The only way to end corruption at the IRS is to

[Ishmael]

1920s - top rate 76%
Early 1930s - temporary drop to 25% to combat the GD
Mid 1930s - back up to 63%
Late 1930s - Up to 78%
WWII - up to 90-something percent
1951-1964 - 90%
1965-1981 - 70%
1982-1986 - 50%
1987-2002 - 40%


So what unique circumstance over pretty much the entire 20th century allowed much higher capital gains rates to work?

It didn't work, ever. Adjusted for inflation the revenues returned were inversely proportional to the tax levied. Christ, even Obama knows this and when questioned on it justified the higher rate only in the context that it was "Fair."

Further it had the effect of freezing investment capital in place. Remember, there is no taxable event until a sale is made. So investors left their capital in place thereby ignoring new industry and capital growth ideas. Whatever growth took place was in the form of 'net worth' which they could borrow against. Higher capital gains taxes are the financial equivalent of an embargo on new goods and services.

Ishmael

 

[kbate]

Then you think it's okay to raise capital gains rates right now. Record profits, record investing/buying. An 80-year track record of showing that America prospers under a capital gains rate that's up to six times higher than it is now.... Why would you not back it?

The peak capital gains rate in recent history (1950s) has been just under 40% with the average closer to 25% for the long term history.

You are going back to that 8 years - 1913 to 1921 and extrapolating your 80 year history again.

 

[4est_4est_Gump]

It didn't work, ever. Adjusted for inflation the revenues returned were inversely proportional to the tax levied. Christ, even Obama knows this and when questioned on it justified the higher rate only in the context that it was "Fair."

Further it had the effect of freezing investment capital in place. Remember, there is no taxable event until a sale is made. So investors left their capital in place thereby ignoring new industry and capital growth ideas. Whatever growth took place was in the form of 'net worth' which they could borrow against. Higher capital gains taxes are the financial equivalent of an embargo on new goods and services.

Ishmael

But damnit, it just ain't FAIR! Maybe we need an additional wealth tax, like the AMT!

 

[JAMESBJOHNSON]

In 1965 10 billion was big money. today it buys a bag of cheetos and half of an Obama campaign.

What the government spends in a month today, is greater than the M2 supply in 1965.

Inflation since 1965 is like 760%. A dollar then is worth $7.60 now.

Doing the math it seems that the low income folks have been screwed the most via minimum wages and college tuition and housing prices. My first semester of college in 1967 cost me like $90 plus books. Today the same semester at the same college is $1600. It oughta be like $700.

 

[4est_4est_Gump]

A good point was made over at NRO for those of us who know the Obama Political History of intimidation and getting private records unsealed, just like Islam takes its cues from the life of Mohammed, the IRS and all these other agencies, and there will be more shoes dropping, were merely taking the tack and direction of their captain.

President Obama and Co. are in full deniability mode, noting that the IRS is an "independent" agency and that they knew nothing about its abuse. The media and Congress are sleuthing for some hint that Mr. Obama picked up the phone and sicced the tax dogs on his enemies.

But that's not how things work in post-Watergate Washington. Mr. Obama didn't need to pick up the phone. All he needed to do was exactly what he did do, in full view, for three years: Publicly suggest that conservative political groups were engaged in nefarious deeds; publicly call out by name political opponents whom he'd like to see harassed; and publicly have his party pressure the IRS to take action.

Mr. Obama now professes shock and outrage that bureaucrats at the IRS did exactly what the president of the United States said was the right and honorable thing to do. "He put a target on our backs, and he's now going to blame the people who are shooting at us?" asks Idaho businessman and longtime Republican donor Frank VanderSloot.

Kimberley Strassel, WSJ
http://online.wsj.com/article/SB10001424127887324767004578487332636180800.html?mod=rss_opinion_main

 

[mercury14]

The peak capital gains rate in recent history (1950s) has been just under 40% with the average closer to 25% for the long term history.

You are going back to that 8 years - 1913 to 1921 and extrapolating your 80 year history again.

Er, epic misreading on my part. I was listing the top marginal income tax rate.

 

[mercury14]

It didn't work, ever. Adjusted for inflation the revenues returned were inversely proportional to the tax levied.

[citation needed]

I have CRS and CBO studies that say otherwise. According to both of these sources, historically (including the Bush tax cuts), revenues returned spiked as the capital gains tax was lowered or expected to be lowered. But the revenues returned were from the glut of investors taking gains based on the change. The effect fades quickly and vanishes after less than two years.

Besides, the capital gains rate increase we just had correlated with record investing and a spike in revenues beyond what the CBO projected. Your rule of inverse proportionality is being proved untrue even as we speak.

 

[Colonel Hogan]

Capital gainers pocket squat, the gains are entirely inflation. The government taxes the inflation it creates.

I have no desire to get into a flame war with you, but this really is a pathetically stupid statement. Your own words prove it below.

Inflation since 1965 is like 760%. A dollar then is worth $7.60 now.

Doing the math it seems that the low income folks have been screwed the most via minimum wages and college tuition and housing prices. My first semester of college in 1967 cost me like $90 plus books. Today the same semester at the same college is $1600. It oughta be like $700.

Quite obviously then the "gain" in college tuition over and above the $700 dollar inflationary increase you would expect was, in fact, due to something else. What was it?

But let's remove the component of greedy arbitrary price setters and look at your numbers as a theoretical investment in common stocks.

According to you, every single share of common stock purchased in 1965 would have appreciated no more than 760% to today. I believe that's what "the gains are entirely inflation" means in commonly understood English.

But we can all find examples of stocks that have done far better and far worse in that same time period. The inflationary component in their current share price certainly exists. But the deviation in the current share price above or below the effect of inflation skewers your absurd premise and suggests other forces at work. In fact, those forces are the very reason intelligent people invest in shares of equity. What are they?

Perhaps you'd like to take another crack at saying what you really meant.

 

[koalabear]

Close the IRS, the bill collectors for the Fed. We don't need em, States can collect the taxes.

 

[unregistered]

 

[Ishmael]

[citation needed]

I have CRS and CBO studies that say otherwise. According to both of these sources, historically (including the Bush tax cuts), revenues returned spiked as the capital gains tax was lowered or expected to be lowered. But the revenues returned were from the glut of investors taking gains based on the change. The effect fades quickly and vanishes after less than two years.

Besides, the capital gains rate increase we just had correlated with record investing and a spike in revenues beyond what the CBO projected. Your rule of inverse proportionality is being proved untrue even as we speak.

That is but one analysis, the Cato Institute has another that disputes that one and offers other well thought out reasons that there should be NO capital gains taxes at all.

However, that does NOT advance the topic one iota. The IRS is an extreme danger to ALL citizens no matter what their particular political bent may be. It is out of control and overly politicized. It must go the way of the Dodo.

That being said, government must be funded in one way or another. The goal is to develop a method of taxation that is fair to all citizens and adequately funds government.

Ishmael

 

[mercury14]

That is but one analysis, the Cato Institute has another that disputes that one and offers other well thought out reasons that there should be NO capital gains taxes at all.

However, that does NOT advance the topic one iota. The IRS is an extreme danger to ALL citizens no matter what their particular political bent may be. It is out of control and overly politicized. It must go the way of the Dodo.

That being said, government must be funded in one way or another. The goal is to develop a method of taxation that is fair to all citizens and adequately funds government.

Ishmael

Well yeah Cato is pretty far to the right so everything they produce will support a predetermined conclusion. They're like those creationist "scientists" who take a vow of Biblical inerrency before setting off to study creation. The studies I have are nonpartisan and btw there are two of them, not one.

I don't see any evidence that the IRS is an extreme danger to all citizens, is out of control, and overly politicized. Maybe the IRS investigation will overturn some massive conspiracy and then maybe you've have a point but until then it's not looking like you have any evidence to support your position.

 

[4est_4est_Gump]

CBO studies are static by law.


Economics is the study of Human Action and that is dynamic.

 

[RobDownSouth]

CBO studies are static by law.


Economics is the study of Human Action and that is dynamic.

"Human Action"?
http://cache.ohinternet.com/images/d/d7/LOL_WUT_PEAR.jpg

Psychology, Sociology, Economics.....they're all synonymous, right Chief?

 

[JAMESBJOHNSON]

While telling us that Medicare would only cost 15 billion.

LBJ was a special prince. His last term the deficit was 25 billion. Nixon's first term saw a 3 billion surplus.

What Democrats never see is how LBJ lauded the poor and blacks, then shipped both off to Vietnam.

 

[4est_4est_Gump]

The Fair Tax allows the poor to opt out of paying any taxes, yet still being able to enjoy things like homes and cars...



... plus they get all of their paycheck.

As it is now, they get out of income tax, but the do not get out from under the consequences of the income tax because of the imbedded cost of tax compliance, in short, they currently pay the Fair Tax, which is really unfair.

The simple fact of the matter is that most Liberal and Socialists see only the benefit of the broken window of 'soaking the rich' for their 'fair share' while 'fairly' absolving the poor of paying the tax visibly while condemning the middle class to secretly fund it.

Then you hand the power of collecting the tax over to an entity which will now answer to nobody while treating the taxpayer under the Napoleonic Code where if they say you are guilty, then you have to prove innocence beyond a shadow of doubt while when asked "who done it?" by Congress, it turns out nobody did, there's nothing to see here, it was just poor customer service. There are nothing but Dark Shadows of doubt.

 

[JAMESBJOHNSON]

If I ruled the world here's what we'd do:

Every Real American would be vested to the tune of, say, a million dollars. If you sign up for food stamps or unemployment or a Pell grant or Medicare the money comes outta your million.

 

[4est_4est_Gump]

In two weeks, the poor would have lost all their money and the rich would have gained it for you cannot free humans of human nature, habit and culture...

 

[kbate]

The Fair Tax allows the poor to opt out of paying any taxes, yet still being able to enjoy things like homes and cars...

Explain how someone who has to spend every dollar they earn just to buy gasoline, food and clothing is going to avoid the Fairtax. The idea of a prebate didn't come about because the 'poor' can avoid the tax by choosing to 'not buy'.

 

[Byron In Exile]

1920s - top rate 76%
Early 1930s - temporary drop to 25% to combat the GD
Mid 1930s - back up to 63%
Late 1930s - Up to 78%
WWII - up to 90-something percent
1951-1964 - 90%
1965-1981 - 70%
1982-1986 - 50%
1987-2002 - 40%

Where are you getting these numbers?

Are you making them up?

 

[Ishmael]

Well yeah Cato is pretty far to the right so everything they produce will support a predetermined conclusion. They're like those creationist "scientists" who take a vow of Biblical inerrency before setting off to study creation. The studies I have are nonpartisan and btw there are two of them, not one.

I don't see any evidence that the IRS is an extreme danger to all citizens, is out of control, and overly politicized. Maybe the IRS investigation will overturn some massive conspiracy and then maybe you've have a point but until then it's not looking like you have any evidence to support your position.

*chuckle* Really up to speed there, huh sparky?

Ishmael

 

[mercury14]

Where are you getting these numbers?

Are you making them up?

See my post where I said I submitted the top marginal rate.

 

[JAMESBJOHNSON]

Explain how someone who has to spend every dollar they earn just to buy gasoline, food and clothing is going to avoid the Fairtax. The idea of a prebate didn't come about because the 'poor' can avoid the tax by choosing to 'not buy'.

You'd be amazed how cheaply you can live, and make-out okay, if youre willing to shut down your ego when you shop. Poor folks could stop driving SUVs, for instance. They could stop smoking and drinking.

After I retired I worked at Quickie Mart for a while: Virtually every poor person buys (in this order) cigarettes, beer, snacks, lotto tickets, milk, bread, and gas (with whats left of their money).

 

[Byron In Exile]

See my post where I said I submitted the top marginal rate.

I saw it.

The top marginal rate in 1988 was 28%.

In 1925 it was 25%.

 

[mercury14]

The top marginal rate in 1988 was 28%.

Yeah you're correct, it was briefly dropped to 28% then went back up to 40%.

In 1925 it was 25%.

And I said as much...