What Taxes

I've heard considerable debate over the past several years about the "Bush Tax" cuts which usually means raising the top rate an additional 3%. While that's a worthwhile conversation that's not really what I care to debate here. It seems to me that "we the people" spend quite a bit of time discussing those things instead of focusing on those things that most of us would agree on. I realize saying most is dangerous because some people would argue about the sky being blue but what the heck I'll take my chances.
Why does a hedge fund manager pay a lower tax rate than a Cardiologists? I don't know about you but a place a little more value on the work of a Cardiologists than a hedge fund manager so why does he or she pay a higher Rate. Let's assume we have a pretty good Cardiologist and he or she makes 1 million dollars year and we have a small hedge fund manger who makes 1 million dollars a year. Wouldn't a basic sense of fairness say they should have the same federal tax obligation. Well that's not how it works. For demonstration purposes let's assume no deductions and just look at 750K of earnings because the top rate of 35% kicks in at 250K. Let's see how different their taxes will be...

Cardiologists 750K * 35% = Tax Liability of $262,500
Hedge Fund Manager 750K * 15% = Tax Liability of $112,500
Equals Hedge Fund manage paying $150,000 Less than the Cardiologist

Can we agree this is bull? This is not a party issue because it was on the book's when the R's controlled all three branches and it was on the books when the D's controlled all three branches. I wonder how it stayed on the books with both parties? It's almost like both parties serve the same interest but that can't be true can it? For those of you who don't know what I'm talking about it's called the carried-interest loophole. Do a Google and you will find both parties saying it needs to be eliminated but as far as I know it's still on the books.

the entire flaw of your argument is comparing capitol gains to earned income.

i can make 1 mil investing 500k,that one mil would be taxed on profits,but i could just as easily lost that 500k.thats why capitol gains is taxed less,because its a gamble on income and not a guarantee.

earned income is guaranteed income so long as you hold that job.

beerftw said:

the entire flaw of your argument is comparing capitol gains to earned income.

i can make 1 mil investing 500k,that one mil would be taxed on profits,but i could just as easily lost that 500k.thats why capitol gains is taxed less,because its a gamble on income and not a guarantee.

earned income is guaranteed income so long as you hold that job.

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Errr if you lost it you wouldnt owe any taxs on it...you only pay when you make it....its absurd to have the cardiologist pay more...and its designed that way to take care of the wallstreeters....which in turn take care of our elected thieves...

lpast said:

Errr if you lost it you wouldnt owe any taxs on it...you only pay when you make it....its absurd to have the cardiologist pay more...and its designed that way to take care of the wallstreeters....which in turn take care of our elected thieves...

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the idea is though odds are you have to losemoney to make it.

comparing capital gains to regular wages wont apply unless you had to pay walmart on the hopes you might make money.last time i checked you dont pay employers for a paycheck,peoplen who make money through capital gains do,therefor they need to gamble like in a casino.so the more taxes they have,the less incentive they have to gamble as in the long run taxing capitol gains as income would royally hurt the stock market and investing.not to say it cant be raised but there are smarter ways to do it than trying to demonize people for investing money by taking away alot of their gains,and to top it off there are no guaranteed gains,so taxing them too high can cause everyone but multi millionaires to lose in the investing game,thereby acceleraing the so called one percent while hurting smaller investors trying to get into the game.

beerftw said:

the entire flaw of your argument is comparing capitol gains to earned income.

i can make 1 mil investing 500k,that one mil would be taxed on profits,but i could just as easily lost that 500k.thats why capitol gains is taxed less,because its a gamble on income and not a guarantee.

earned income is guaranteed income so long as you hold that job.

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As I said some people will argue about the sky being blue. I deliberately left off the terms capital gains and earned income because it's one of those things politicians use to cloud the issue instead of taking things on face value. Moreover, hedge fund manangers aren't risking their money so they didn't need any encouragement via the tax code to invest other people's money.

John.NoseTip said:

As I said some people will argue about the sky being blue. I deliberately left off the terms capital gains and earned income because it's one of those things politicians use to cloud the issue instead of taking things on face value. Moreover, hedge fund manangers aren't risking their money so they didn't need any encouragement via the tax code to invest other people's money.

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if a hedge fund manager is getting earned income they would not qualify for capitalgaines but rather earned income tax.unless of course you are comparing the effective rate of one group with the marginal of another group,which i have seen members of the left use before.example of that is peopleon the left using an effective rate of 12% vs a marginal rate for middle class,ignoring the fact if effective is compared by both,middle class pay alot less.marginal vs effective only worls on those too stupid to tell the difference,but fails on those even slightly educated on the tax system.

now if you are referring to hedge funds and not hedge fund managers,hedge funds tend to be higher profit,hedge funds tend to diversify investments,and yield more constant profit but lesser than other investments.they still require investment to recieve a payoff unlike earned income and can take a long time to payoff,vs stock market which can yeild quick profits.either way money is gambled,just one with higher odds but less max payoff,vs high max payoff and lower odds.

lpast said:

Errr if you lost it you wouldnt owe any taxs on it...you only pay when you make it....its absurd to have the cardiologist pay more...and its designed that way to take care of the wallstreeters....which in turn take care of our elected thieves...

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The money that is being invested has already been taxed, hence the logic behind the profits from investing that money is at a lower rate.

Investment spurs innovation. Less investment--because of higher taxes--leads to less innovation.

John.NoseTip said:

As I said some people will argue about the sky being blue. I deliberately left off the terms capital gains and earned income because it's one of those things politicians use to cloud the issue instead of taking things on face value. Moreover, hedge fund manangers aren't risking their money so they didn't need any encouragement via the tax code to invest other people's money.

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No, but without people being encouraged to invest their money, the hedge fund guy wouldn't be able to make money and...hold onto your hat...he wouldn't make any money...and...I know this is going to blow you away...he wouldn't pay taxes!

I'll never understand how Libbos think government spending is the alpha and omega of our problems, but don't have a clue where that money comes from.

Someone care to explain how causing taxpayers to make less taxable income is supposed to do anyone any good?

apdst said:

The money that is being invested has already been taxed, hence the logic behind the profits from investing that money is at a lower rate.

Investment spurs innovation. Less investment--because of higher taxes--leads to less innovation.

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If I pay taxs on my gross...and make more money on my net...I "EARNED" more income...doesnt matter how you earn it...its earned income and should be taxed at the same rate.

lpast said:

If I pay taxs on my gross...and make more money on my net...I "EARNED" more income...doesnt matter how you earn it...its earned income and should be taxed at the same rate.

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Go ahead and tax it at the same rate and slow down investments. Be my guest, but don't start boo-hooing when thing still don't go your way, or, when they go even less your way.

apdst said:

No, but without people being encouraged to invest their money, the hedge fund guy wouldn't be able to make money and...hold onto your hat...he wouldn't make any money...and...I know this is going to blow you away...he wouldn't pay taxes!

I'll never understand how Libbos think government spending is the alpha and omega of our problems, but don't have a clue where that money comes from.

Someone care to explain how causing taxpayers to make less taxable income is supposed to do anyone any good?

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So if I understand the thrust of your argument it's that the rate needs to be lower to encourage investment right? Well I just don't see how that holds water. Let's see a cardiologist goes to college for 4 years, medical school for 4 years, accumulates a truck load of debt and then does a residency for 3 years where they put in ungodly hours. If I buy your logic we shouldn't have any cardiologists because their tax rate is too high. Yet I can go into any city in America and find a cardiologists. How can this be with a tax rate of 35%? The only way your argument holds up is that someone writing a check hoping to get a bigger check back needs more incentive than someone giving up eleven years of their life to be a cardiologists.

In my example I only used the 750k of the 1 million which is taxed at the same rate so I really don't understand your argument about effective rates and marginal rates. If you think I was trying to pull some slight of hand I assure I wasn't that's why I ignored the first 250K that are hit with different rates.

John.NoseTip said:

As I said some people will argue about the sky being blue. I deliberately left off the terms capital gains and earned income because it's one of those things politicians use to cloud the issue instead of taking things on face value. Moreover, hedge fund manangers aren't risking their money so they didn't need any encouragement via the tax code to invest other people's money.

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you actually make a sound point and while I oppose taxes on income I agree that a hedge fund manager's compensation should be treated as earned income.

John.NoseTip said:

So if I understand the thrust of your argument it's that the rate needs to be lower to encourage investment right? Well I just don't see how that holds water. Let's see a cardiologist goes to college for 4 years, medical school for 4 years, accumulates a truck load of debt and then does a residency for 3 years where they put in ungodly hours. If I buy your logic we should have any cardiologists because their tax rate is too high. Yet I can go into any city in America and find a cardiologists. How can this be with a tax rate of 35%? The only way your argument holds up is that someone writing a check hoping to get a bigger check back needs more incentive than someone giving up eleven years of their life to be a cardiologists.

In my example I only used the 750k of the 1 million which is taxed at the same rate so I really don't understand your argument about effective rates and marginal rates. If you think I was trying to pull some slight of hand I assure I wasn't that's why I ignored the first 250K that are hit with different rates.

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Your comparison is idiotic. Not to mention, the student loans are tax deductable. :rofl

TurtleDude said:

you actually make a sound point and while I oppose taxes on income I agree that a hedge fund manager's compensation should be treated as earned income.

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That's the point I was trying to make. I wasn't trying to argue what tax rates should be in general or if there should even be an income tax as opposed to a consumption tax. Those debates can and are made but kind of with I'm trying to get at is that can't we make things as fair as possible until the grand final decisison is made on taxes

If all else fails call people names. You forgot to throw in i'm anti-american and I don't love my country. The comparison couldn't be more obvious your argument was that a higher tax rate effects behavior e.g. people will stop investing. Yet that same tax rate doesn't prevent people from giving up 11 years of life and going into debt to be a cardiologist.

TurtleDude said:

you actually make a sound point and while I oppose taxes on income I agree that a hedge fund manager's compensation should be treated as earned income.

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Who are you and what have you done with our Turtledude?

John.NoseTip said:

If all else fails call people names. You forgot to throw in i'm anti-american and I don't love my country. The comparison couldn't be more obvious your argument was that a higher tax rate effects behavior e.g. people will stop investing. Yet that same tax rate doesn't prevent people from giving up 11 years of life and going into debt to be a cardiologist.

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communist is what you are,they have black souls

Redress said:

Who are you and what have you done with our Turtledude?

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hes in europe accepting socialized meds,if anyone in america saw it,it would kill his rep,you know this:roll:

It's worse than that I don't believe anyone has a soul! OOOOOOO Spooky huh. I still don't see what that has to do with anything

John.NoseTip said:

That's the point I was trying to make. I wasn't trying to argue what tax rates should be in general or if there should even be an income tax as opposed to a consumption tax. Those debates can and are made but kind of with I'm trying to get at is that can't we make things as fair as possible until the grand final decisison is made on taxes

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I see hedge fund managers have earned income from managing a hedge fund

John.NoseTip said:

It's worse than that I don't believe anyone has a soul! OOOOOOO Spooky huh. I still don't see what that has to do with anything

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what does that have to do with an argument???

im gonna try that,omg im losing but i dont believe in souls and im athiest so i win despite the actual argument!!!!

Redress said:

Who are you and what have you done with our Turtledude?

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sine you are a mod with super duper powers you can probably find posts of mine from months ago where I said the same thing. My brother is a CFA. he gets paid a salary for being a CFA etc-its earned income. seems to me the same should be true with a HFM

Let's You said I was communist with a black soul. So to dismiss that argument I say I don't beleive in souls but what does that have to do with anything. To put it in simple terms what i was saying is even if i'm the biggest boogie man that ever existed what does that have to do with my point. Get It. That's not deflecting but rather trying to mock you calling me communist with a black soul. Really it's ok to disagree without calling me a black souled commie but if that's the best got so be it

John.NoseTip said:

Let's You said I was communist with a black soul. So to dismiss that argument I say I don't beleive in souls but what does that have to do with anything. To put it in simple terms what i was saying is even if i'm the biggest boogie man that ever existed what does that have to do with my point. Get It. That's not deflecting but rather trying to mock you calling me communist with a black soul. Really it's ok to disagree without calling me a black souled commie but if that's the best got so be it

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not getting what ur sayin,urz wurdz iz cuminz owt az gibrish

beerftw said:

not getting what ur sayin,urz wurdz iz cuminz owt az gibrish

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My understanding of your argument is that there will be a shortage of investments if they were taxed at the 35% rate. If I misunderstood your argument then try rephrasing it and maybe I will understand.

My point is if a 35% rate will prevent people from investing then why don't we have a shortage of Cardiologists? Considering that a Cardiologist has to go through eight years of schooling, three years of training and take on considerable debt to be a Cardiologist. What's so special about writing a check to get a bigger check that it requires a lower tax rate than a Cardiologist that invest eleven years of his or her life.


Lastly I don't understand why you felt the need to call me a black souled commie just because you don't agree with me.