Saturday, August 04, 2007

Democrats fail miserably

The Democrats have refused to raise tax rates on capital gains, mainly because they are being paid off by the hedge funds. What a bunch of chokers. So now we get more and more ultrarich while the poor can't afford basic medical treatment. Is that the kind of country we want? Still, the next president may make that change, but the current congressional Democrats are proving what a bunch of spineless bought-and-paid-for bribe-takers they have turned into. They also passed that FISA bill that gives MORE POWER to the Attorney General. That's Alberto Gonzalez.

I'm still more of a Democrat than anything, but I really don't like to see the rich getting richer and Congress doing nothing about it while everybody else, especially the poor, are getting worse off. The farther this country slides into a land of the very rich and the very poor, the more it will come to resemble Brazil, i.e., total hell.

But things can still change for the positive. Especially if something is done on health care. And there will be always more opportunities to change the tax code for the better.


Collin said...

I am not opposed to paying taxes, to support the education and the infrastructure that affords we Americans such a fine standard of living. I am not particularly Republican nor fully realized Democrat.

But I do have an objection to capital gains taxes.

Capital gains taxes are double taxation. Corporations, whose shares investors buy and trade, pay a tax of about 30%. This overhead is reflected in the share price and in the amount of dividends the company is able to pay out. To then tax the individual whose wealth is connected to the profitability of the company that is already taxed at 30% is to tax that individual twice.

I'm not saying that money managers aren't afforded outrageous sums for their efforts. But I think there should be consideration in this debate for the public shareholders who are NOT money managers pulling down 2% of $500mil, but, rather, average people saving for their retirements because they feel that social security is a thing of the past.

chris farrell said...

Many rich people get most of their income from capital gains. That means they are getting taxed at 15%, which is unfair. Most rich people pay lower taxes than average people: ask Warren Buffett, because of the lower capital gains tax.

Maybe there should be some kind of comprehensive overhaul of the tax code, but in the case of hedge fund managers, they are risking none of their own money, and yet they get to pay 15% on the millions of income they get each year, which is hardly fair.

It's also unfair that the rich are getting richer because the stock market keeps going up and they are being taxed at a 15% rate while the poor get poorer because the corporations cut wages so that their profits keep going up, and so their stock prices keep going up and the rich get richer. I personally don't want to live in a country of ultrarich and dirt poor, which is where we are headed. The rich are becoming stratospherically rich, and for what? They invest their money and pay the low capital gains tax on it.

Productivity has gone up a lot in the last ten years, but average real wages have stayed the same or dipped. Why is that? Workers don't have any bargaining power, and so the gains in productivity have translated into greater corporate profits, which translate into higher stock prices, which primarily benefit the rich. These capital gains are then taxed at a lower rate than what the worker is paying. Not fair at all.

As for corporations paying taxes, they don't pay many taxes at all. Most of the drug companies, for example, manage to shelter their money overseas.

A lot of money is also wasted by rich people trying to figure out how to shelter their money so they can pay capital gains tax rates on it. If we make the rates equal, this complication will go away.

Also, if you consider that raising that tax will take money mostly from those who have more than they need and make money available for stuff like life-or-death health care for the poor, I don't see how you could be against it.

If social security is to be a dead program, you will see people dying on the street. If the government gets more revenue, it can stabilize social security.