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Forum Post: Tax Reform and Corporate Reform

Posted 10 years ago on Nov. 30, 2011, 10:43 a.m. EST by stewbee (1)
This content is user submitted and not an official statement

There are countless ways in which inequity has infiltrated our system, but here are two things that could be accomplished that would make a huge difference: The first is is in the tax code. We have a progressive tax system, which means if you earn more, you pay a larger percentage of taxes. It may not be perfect as is, but has an essence of fairness to it. The problem is in the capital gains tax. It is a flat tax, at 20%. It should be progressive as well. In the first place, the idea that unearned income can be taxed at a lower rate than earned income rewards laziness. I am okay with a heart surgeon getting paid the big bucks, but not okay with the couch bound day trader getting taxed at a lower rate than that surgeon. If you are in the 35% tax bracket, your capital gains should be taxed at 35%, and if you actually don't work and only have capital gains, it should be taxed progressively as well: 15, 25, 35 percent just like the tax code. This is how the uber-wealthy manage to not pay there fair share, because they take their money from others in money trades, not work.
The second would be to work towards a constitutional ban on treating corporations as people. This is a work around to the Supreme Court's Citizens United decision, and many other loopholes that corporations use to avoid regulations and paying their fair share.
Both of these goals are practical and would make a huge difference in re-balancing our system, without throwing it out. They are also probably more attainable (for now) than public funding of political campaigns, which would also make our system more honest.



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[-] 1 points by stewbee (1) 10 years ago

@off my brain:Your tone is a bit aggressive for discussion, but I see you know a bit about the tax situation. I do realize that there is some variability to the rate based on income and long versus short term gains, but that doesn't change the fact that the top rate is 20%. I think that your claim that poverty will increase in older taxpayers in a progressive capital gains tax scheme is unfounded. If you read this carefully, you will see that I would have people who don't work (like retirees) pay in according to income levels as well. I would imagine the specifics could be worked out, but if you're making capital gains in the lower income levels, your taxes would be at a lower or minimal rate. On the other hand, if you're not working, but making 500K/year in capital gains, 20% is just too low, regardless of age. Most retired persons spread their sales accordingly to avoid a larger tax penalty anyway. Thanks for your input.

[-] 1 points by offmybrain (23) 10 years ago

"The problem is in the capital gains tax. It is a flat tax, at 20%. It should be progressive as well"

You are wrong it is progressive,short term capital gains are taxed at ordinary income rates.Long term capital gains are taxed at 0 or 15%. A consequince of raising long term capital gains tax is you increase poverty in older taxpayers.