Quote:
Originally posted by sebastian_dangerfield
I understood the first part of your post. You're missing, or avoiding, my point.
You cannot tell me that a person will be just as well off in retirement with a cap gains rate equal to the tax on wages, which is what you suggested, or at least implied. Higher taxes equal less money in people's pockets. I'm no tax lawyer, but its hard for me to see that any other way. What you're now arguing is more honest. You're admitting that, yes, raising the cap gains rate would decrease the quality of people's lives both pre and post retirement. And you're admitting you are seeking a wealth redistribution from those with accumulated capital to those without. That's govt interference.
I would support wholeheartedly a tax cut for workers to bring their taxes in line with the cap gains rate. If we must have parity, I'd say that's pretty fair. If Henry Kravis can have his advantageous rate on carried interest, why not the school janitor on his paycheck? Why don't we see the argument made from that perspective? Would you support that?
And please, don't try to repackage the lower cap gains rate as govt interference to try to make yourself out to be on the side of smaller govt. That's pretty transparent. The interference is the fact that we have a govt spending ungodly sums on that ludicrous war and so much pork throughout ourt country. Ultimately, people like you and I shouldn't disagree on these things. We should get together against the common enemy that steals from everyone - our bloated Fed Govt.
Start first with a downgrading of all federal benefits. Move next to eviscerating the defense contracting industry, which looks to me like one huge subsidy for a sector of the economy that ought to be dormant except when absolutely needed (See: Not Iraq).
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I didn't repackage the lower capital gains rate as government interference; that's exactly what it is. Look at Section 1 of the Internal Revenue Code and you'll see what I mean. Sec. 1(a) provides the tax rate. Sec. 1(h) provides for a reduction in that rate for dividends and capital gains.
I don't view seeking parity in tax rates as income distribution. The wage-earning population will not get one thin dime of the additional tax revenues. Wealth distribution would involve a transfer payment (e.g., refund or credit to wage-earners). Parity in tax rates simple removes a tax benefit currently afforded under the statute.
You may favor lower tax rates for everyone. I don't disagree in the abstract, although I would hold off onnreducing rates until we eliminate the deficit and reduce wasteful spending. In fact, I agree with you that without these two evils, it would be possible to reduce tax rates. We are just arguing over semantics (with respect to whether the law gives a break to dividends and cap gains) and timing.
