Obama tax plan

[DosEquis]

Originally Posted by 6SpeedTA95

Exactly you're taxing the GAIN, the entire purpose of investing in the first place. So your 12% return with a 15% tax is now a 10.4% return and you want to make it a 28% tax? Then fine now its down to a 8.4 or 8.5% return, it DRASTICALLY affects ROI which discourages investment in the first place when people do invest it makes them less likely to want to move to other more effecient vehicles for investment due to this affect on ROI.

Ok, so because your return is 8.5% instead of 10.5% ...you are going to put your investment dollars in a savings that earns 4%? Not buying it.

[cashishift]

Originally Posted by DosEquis

So you are telling me, that if someone has $100k sitting around..they will just put it in a regular savings account, or keep it in $10s and $20s under the matress, because the return on their investment is going to be taxed more?

I don't buy they are just going to pass on investing because their return is taxed more, then causing stagnation. Warren Buffett is going to pull his money out and not make his 10-12 billion in income, because his taxes will be more on the income?

so that's where you keep all your money..

[Ardentfrost]

Originally Posted by DosEquis

Ok, so because your return is 8.5% instead of 10.5% ...you are going to put your investment dollars in a savings that earns 4%? Not buying it.

If the projected adjusted ratio drops you below your level that you are averse, then yes. That's human nature dude. Finances and Investments 101.

[Ardentfrost]

Originally Posted by DosEquis

Iran we removed their leader and installed brutal dictators.

Iraq, we support saddam insane..give him wmd..then remove him when we find convenient.

Russia, we were in a huge arms race and threatened to blow each other up.

North Korea, we label part of the axis of evil and tell them to cooperate or else.

Those actions were part of militarism and imperialism...not economic. Not allowing our business to use them as a tax shelter is on a whole completely different page.

It was also an analogy, not an implication that foreign policy is a game.

All cases started with economic "adjustments." Economics is where it STARTS, not where it ends. It ends in embargoes or cold wars or hot wars or a generation of people who hate you.

[DosEquis]

Originally Posted by Ardentfrost

If the projected adjusted ratio drops you below your level that you are averse, then yes. That's human nature dude. Finances and Investments 101.

It would only be temporary. A couple weeks before the tax increase passes you will see the market go down, just as 6speed posted earlier. They will want cash out to make as much as they can at the time. They will then reinvest. After you emerge from the 101 books there is reality. Reality is that it is also human nature to want to acquire more money. At the time the market goes down because of that, it would be a great time to buy in even more. There will probably be a lot of under valued investments out there ready to get in to. You can use all the investment jargon from the 101 books that you would like, but reality and history will show the economy will move right along because people will still be making money. They made investments in the 1990s when capital gains was higher, and they will make investments in 2008 and beyond.

[DosEquis]

Originally Posted by Ardentfrost

All cases started with economic "adjustments." Economics is where it STARTS, not where it ends. It ends in embargoes or cold wars or hot wars or a generation of people who hate you.

I don't think any of those countries and the problem they have with us originated from economic adjustments. Obama is also saying that he wants people to follow the already established international law. Its about not providing tax shelters for business, looking to make millions in our country but not pay the taxes everyone else has to pay.

[6SpeedTA95]

Originally Posted by DosEquis

Ok, so because your return is 8.5% instead of 10.5% ...you are going to put your investment dollars in a savings that earns 4%? Not buying it.

NO but what you will do is you'll funnel it to safer stock investments which will impact startup companies and companies that may be struggling slightly, taxing capital gains especially at the ridiculous rate of 28% makes the problem of effecient capital distribution even worse. Because now the biggest money maker may be to invest in this new IPO that has a large potential, lets just say for arguments sake that there's a 25% chance that you'll earn a 20% return and a 50% chance that you'll get a 16% return or greater. You factor off the 28% tax and suddenly the 20% return drops to less than 15% and the 16% return drops to BELOW market average of slightly less than 12% return. So that means there's a 50% chance you'll earn less than 16% or LESS than the market average on this stock due to the tax. Or you can invest in GE a big corporation that has a good dividend and steady growth and the chances of you getting just market average are substantially better.

So what happens you manipulate the distribution of capital through taxes hurting smaller potentially "more risky" companies. The result? A less than effecient return on capital/investment both for stock holders and businesses along with everything else that depends onthe stock market like pension funds, 401ks and retirement accounts. Furthermore there are substantial capital funding issues that can also be impacted by higher capital gains taxes. Arbitrarily raising capital gains taxes like it is some heal all is ridiculous and it has been proven time and again that improper distribution of capital is a direct result of capital gains taxes.

[6SpeedTA95]

Originally Posted by cashishift

so that's where you keep all your money..

Welcome to the board, sorry I didn't catch your post earlier to get it approved, I just went back to the floor and noticed the thread needed attention

[DosEquis]

Originally Posted by 6SpeedTA95

NO but what you will do is you'll funnel it to safer stock investments .....

I understand the risk/reward stuff. What percentage of investing is done in the high risk arena you are referring to as it stands right now? I am guessing it is a very low percentage. Most new business fails, and it is a reality regardless of the level of capital gains taxes. The people you are referring to are the ones who would front hundreds of thousands in to a possible business essentially gambling for exceptional returns. Will there be less gambling if you don't win as much? Probably. Gambling is such a small percentage of the current investing though and the drastic negative affects you speak of will be marginalized because it is such a small percentage of investing.

Further 28% is not ridiculous and your man Ron didn't think so either. It was that level (or higher) in the past and people still invested. Once a population becomes accustomed to a certain level of taxation they adjust their finances accordingly. I can't help but point out that we also wouldn't need to even speak of tax increases but the last four presidents have financed everything, fighting in wars that we didn't need, giving billions to foreign countries in some sort of international welfare, etc. and now its time to make the payments.

[6SpeedTA95]

Originally Posted by DosEquis

I understand the risk/reward stuff. What percentage of investing is done in the high risk arena you are referring to as it stands right now? I am guessing it is a very low percentage. Most new business fails, and it is a reality regardless of the level of capital gains taxes. The people you are referring to are the ones who would front hundreds of thousands in to a possible business essentially gambling for exceptional returns. Will there be less gambling if you don't win as much? Probably. Gambling is such a small percentage of the current investing though and the drastic negative affects you speak of will be marginalized because it is such a small percentage of investing.

Further 28% is not ridiculous and your man Ron didn't think so either. It was that level (or higher) in the past and people still invested. Once a population becomes accustomed to a certain level of taxation they adjust their finances accordingly. I can't help but point out that we also wouldn't need to even speak of tax increases but the last four presidents have financed everything, fighting in wars that we didn't need, giving billions to foreign countries in some sort of international welfare, etc. and now its time to make the payments.

wait wait wait you're ok with taking away necessary capital from small businesses? You're doing it indirectly but that is exactly what you're doing. This is the problem with politicians, both republicans and democrats, they are a bunch of self rightous idiot lawyers that are clueless on economic issues. This will have a substantial impact on capital distribution period. 28% is ridiculous thats a huge chunk of ROI GONE...why? So some politician can create a feel good fuzzy at the expense of investors, US jobs and business entreprenuers.

There are some potentiall issues with the capital gains system but arbitrarily raising the capital gains tax on everyone is RIDICULOUS and 99% of economist that have a clue agree that it manipulates capital flows in the market and makes it LESS effecient.

There should be *some* capital gains taxes but for the most part there should be zero and if there's going to be an across the board tax it needs to be less than 10%.

[Ardentfrost]

Originally Posted by DosEquis

I don't think any of those countries and the problem they have with us originated from economic adjustments. Obama is also saying that he wants people to follow the already established international law. Its about not providing tax shelters for business, looking to make millions in our country but not pay the taxes everyone else has to pay.

No? We tried to bully Cuba into abandoning their state funded sugar farms because they could sell cheaper than us. So we started by majorly increasing tarriffs for Cuba, it pissed Castro off, so he did the same in return, which pissed us off more, so we raised them and so on until eventually it turned into an all out embargo and no more love for or from Castro (our old buddy). Enter cold war and cuban missile crisis, and multiple attempts by us on his life throughout the years and you have a foreign diplomacy nightmare sparked by us trying to use our economic beefiness to push another country into capitalism.

Similar things happened with all the other countries. The coup d'etat in Iran wasn't the first thing we did... we started with economic sanctions and whatnot. Same for Iraq: after installing Saddam and him doing some stuff that we didn't approve of, we started throwing around our economic weight.

Over and over again this happens. Over and over again it turns into some bullshit that would have been easily prevented.

I'm not saying we shouldn't be trying to prevent people from having tax shelters in some nations, I'm just saying that throwing around our economic weight to do it is not a good way to go about it.

[7th Ninjai]

Originally Posted by DosEquis

Bloomberg.com: Worldwide

It would appear that Obama is proposing an 80 Billion tax cut for the middle class americans.

To help pay for it "The tax cuts would be funded in part by raising tax rates on dividends and capital gains. Now 15 percent, that rate would rise to as high as 28 percent, the rate under former President Ronald Reagan." He also said to help pay for it "Obama would also crack down on international tax havens used by companies. The plan would create a list of countries where companies locate to evade U.S. taxes and use economic pressure to make them comply with international laws. It's time to shed some sunlight not only on companies that abuse the tax code, but also on the secretive offshore tax havens that shelter them."


I can say that this plan of his has bumped up his brownie points in my book. It is about time we had some fiscal responsibilty and some help to the average consumer since they do control 65%+ of the economy with their spending.

Instead of threatening companies with taxes if they've been locating their operations overseas for tax purposes (how would Obama prove this anyway), how about lowering taxes in our country to give them financial incentive to invest at home?

[6SpeedTA95]

Originally Posted by 7th Ninjai

Instead of threatening companies with taxes if they've been locating their operations overseas for tax purposes (how would Obama prove this anyway), how about lowering taxes in our country to give them financial incentive to invest at home?

Tell him what he's won bob!

[DosEquis]

Originally Posted by 7th Ninjai

Instead of threatening companies with taxes if they've been locating their operations overseas for tax purposes (how would Obama prove this anyway), how about lowering taxes in our country to give them financial incentive to invest at home?

They do invest here. Thats why they are being asked, or forced, to pay taxes here. They invest here and skip over to some other country to avoid the taxes. They want the profit american consumers can bring to them but they don't want the taxes.

[Rouger2]

Originally Posted by Ardentfrost

No? We tried to bully Cuba into abandoning their state funded sugar farms because they could sell cheaper than us. So we started by majorly increasing tarriffs for Cuba, it pissed Castro off, so he did the same in return, which pissed us off more, so we raised them and so on until eventually it turned into an all out embargo and no more love for or from Castro (our old buddy). Enter cold war and cuban missile crisis, and multiple attempts by us on his life throughout the years and you have a foreign diplomacy nightmare sparked by us trying to use our economic beefiness to push another country into capitalism.

Similar things happened with all the other countries. The coup d'etat in Iran wasn't the first thing we did... we started with economic sanctions and whatnot. Same for Iraq: after installing Saddam and him doing some stuff that we didn't approve of, we started throwing around our economic weight.

Over and over again this happens. Over and over again it turns into some bullshit that would have been easily prevented.

I'm not saying we shouldn't be trying to prevent people from having tax shelters in some nations, I'm just saying that throwing around our economic weight to do it is not a good way to go about it.

That is a pretty good cuban story but it is just a story. Castro was a communist and still is. He lead a communist revolution and that is why we hated him and still hate him. He started out like a sheep but turned quickly into a wolf. It was all a ploy to turn his country communist.

[Ardentfrost]

Originally Posted by Rouger2

That is a pretty good cuban story but it is just a story. Castro was a communist and still is. He lead a communist revolution and that is why we hated him and still hate him. He started out like a sheep but turned quickly into a wolf. It was all a ploy to turn his country communist.

Yeah, that's why we had great relations with them (and him specifically) for years. uh huh

[RMNIXON]

If he wants to be smart he should run on a simplified income tax, leave Capital Gains alone, and raise the income limit on no income tax liability if he wants to throw a bone at voters who need a break. I would also limit Earned Income Tax Credits to the amount actually paid in taxes. It should not be a welfare program. What he proposed sound to much like another Two Americas shift in the tax burden when it is already very tilted. More politics than good policy.

[Rouger2]

Originally Posted by Ardentfrost

Yeah, that's why we had great relations with them (and him specifically) for years. uh huh

When did we ever have great relations with Castro. He and Russia tried to check mate us by putting nuclear missles in Cuba. He emptied his jails of criminals and sent them here as refugees. We do not trade with him because he is a communist and has been since he first took over the government and murdered thousands of people who opposed him. We have never let americans visit Cuba. There have been some easing of that visitation policy though. We had great relations with the guy he deposed in his revolution but never with Castro.

[Ardentfrost]

Originally Posted by Rouger2

When did we ever have great relations with Castro. He and Russia tried to check mate us by putting nuclear missles in Cuba. He emptied his jails of criminals and sent them here as refugees. We do not trade with him because he is a communist and has been since he first took over the government and murdered thousands of people who opposed him. We have never let americans visit Cuba. There have been some easing of that visitation policy though. We had great relations with the guy he deposed in his revolution but never with Castro.

Damn dude, you are WAY later. You need to look up history of relations with Cuba. Before the 50's we were great friends... we traded with them, people could go there. It was all about sugar production and Castro wanting to become less democratic and more communist.