 2001-2009. Did you forget about that?

 

[cawacko]

Thank you. Would you say that four startups you mentioned (all pie in the sky, against the odds superstars) are typical of the companies which create the majority of new jobs? Yes?
What about them? There would be no new business without them? Or there would be no Gordon Gecko type job destroyers without them? Is that why you left the sentence unfinished? Face it, private equity and hedge fund capital is used to eliminate jobs not create them. In this country. They move the jobs to foreign countries as soon as possible. And hoard capital? What is the corporate balance sheet these days? Last I heard it was 2 trillion and growing. I guess that proves the need for reduced capital gains tax is completely false, wouldn't you say? In fact, big business has more than enough capital on hand to finance it's own growth.
Capital gains rates have one function and only one; to reduce the tax burden of the very wealthy. Most new jobs are created by small businesses as you know. Businesses financed by savings, family and friends, credit cards/vendor credit, sweat equity and small local bank loans. Reduced capital gains rates do nothing to aid any of these scenarios, yet the VAST majority of new jobs are created there.

Ok, I missed this response. I'll offer my thoughts.

1) Technology is booming and offering massive growth and high paying jobs. Many of these companies are funded by venture capitalists and private equity. A company may start in a garage with individual savings or maxing out a credit card but it can only grow so far from that. Eventually it is going to need to real capital.

2) Yes during the 2012 election people want to rip Mitt Romney and private equity for partisan reasons. Let's take a look back at the '70's. We had high tax rates and high inflation. It created massive corporate bloat and conglomeration that caused a massive decline in corporate equity. This was a time when companies had large fleets of corporate jets and other huge perks that were essentially justified by the fact money would be confiscated by taxes or inflation if it was not spent.

This changed in the '80's with the combination of Reagan's tax cuts and Volker fighting inflation. Then all of sudden companies like Bain step in and started a restructuring campaign for American businesses which radically increased their values.

3) You are comparing two different things when talking about large companies hoarding cash and high net worth individuals providing capital. This is really a different discussion but the question to ask is why are these large companies choosing to sit on large amounts of cash? What is it about today's economic environment that leads CEO's to think this is the best choice for their organizations? But that's not what we are really talking about here. We're talking about V.C. firm's and other high net worth individuals that provide the needed capital for small companies to grow. That is who these cap gain taxes are directed at. That is who the government is trying to incentivize to invest their money.

The other question to ask is where does the money to grow come from? One doesn't go from maxing out a credit care straight to the public markets.

 

[Rune]

Ok, I missed this response. I'll offer my thoughts.

1) Technology is booming and offering massive growth and high paying jobs. Many of these companies are funded by venture capitalists and private equity. A company may start in a garage with individual savings or maxing out a credit card but it can only grow so far from that. Eventually it is going to need to real capital.

You missed or dismissed the point that most people are employed by small business NOT large or giant business. Small business has no need for venture capital.

2) Yes during the 2012 election people want to rip Mitt Romney and private equity for partisan reasons. Let's take a look back at the '70's.

No. When Mitt said he knew how to bring the jobs back to America he was right. He knew that he could close all the factories he (personally) owns in China and reopen the factories he closed in the US. Nothing partisan about that, in fact a great many republicans voted for Obama for just that reason. They knew he knew, but they also knew he was lying.

We had high tax rates and high inflation. It created massive corporate bloat and conglomeration that caused a massive decline in corporate equity. This was a time when companies had large fleets of corporate jets and other huge perks that were essentially justified by the fact money would be confiscated by taxes or inflation if it was not spent.

This changed in the '80's with the combination of Reagan's tax cuts and Volker fighting inflation. Then all of sudden companies like Bain step in and started a restructuring campaign for American businesses which radically increased their values.

LMFAO. Bain destroyed the actual value of any company they were involved with and kept it for themselves. Seriously, you can't make this kind of shit up.

3) You are comparing two different things when talking about large companies hoarding cash and high net worth individuals providing capital.

No, I am proving that business doesn't need lower capital gains tax rates to grow. Let me give you an example of why you are wrong. If you are the owner of a hedge fund with no personal equity in said hedge fund, why is your income taxed as capital gains?

This is really a different discussion but the question to ask is why are these large companies choosing to sit on large amounts of cash? What is it about today's economic environment that leads CEO's to think this is the best choice for their organizations? But that's not what we are really talking about here. We're talking about V.C. firm's and other high net worth individuals that provide the needed capital for small companies to grow. That is who these cap gain taxes are directed at. That is who the government is trying to incentivize to invest their money.

Again you make the erroneous assumption that big business provides the most jobs. It does not.

The other question to ask is where does the money to grow come from? One doesn't go from maxing out a credit care straight to the public markets.

Small business, (the main stay of job creation) grows by reinvesting it's own profits. Always have, always will. Your confusion is because you think that only big business creates jobs.

It is true that for a small business to become a big business quickly, massive infusions of capital are needed. However, the benefits of this are not job seekers.

 

[cawacko]

Ok let's look at this issue now. Why is the debt so high? What happens if we raise spending yet cut taxes? That is what happened from 2001-2009. Did you forget about that?

You're making a different point above. This is what you initially said. ""Clearly we are not taxed enough already or there wouldn't be a deficit"" Of course there are going to be variable factors of how the market responds to government action but for the basic point of discussion wouldn't the deficit drop if taxes are kept the same but spending is reduced?

 

[Rune]

You're making a different point above. This is what you initially said. ""Clearly we are not taxed enough already or there wouldn't be a deficit"" Of course there are going to be variable factors of how the market responds to government action but for the basic point of discussion wouldn't the deficit drop if taxes are kept the same but spending is reduced?

Honestly, I am sorry. I assumed you would see that I reversed your scenario thereby answering your question. Yes, clearly tax increases alone will not lower the deficit.
Spending cuts without increased revenue will not either. Both actions are needed.

 

[Cancel 2016.2]

It sure as fuck hasn't grown from big business or capital investment in the past 7 years. Typical Simplefreak talking point.

1) That doesn't alter the way the private sector grows
2) Business owners are going to expand when it is economically viable
3) As long as they see political risks, they are going to be cautious with expansion
4) The government can get in the way via mandates/tax code etc...

I can't help but notice you did not comment on what it is that YOU think makes the private sector increase jobs. I would still be interested to hear your thoughts on this.

 

[Rune]

1) That doesn't alter the way the private sector grows
2) Business owners are going to expand when it is economically viable
3) As long as they see political risks, they are going to be cautious with expansion
4) The government can get in the way via mandates/tax code etc...

I can't help but notice you did not comment on what it is that YOU think makes the private sector increase jobs. I would still be interested to hear your thoughts on this.

If you didn't notice, you are not very observant.

 

[Cancel 2016.2]

It is demand which creates jobs. I never knew a businessman who made capital investments because they got a tax break. They make those investments to meet increased demand and to grow their business. Tax breaks incentivize them to do so and that is good but the demand still has to be there.

Yes, demand drives growth, however you have to have:

1) innovative products that will drive demand, those are typically created prior to demand. How much demand was there for Microsoft software in 1987? For the laptop computer prior to the early 90's? For a search engine? etc... you have to have people taking risks early on. Those with great ideas/products that couple with well designed business plans will then make it to the point that consumers begin to demand more of what they have.

2) Even with demand, companies must have capital with which to expand. That comes from investors.

3) I never said anyone made capital investments for a tax break. So not sure where you got that little straw man.

 

[cawacko]

You missed or dismissed the point that most people are employed by small business NOT large or giant business. Small business has no need for venture capital.
No. When Mitt said he knew how to bring the jobs back to America he was right. He knew that he could close all the factories he (personally) owns in China and reopen the factories he closed in the US. Nothing partisan about that, in fact a great many republicans voted for Obama for just that reason. They knew he knew, but they also knew he was lying. LMFAO. Bain destroyed the actual value of any company they were involved with and kept it for themselves. Seriously, you can't make this kind of shit up. No, I am proving that business doesn't need lower capital gains tax rates to grow. Let me give you an example of why you are wrong. If you are the owner of a hedge fund with no personal equity in said hedge fund, why is your income taxed as capital gains? Again you make the erroneous assumption that big business provides the most jobs. It does not.

Small business, (the main stay of job creation) grows by reinvesting it's own profits. Always have, always will. Your confusion is because you think that only big business creates jobs.

It is true that for a small business to become a big business quickly, massive infusions of capital are needed. However, the benefits of this are not job seekers.

I agree most jobs are created by small businesses. SF said the same thing. There's no questioning that.

The change in the value of companies from the '70's to the '80's and the role LBO's and private equity played in that is another discussion but the values are out there. You can laugh but it is true. Hell I started out of school working for a real estate company that had been owned in the '70's by Sears. Now what the fvck does Sears know about running real estate? Yet that was the mindset of the '70's. My company got bought out and taken private and is now a global real estate giant.

Hedge funds and hedge fund managers all invest in their funds. They have to have 'skin in the game'.

I'm not sure how job seekers don't benefit from fast growing firms that receives large infusions of capital.

 

[Cancel 2016.2]

Thank you. Would you say that four startups you mentioned (all pie in the sky, against the odds superstars) are typical of the companies which create the majority of new jobs? Yes?

First, ignore the post that said you didn't answer. I simply hadn't scrolled down far enough yet.

Second... yes... pick a company, any company and this is how they started. Ford, GM, GE, all the way down to the small mom and pop shops... they all began in the same manner.

What about them? There would be no new business without them? Or there would be no Gordon Gecko type job destroyers without them? Is that why you left the sentence unfinished? Face it, private equity and hedge fund capital is used to eliminate jobs not create them.

That is complete nonsense.

In this country. They move the jobs to foreign countries as soon as possible. And hoard capital? What is the corporate balance sheet these days? Last I heard it was 2 trillion and growing. I guess that proves the need for reduced capital gains tax is completely false, wouldn't you say? In fact, big business has more than enough capital on hand to finance it's own growth.

1) I have stated we should increase cap gains taxes
2) A company has to believe it is economically viable to invest in growth in order for capital to be put to use for growth. If they feel there is too much risk, they won't expand.

Capital gains rates have one function and only one; to reduce the tax burden of the very wealthy.

Wrong. While I agree cap gains taxes should be raised, the reason they are lower is because of the corporate tax code.

Most new jobs are created by small businesses as you know.

True, because as I stated, the large companies are large because they have already gone through the growth cycle and are now mature companies.

Businesses financed by savings, family and friends, credit cards/vendor credit, sweat equity and small local bank loans. Reduced capital gains rates do nothing to aid any of these scenarios, yet the VAST majority of new jobs are created there.

As I said, it is not just large investors that invest and take a risk. But those bank loans are all investor capital.

 

[Cancel 2016.2]

It's complicated. You are trying to simplify it to a single sentence.
Before I bother, why don't you reply to the post you bumped for me, which I generously answered just for you.

Overspending of income can occur, regardless of the amount of income. Compare our budget pre-crisis to that of today. Did it rise based on inflation? Or is it dramatically over inflated?

 

[Rune]

I agree most jobs are created by small businesses. SF said the same thing. There's no questioning that.

The change in the value of companies from the '70's to the '80's and the role LBO's and private equity played in that is another discussion but the values are out there. You can laugh but it is true. Hell I started out of school working for a real estate company that had been owned in the '70's by Sears. Now what the fvck does Sears know about running real estate? Yet that was the mindset of the '70's. My company got bought out and taken private and is now a global real estate giant.

Hedge funds and hedge fund managers all invest in their funds. They have to have 'skin in the game'.

I'm not sure how job seekers don't benefit from fast growing firms that receives large infusions of capital.

Yet the majority of their income is in the form of fees for managing other's capital....why are management fees considered capital gains?

 

[Rune]

First, ignore the post that said you didn't answer. I simply hadn't scrolled down far enough yet.

Second... yes... pick a company, any company and this is how they started. Ford, GM, GE, all the way down to the small mom and pop shops... they all began in the same manner.

I asked if the for companies you mentioned are typical of those creating new jobs, not how they started. We all know the answer, so don't bother with further obfuscation.

That is complete nonsense.

No, you wish it were nonsense. Vulture Capitalists buy companies, fire thousands of employees and and send the remaining jobs overseas while saddling the company with debt and charging fees for their services. Net result; job loss.

1) I have stated we should increase cap gains taxes
2) A company has to believe it is economically viable to invest in growth in order for capital to be put to use for growth. If they feel there is too much risk, they won't expand.

Yes it has been acknowledged that mature companies do not provide many new jobs, if any. Thank you for reinforcing my point.

Wrong. While I agree cap gains taxes should be raised, the reason they are lower is because of the corporate tax code.

Opinion, not capable of being substantiated.

True, because as I stated, the large companies are large because they have already gone through the growth cycle and are now mature companies.

Yes, as I stated, reduced capital gains rates have little to nothing to do with new job creation, the entire justification for their existence.

As I said, it is not just large investors that invest and take a risk. But those bank loans are all investor capital.

Again, this is not justification for a separate class of taxpayer.

 

[Celticguy]

How many more years should we try that, and when is it supposed to start working?

it works every day. If domestic investment is still unattractive then address that problem as the seperate issue that it is. Crushing regulation and an uneducated workforce are real problems that are only getting worse. But if you take your version then dont act surprised when this country becomes the bankrupt backwater it is striving to be under liberal policies.