[Aminkaoo]

http://www.fiscalcommission.gov/site...hair_Draft.pdf

Seems to me there's lots for everyone to hate in there. I like the basics of the tax reform (simplify, cut rates in exchange for reducing deductions). I like that they advocate cuts to both guns and butter. On the other hand, I find their "plan" for reducing long-term healthcare costs to be, well, awfully vague. And that's the #1 problem.

Hopefully, this results in some sort of productive debate and compromise. Yeah, right, who am I kidding?

-Arrian

In favor of everything in there, basically.

[Fainnamoony]

Ok, so I'm in, KH is in, Dan is in... hell, even Drix seems to be in.

Ergo, it's DOA, right?

-Arrian

[HedgeYourBets]

Yeah. I bet the Dems will scream loudest, btw

[ViagraFeller]

Argh. Didn't notice that they want to increase capital gains taxation

Dumbest tax ever.

[thehhhyips]

Some right-wing screaming:

http://www.atr.org/obama-debt-commis...trillion-a5647

I don't really care who screams the most. I do care that something that at least resembles this gets done.

-Arrian

[Nadin Maison]

So basically you think taxing capital gains at a rate lower than taxation of income is good because it encourages an outcome you think is good (and I agree that outcome is good, being a saver myself). Isn't that just one more example of social engineering via the tax code?

Also, Bob's retirement will presumably involve spending (at least some of) what he's saved up. Adam will be forced into at least some frugality in his twilight years.

Adam's spending pumps money into the economy, so that the businesses in which Bob invests can make money, no?

-Arrian

[Crundaangerge]

You need to reread, arrian. I have no view on the morality or prudence of saving (consuming later) versus consuming now. That is why I don't want to penalize/advantage one over the other.

[AcecePesFeacy]

Why is investment income not... income? How is taxing that at the same rate as income conveying an advantage?

-Arrian

[gedsiz]

If neither Adam nor Bob will leave anything to their children then their lifetime consumption would have the same risk-adjusted present value before taxes (since they both earn the same amount). Therefore, both efficiency and equality imply that their after-tax consumption should also be equal.

Capital gains taxes violate that requirement.

[TubOppomo]

edit: crosspost, thinking about your most recent post.

-Arrian

[phpfoxmods]

Completely agree with KH on the capital gains taxes. It is not a good tax and it's a shame that it was inserted into an otherwise solid plan. But this is Washington, where modern financial theory seems to intrude little.

[russianstallian]

1$ consumption today and 1.50 consumption 15 years from now have the same value (they trade against each other at par). Therefore, charging tax on the 50 cent difference is no more sensible than charging a different tax on somebody who buys 2 50$ video games rather than 1 100$ game because 2 > 1

[squicscor]

In favor of everything in there, basically.

QFT

[zlopikanikanz]

This is a far better argument against the capital gains tax than anything I have heard on apolyton:

http://www.manhattan-institute.org/h...morandum_7.htm

JM

[Wgnhqhlg]

Imran,

The rate cuts are only part of the story. It also takes an axe to various tax deductions.

-Arrian

[IRMartin]

No, they should be taxed as regular income at their market price on granting, due at granting (or their mkt price at sale, due at sale)

[dubGucKcolo]

No, they should be taxed as regular income at their market price on granting, due at granting (or their mkt price at sale, due at sale)

[Gremlinn]

Any fiscal conservative who is an advocate of saving taxpayer money should be an advocate of a single public health care system Rationing! DEATH PANELS!



-Arrian

[VonErmad4]

Getting rid of the health insurance deduction would probably be the single best thing that could be done for US health care.

JM

[TaxSheemaSter]

This is a far better argument against the capital gains tax than anything I have heard on apolyton:

http://www.manhattan-institute.org/h...morandum_7.htm

JM

The fact that you think so demonstrates how much you need to learn. The best arguments against capital gains are, in order:

1) It distorts at the savings/spending frontier unnecesarily; if you want to levy taxes on the rich, then levy them on the rich: those whose lifetime consumption is higher than others

2) Even inframarginally to the savings/spending frontier, it distorts work incentives more for savers than spenders; a fundamental principle of efficient taxation tells you that differential taxation between two groups is more distortionary than a uniform rate (the deadweight loss is approximately proportional to the square of the tax rate)

3) Taxes don't stay where you put them, and there is good reason to believe that in a world where capital is the most mobile, capital gains taxes fall on everybody other than the holders of capital

4) It distorts between various capital structures (e.g. dividends and interest-bearing instruments are the worst possible way of investing taxable money)

5) Nonsense arguments (like the one you posted)