Monday, September 12, 2011
While cutting the payroll tax may not a terrific job creating measure, raising it right now is a bad idea. One of the last things we need right now is the government sucking more money out of people's pockets... and eliminating the 'temporary' tax break would do just that. And it's rich to see critics complain that this tax cut has a negative impact on social security when they know that social security finances are a bookkeeping fiction.... the only thing that matters is the sum of tax collections and the sum of government spending.
I have to agree with the critics (Democrats, mostly) who argue that capital gains shouldn't receive such favorable tax treatment. (granted, I'm not calling for them to be raised right now, at least not without matching cuts elsewhere). To me, a dollar of income is a dollar of income and it doesn't matter the form income takes, the tax on that income should be the same as on any other dollar of income. Giving a tax break on capital gains is gaming the tax system, something conservatives profess to dislike (except, I guess, when doing so nets them some extra money?). As for the claim that taxing capital gains at a higher rate doesn't take into account the inflationary effect of that gain, there are a number of other 'investments' people make without receiving a special tax break. People spend tens of thousands of dollars on an education that (hopefully) provides a good return on the investment... and without any special break on their ROI. As to the claim that 'investment' will dry up without a tax break, much of what is called 'investment' doesn't go into new start ups, it is simply people buying established companies on a stock exchange. And finally, to the point that capital gains are a form of double taxation, that doesn't apply where the entity is a non-C Corporation, and in the case of C-corps, double taxation is the price to pay for having an entity that enjoys many of the benefits of 'personhood'.