…might have come around a lot sooner, but you disappeared from the thread.
thanks!
JJ: Taxing capital gains lower than income etc. can create incentives towards speculation and away from productive investment.
Please read this: http://www.onlineopinion.com.au/view.asp?article=11849
Hmmm… So then why does Ron Paul argue that our businesses are being driven overseas at all if its a good thing?
I obviously have some reading to do.
…might have come around a lot sooner, but you disappeared from the thread.
What are you talking about? That post of yours made me think 
You did put it well: “Great. So it’s ethical to take even more money from people against their will. Got it.”
Glad to hear it. Just sayin maybe if the conversation continued, clarity would have come sooner. But I also understand the need to digest things some times. And you have continued to participate a lot, so I suppose growth has come from other conversation.
Sigh.
First of all, no one is arguing that taxes (or coercion of any kind) don’t distort the market. Obviously they do. This is why the smaller the government, the better…all the way down to no government. Because all government is is coercion. But if profits are made, it was a productive investment. Period. (Provided fraud or coercion wasn’t involved, of course). This notion that “speculation is bad” or that “borrowing is bad” is some of the most asinine nonsense I’ve ever heard. You might as well say “cars, guns, and hammers are bad.” That’s the first thing. The next is how this guy uses the same “government owns 100% of your income” language almost all statists do. He spends a whole paragraph spouting numbers about how tax-paying landlords incurred losses over 2007-08, and he closes it with this:
“their ability to offset those losses against their other taxable income would have cost over $4.8bn in revenue foregone; if (say) one fifth of them had been in the top tax bracket then the cost to revenue would have been over $5bn.”
You catch that? People not having to pay taxes on money they don’t have “costs” the government. Lovely worldview this guy has. But it gets even better in the next sentence:
“This is a pretty big subsidy from people who are working and saving to people who are borrowing and speculating.”
Got it? The people who lost $8.6bn are getting a “subsidy” because they didn’t have to pay taxes on that money they no longer have. He continues on with this “not paying taxes on money you don’t have = subsidy” nonsense for a while, and then gets to this part:
“The revenue foregone through negative gearing could alternatively be used to build nearly 20,000 new ‘affordable’ homes each year. Over a decade, that would make substantial (though still incomplete) inroads into the massive shortage of affordable housing that Australia now has.”
Yes, because that’s exactly what an economy needs more of. Government housing projects. This whole article is just Keynesian/socialist nonsense. If you’d like further critique or clarification, please feel free to point out anything specific and I’ll address it. In the mean time, you can return the favor and read something actually worth reading and learn about the social function of stock speculators. And while you’re at it, you might try the social function of insurance, futures markets, credit default swaps, and banks as well.
Firstly I wasn’t arguing against speculation in general at all, and I actually don’t agree with everything in that article. I was pointing out an instance of government intervention that has contributed towards a bubble (granted, there are other factors too such as direct subsidies/easy credit schemes).
“If profits are made, it was a productive investment. Period.”
The point is that when the bubble pops and the malinvestments are revealed, there won’t be many profits made. Surely this sounds familiar to you. The prices of houses have been declining this year for the first time in over a decade.
More on this: http://en.wikipedia.org/wiki/Australian_property_bubble
Peter schiff seems to like Herman Cains plan for the most part, well moreso than our current plan. The phases still concern me.
Well that’s a relief.
Like we need one of those pointed out?
Bro, you’re the one who said “create incentives towards speculation and away from productive investment” as if having one meant not having the other. My point is that doesn’t have to be the case.
Ultimately it sounds like you’re making an argument for having taxes for capital gains be just as high as taxes on income. And I’m saying nothing you have presented has supported that argument. If that’s not an argument you’re making, you’ll need to clarify what your argument actually is, and what the point was behind that original post.
“Like we need one of those pointed out?”
In regards to the effects of lowering capital gains, it might have been an interesting one to look at.
“My point is that doesn’t have to be the case.”
I should have been clearer but I thought that with the link you’d know what I was talking about.
“Ultimately it sounds like you’re making an argument for having taxes for capital gains be just as high as taxes on income.”
No, not in general, because in the example I gave there were other incentives/disincentives towards investing in housing/everything else. I was just pointing out an example where lowering capital gains compared to income likely had a particular effect. You might say that’s obvious and you don’t care, but do you think you could account for the extent of all the effects of various taxes, regulations etc combined? You seem to think I was attacking you or something, which I wasn’t.
No I certainly didn’t think you were attacking me. My question is what was the point of that post? Now it sounds like all you’re saying is that “taxation creates incentives and disincentives which has an effect on the economy.”
In other news, water is wet and Nancy Pelosi’s had work done.
As I said I was just pointing out an example that was related to what you were talking about and which people might find interesting. If you don’t, then I guess it doesn’t concern you.
Ironically Dave, it’s your buddy Bob Wenzel who is now claiming Schiff endorses the 9-9-9 plan…
Judging by the comments, at least I’m not the only one who’s recognizing the man’s getting to be full of crap. I’m telling you. Senility is a bitch.
JJ,
I don’t know Bob Wenzel personally, nor do I know his age. So I cannot tell you if he is senile or not.
I do know that I have benefited greatly from reading his blog.
The argument he presents against 999, quoting Rothbard’s reasooning, seems pretty sound to me. If someone has a rebuttal, I’ll be interested to hear it.
Peter and he are going to thresh it out on Pete’s radio show, possibly as soon as tomorrow. I look forward to the discussion.
The above video starting at 9m57s is really good. Linked below:
http://www.youtube.com/watch?v=7iJvtQpyx1A&feature=player_embedded#t=9m57
Don’t get me wrong, the first part is really important as well.
JJ, I have a question: When corporate taxes are calculated right now, are employee wages subtracted out before taxation?
Furthermore, I have a question of 999 vs. FairTax. The FairTax would only the time when the consumer buys a good. Hence, it is not a VAT. But how does 999 work? Because Bachmann accused 999 of being a VAT.
Yes, as a business currently you are taxed on profit, meaning revenue minus expenses. Salary and wages are deducted as expense. (quick summary with PDF here). To get a bit more into the accounting, see here.
The only thing I could do here is differentiate the FairTax from a VAT. I’m not familiar at all with the specifics of Cain’s plan, nor am I that interested in spending time looking into it. The utility from that just isn’t there (at least not for me). This is why I’m greatful to Schiff for getting into it far enough to expose the hidden payroll tax (as far as I know, he’s the only one who has talked about this.)
But here’s a Forbes article titled Flat tax vs. Fair Tax vs. 9-9-9, but Forbes is notorious for publishing total bullshit (I just read one article that claimed Chris Christie used to be the U.S. Attorney General)…and this particular article actually uses “VAT” and “sales tax” interchangeably, and then on top of that, labels them both “Fair Tax”, which is also complete bullshit. And of course, if that weren’t enough, it doesn’t even mention 9-9-9 until the last paragraph, and that’s just to say that Cain claims it’s a “combination of a flat tax and sales tax.”
And here’s another one which actually goes into some numbers, bascially to make the case that it’s one big sales tax (that hurts the middle class and helps the rich, of course.)
So there’s Forbes for you.
But here’s an interesting twist: "Architect of Cain’s 9-9-9 plan says he should drop the sales tax"…and guess what it should be replaced with? A payroll tax. Apparently then it would be a “total winner.”
JJ, I posted the above video on http://www.nerds4cain.com/forums/discussion/116/schiff-9-9-9-plan-is-actually-9-9-9-9-hidden-payroll-tax
and got this response:
9-9-9 establishes the entire United States territory as an empowerment zone, and payroll is fully deductible in that zone. Sure, a company cannot deduct payroll if they hire people in another country, but what’s wrong with that? Therefore, the assertion that it contains an embedded 9% payroll tax is pure nonsense.
Looking up “empowerment zone” I found these details ( http://www.hermancain.com/999plan ):
9% Business Flat Tax- - Gross income less all purchases from other U.S. located businesses, all capital investment, and net exports.
- Empowerment Zones will offer deductions for the payroll of those employed in the zone
Is Schiff wrong? There are not many details, but it appears that payroll is deducted…