Energion Roundtable: Capital Gains Tax

I’m a little late to the conversation, but I wanted to get this quickly out. I’ve been thinking about the question all day, and while this may come as a confused answer, I wanted to talk my way through it.

First, a previous question inquired as to how my faith impacted my vote. That is difficult to say, because faith is such a vital part of who I am. I am a Christian, and a conservative one at that and that leads to a pretty liberal outlook on politics. I take Matthew 25 pretty serious, but I also take it serious that the character of the person is worth something as well. My conservative reading of Scripture also prevents me from engaging in jingoistic warmongering. While I am leaning to voting once more the President, how foreign policy and his catering to the business community leaves me wondering just what I am voting for. Several recent articles, and I’ve said this for a long time, indicate the President is a modern Republican from the 90’s. While I was a conservative Republican in the 90’s, I am not now. I grew up, after all, and read Scripture seriously. I will generally vote Democrat, but have voted for third party candidates before. One of the issues I face in this election cycle is that I believe a GOP controlled Senate will damage this country for generations to come. Looking forward always decides my vote.

The second question was in regards to the top three issues in the federal elections. First, I am tired of war. Second, I am tired of the retread Reaganomics. Third, I believe the GOP will take us backwards. Eventually, the mimetic desire will break and will see social unrest.

So, now… for the question of capital gains. First, I think “work” should not be taxed. No income tax. No corporation tax. I believe in a progressive flat tax. In other words, no tax on food and the bare necessities of life, at least on the Federal and higher State level. Capital gains, the tax you pay when you sell imaginary pieces of paper, seems just as imaginary, but without a flat tax, one must tax things otherwise not worth taxing. I guess I view capital gains taxes like taking a census for imaginary friends. Our economy is too tied to Wall Street (imaginary capital) and not Main Street (production). I also do not believe in double taxation, something capital gains does.

But, what about selling real estate? Or actual product. Without a flat tax, you have to secure a method of raising money, and the people who have the most taxable money are those with product to sell. We need to shift capital gains out of Wall Street, limit the money traded on Wall Street (can of worms there), and tax actual product. If we could, I would limit all capital gained from Wall Street and other stocks to refocus the money into actual production.

The President has shown a remarkable ability to bend to the rich. I doubt he would support this plan. Generally, only more conservative candidates will tend to speak about the flat tax, but it will never get down.

Do you want to submit feedback? Email Henry at Pubs@energion.com, or leaven your comments at http://energion.net (see the convo here)

And go here fore more detail about this roundtable.

Let me also add… my contributors to this blog or other friends are welcome to post here as well.

You Might Also Like

9 Replies to “Energion Roundtable: Capital Gains Tax”

  1. In tax policy, progressive means not just that the rich pay more tax, but that they pay a larger percentage of their income than poorer people – at every level of income. Even just the federal tax code is no longer progressive at the highest income levels. Add in state and local taxes (don’t forget property taxes!) and the overall US tax system is already flat or even regressive at some income levels.

    But my main point is that a progressive flat tax is an oxymoron.

    1. A progressive tax is defined as a tax the poor doesn’t pay, such as On food.

      We could call this a progressive/graduated flat tax. In other words, you pay to play. Food and even some clothing escape taxes.

  2. Mark– you seem to imply that the rich don’t pay more % than the rest of us. According to the IRS web site the very rich pay on average about 25% of their income as federal taxes and the middle income payers average about 7.5%. This may not be as progressive as you would like but it’s not what you imply. Joel is right, the entire tax code needs to be scrapped and replaced with a very simple and fair/progressive code without the thousands of loopholes. Very little support for this from either party. Choose carefully what you vote for because the agendas are more important than misleading talk coming from all sides. As for churches, they should stick to faith and ethics but the individual should follow his or her faith in political activity. This does present a slight conflict for church leaders who by definition speak for the multitude.

    1. Skid, your figures don’t include payroll taxes, which I failed to mention above as well. Total federal (income + payroll) effective tax rate is around 15% for middle incomes. Add local sales and property taxes and it goes up. The point is that the federal income tax rates have to be very progressive in order to overcome the regressive payroll, sales and property tax burdens.

      I said it wasn’t progressive at the highest income levels. Many top earners get most of their income in capital gains or carried interest, and these rates are lower than the top marginal tax rate. So at the rich end of the spectrum, the more you earn, the more likely you pay a lower rate on your total income because it isn’t wage income.

  3. According to the politicians those who pay payroll taxes will get it all back as cash payments like any other investment. Not 100% true but we all believe what we want. If I had all of my payroll taxes in an account earning nominal interest I could be living comfortably on just the interest. I know because I calculated it from the SS report of the actual numbers. While you are at it why not add in the property taxes which would swing things in the other direction. I’m not sure what is fair but I am in favor of the truth and looking at the actual facts rather than repeating some pundits cheap talk coming from both sides of the media. Even the fact check sites are sometimes biased.

  4. The numbers I posted were average of those reporting more than one million dollars. Of course there are many exceptions, most of them probably older individuals who have put their assets in tax exempt bonds, etc. This reinforces the fact that a total scraping of the current tax laws is essential. The problem is not so much the tax rate but the exemptions. I’m not sure about this but I have seen it reported that the loopholes account for a loss of near a trillion dollars per year.

Leave a Reply, Please!

This site uses Akismet to reduce spam. Learn how your comment data is processed.