hthttps://pjmedia.com/trending/ted-cruz-advocates-small-tax-change-that-could-create-20k-jobs/tps://pjmedia.com/trending/ted-cruz-advocates-small-tax-change-that-could-create-20k-jobs/ "n Monday, Sen. Ted Cruz (R-Texas) and 20 other senators sent a letter to Treasury Secretary Steve Mnuchin asking him to change the way the federal government levies taxes on capital gains, indexing the tax to inflation. This change would be more just and it would unleash investment by incentivizing more Americans to buy stock in companies. In fact, this small tax adjustment is estimated to create an additional 21,800 full-time equivalent jobs. According to the nonpartisan Tax Foundation, pegging the capital gains tax to inflation would add approximately $22 billion to the U.S. economy over the long run, boost after-tax incomes by 0.2 percent on average, and create an additional 21,800 full-time equivalent jobs. Democrats claim that this tax adjustment would help the rich, but every segment of investors would have their tax burden reduced in real terms. Furthermore, the benefits of economic growth would help everyone.
Cruz, with yet another good bit of law written, shows that he actually understands economics and currency. More like him please.
Yep. My plan is similar. Change corporate income tax, capital gains and dividends, and interest to an even 20% (short or long term). This would include income from IRA’s and 401k’s to keep taxes simple (since a good portion of the money is derived from dividends and capital gains). Increase payroll tax to 10% to fund ss and Medicare. And then adjust tax tables for personal income tax rates at 10, 20, 30, and 40%.
Nope. Capital gains are a much different beast than earning a wage. There is much more risk and time delay. That is why Cruz's offering makes so much sense. Of course I agree with your last phrase. Lower rates on ordinary income. Do that, but treating the 2 as the same kind of animal is economically illiterate.
It's a trade-off. It's higher risk, but it's higher reward. And of course, you get to write off your losses. The payoff takes longer, but it's far less of a time commitment. You have to wait for your money, but it's not a time sucker (like a job is). We have different views on what the tax code should be about. Promoting economic growth or private investment (or being "economically literate," whatever that means) shouldn't be the goal. It should focus on fairness, and by that, I don't mean economic justice and progressiveness. I mean treating people and their money the same and taking as little of it as possible.
I agree. I guess my point is that if I invest $100 today. In 5 years that is really only $95 due to inflation, as an example. So for taxing longer term investments, it is correct to deal with it in its current value. It is the correct way to determine if gain or loss was really made and how much of one. That is my point really. It is far to treat money what it is really worth today. For sales tax, payroll tax, income tax the $ value when taxed is the same or very similar to the value when you received/spent the $. That is a very accurate statement for payroll and income. Sales could be tricky though. Depends on how long you had the pennies stashed under your bed. But that would also be a difficult calculation to make for a normal person and it would be impossible to convince a store owner, that your money was "old".
Naturally. Even if it would really help the middle class and/or lower class, they would still say that. Of course, it's hard to help the lower class a ton with income and capital gains tax reductions. To help them out, you'd have to reduce taxes on things that Democrats will never agree to a reduction of (medicare, social security).
If you reduce capital gains tax, there is more incentive to invest capital in new businesses and current business improvements. Both of those things increase the number of jobs and the wage rate level. Both of those things help poor people. Capital accumulation = good for everyone. Capital consumption = bad for everyone. Capital in those statements means factors of production.
It's hard to help them directly, because they pay so little in taxes. Our federal tax system is very progressive, not because of how hard it taxes the wealthy but because of how little it taxes the lower and lower-middle classes. Can you indirectly help those classes with tax relief? Very much so, because tax relief on the upper brackets opens business and investment opportunities, which create jobs. To be fair, Democrats have favored cutting the payroll tax (funds Social Security and Medicare) rate at times. In fact, we had a temporary payroll tax reduction about 8 years ago. I've heard some favor lowering it permanently in return for increasing (or even eliminating) the wage cap on payroll taxes.
The poor needs to pay payroll taxes because they overwhelmingly consume government resources. Further everyone uses SS and Medicare. It’s not supposed to be a charity.
The poor should be paying at least a token amount of all taxes. Nobody should have negative or zero tax liability. I'm not a fan of the EIC. It looks like it helps the poor, but it's actually just corporate welfare for MacDonald's and Walmart. They are the ones who reap the real benefit of it. I'd prefer that we eliminate the payroll tax and the Social Security and Medicare trust funds. All they do is create an illusion of fiscal stability and a political assumption that people have some sort of special entitlement to benefits. That makes it much, much harder to rein those programs in and force them to live within the normal budget constraints. That's why they're now almost triple the cost of national defense. That is a disgrace.
Flat tax with no exemptions and eliminate the IRS. The poor pay little while the rich pay a handsome amount while we save mountains of money on a useless behemoth organization.
Progressive tax system isn't about raising revenue. Think about that. We know it isn't because we run huge deficits. The government prints whatever money they want to spend on things. Taxation is about social engineering. Progressive tax system means it is harder to accumulate wealth. It keeps the rich, rich and the poor, poor. It is the rich and powerful pulling up the ladder. It is harder to start a business. It is harder to build your business big and powerful. Regulations are also a tax.
They are a tax, and as you've correctly pointed out, they are frequently tools for stomping out competitors or potential competitors.
". Can you indirectly help those classes with tax relief? Very much so, because tax relief on the upper brackets opens business and investment opportunities, which create jobs." MrD This kind of statement obviously is racist or sexist or something.Every single Dem including all clowns running for POTUS loudly and often remind us the tax cuts ONLY benefit the rich,never mentioning that 95% who pay any tax get a break . And certainly never mention the benefits of having wealthy people create more jobs.
So true. It's amazing that so few people understand that. Making $500k+ a year doesn't make you wealthy. Having a lot of wealth makes you wealthy. So many "empathetic" billionaires like Buffett in favor of increasing income taxes on high income earners but of course they would never propose a wealth tax.
I think they would grudgingly admit that non-rich people did get some relief but argue that the overwhelming majority of the relief went to the upper brackets. If you believe in an economic zero sum game, they're right, but that's economically illiterate. What I'd like to see them asked is this. "When was the last time a poor guy offered you a job?" I'd like to hear their answers. To create a job, you need to have enough money to live on your own, make a payroll, and have enough reserve cash to pay business expenses even when cash flow is poor or have enough credit to finance their expenses on a short term basis. Poor people can't do that. Middle class people can't do that. Even upper middle class people can't do that. You pretty much have to be rich to do it, and every dollar to take from the rich guy in taxes is a dollar he can't use to hire somebody.
That's reasonable, but right now even the 7.5% (or 15% if they venture into entrepreneurship) is nigh crippling - and it's rough on the lower end of the middle class too, for that matter. Although part of that issue is other government policies that drive up housing costs and insurance costs, property taxes, sales taxes, etc. A flat tax wouldn't mean the poor pay little, unless we mean flat relative to Utility, which pretty much nobody ever does. Or we fix both problems at once....
Flat as in flat percentage. 10% of 20,000 is $2,000 10% of 200,000 is $20,000 Poor pay less and wealthy pay significantly more. No regulating body IRS is necessary because there is no need to file income taxes. Maybe there is a threshold where people who make below XX amount pay a smaller percent but everyone who earns income pays something. 10% is just a random number. I have no idea what the right % should be.
It's curious that other taxes like sales tax, licensing fees, etc. are left out when claiming the poor don't pay any taxes. Focusing only on federal income tax for the poor is akin to focusing on the budget deficit and neglecting entitlement programs in the discussion.
