Trumped up trickle down or Clintonized?

[whell]

Originally Posted by donquixote99

Per this U Penn discussion, you are correct from an accounting and tax perspective, but by accounting definition, not due to human labor input.

Per classic economic theory, standing timber still does not seem to me to fit the idea of 'capital.' Stockpiled cut logs would be capital.

http://extension.psu.edu/natural-res...estland-owners

We can agree to disagree here, 'cuz there remain examples aplenty. Ask the sod farmer, for example, if his grass is capital. But I digress.

To your earlier post, sure: the argument that, I think, sensible folks would have isn't whether or not financial gains realized from the conversion or appreciation of capital should be taxed. Its how much. I don't think I agree that "too little tax" on capital damps economic activity. But there are typically societal costs to the conversion of capital that can be paid for with a MODEST capital gains tax.

[donquixote99]

Originally Posted by whell

We can agree to disagree here, 'cuz there remain examples aplenty. Ask the sod farmer, for example, if his grass is capital. But I digress.

To your earlier post, sure: the argument that, I think, sensible folks would have isn't whether or not financial gains realized from the conversion or appreciation of capital should be taxed. Its how much. I don't think I agree that "too little tax" on capital damps economic activity. But there are typically societal costs to the conversion of capital that can be paid for with a MODEST capital gains tax.

Sod of course is a crop. Standing timber is more like coal in the ground, tree farming aside.

And we must agree to disagree if you cannot see there are economic consequences to incentivizing taking capital gains over taking income.

[whell]

Originally Posted by donquixote99

And we must agree to disagree if you cannot see there are economic consequences to incentivizing taking capital gains over taking income.

Of course there are consequences, but you don't need a capital gains tax as the sole remedy to regulate that particular behavior.

[donquixote99]

Originally Posted by whell

Of course there are consequences, but you don't need a capital gains tax as the sole remedy to regulate that particular behavior.

What regulatory remedies do you prefer, and why are they better than a proper level of capital gain tax?

[donquixote99]

Originally Posted by whell

The tree is capital as since it can be argued that the value is increased by human labor in this example. Also in this example, the tree is the "raw material". Raw materials are capital.

The definitional argument aside, would you care to comment on my main point, which is that to low taxation of capital gains, in comparison to taxation of income, can be an economic impediment to growth by over-incentivizing risk?

[Pio1980]

Determine the value of the labor or skill contribution to the resource is a consideration.
I don't think much of profiting from gaming economics without actually providing a useful trade, service, or product.


Sent from my SM-N900V using Tapatalk

[Pio1980]

Investment is ok get a return for providing capital, but the enterprise's primary priority should be their service/ product and their employees, rather than investors.

Sent from my SM-N900V using Tapatalk

[whell]

Originally Posted by Pio1980

Investment is ok get a return for providing capital, but the enterprise's primary priority should be their service/ product and their employees, rather than investors.

Sent from my SM-N900V using Tapatalk

In reality, I think its a balance. If you don't prioritize the needs of investors, you negatively impact market capitalization if you're a publicly traded company. But even in a publicly traded company, investors would support a business strategy that balances their needs against those of the customer and the employees if the strategy was successful.

On the other hand, if you want to strictly favor investors, take or keep the company private and pursue whatever business strategy makes sense. If the strategy works, customers will beat a path to your product and folks will want to work for a successful company that provides opportunities. If the strategy doesn't work, well...failed enterprises are not uncommon either.

[Oerets]

How just is our tax system when the wealthy pay property taxes based upon the value assessed. The higher the value the higher the tax. Commercial property valued differently then residential. But when it comes to business or personal income less is better? Why the difference?






Barney

[donquixote99]

Thanks for the actual data, Boreas. Looking at it, I think it's possible that a low capital gains tax incentivizes investment when growth is expected or happening, and encourages disinvestment when low growth or recession is expected or happening. Will tend to add volatility, therefore. An interesting question for research perhaps.