1 This sounds like something that could become part of the tea-party agenda.

2

No guts no glory.  Wimp.

3 sounds good. Of course, as it doesn't help Michelle's kids, it ain't gonna happen with Barry in the Oval Office.

4 Politically, it's awful, especially with the current populist/bash the fat-cats mood of the country.

I dunno 'bout this...a whole lot of non-fat-cats get hit with capital gains tax.

5 Sounds like a solid as hell plan. Where did this guy come from?

6 Paul Ryan has the sexiest brain ever.

7

Ace--I do not agree on cap gains.  In essence, it's double taxation on money one has already made.  Plus, it is a fail safe revenue generator, as has been demonstrated time and time again.

Otherwise, the minimum retirement age question AND means testing are two components of any serious solution.  "Serious" being the oeprative word since we have a bigger deficit of that these days than dollars.

8 >>>I dunno 'bout this...a whole lot of non-fat-cats get hit with capital gains tax. Right, that's true, but most "non-fat-cats" derive the majority of their income through labor, not investment. Sure, on the 10% or so they get through investment they'd like the cut, but they would, I am thinking, resent the fact that someone getting 100% of income through investment would pay 0% income. I think people resent this shit -- that's why the Republicans are always branded the party of the rich, etc., and why it works so frequently.

9 >>> Plus, it is a fail safe revenue generator, as has been demonstrated time and time again. Well, if you cut it to ZERO, it doesn't generate revenue, at least not directly. The Laffer Curve doesn't work with 0% tax rates. It's possible that it will spur enough growth that we'll easily make up for the "lost taxes" in greater taxes on labor... but still, the optics are not great here.

10
Meaningless if the R's go into November stepping on their cranks. 

11 Then why would anyone work hard enough to make more than $99,999? The answer is a flat tax of 15% with the first $20,000 of income exempt.

12 Agree with Circa. Double-taxation is immoral. This is a great plan, and it ought to be stenciled on the back of the hand of every Congresscritter. This could nationalize the election in the fall, and there should be no objections to it, provided it tests out budget neutral. I fear, however, that because the CBO uses static models that it would show an increase in the deficit.

13 O/T:  a taste of things to come?:  "Musical Chairs: White & Case Loses Lawyers to Latham in London"

14 Nah, makes too much sense, we need a 3,000 page bill with conflicting dictates and policies.

15 About capital gains: Sure in my libertarian fantasy world I would love to see 0% capital gains tax.  And no income tax.  But, if we're going to have an income tax, why not treat capital gains like ordinary income?  This defeats the whole "idle rich don't pay their fair share" meme, as even the idle rich would have investment income that is taxed.

16 IMO the Tea Partiers should be holding the Fair Tax plan up as the ideal, but be open to ANY type of tax reform that gets rid of the "progressive" income tax.

17 The biggest problem with MSAs right now is the "use it or lose it" feature: if you don't spend it all by year's end, it's gone. That greatly limits its usefulness, because who can predict how much you're going to spend in the upcoming year? And it almost entirely destroys its usefulness in saving for a rainy day. This restriction is so crippling, you'd almost think someone was trying to destroy the usefulness of MSAs ... As for capital gains, while I realize that it's double taxation and all that, selling a modified Ryan plan will require some form of capital gains tax as a political reality. I'd hate to lose the whole package over one provision. By the way, what does the Ryan plan say about corporate income taxes? Or taxing the overseas divisions of US corporations?

18 above, i'm of course referring to joint filers.

19 >>>Then why would anyone work hard enough to make more than $99,999? I don't think you understand marginal tax rates. the 25% is paid on all income AFTER 100,000. The first 100,000 gets taxed at 10%.

20 The CBO scored this plan, and found the numbers to be totally legit. Ironically, while the Ryan plan actually brought the budget into surplus by 2050, the CBOs best guess of extrapolating the status quo had the economy imploding by 2030. They basically said they couldn't generate a forecast for a baseline scenario beyond that point because the deficits and debt loads were so massive it broke their economic models. Tea Parties + Ryan Plan = EPIC WIN

21

but still, the optics are not great here.

Something like 110 million people have stock investmetns of one kind or another, so I'm not sure the fat cat argument really holds water now.  However, if you are suggesting some sort of mechanism to ensure a minimum tax on the Teresa Heinz Kerrys of the world, who have made a point of totally tax-free bond holdings--I can be sold on that.

As for the growth implications--they would be substantial, especially if we made a serious attempt at ending the oil jones, but there is that "S" word again.

22

Ace--I do not agree on cap gains.  In essence, it's double taxation on money one has already made.

How is it double taxation?  It is a tax on investment EARNINGS, not on the principal.

23 Vouchers are the thing that will largely resolve the health care debate. Make them nontransferrable and unusable for any other purpose, then cut back on all the other medically oriented transfer payments.

24

Of course this is a good idea.  Palin has championed Ryan's budget ideas and the GOP is practically making a show of distancing themselves from him. 

Now, that said, I was almost set to become a champeen of Ryan but saw a list of the boneheaded things he has voted for, which showed some monumentally bad judgment.

25 >>>gree with Circa. Double-taxation is immoral. Not really. You're not being double taxed. If I am taxed on $10,000 that I will now invest, I have been taxed once on it. Now I invest it. If I do not make money on this investment, I have $10,000, the same I started out with. I am not taxed on that -- if I WERE taxed on that, that would be double-taxation. It's only when I see a gain I am taxed. If my 10,000 investment turns into 20,000, well, I've made 10,000, and I've never been taxed -- not even once -- on that 10,000 gain. So, you know, if we're in public, I'll do the "double-taxation is immoral" thing with you, but if we're just here, talking behind the scenes, I've got to say I've never bought this "double taxation" argument.

26 Posted by: Fresh Air at February 08, 2010 02:06 PM (1yI4

You are already being "double taxed" on a lot of things.  If you take your earnings and put them in your savings account you then have to report the interest on your savings account on your income tax.  So, in effect, you are Being taxed again on the same money.  The only way to avoid this is to invest in tax free instruments and they still find ways to sneak taxes in there.  Heck, in Washington DC my guy friends are telling me that they are now charging you for a bag in the stores.  They feel this is anti male since the ladies don't mind carrying around those "shopping bags" that are meant to be used over and over and guys have a problem with that.  So, my guys friends say they are now paying for a bag every time they go into any store there.  They told this to me in the vain of..."the whole country will be doing this soon">

27 How does this differ from the much-ballyhood flat tax plan?

28 Paul Ryan is my guy.  I've worked on his campaigns for three cycles now.  He will be President one day.  He's that good.

29 ace: marginal tax rates are indeed understood. however, the point still stands that progressive tax rates of any kind discourage earning above the lowest rate. if I will now lose 25% of every dollar I earn over $100,000 jointly, what's the incentive? However, if everyone gets taxed at 15% then I'm assured a fixed percentage of income is fairly taken from everyone, thus making me more inclined to work harder without the hit from a marginal rate.

30

Well of course I would agree that double taxation is immoral.  But a capital gains tax is not double taxation.

What is truly immoral is the double taxation known as income tax and sales tax combined: you're taxed when you earn it, and then you're taxed when you spend it.

31 yeah as curious says, every dollar you have or spend has been taxed dozens of times, it gets taxed pretty much any time it changes hands or is used for economically productive activity, so really the argument is that "it's okay to be taxed eight times on a dollar, but this ninth time, well, then it becomes immoral."

32

National Sales Tax

Rewards productivity, that which produces income.

Discourages excess spending.

33 just one point from the comments ...  a 0% cap gains tax won't generate any revenue ...  5% would be better ...  reducing it does work, just not to zero ...

34
What is truly immoral is the double taxation known as income tax and sales tax combined: you're taxed when you earn it, and then you're taxed when you spend it.

Yes.

35 i'm tired of taxes period

36
Look, extraneous taxes are extortion. We had this argument about the gas tax. A gas-tax is a ripoff, plain and simple. So are capital gains tax, excise tax, telephone tax, medicare tax, property tax, etc.

We pay an income tax and that should be enough to run the federal govt.

37 O/T:  I love the way people worry about the money they earn which is reported to the government every quarter, without fail, so you can be taxed.  What about all those folks dealing in cash only?  No one taxes them.  That is the little underground economy no one talks about that is also forcing the worker bees to pay for the entire shebang.  When are they going to even acknowledge that this scenario even exists.

38 This will be the arguement against this for the foreseeable future: "The people have communicated their concerns about deficits. As long as we have deficits, we cannot responsible entertain the idea of tax cuts." Never mind Laffer curve, never mind that they don't cut spending. Tax cuts are always portrayed as irresponsible, as if cutting taxes is a form of spending rather than less taking from the productive.

39 >>> . if I will now lose 25% of every dollar I earn over $100,000 jointly, what's the incentive? Um, that you keep 75% and therefore are richer? There is an incentive, dude. Check out "World, History of," and you will see that even at relatively high rates of marginal taxation people still want to make money. THey don't like that the government is grabbing more of each marginal dollar, but they are still incentivized enough to work and make more than the minimum tier of tax rates. When you get up to very, very high rates of taxation, then people decide it's better to take free time -- which can't be taxed -- instead of more dollars. but I don't think that happens at 25%. Otherwise, why the hell are people working hard even now at the 35% top marginal rate?

40 the death tax is the worst

41 Then why would anyone work hard enough to make more than $99,999? The answer is a flat tax of 15% with the first $20,000 of income exempt.

Word.  Although 10% is good enough for God and it should be good enough for the state.  And make income only taxable above the "poverty-line", wherever that is set.  That would be a twofer, lots of pressure to hold the line down would cut into entitlements.

42

Kind of sounds like a leader emerging - stepping up - filling a vacuum - doing what is needed.

just sayin'

43 Count me out. The jump from 10% to 25% is either too low or too steep.

44
Seriously, a gas tax to pay for highway infrastructure?

What the heck are we paying income tax for?!?

45

Posted by: ace at February 08, 2010 02:10 PM (jlvw3)

I'm assuming you are talking about investing in stocks. The money you make on capital gains has already been taxed and the company you invested with are the ones that paid it. So it IS double taxation.

46 Paul Ryan = Superstar.

That said, a 15% flat tax (individual and business) is the conclusion I have come to.  I don't want the federal government treating people differently, period.  They should not pick winners and losers, even if the losers (of tax rate policy) are winners in life.  It is not their business and causes all kinds of market and investment disruptions, not to mention the campaign donation payoffs incumbents get for favorable tax treatment legislation.

47 Brown Line:  The biggest problem with MSAs right now is the "use it or lose it" feature

I think you're confusing MSAs with "Cafeteria Plans".  A Cafeteria Plan is use-it-or-lose-it, but an MSA, as I understand it, is a savings account that belongs to you.  You put up to $5K (or whatever) in the account per year, and use that account to pay for small legal expenses.  Then you carry a low-cost catastrophic medical policy to cover major medical emergencies larger than your savings account can cover.

It restores the provider/consumer relationship between you and your doctor.

48

"The biggest problem with MSAs right now is the "use it or lose it" feature: if you don't spend it all by year's end, it's gone. "

This is not the case with my Health Savings Account, which rolls over.

49

"politically, there's no fallout, or very little, because current and soon-to-be seniors see absolutely no changes at all"

Tell that to Bush's partial privitization of Social Security plan.  That plan was not available to current retirees and optional for the younger generations.  Still a poltical toxic brew because of knee jerk political hyperbole. 

50 BillR-- Okay, well that company has already been taxed so it if your INCOME from the company, as a PAID EMPLOYEE of that company, gets taxed, your income is double-taxed. hence, we should have no income tax. Double taxation.

51 Somewhere we need to work in a total wealth poll tax of some kind.  Kennedy trust funders are not pulling their weight.

52

Kind of sounds like a leader emerging - stepping up - filling a vacuum - doing what is needed.

just sayin'

George Will recently predicted  he will be our next Vice President.

53 Think of all the unemployed H&R Block workers!

54
And why do our Congress critters make so much damn money? And why do they have huge staffs, offices, stipends, and perks such as free travel expenses?

Holy shit, a state rep in Massachusetts makes $70K/year! For what???

55 I agree with your attitude about Cap Gains Tax.  As a conservative, I never bought into the notion that Cap Gains Taxes  should be reduced or eliminated. I favor parity of rates with ordinary income.  I have a friend my age - mid 50's who quit working several years ago to manage his own portfolio (from an inheritance). He makes  a six figure income from it. He has no wages. He would love to pay no cap gains tax. But is it fair that he free rides and supporting the government falls mostly on the backs of working people (like you and me). 

56

How is it double taxation?  It is a tax on investment EARNINGS, not on the principal.

Allow me to refine my point just a bit.  I look at it this way--if you take your money an blow it on bottled water and M&Ms--you pay no additional tax.  If, instead, you try to do something productive (more on that), then you are taxed.  I do not, for instance, believe that currency speculation, massive tax-free bond holdings or shorting stocks are productive investments--legal, yes--productive, no.

We would never be able to make the investment in the first place without income that has already been taxed.  The choice of what to do with the money and the normative/economic/societal benefit that comes with productive investment is something that should be encouraged, not punished and certainly not demonized. 

57 I have noticed that more and more people are suddenly aware of how much "tax" they are actually paying.  I guess BO letting the GWB tax cuts expire and people realizing their tax rate is going up is making them examine exactly how much money they will have to live on and how much less they will have for fun or any extras.  People are realizing that the tax rate going up means they will be working to pay their taxes. 

58 CPAs and Tax Lawyers hardest hit.

59 Actually, the left should be on board with a tax rate of zero for capital gains.

Want green tech?  Invest your own money, grow it, and keep it.

Pension reform?  Keep all your gains.

The left's army is laborers that sign up for voluntary socialism(education, government labor, and medical administration).  They should keep all the cap gains for their pensions as well.

60 There's a very good argument that any particular tax is immoral and disincentivizes labor or investment or consumption (also a good thing!). But where the rubber meets the road, we need SOME taxes. So the argument isn't whether we should have taxes at all (we need to) but whether this tax is more pernicious than that tax. I do not understand why a guy bustin' his hump for 50 hours a week (including overtime) gets taxed but supposedly it's immoral if a day trader's investment income is taxed. And that's not the problem-- who cares if *I* get it? I'm a nobody. The problem is that most of America doesn't understand why this should be, either.

61
I think sometime people misunderstand the capital gains tax and double-taxation.  It seems that people sometimes think that you pay capital gains tax, and then you pay income tax on that profit.  You don't.  You just pay the capital gains tax and you are good to go.

Frankly I don't quite get the argument that capital gains should be incentivized more than any other income.  Sure, it is good to invest.  But it is also good to work extra hours and make more money.  Or make a better product and make more money.  Or make money in all kinds of other ways.  Why is investment put on a higher pedestal than plain old fashioned hard work?

62 Holy shit, a state rep in Massachusetts makes $70K/year! For what???

For part-time employment.  NATCH!

63 Ryan needs to run for Prez, not Vice Prez.  He's got the Guts needed to get the Glory:  He's way, way smarter than Obama, and unlike O, Ryan's got the 3 C's

Character
Creditiblty
Charisma

He's got my vote

.....and the way Manning threw that pass, I could have grabbed it and ran

64 AIEEEEE!!!1!!

This isn't FAIR!!!1!!

There's no way to pay for this!!!1!!

The Rethuglipukes want old people eating cat food!!!1!!

They're going to give tax cuts to the rich!1!!!

/repeat, louder and louder, until the Republicans back down.

65
Our asshole governor, Devil Patrick, is trying to make a deal with Nissan to incentivize them to make more 'green' transportation.

If there's a market for 'green' products and shit, the entrepreneurs will produce and sell it, no need for government intervention.

STOP MEDDLING!

66 If I read right and the tax rate for a single filer making more than $50k is 25%, that seems more than a bit harsh: You income tax more than doubles if you make $50,001 instead of $49,999? The basic idea is great, but did I misunderstand that?

67

The reason we will never see a simplified tax code is the ability of tax lawyers and CPAs to lobby versus the general publics inability to lobby.

68

I don't agree with you Ace on the capital gains. The two things it affects are the real estate market and the capital markets. No one trades stocks for long term anymore, unless you consider a couple of months long term so Obama's fat cat bankers don't really profit by it. People owning a house do though if they have any profit left in their house. The Bush tax cuts eliminated capital gains on houses below $500,000 in profit. Obama is going to let that expire this year and in will affect middle class Americans.

Stocks being trading on an hourly, daily, weekly or whatever are taxed as real income now anyway. The only stocks held longterm for the most part are mutual fund shares which are again held by the middle class.

You may be right politically in that middle income people may not be aware that it is them that elimination of the tax would help but I give them credit for being smarter than that.

69 56 steve free ride? he doesn't pay property tax? he doesn't pay sales tax? really? free ride? he doesn't employ a gardener? he doesn't have a house cleaner? he doesn't travel or buy cars or clothing? do you really feel like he hasn't contributed enough?

70 yeah, we don't want to disincentivize labor, certainly. We don't want to disincentivize anything -- investment, labor, saving, consumption. All these are good. But at some point we need taxes. So those arguing for 0% cap gains have to do a lot of convincing as to why it's more double-plus-bad to disincentivize investment income than busting-my-ass-at-labor income.

71 Sounds good at first blush, but what a weird effect it would have on real people. You've got to stay under 100,000 dollars in combined income (I'm not sure if they're including stuff like rental income, inheritances, etc, or how it would affect self-employed people) or earn enough over $100,000 that the extra 15% pay cut you'll be taking on that additional work/income is worth it.

72 He's way, way smarter than Obama, and unlike O, Ryan's got the 3 C's

Character
Creditiblty
Charisma



I can personally attest to this as fact.  My history with Ryan here in SE Wisconsin is nothing but extraordinarily positive.  I cannot say enough good things about this man and his family.

73 I do not understand why a guy bustin' his hump for 50 hours a week (including overtime) gets taxed but supposedly it's immoral if a day trader's investment income is taxed.

The day trader does have income.  How does the day trader pay their FICA taxes?

Guy bustin his hump can also just be worker for shares instead of income.

74 robtr, I didn't know that.

75 {MAMA WINGER!!!!}

76
But is it fair that he free rides and supporting the government falls mostly on the backs of working people (like you and me). 

Yes because the money was already taxed. Besides he'll spend the money in the private sector which is a lot better for the economy than the govt spending it.

77 Ace, my income as an employee of a company is not paid out of capital gains, it a part of their overhead. Most of those type of expenses are written off.  In fact I would say by them paying me it lowers their capital gains. But then without me there would be no capital gains

78 I'm assuming you are talking about investing in stocks. The money you make on capital gains has already been taxed and the company you invested with are the ones that paid it. So it IS double taxation.

Wrong. You're confusing dividends and capital gains. The capital gains is the increase in the price of the stock. That hasn't been taxed at all since it is entirely theoretical until the gain is realized, that is, when you sell the stock. And the sale of the stock is normally to a third party, not the corporation.

79 a whole lot of non-fat-cats get hit with capital gains tax.
Posted by: Tami at February 08, 2010 01:59 PM (VuLos)

Not that anyone's going to have to worry about this right now, but one place the capital gains were reliably appearing for the longest time was in the sale of real property.  Property owners would be thrilled not to have to pay taxes on the sale of their homes, etc.  Gains to after-tax retirement accounts, too, would be exempted, I'd think.  How many people are going to be upset that their Roth IRAs wouldn't be taxed?  I don't think the measure is as toxic as Ace fears.

80 goddess !!!!!

81 Hate sseeing good ideas tht'll never happen.

82 Ace, it occurred to me that when people say a tax is immoral they may be looking at it in the context of "where the hell is the money going?  what is it doing?  What are ordinary Americans gaining from it?"  That is what real people online in Walmart or the grocery store are asking, they say "I don't mind paying taxes, don't get me wrong, but, where the heck is all this money going, I'm not seeing it in my city or town and I'm not seeing all the budgets and such online like he said.  Heck, if I had all the money they have to work with, me a regular American, I would use it much better than they do".   That's what they are saying.  They bring home a certain amount.  They have to feed an clothe a couple of kids, pay the mortgage, pay the utilities, pay maybe for private school and they literally have nothing left.  And they are buying food and clothes on sale.  And they can be making $250 grand between the two of them and still not make it and they are frugal as hell and doing their best.  So, if they think their lawmakers are squandering the huge amount of money they make in our tax money, they are going to be upset, and rightly so.

83 I'm for abolishing income tax period.

84

Circa @ 57: I don't buy into the moral/immoral arguments about earning and spending money.  I don't care if you earn your money by shorting stocks and then spend it all on hookers 'n' blow.  You don't have some sort of obligation to do something "productive" with your money, where "productive" is defined by the collective.

85
Nancy Pelosi and the PROGRESSIVES will hate the idea.

WHERE'S THE MASSIVE GOVERNMENT CONTROL?

86 Tax cap gains at half the regular rate: 5% and 12.5%.  Cap gains taxes should be lower.  You aren't risking anything when you labor.  You're risking everything when you invest.

87
Doods, these 'taxes' are paying for shit such as the John Murtha Airport. We can do away with all these superfluous taxes which are nothing more than a govt shakedown.

88 I'm a little disturbed by the class warfare arguments being offered up.  It's the other side that justifies our current insane tax code by repeating ad nauseum "THE RICH EXPLOIT PEOPLE THEREFORE THEY MUST PAAAAAAAAY".  Let's not buy into the same fever just with different words.

89 >>>You aren't risking anything when you labor. Is that so?

90 89 this is kissel don't forget the trips these elected idiots are taking on our dime

91 >>>You aren't risking anything when you labor. I was not aware of that, sir.

92

I don't care how you guys pay as long as I still get my NEA check each month.

93 Why not get rid of income tax altogether and just go with a national sales tax of 10% that exempts the first $100,000 of a home, first $25,000 of a car, groceries, children's clothes and hygiene items?

Then hookers, drug dealers, gamblers, etc. can pay their fair share, too, when every they buy a coffee or a fancy car.

This would be a progressive tax.  Poor people spend a larger portion of their income on groceries, kids clothes, and hygiene items than rich people do.  Poor people would get a larger break on their home and car, too, because they don't buy $500,000 houses or $60,000 cars.

But most of all, I like it because then illegals and criminals get to pay their share, too, without reporting any income to the IRS.

94 I just wish they (we) would push this enough to make Bambi and the Socialists shoot it down.

95 Paul Ryan? Is that Ron Paul's son? Sorry. It had to be done.

96 >>>You aren't risking anything when you labor. You have interesting ideas and I would like to subscribe to your newsletter.

97 Paul Ryan is my guy.  I've worked on his campaigns for three cycles now.  He will be President one day.  He's that good.


Pants crease?  Speechifying ability?  Suspicious birthplace?

98
In order to do this - each and every entrenched government congress hog will have to be replaced.

99
don't forget the trips these elected idiots are taking on our dime

Exactly.

100 No capital gains tax means greater sensitivity to value. Money would more quickly flow to better investments. That would be a good thing. .

101 I was not aware of that, sir.

Posted by: A Soldier in Iraq at February 08, 2010 02:32 PM (jlvw3)

Touche.  You folks don't pay income tax, though, do you?

102 Lincolntf @ 72: My thoughts exactly. This scheme would set up a big artificial wall at $100K that would have ultimately unproductive effects.

103 You aren't risking anything when you labor.

Let's push this to absurdity.

104 Posted by: chemjeff at February 08, 2010 02:32 PM (pTyL2)

The beauty of America is that anyone, anyone can get rich.  Not so, in other places and not so in America if they make it so you are doing nothing but paying to live and paying down your debt and not being able to save for the dream of maybe starting a business or something. 

Met a lot of european elite types on vacation this year.  They were on their month long paid vacation and very smug.  They forget to tell you they are stuck in a spot on the wealth chain and they can't move up.  They can fall down, but they can't move up.  So of course they are taking every minute of the month's vacation. 

105 What you are missing is that something like 70% of the population are now investors ... it is not about fat cats, it is about everyone.

106 95 crosspatch with all due respect, why do you want to reward the subpar and punish the over achievers?

107
You aren't risking anything capital when you labor.

Better?

108 Sigh.  Hey firefighter, and soldier, and ppo-liceman?  I meant youu aren't risking your pay.

109 Good ideas but hard to get all the ducks lined up in a row for it.

Eliminating the nearly sacrosanct home mortgage interest deduction will take some work.  It's stupid and distortionary but it's ingrained.  Is he also proposing to remove the charitable giving deduction?  That's also a minefield.

110 110.  Ya, thanks.

111

O/T  Death Punch.  All right, Morons, since we're all supposed to go ($$) under, I still have hope we're going to elect a rational person to the presidency in 2012.  While we'll be in the depths of a great depression then, buy the ingredients for this Death Punch now and hang on to it until zero's run out of town on a rail.  We're going to have a lot of celebrating to do.  (Read the comments off to the right.) 

 http://tinyurl.com/ybxod6z

112 Capital gains are income. It should be taxed as income. Why should we punish those who work for earned income in favor those that work for unearned income?

We shouldn't. Cap gains should be taxed at the same rate as other income. Period.

113

How is any of this going to help unless we cap what the gov is allowed to spend? 

We need a new admendment that limits gov spending to whatever taxes are raised minus dept payments. Once congress spends all that money, they are in recess and have to go home to their own districts and answer their own phones, live in their own districts and actually hear from their constituants for the rest of the year. 

 

114
Yes, by all means, let's make sure we keep taxing the producers so the govt can spend that $$ on extended unemployment benefits!

I think that's on page 1 of How to Destroy a Free-Market Capitalist Economy.

Look, President George Bush, polynikes' hero, put it very well when he said we're better when the people spend their own money rather than the govt spending the people's money.

115 Except.  Tax actors at an 80% rate.  I don't care if it discourages actors.

116 Capital gains would be taxed under my benevolent dictatorship with a flat tax, however, if you make the capital gains rate too high, it causes people to avoid making better free market decisions due to the tax.

I do disagree with Ace on the comparison of the 50 hour busting your hump guy vs the day trader though.  The day trader is also risking assets, which we want in society, its a good thing.  I may have read more into it than was meant, but I give no more "honor" to the busting the hump guy.

117 What's so wonderful about the refundable tax credit for health care? Granted, it's about the best we can do in an era when even Republicans are essentially Marxist. But why should health care be thrown into the big cannibal pot at all?

118 115.  It ain't unearned.  And see aabove.

119 I don't think you guys realize that the market makers sometimes have their own homes on the line.

120 It would have just two rates: 10 percent on incomes up to $100,000 for joint filers and $50,000 for single filers; 25 percent on higher incomes.

No.  just.  no.  One tax rate for all.  None of this progressive stuff.  This creates the "two Americas" that Edwards liked to whine about.  I do not agree with punishing (yes, punishing) anyone who makes more than a certain amount.  That's bs.  This kind of stuff just overlooks the fact that 10% at 200k is more than 10% at 100k.  You shouldn't have to pay a higher percentage on what you earn than anyone else.

121
wow you guys are okay with government behaving as your agent? You think the govt is entitled to a piece of every pie, every transaction, coming and going and everything in between?

122 anyone with a retirement plan is screwed .....so all those grandmas and grandpas who just want to enjoy their savings are screwed out of THEIR MONEY. so sleep well everyone who thinks their should be capital gains taxes.

123 123.  While I agree, it'll never happen.

124 Murtha...dead.

Please halt all planes from taking off and landing for a period of one hour at Murtha Memorial Airport.

125 mama winger at February 08, 2010 02:25 PM (Ue9UN)

Hi, mama.  It appears you were also booted off Charles Johnson's Personal ClusterFark webiste, which has become a very weird cult.

I was dumped for NOT POSTING

Paul Ryan is the Real Deal, and that real deal-ness comes through on TV, radio, in person, etc.  All of your Sarah People ( whom I love and respect; you and her ) can have her as VP. 

The VP's role in the modern era should be as a spokesman for the Prez's ideas and policies:  Someone to drive the media Crazy and deflect all the Crap from the Prez

126 My only quibble is with dropping the cap-gains tax to 0%. I know this is something of a conservative Holy Grail, but I disagree with it on policy grounds and political grounds.

Damn Ewok RINO! Get him!
I wouldn't be surprised if a squish like him let scandi hobos go!
Bet he drinks Scandi Aquavits instead Val-U-Rite!
He's got David Frum on Facebook!
He thinks David Brooks is cool!
He's probably even likes brown people!
You're dead to us.

127 Murtha croaked

128

How is any of this going to help unless we cap what the gov is allowed to spend? 

Exfuckingzactly! The govt will never stop finding ways to tax us and will never stop finding ways to spend our money. Never.

129 124.  No, but we're being realistic.  In a perfect world, we wouldn't need government.

130 Capital gains are income. It should be taxed as income. Why should we punish those who work for earned income in favor those that work for unearned income?

We shouldn't. Cap gains should be taxed at the same rate as other income. Period.

Posted by: Iskandar at February 08, 2010 02:37 PM (/o58C)

That's a good idea if you want people to stop investing and risking their money in America's Businesses. The only down side to that is when people stop investing and risking their money in businesses, there aren't any business to go work for. Maybe Obama will buy the rest of the corporations so you can have a job.

131 Posted by: phoenixgirl at February 08, 2010 02:42 PM (ucxC/)

true but then they'll just move in with their kids, after all, the grand kids who just graduated from college and can't find a job are there already and the thirty somethings having trouble keeping their homes are headed there too.  One big happy family....

132 Never speak ill of the dead. Unless it's Jack Murtha. I'll be dipping my balls in his embalming fluid.

133

This complete bullshit...a lie...fantasy

Republicans don't have ideas

134
Murtha croaked

wow really?

135 It's taking everything I have to just say...RIP.

136 Murtha dead.  Damn.  I so wanted him to finish out his days in the Ironbar Hotel.  Skullworthy?

137 Just heard on Rush that Murtha died. I'll give it a day or 2.

138 O/T
Rush just said Murtha has died.

139 Murtha's dead.  Humm...

*thinks about mother saying "if you can't say anything nice, don't say anything at all*

I say, "__________"

140 Hmmm...

No, I'm just not seeing the pant crease on this Ryan plan.

141 Murtha is now a zombie corpse man

142 curious @ 107, agreed

143 You won't be getting rid of me that easy.

144 Government shapes behavior through taxes, exemptions and credits. I do not like government shaping behavior.  Therefore I support a flat tax along the lines of a sales tax.  No exemptions. Pay as you go.  Too poor to buy stuff?  You won't be paying much in tax.  Frugal and self-sustaining?  Neither will you.  Rich materialistic capitalist pig?  You'll be paying a lot but it will be within your control.  No more nanny state telling me that if I put in a new energy friendly greenie front door I can get 98 bucks back on my refund.  I am sick of their agenda being forced down my throat thru tax 'incentives'.

Get rid of that monstrosity and just let people pay  a simple sales tax.

145

Andrew's Dad aty #33...

I agree 100% with you.

This would assist my beef with illegal immigration. We still need to know who is crossing the borders, but these immigrants would be forced to pay into the system, rather than just taking out of it.

It seems so simple to me, actually.

146
No, but we're being realistic.  In a perfect world, we wouldn't need government.

Of course, ol' chum. I read most of the Federalist and Anti-Fed papers; I know the history of our country. But holy shit isn't 10% of our income enough? This shit is getting out of hand.

147 So is there going to be a special election for Murtha's seat, or will they just wait til November?
I figure they'd just wait at this point.

148 146 was supposed to be posted by Zombie Murtha, I ain't going anywhere either.

149

Nobel prize winning economist whose award flushed the remaining vestiges of respectability from the prize, says Barry's idiotic socialist ideas haven't harmed us a bit:

http://tinyurl.com/ycd859p

*More wine for my friends!*

150 OT: John Murtha (D) PA, has kicked the bucket at age 77.

151 This is Kissel: You killed JM with that comment at #89.  Speaketh ill of the pork runway and you might just kill the pig.

152

Nah, makes too much sense, we need a 3,000 page bill with conflicting dictates and policies.

And pork! You have to have a shitload of pork to get it passed.

153 What bugs me to death is that people will always have their grumble about anything as complicated as this, and refuse to sign on to a much better system because it's not their favored system.

This is the very heart of politics and it's very frustrating.

This is a more fair system.  It's a much better system.  It's something the requires populist support that only comes around rarely. 

We should jump on board.  It can be tweaked and reformed as we go down the road.

and to be frank, the ZERO cap gains tax is an obvious ruse.  that's something Ryan probably intends to be a negotiating concession to the democrats and Ace and others.  Ask for Ryan's proposal in this November Election as a central facet of reform, and when the democrats freak out, stipulate we'll allow a 10% cap gain tax as a compromise.

In reality, we're getting what we want.  It's utterly unrealistic that the cap gains tax is going to be eliminated anyway, and we all know it, so let's all jump on board this system.  Even die hard democrats should recognize that this is so much easier and better than the convluted bullshit we have today.

And I love the health care reform idea. 

Ryan is the shit.  If he keeps this up, Sarah Palin is going to vote for him.

154 So will it now become the Murtha Memorial Airport?

155 The Republicans need to stop being the party of no ideas, no plans and no compromise. We've tried bi-partisanship with Republicans but they have no solutions and no ideas. Massachusettes happened only because we weren't making the case for single-payer and universal coverage. If the President would go on television for once with a speech to the American people about what he plans to do, then you guys are toast. Seriously. Being the party of obstructionism to our progressive agenda will doom you to continued minority status this November. Just wait and see.

156 Ace is spot-on here.

I find capital gains taxes abhorrent (I incurred opportunity costs with my own hard-earned jack which generated wealth, and the corresponding revenue was subject to taxation in one form or another -- what are you charging me for again?), but the immutable political reality is that any proposal that includes a 0% cap gains tax component even as a footnote on the index pages is soooooo politically toxic that it endangers the rest of the agenda which is both super-awesome and politically salable.

There's a lot of realist/idealist MMA matches going on here lately.  I'm in the latter camp generally, but there's got to be a 90/10 line or at least an 80/20 line for even the most pure of purists.

157 Holy shit! John Murtha is dead.

158 Murtha...whatever.

159 Time to sharpen those ol' barbs again

160 I'm not a fat-cat (well, not in the normally accepted sense), but I still have to pay capital gains even if I sell a couple hundred bucks worth of stock or mutual fund shares.

Eliminate that, or most of it, and I think it'll make the economy take off like nobody's business. 

I'm sure that the 0% is a bargaining chip position, but I say short-term gains should be taxed at 15%, long term (over a year) at 10%, and anything over five years, 0%

Just my idea...

161 Posted by: ace at February 08, 2010 02:04 PM (jlvw3)

0% on capital gains....because it should be treated and taxed as income, same as dividends.

162

Capital gains are taxed at a lower rate to encourage investment. It works, too. And a lower rate encourages investors to liquidate their gains now instead of just holding them. That is also a good thing.

Tax-free bonds pay a much lower rate than corporate or US Govt bonds. And they are nearly always used to finance infrastructure of some type or another. So to say this is not a productive investment is just baseless. You'd be hard-pressed to find a more efficient generator of union pork productivity.

163 This kind of stuff just overlooks the fact that 10% at 200k is more than 10% at 100k.  You shouldn't have to pay a higher percentage on what you earn than anyone else.

That's because most people are inherently bad at math, thank you public education. I fight with my friend who believes we're not paying enough in taxes about this all the time. He thinks we should pay more. I doubt he understands exactly what you said above.

164

"This is a more fair system.  It's a much better system.  It's something the requires populist support that only comes around rarely.  "

Very much this. Remember the left complaining about Obama care cause it wasn't socialist enough, merely several incremental steps towards it?

Don't be that kind of stupid.

Though, of course, in the current climate I don't see this going anywhere fast. Let's hope for some climate change in 10 & 12.

165 Hello John Murtha, say hello to my horny barbed cock.

166 OT:  Just saw that John Murtha has passed away.

167 ""Ryan needs to run for Prez, not Vice Prez. He's got the Guts needed to get the Glory: He's way, way smarter than Obama, and unlike O, Ryan's got the 3 C's"" I agree with Ace, the plan is good and its good to see a Republican come out with some real policy. But there might be a bit of a problem with Ryan running for President----TARP. I was on the Ryan bandwagon too until he foolishly voted for TARP, in fact, he insisted on it. Not to mention, voting for W's auto bailout in December 2008. It's taking me a while to try and forget about that. But if Tea Party Nation has anything to say about it and want to play the ideological purity roundabout, they might have an easy target there. Picture that in the primary or in the general----Obama pointing saying "well, you voted for the bailout too..." Major caution here...

168

I'm just glad it's something that we can SEE! And be able to look at and talk about.  It's so un-obma-like, that they'll either steal it and say it was HIS idea, or trash it for not being HIS idea.  

First thing I thought when I heard Murtha was dead? Good.  Sorry, no timeout for him, no delicate pause of respect, doesn't deserve a bit of it.  Let his family mourn him.

169 I don't think this will save entitlements. SoSec and Medicare/caid aren't dying because of Gen X and later, they're in trouble because of the $70 trillion in unfunded liabilities for Baby Boomers, and this does NOTHING to address that.

There is no saving the entitlements system.

170 166

That's because most people are inherently bad at math, thank you public education. I fight with my friend who believes we're not paying enough in taxes about this all the time. He thinks we should pay more. I doubt he understands exactly what you said above.

Posted by: wherestherum at February 08, 2010 02:58 PM (gofDd)

I had the eureka moment about this during hs history class one day.  It was so obvious.  I've been pissed about taxes ever since.  My radical idea has always been to eliminate all taxes except federal and state income taxes and to lower it so that no more than 10% (if I'm being generous that day) in total (both fed and state) of your income gets taken.  No more property taxes, sales taxes, use taxes, gas taxes, etc.

171 Follow up: Cutting taxes is good and cutting cap gains is good. (One of Reagan's guys said if you don't cut taxes low enough so that the government revenue suffers, you're not doing it right.)

The bigger thing here is spending and debt, and there is simply no way to recover from the amount of debt we have. Cf. Greece, Italy, Ireland, Portugal, Spain, the UK, and Weimer Germany.

172 Except for the fact that I'd have to sell my house. Great plan.  My husband and I make 110,000 a year.  Tax us 10,000.00 more dollars and we lose our home.  Nice.  The idea that 100,000 a year for a couple is anything more then barely getting by blue collar is a problem.

173 MSA's are expanded HSA's, they are cumulative. FSA's are the use it or lose it.

174 I think you're confusing MSAs with "Cafeteria Plans".  A Cafeteria Plan is use-it-or-lose-it, but an MSA, as I understand it, is a savings account that belongs to you.  You put up to $5K (or whatever) in the account per year, and use that account to pay for small legal expenses.

It restores the provider/consumer relationship between you and your doctor.

Yeah.  I just went to the doctor for fluid in the ear.  A quick office visit and a prescription.  There is absolutely no reason insurance should be involved in that transaction.

And with the Health Savings Accounts, it puts the onus of staying healthy on the individual since they are the ones who will have to assume the cost.

175 Mel,

Under the plan, if you eared $110,000 you would make $7,500 more than if you earned $100,000.  How would making more money cause you to lose your house?

176

I have always thought the government had no business using the tax code to extort people into certain behaviors.  A flat tax of this sort goes a long way towards fixing this problem.  There is really no difference between fining someone for something and taxing them more for certain behaviors than others.

Almost everyone owns stock now so even the capital gains provision isn't out of the question.  It is taxed twice as it is so there is no reason not to settle on taxing it once at the lowest rate we can get.  If you tax it at the corporate level as it goes out you can have the personal level at zero and have the same effective tax rate for instance.  Then you can claim you are sticking it to big business if you want to claim the populist mantle.  This is what is meant by double taxation.  A company makes a dollar and it is taxed first as income for the company and then as income for the individual through dividend or capital gains.  The company is taxed for a dollar that does not belong to it and it didn't get to keep.  It belonged to the shareholders.  Then the shareholders are taxed for the same dollar.  It is kind of like taxing the teller for counting out your money for you.  The money only changed hands nominally because it never belonged to the teller in the first place.

Now if we could just ad a provision where when we fill out our tax forms we get to stipulate how much of our money goes to each department of government we would be golden.

BTW, Firefox is not allowing me to post here so I fired up IE.  Either that or Ace banned me because I'm teh racist with all of this capital gains talk.  I guess I will just have to play with my teabags all by myself now...

177 Posted by: Olliander at February 08, 2010 03:01 PM (6uiF7)

If voting records were a Big Deal, Obama would still be taking bribes and voting 'present' in the Illinois Senate.  I realize that Ryan falls short on some parts of the Purity Test, but he is from Wisconsin.  Scott Brown ain't pure, either, mostly because he's from Mass and that place is what it Is.

I'd say 'some caution' rather than 'major caution'.  If we let the Far Right dominate the Party, we'll end up being the Other Democrats ( who let the Far Left dominate )

Ryan is a conservative who can get the Indep vote.  In politics, you should let the past fade away and look to the future.

178 But there might be a bit of a problem with Ryan running for President----TARP.

I was on the Ryan bandwagon too until he foolishly voted for TARP, in fact, he insisted on it. Not to mention, voting for W's auto bailout in December 2008.



I spoke to him on the phone about that in a conference call to the district here.  He also wrote about it in the local paper. The summary of his position was this - he hated that whole thing but told us that there was way worse legislation coming down the pipeline if that particular bill was not passed.  He said the steps that would be taken by the government if TARP was not passed was worse than TARP.  I think he was trying to avoid an even worse government intervention, as he saw it. 

It is certainly a fair question though.

179 Is it just happening to me or did a bunch of posts just disappear?

180

As has been mentioned somewhat previously, capital gains are currently taxed twice and in some cases three times if you consider inflation. For gains on real property, your "gain" does not take into account the devaluation of the dollar over time and so you can end up being taxed on a profit that you never made in inflation-adjusted terms - i.e. you can lose money and still get taxed. On financial assets like stocks, you have the inflation issue, plus the fact that the corporate profits (which are the basis of stock prices) are generally taxed at 35%.

If you don't like the "optics", how about eliminating the corporate income tax and then taxing all income on the same basis (with no distinction in tax rates between wages, dividend, cap gains) with the proviso that cap gains are adjusted for inflation? That way the government isn't favoring any particular way of making money.

A lot of worrying about what is the best way to win elections rather than what is the best policy around here lately. Remember, candidates do actually get to speak and argue in favor of their policies to convince the electorate. The voters are not static.

 

181 And what do you think the very first piece of business in the new Congress will be after this passes?....anyone?........Bueller?
The Congressional types will immediately start writing in exemptions and deductions for 'the children', and for 'the enviroment' etc..... ad nauseum until we get right the fuck back where we are now.
The Fair Tax is the way to go.
Get the gov't off your back and make your own decisions about how much tax to pay.

182 Actually,
yeah,

Just say cap gains = income.  Eliminate the distinction.  you make some profit on your house sale or your stocks, you just add that into your salary.

And this makes inherent sense.  Some people will sell investments when they lose their job, etc.  this is fair.

183 Is it just happening to me or did a bunch of posts just disappear?

Posted by: curious at February 08, 2010 03:17 PM (p302b)

No, they've been weird most of the afternoon.  Takes several refreshes to get all the comments back.  I think Pixy is being spammed.

184 I guess I'm reading it wrong.  It says there's a simplified form for people making over 100,000 of 25% tax rate.  Is there still an option to take deductions??  I do not pay 25% in taxes at present.  I pay 15. 

185 >> I have always thought the government had no business using the tax code to extort people into certain behaviors.  A flat tax of this sort goes a long way towards fixing this problem

I agree with this point.  I would further say that a consumption tax does that job even better than the flat tax.

This is the key point as to why the left would be so opposed to the idea of elimination of the income tax in favor of a consumption tax.  It largely removes the government's power to control.  Ditto with the flat tax.

That said, turning towards the practical side of things, I would be HUGELY in favor of this proposal.

186 " guess I'm reading it wrong.  It says there's a simplified form for people making over 100,000 of 25% tax rate.  Is there still an option to take deductions??  I do not pay 25% in taxes at present.  I pay 15.  Posted by: Mel"

Read it again, it's really simple.

187 That said, turning towards the practical side of things, I would be HUGELY in favor of this proposal.

Posted by: dan-O"

Exactly.  There are several better alternatives to this in my head, but they are simply not going to happen any time soon.  We can shoot for the moon if we want, but this ryan proposal would be a really good thing.

And it would actually probably help move in the direction of a consumption tax or a flat tax. 

188 http://tinyurl.com/yghhvsr

189 I will revise and extend my remark to also include ALL investment income taxation is immoral. Once your personal earnings are taxed once, that should be it. The flip of this is you shouldn't be allowed to deduct capital losses, either. Eliminate taxation and everyone will seek to put their money where it will increase significantly, i.e. equities. This will result in massive capital formation. Keep it the way it is and you bias the system towards debt. It just won't give you the same dynamic economic environment. Curious-- You don't avoid tax on municipal instruments. You simply take a lower coupon in exchange for ducking federal interest. On a risk-adjusted basis, you should (theoretically at least) wind up on the same place as you do on taxable debt. The main advantage is for high income-bracket earners whose marginal tax savings is beyond the average that is imputed by the coupon on the muni bond.

190 polynikes at February 08, 2010 03:12 PM (m2CN7)

You like to say that people whose views differ from yours,  "DON'T KNOW ANYTHING ABOUT....."

You should consider dropping that phrase, as it's as incorrect as it is rude.

191 I read the headline quickly, and thought it said "Soylent."

That would be a very different story I think.

192 how about an even easier reform plan... do away with federal tax code altogether.  let the states collect all taxes in whatever manner they deem fit and they can then fund the Federal government themselves.

whatever money they don't have to spend funding the feds is money left locally which automatically makes the states vested parties in federal frugality.

193 I like some of this plan. What about retiring the debt? I propose a national auction of real property (real estate) in the Western states where the U.S. Government owns an inordinate majority of the lands. Where in the Constitution does the fedral gummint get to be the world's biggest landowner?

Proceeds from the auction (and I would prefer to sell land to individuals who will work the lands or settle them ) would go toward retiring the debt.

As ruler of the universe, I would also enact a "fatcat" tax break. Yes, you heard me. BIG tax breaks to Tereza Kerry types who invest a BIG chunk of that fortune they're sitting on in new industry INSIDE the U.S. that creates NEW JOBS. Otherwise, we tax their gi-nourmous nest eggs.

Oh, and free beer for everyone.

194 Murtha? Never heard of him.

195 #181 Santa Rosa Stan Fair point. I don't disagree with you.

196

So If I make $49K per year, my taxes will be roughly $4.9K, and I get to take home about 44K.  But if I make $51K per year, my taxes will be $12.5K, and my take home pay will be 37.5K per year.  This is the problem with dramatic changes in tax rates at arbitrary figures ($50K)  I would need to get a raise to $60K per year just to make it worth my while to go above $50K

There needs to be a gradual ramp from 10% to 25% between $50K and $100K.  Or something smilar

197 @ mama winger I like the guy, seriously. It's just that the TARP and auto bailout still stings, generally speaking.

198 Apologies if already posted, but I would much rather see a 15% flat tax across the board for everything: income, capital gains, corporate, with very minimal deductions (standard deduction pegged to poverty level/dependents for personal income, pegged to inflation for capital gains, taxes paid to a foreign entity for corporate). Additionally, every wage earner should be required to pay some amount of income tax even if you're at or below the poverty level, it could be as minimal as $100 as long as you're paying it. No one should be allowed to be exempt.

As ace says, setting capital gains at 0% would be a bad move politically, but there's another reason I would set it at the same rate as income taxes, and that's the rise of the trust-fund liberals. More and more you see wealthy liberals who have no problem with the notion of raising income tax rates because they're paying the lower capital gains rate as opposed to the higher income tax rate.

199 "but I want flat tax" is not an intelligent response to this.

Would you vote against this because it's not a flat tax? 

It's flatter, so you should vote yes and continue to argue for your preference.  We should all get on board with this.

If we don't come together for a feasible reform, we don't get a reform.  This is a good idea.

200

Any plan about SS is almost DOA because the 65 and older crowd don't want any changes period. Either Democrats (Bush's 2005 SS plan) or Republican (2009 Obamacare Medicare cuts) will be demagoging the issue depending on which party proposes the change.

Hell Obama wants to send SS recipients a special $250 bonus because they didn't get an inflation COLA this year, and he'll probably get it because nobody wants to confront the seniors who paid years into the system and expect everything coming to them. And an "ironclad" guarantee for the existing seniors won't work because that was tried on Bush's 2005 SS reform.

The system is essentially in a death spiral with no political way to fix it (it could probably be band-aided with additional taxes). In addition, any changes may be too late as we speak. Even Ryan's plan will not impact SS spending until 10 years from now, but the system is now in the red and getting redder.

I'm all for reform, and would even vote for somebody who proposed it. But I would expect the chances of passing to be less than 10%, simply due to the fickleness of the voting public.

Ken

201 So If I make $49K per year, my taxes will be roughly $4.9K, and I get to take home about 44K.  But if I make $51K per year, my taxes will be $12.5K, and my take home pay will be 37.5K per year.

No no no no.  These are marginal rates.  You pay 10% on the first $50,000.  You pay 25% on any amount over $50,000.  So if you earned $49,000, you'd pay $4,900, leaving you a take home of $44,600. If you if you earned $51,000, you'd pay $5,250, leaving you a take-home of $45,750.

202

#200 So If I make $49K per year, my taxes will be roughly $4.9K, and I get to take home about 44K.  But if I make $51K per year, my taxes will be $12.5K, and my take home pay will be 37.5K per year. 

Uh no. You will be paying 25% on every dollar above 50K, not 25% on your entire income.

50K * 10% = 5K

(51K - 50K) * 25% = 0.25 K

Total taxes: = 5.25 K for 51 K income, not 12.5K

203

And then there's all this great stuff:

Universal access to affordable health care would be guaranteed by...

 

So instead of running from Obama's challenge to openly debate health care on TV, the GOP can clip this and actually advocate something.  

 

 

204 The tax would still be stepped like the current fed income tax. 25% of anything over 100k married. so at 100k you'd be paying 10k, anything over that its 10k + the difference. So at 150k, you'd be paying 10k+12.5k (25% of 50k) for a total of 22.5k, giving you a net income of 137.5k. As for going to a non-deduction system making people lose homes, they'd have to have a massive interest payment to have that be the case. Ex: Married (childless) income of 124000. Total federal income taxes: 23375. Couple pays 13000 in 100% deductible interest. Post deduction taxes: 20125. Same couple w/ the proposed system: total taxes: 16000.

205 nothing gets done until we change government pensions as well. give them a 401(k) just like everyone else. If I have to pay them more salary, so be it. Happy to do it if they trade that and their amazingly well funded pension for a 401(k)

206 As someone who's crossing the 100k barrier this tax year, I can say that my actual total income tax rate from last year was just around 6%. Hmmm.

207 And I do find that the legislative branch makes far too much money. It should be indexed on average income.

208 ok, sorry yall

209 @mr.frakypants: how did you manage that? I suck at lowering my tax burden =\

210

211 As someone who's crossing the 100k barrier this tax year, I can say that my actual total income tax rate from last year was just around 6%. Hmmm.

I think Ryan is including payroll taxes (6% up to 250K) in his plan. So add your income and FICA tax together.

211 Solvent green?

212

My own plan would be to repeal the 16th amendment and make the Federal government get the money the way they are supposed to except for:  a new admendment that would make the Senate more of a "House of Lords" type body.

During the Senate election each voter will have one vote for each dollar they pay (yes a poll tax, it could be capped). The proceeds will go in the U.S treasury. My hope is that these people would be less likely to spend money on welfare programs since their constituants would be net tax payers and not government recepients.

Ken

213 Hmmmm.... I know there's one in Will's article, but was it too hard to provide a link to Ryan's totally awesome web site in the text of this post?

Also - feel free to steal the banner image: top-right of my home page. I was surprised there wasn't one on Ryan's site.

I guess my comments and emails about this plan days ago just got lost in the ether. Bummer.

On the 0% cap. gains thing - maybe if we moved to a strategy of actually educating the public on issues like this instead of just whining about how the public is too stupid to go for it... ?

214 I like the sound of most of the plan.

However, I just gotta say FUCK progressive/graduated tax rates!!!!!!!!!!!!!

One rate for everyone.  If 10% is good enough for people making $50,000, then it is good enough for people making $500,000.  The guy making $500K would pay 10 times as much in taxes as the guy making $50K.

215 #112 NYCCon:
Eliminating the nearly sacrosanct home mortgage interest deduction will take some work.  It's stupid and distortionary but it's ingrained.  Is he also proposing to remove the charitable giving deduction?  That's also a minefield.

This is the fatal problem with this proposal.  If you remove the home interest deduction, you will destroy the suburban residential real estate market.  The financial benefit to owning vs. renting depends on the deduction.

Personally, I would prefer to have a total destruction of home values, as I have no equity in my home (hooray for buying in San Diego in 2005!), and a meltdown would allow me to jump back in and buy a really nice place with cash. But I'm the exception.  Also, removal of the charitable deduction will mean the gov't will have to step in and pick up the 'soup kitchen' slack, so taxes will have to go up anyway.

216 #220: As far as I can figure you'd have to be paying a huge amount in interest to take a tax hit dropping to his proposed 10/25 plan. What am I missing?

217

There are millions of rental units in this country suffering from deferred maintainace. Typically owned by older, long-term landlords who live off the income, these units would be better off sold to new owners who tend to improve properties. A zero cap gains tax would cause a LOT of properties to change hands, spurring investment, jobs, and better living conditions for tennants. Development of many pieces of raw land would suddenly become viable as the owners could sell at a lower price and still come out ahead.

All levels of government would gain revenue by way of sales, property and income taxes from higher employment, higher property values and economic growth. The commerical and residential real estate markets would get a huge boost. Hmmm, 80% of the wealth of the country is held in real estate, could this help the entire country? Duhh.

If every economic problem must pass the test of "no one of means can make any money off it" we are doomed.

218

221 #220: As far as I can figure you'd have to be paying a huge amount in interest to take a tax hit dropping to his proposed 10/25 plan. What am I missing?

Nothing, some dumbasses actually make financial decisions (lots of mortgage interest)  like that.

219

Entitlements need to be pegged to longevity.   It's that simple.

But as Paul Ryan says, you can't punish the people who have paid in for decades and who have based their retirment plans on the expectations that were set for them.

But for people far away from retirement, the dates to receive the benefits should be set to begin at the last 10 or 15% of the then-current longevity statistics.

Now, I don't know if Ryan suggest it, but the way to fix Medicare to move away from a gauranteed outcome (which today is basically 80% of the cost of any procedure the medical establishment comes up with), to an amount of money that the recipient must use to buy PRIVATE insurance, again, at the point the person meets the longevity requirement.

In short order, the Health Insurers would develop hundreds or thousands of insurance programs that would be nearly infinitely better than the mess we have today for seniors.

The reason the Medicare benefit would have to be used to purchase insurance is that if it wasn't mandatory, a lot of people would blow it on booze or drugs, and then still get the medical attention for free, because the country isn't willing to let people die just because they are stupid.

220 DJIA   9,908.39 at the close.  -103.84  (-1.04%)

221 Cap gains rate SHOULD be 0. Tax revenues from other sources would ultimately increase as a result, how would they not? If we want to make the American economy tick again and get its global mojo back, we need America's hands-on, working investors to fine-tune and then stoke the engine, rather than a dreary, burdensome socialistic government trying and miserably failing to do it. Cap gains tax is a smash-and-grab, short-term kick-the-can revenue tactic... Not good for the medium or long term when we have (currently) the future's badly underfunded govt mandates to rein in. Paul Ryan is a hero. I sure wish America would heed this great plan.

222 224

221 #220: As far as I can figure you'd have to be paying a huge amount in interest to take a tax hit dropping to his proposed 10/25 plan. What am I missing?

Nothing, some dumbasses actually make financial decisions (lots of mortgage interest)  like that.

------

Like many retards, I have a 100% interest only mortgage payment, at 25% of my initial income.  As I was just starting my career when I bought, I figured I would be able to pay off the whole thing in 10 years.  But for the first 5, I planned to only pay interest.  So the mortgage deduction was a central part of my plan.

Of course, I would give it up if it meant going to one of these simpler plans. I would just shift to renting for cheaper.  As many people would do likewise, home prices would plummet.

223 I'd support a zero tax on capital gains, so long as the gains were suitably re-invested.  When the money hits your pocket it gets taxed as income.

Pulling out my 2009 taxes and running the numbers this proposal hits me hard.  I'm a high earning husband with two kids and a fat mortgage, but little other deductions.  So long as I am not taxed on FICA, or medicare contributions, or State income taxes  I'm still down with the plan.

Although I'd prefer a flat tax.

But something has to give.

224 God damnit does Ryan just kick copious amounts of ass. 

I love how he spends all of his time just hammering away at economics and basically nothing else.  Dude is a serious fiscal-con and if you can make sense talking about big numbers people are gonna love it.

225 tap tap

226 Singapore and China dropped the cap tax to 0% and the rest is history. Banking giants and people with a competitive bent and brains to go with. What does Obama do? Puts a anvil around our necks and ties one hand behind our back and says go get'em oh wait I guess that's the point he wants us to fail. Oh and lottery winnings are tax free!

227

Yhe flat rate idea works great - until different rooting interests ret involved. There should be a tax credit for married couples to encourage people to get married. There should be a tax break for farms, corporations, small businesses, for parents can send their kids to college, etc. ,etc., ad nauseum, till the flat tax is about as flat as the Himilayas.

And please don't insist it's the Democrats fault, because the Republicans are just as bad.

228 Sucks if you're a guy who makes $99,999/year. You'll be begging your boss not to give you a raise under 16%.

229

#209/#220, etc.

Paying massive mortgage interest??  I'm at 6% .  I guess I could have refinanced at a lower rate, but what of this:  Making approximately 110,000 paying 16,000 in taxes.  At 25% flat over 100,000 that's a 10,000 tax hike to my family of 4.   That's 833.00 a month.  While we live in the green, it's not by that much.   We'd have to sell the house, as we don't run around spending our money on cruises and nights at theater as it is.  Our deductions are all kid related, charity related and mortgage interest (because the house is new). 

 

230 TARP vote notwithstanding, you could do a hell of a lot worse than Paul Ryan for a presidential candidate.

I'm not in his district, but I've heard him speak numerous times here in WI.  I don't care where he goes, Paul Ryan is always the smartest guy in the room.  I would kill a man to see a mano y mano debate between Ryan and Obama.  He'd be kicking Barry's ass so hard and so long he'd need to pack a lunch.

231 I'm stuck with a 2.5yo on my lap, so I can't read the whole thread. But I will throw out that capital gains _must_ be treated differently from ordinary income because the capital is at risk. If you treat capital gains as ordinary income, your disincentivizing risk taking that leads to wealth creation. As to tax free bonds, those exist due to a 100 year old Supreme Court decision (can't recall it off the top of my head, but that's where the phrase "The power to tax is the power to destroy" comes from.)

232 This is what should guide us when we plan tax reform. Government has no business knowing how much money you make or where it comes from. Government has no right to tax your income in any way shape or form. Government may tax the price paid for a a product or service. Period.

233 Everybody read right, George Will didn't write right.

Income <> incomes.

Income above 50,000 taxed at 25% means only income above 50k.

IncomeS above 50,000 imples that the entire income will be taxed at that rate.

It's isn't freaking rocket science, Georgie-boy, get it right.

Also, I worry that if you allow ONE split by income, you'll end up right back where we are now in about 5 minutes.

234 i say screw it all. my tax plan for america is no taxes. yup no taxes whatsoever for american citizens. no corporate taxes no state taxes no gas no highway no property, and on and on. And open borders for anyone wanting to become citizens.  yup, anyone, iranians, yemens, mexicans, canadians, even the damned frenchies can easily become a us citizen. They just have to wait out a 20 year 80% income tax bracket before they and any of their kids can become a citizen though. so there you have it, all taxes will be the burden carried by foreigners. if you are illegal and have been evading paying your tax burdens than poor san francisco wont have all those lovely dog parks, social programs, and green initiatives.  how much you want to bet all these leftist ass clowns will finally get serious about illegals?

liberals only understand fiscal conservative values when their wallets are on the line.save america, bankrupt a liberal.

235

The basic problem with this otherwise excellent plan is that most homeowners DEPEND on being abe to deduct their real estate taxes, interest on their mortgage loans and their State and Local government income taxes. And State and local or municipal taxes sure as hell aren't going down in most of America.

With this plan implemented in one fell swoop, an awful lot of folks would get hurt very badly.  Unless you adjust the taxable level based on cost of living. Hell half or more of the homeowners in NYC for example, wouldn't be able to deduct their mortgage interest, real estate taxes, New York State Income Taxes and New York City income taxes and would wind up paying so much in those taxes that even at 10% (or more) at the Federal level,  they will go broke. Period.

236 242 has it right...

...10 percent of my income would hurt me a LOT more than 25 percent of Sean Hannity's income would hurt him...

...I say 5% for individual incomes up to 40, 000 - 8% for incomes from there to 80,000 - 10% for incomes to 200,000 - and a flat 25% upwards of that.

237 Here's my idea: You can choose to pay 10% income tax, or not. If you do, you get to vote. If you don't, you don't.

238 243 and 242, isn't it worth considering the basic implication of letting a lot of people go tax free?  If you only pay 5% and can deduct your mortgage interest, are you really paying your fair share?

It's not JUST about how much it hurts you.  It's about how much you're doing your part for your country.

Ordinarily I scoff at this crap.  Until our nation stops spending money on so much garbage, you can scoff too.  But still, some people would be hurt by any fair tax system because they simply spend too much of their wealth.  I wouldn't mind your notion of lower than 10% up to 40k, but I do want everyone to pay some REAL money in taxes.  That's a critical factor in keeping them from yawning when the government goes hog wild in spending.

I also think the government should only be allowed to pass an unbalanced budget in a severe emergency. 

combine everyone-pays-some taxation with balanced budget, and the government can't get away with murder.  That leads to much more prosperity.  More opportunities for those poorer families to be richer.  Everyone wins, except the corrupt DC fucks on both sides of the aisle.

239 "

So If I make $49K per year, my taxes will be roughly $4.9K, and I get to take home about 44K.  But if I make $51K per year, my taxes will be $12.5K, and my take home pay will be 37.5K per year.  This is the problem with dramatic changes in tax rates at arbitrary figures ($50K)  I would need to get a raise to $60K per year just to make it worth my while to go above $50K

There needs to be a gradual ramp from 10% to 25% between $50K and $100K.  Or something smilar

Posted by: KLH"

MARGINAL TAX RATES.  Look into it.  Understand it.  Not trying to be a dick, but fucking A.

240 100% exclusion on foreign income! Please.

241

245 nailed it. The biggest problem we've got is that too damned many people get to vote for benefits to be added WHEN THEY WON'T BE PAYING FOR THEM! Hell, who wouldn't like that arrangement? Remember that stupid welfare broad at Cobo Hall in Detroit who said, "I don't care where Obama gets it. Maybe he gets it from his stash. All I know is I want my part of that Obama money."

You should only be allowed to vote for benefits if you're going to be part of the polity that will be taxed to provide them. If you're just a free-rider, you don't get a share in the decision.

Why do you think the Democrat criminals have been so anxious to cut the numbers of people paying taxes? People will ALWAYS use more of any benefit if it doesn't cost them anything.

I found this out the hard way as a landlord. When I first got into the business, I used to charge only rent; I paid the utilities. My tenants' utility bills were outrageous. I wised up and lowered the rent but made the tenants responsible for their own utilities. It was amazing how much lower those monthly bills became overnight!

What we have now is the worst of all possible situations: mob rule with demagogues feeding/bribing the mob with money from the productive. The mob gets all the benefits and none of the risk...right up until everything collapses. If we're going to have any chance at reclaiming America, we're going to have to make a lot more people tax payers. Maybe not a lot in taxes, but they've got to have a stake in the game. If that happens, they'll finally have some interest in how much money is taken from them and what it is spent for.

242 The idea is simply another band aid and pacifier for a intrinsically corrupted system that empowers politicians of all kinds.  A consumption tax is better by leaps and bounds but doesn't leave as much opaque area for special interests to operate in, and therefore is not promoted by self interested politicians.  The only real answer I have seen so far is the FairTax.  I have never been fooled by self interested politicians and don't intend to start now Mr. Ryan.

243 Damn it! Lets get it straight: Cap gains tax is biggest tax code impediment to economic growth. It effects every income category so it is not a fat cat issue. People park their assets for years to avoid the tax. This is the opposite of growth. Cuts in the tax work every time. Over spending fails every time. The fat cat argument is killing our economy. Averice is a deadly sin.

244 DeMint/Ryan 2012

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