Would you favor increasing capital gains taxes even if it reduces govt revenue?

[Sbane]

I don't think capital gains need to be raised for everyone. Why not just make sure that those who make above a certain amount pay a certain percentage in taxes on their overall income including capital gains?

To the extent the math translates per that rule into an effectively higher capital gains rate, you still have the same issue to some degree, regarding recognition avoidance. That is one reason why it is wise public policy to first try to generate more revenue (which of course we need), from slashing deductions first, rather than upping rates. It is just more economically efficient in a host of ways.

Yes, we could get rid of deductions for the rich and not lower rates as much and that way make them pay, say 30%. But even in that scenario we are going to be punishing the hard working neurosurgeon and coddling lazy ass aristocrats like Opebo ( or people a little above his class status). So we punish the people who earn the money and then let their kids travel around Thailand or Europe. Not the right sort of incentives......

[Torie]

I don't think capital gains need to be raised for everyone. Why not just make sure that those who make above a certain amount pay a certain percentage in taxes on their overall income including capital gains?

To the extent the math translates per that rule into an effectively higher capital gains rate, you still have the same issue to some degree, regarding recognition avoidance. That is one reason why it is wise public policy to first try to generate more revenue (which of course we need), from slashing deductions first, rather than upping rates. It is just more economically efficient in a host of ways.

Yes, we could get rid of deductions for the rich and not lower rates as much and that way make them pay, say 30%. But even in that scenario we are going to be punishing the hard working neurosurgeon and coddling lazy ass aristocrats like Opebo ( or people a little above his class status). So we punish the people who earn the money and then let their kids travel around Thailand or Europe. Not the right sort of incentives......

You might want to focus on the estate tax for that one. The rich can just buy municipal bonds, and pay no tax at all, with an implicit tax of maybe 30% due to the lower interest rates. And that tax loophole will never go away. If it did, state and local governments would have to pay more to service their debt. Once upon a time however, rates on earned income were lower than on ordinary investment income, like interest and dividends, and short term capital gains.

[Brittain33]

Any time Barone claims to be speaking on behalf of liberals, Dems, or anyone under age 50, verify it.

[Torie]

Any time Barone claims to be speaking on behalf of liberals, Dems, or anyone under age 50, verify it.

The best I could do was my little poll here.   So far, Barone is "right" by a margin of 8-4. 

[Jacobtm]

Reducing capital investment as a proportion of the economy in itself is a worthy goal. Our whole system has been skewed towards the financial sector by preferential government treatment for years. We ought to correct that.

Though to be fair, it's not really productive capital investment that is being rewarded under the current system. Increasingly, the economy has become a debt economy where the servicing of debt is what greases the wheels. so to speak.

True. Things like lending a business money so it can expand is certainly useful and productive real economic activity.

Of course, the explosion of the financial sector recently is driven by a smaller and smaller proportion of real economic activity and more and more smoke and mirrors, cons and scams.