By John Ransom
5/20/2012
Ericynot wrote: Part of what Buffett proposed in the so-called Buffett Rule is raising the tax rate on capital gains and dividends to the level of ordinary income. Re-read my original post from 11:19 AM. You're confused and so, apparently, is John Ransom. - Obama’s Campaign about Nothing
Dear Comrade Eric,
No, I’m not confused. I think perhaps you don’t understand how tax law actually operates in real life.
Even assuming that the Buffett rule raises taxes on capital gains, there are easy ways for rich people to avoid paying capital gains taxes.
Unlike income taxes, a person can choose when to incur capital gains taxes.
The way Buffett chooses is by buying stocks and holding on to them for a really long time. Until he sells, there is no capital gain event- hence no taxable event. This is a common way that financial advisors routinely minimize the tax burden of people who fall into upper incomes. They buy companies and hold for long periods of time and much more rarely seek to realize capital gains, because the tax makes a big difference in total return.
You may say so what? The “so what” is that by punishing the realization of capital gains you stop the market from being more liquid, thereby not utilizing capital more often. In other words, you need more capital to get the same amount of liquidity.
You also raise less money with higher capital gains taxes.
From Heritage:
In 2003, capital gains tax rates were reduced. Rather than expand by 36% as the Congressional Budget Office projected before the tax cut, capital gains revenues more than doubled to $103 billion.
The CBO incorrectly calculated that the post-March 2003 tax cuts would lower 2006 revenues by $75 billion. Revenues for 2006 came in $47 billion above the pre-tax cut baseline.
Here’s what else happened after the 2003 tax cuts lowered the rates on income, capital gains and dividend taxes:
GDP grew at an annual rate of just 1.7% in the six quarters before the 2003 tax cuts. In the six quarters following the tax cuts, the growth rate was 4.1%.
The S&P 500 dropped 18% in the six quarters before the 2003 tax cuts but increased by 32% over the next six quarters.
The economy lost 267,000 jobs in the six quarters before the 2003 tax cuts. In the next six quarters, it added 307,000 jobs, followed by 5 million jobs in the next seven quarters.
The timing of the lower tax rates coincides almost exactly with the stark acceleration in the economy. Nor was this experience unique. The famous Clinton economic boom began when Congress passed legislation cutting spending and cutting the capital gains tax rate.
RG_From_THP_1 wrote: Barack Obama claims his numerous Golf Outings have saved or created thousands of 'Greens Jobs.'. - Obama’s Campaign about Nothing
Dear RG,
Oh well, then. Now this makes sense. It was a “greens job” thing not a “green job” thing.
Art F wrote: Ahh, we finally disagree. I hated the dot com era and the amount of damage it ultimately did. I hated that people who bought into the dot.com had absolutely no idea what they were doing or why they were doing it. They never asked why they never really made any money, and they bought more because financial clowns told them to. - Don’t Like Facebook
Dear Art F,
Well financial clowns always tell you to buy. But that doesn’t mean that something good can’t come from it.
Wall Street is a dangerous place. For every buyer, there is a seller. Not everyone can be on the winning side of a transaction. That goes for banks, or pharmaceuticals or dotcoms. There are still a number of thriving businesses in dotcoms.
I would say that overall the benefit has been positive.
True Liberal wrote: John, Facebook is actually a pretty big business. There has been a huge innovation in being able to share pics and thought and likes across the wide open web. It allowed people to have friends across the world and stay in touch. My worry is that it could take Zuckerberg out of the equation killing innovation. Without a vision, all of the super-talented will leave to attack other problems. Zuckerberg may turn from a Steve Jobs to a Bill Gates. - Don’t Like Facebook
Dear True,
Except Zuckerberg isn’t a dwarfish dweeb like Gates is.
I knew that Microsoft had reached the top when women starting finding Gates sexy.
It may be a big company, but it doesn’t make big profits. Right now it’s trading about 64 times earnings and 16 times cash flow. That’s pretty rich.
The big obstacle that Facebook has is getting users to increase how much revenue they produce.
From Seeking Alpha:
While Internet infrastructure development in emerging markets will likely contribute to Facebook's user growth, average revenue per user, ARPU, is substantially less in those markets compared to their developed markets' counterparts. Additionally, Facebook has not been able to successfully monetize its mobile users, who represent approximately 500 million users of the company's total 901 million MAUs.
Aura wrote: I don't get why you conservatards don't criticize Jesus Christ for his wealth redistribution schemes. All liberals are doing is carrying out JC's instructions, more or less. - The Emancipation Proclamation: The Man Who Freed the Gays
Dear Comrade Aura,
Oh, here we go: The great liberal in going to break out the Bible for us and explain to us the Gospel According to Barack.
Aren’t you worried about displaying “false religiosity?”
If anyone thinks that the Gospel of Jesus Christ has anything to do with standard tables of deductions and tax returns, then they either don’t understand the Bible or they are just willing to twist the Bible for their own purposes.
Don’t liberals like you, at some point, tire of being hypocrites?
I guess the answer is no.
Mooonbat Exterminator wrote: But wait a minute, Didn't Barry say in Iowa that capitalism and the free market has never worked? Now, before a crowd of Wall Street fat cats, who he claims to despise that free markets are the greatest wealth generator ever. He must have been referring to himself when talking about the wealth that was generated for his campaign. - The Emancipation Proclamation: The Man Who Freed the Gays
Dear Moonbat,
Isn’t ironic that the Obamanauts are marching demanding that we tax the fat cats on Wall Street while Obama raised a record amount of money from Wall Street? I also find it ironic that at the same time Obama has shoveled more money into corrupt Wall Street schemes than any other president in modern history.
As I said above, one would think that eventually liberals would get tired of the hypocrisy. But they are liberals, after all. There is that.
Truth001 wrote: Ransom said: “Supposedly it was passed to curb abuses in origination of consumer mortgages. You may want to read the bill before you make off the wall comments about it.- JP Morgan Shows Obama Bank Reform as Flawed
Dear Comrade Pravda,
You may want to read the bill before you criticize me:
An Act
To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘‘too big to fail’’, to protect
the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.
TITLE XIV—MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT
Sec. 1400. Short title; designation as enumerated consumer law.
Subtitle A—Residential Mortgage Loan Origination Standards
Sec. 1401. Definitions.
Sec. 1402. Residential mortgage loan origination.
Sec. 1403. Prohibition on steering incentives.
Sec. 1404. Liability.
Sec. 1405. Regulations.
Sec. 1406. Study of shared appreciation mortgages.
Subtitle B—Minimum Standards For Mortgages
Sec. 1411. Ability to repay.
Sec. 1412. Safe harbor and rebuttable presumption.
Sec. 1413. Defense to foreclosure.
Sec. 1414. Additional standards and requirements.
Sec. 1415. Rule of construction.
Sec. 1416. Amendments to civil liability provisions.
Sec. 1417. Lender rights in the context of borrower deception.
Sec. 1418. Six-month notice required before reset of hybrid adjustable rate mortgages.
Sec. 1419. Required disclosures.
Sec. 1420. Disclosures required in monthly statements for residential mortgage loans.
Sec. 1421. Report by the GAO.
Sec. 1422. State attorney general enforcement authority.
Subtitle C—High-Cost Mortgages
Sec. 1431. Definitions relating to high-cost mortgages.
Sec. 1432. Amendments to existing requirements for certain mortgages.
Sec. 1433. Additional requirements for certain mortgages.
Subtitle D—Office of Housing Counseling
Sec. 1441. Short title.
Sec. 1442. Establishment of Office of Housing Counseling.
Sec. 1443. Counseling procedures.
Sec. 1444. Grants for housing counseling assistance.
Sec. 1445. Requirements to use HUD-certified counselors under HUD programs.
Sec. 1446. Study of defaults and foreclosures.
Sec. 1447. Default and foreclosure database.
Sec. 1448. Definitions for counseling-related programs.
Sec. 1449. Accountability and transparency for grant recipients.
Sec. 1450. Updating and simplification of mortgage information booklet.
H. R. 4173—11
Sec. 1451. Home inspection counseling.
Sec. 1452. Warnings to homeowners of foreclosure rescue scams.
Subtitle E—Mortgage Servicing
Sec. 1461. Escrow and impound accounts relating to certain consumer credit transactions.
Sec. 1462. Disclosure notice required for consumers who waive escrow services.
Sec. 1463. Real Estate Settlement Procedures Act of 1974 amendments.
Sec. 1464. Truth in Lending Act amendments.
Sec. 1465. Escrows included in repayment analysis.
Subtitle F—Appraisal Activities
Sec. 1471. Property appraisal requirements.
Sec. 1472. Appraisal independence requirements.
Sec. 1473. Amendments relating to Appraisal Subcommittee of FFIEC, Appraiser Independence Monitoring, Approved Appraiser Education, Appraisal Management Companies, Appraiser Complaint Hotline, Automated Valuation Models, and Broker Price Opinions.
Sec. 1474. Equal Credit Opportunity Act amendment.
Sec. 1475. Real Estate Settlement Procedures Act of 1974 amendment relating to certain appraisal fees.
Sec. 1476. GAO study on the effectiveness and impact of various appraisal methods, valuation models and distributions channels, and on the Home Valuation Code of conduct and the Appraisal Subcommittee.
Subtitle G—Mortgage Resolution and Modification
Sec. 1481. Multifamily mortgage resolution program.
Sec. 1482. Home Affordable Modification Program guidelines.
Sec. 1483. Public availability of information of Making Home Affordable Program.
Sec. 1484. Protecting tenants at foreclosure extension and clarification.
Subtitle H—Miscellaneous Provisions
Sec. 1491. Sense of Congress regarding the importance of government-sponsored enterprises reform to enhance the protection, limitation, and regulation of the terms of residential mortgage credit.
Sec. 1492. GAO study report on government efforts to combat mortgage foreclosure rescue scams and loan modification fraud.
Sec. 1493. Reporting of mortgage data by State.
Sec. 1494. Study of effect of drywall presence on foreclosures.
Sec. 1495. Definition.
Sec. 1496. Emergency mortgage relief.
Sec. 1497. Additional assistance for Neighborhood Stabilization Program.
Sec. 1498. Legal assistance for foreclosure-related issues.
You should read all that.
Rat wrote: John, please dump the mustache, unless you have a "hare-lip".
Forget the silly 'mini-beard'. Grow a full BEARD ! I did it. You can too. Trust me, ( giggle, giggle, haw, haw, ) ... - JP Morgan Shows Obama Bank Reform as Flawed
Dude,
That’s a really weird comment coming from a guy. I assume you are a guy, although it’s just possible that you are an Obama-appointed DOJ lawyer who is a woman. Some of them do have beards. Actually I thought it might be a new Obama qualification for a Supreme Court appointment: 1) Must be woman; 2) Must have beard. In any event, I leave the beard department to my wife to manage for me. She likes it. Lastly, the “giggle, giggle, haw, haw” part really creeps me out. That’s like restraining order territory.
Marie150 wrote: I hope politicians are not offering people hush money. Isn't it against the law?- Obama Heads for John Edwards-type Hush Money Scandal?
Dear Marie,
It all depends on the definition of the word “is.”
I colleague of mine, John Zakhem, who specializes in campaign finance matters, put it this way:
Edwards claims the payments were independent of the campaign, and were related to his personal life, not to attempting to shape public opinion relative to his candidacy. I would presume that Obama’s campaign would employ a similar defense. The critical factual aspect of any inquiry by the FEC will be the extent to which Obama’s contributors…coordinated their efforts with the candidate and/or his campaign. If such payments were, in fact, made in a coordinated manner they would be deemed a contribution. If such contributions went unreported and/or were in excess of applicable limits they would constitute violations of BCRA (McCain/Finegold).
Truth001 wrote: If $150K was all it took to silence Wright I would he comes pretty cheap. I take Hlilary at her word that she is done with politics. She has nothing to gain by running. I'm sorry but this stuff is bogus. - Obama Heads for John Edwards-type Hush Money Scandal?
Dear Comrade Pravda,
So you see nothing wrong with Obama offering money to someone. Like a typical liberal your only problem, isn’t moral or ethical, it that not enough money was spent.
At least your hypocrisy is consistent.
“Consistency is the last refuge of the unimaginative.” – Oscar Wilde
75th Retired wrote: I have to wonder if Klein was setup, that this was an engineered trap by the libs. Consider the timing. Wright will come put and deny everything, even if he actually made the statements.. - Obama Heads for John Edwards-type Hush Money Scandal?
Dear 75,
Sometime as conservatives we get a little too paranoid about our paranoia:
Tape at 11: http://www.foxnews.com/on-air/hannity/2012/05/18/jeremiah-wright-president-obamas-faith
Mac287 wrote: JR can only hope that Obama is heading for a "John Edwards type scandal". Just imagine the columns that can be written in triumph! Hope springs eternal, Mr.Ransom...hang in there. - Obama Heads for John Edwards-type Hush Money Scandal?
Dear Comrade 287,
It’s not my only hope. Actually the polls are pretty hopeful that Obama will be gone by fall anyway.
But look: I think you are a sincere fellow, so let me ask you this: If Obama really did pay off cronies to stay out the limelight, wouldn’t that be a big betrayal of everything you believe as a liberal?
Daune wrote: I find the allegations of payoffs a bit hard to believe, only because the people being paid off have nothing to gain from talking, and everything to gain from being quiet. Obama is the most radically leftist president we have had since the days of WW and FDR - the likes of Ayers would know that keeping quiet will get him closer to his radical goals than outing Obama. - Obama Heads for John Edwards-type Hush Money Scandal?
Dear Daune,
That’s assuming that everyone Obama has met in his life is more interested in ideology than in money. This is the United States of America. Outside of Obama’s tiny academic enclave, most people value money,
That’s it for this week.
V/r,
JR
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