Chucky
10th December 2010, 06:24 PM
A Suggestion:
What would happen if we essentially flipped the current rates of payroll tax with capitols gains taxes? Adjusting them, more or less, so that longer term capital gains taxes go up to the 25 to 28% range payroll taxes and payroll taxes down to 15% to 10% range. The purpose is to give the average American an additional 15% or so in their paycheck.
We haven’t had a payroll holiday in about 30 years. Perhaps it’s time to focus our greatest effort on getting more money in the hands of most of the populous. An economy falters when great amounts of money don’t flow adequately through the bloodstream. Tax cuts help, but not as effective in the end as having customers who can still afford to buy a little more out of pocket. Without sufficient consumer demand, there is no profit. In part provide a way for all consumers to pay more for a more modular, durable standard rather than only the cheap and disposable. How about some Mil-spec household goods baby? :) When was the last time you saw that segment of the market?
As for capital gains, there could be numerous ways of balancing short term investments against long term investments in this situation. At a higher rate perhaps some of the differences will dissolve. My understanding is that the purpose of capital gains taxes is to ultimately to encourage long term investing. The short term rates would continue to be even be higher (or within some balance struck between longer and shorter term rates). Perhaps, for a year or so, might it make sense to have a break on short term rates so that capital that needs to change hands can before higher rates go into effect. I don’t know. But in any case, putting the longer term rates higher than they are now, by about 10%, is more likely then to make people hold on to their investments.
Now all this would certainly mean a difference in how business is done in that segment of the market. Long term stodgy holdings were the rule when we grew to the world’s premier and first modern super power in the 50’s and 60’s. If so, it can’t be all that bad of a strategy. At worst, the gains you make come slower. Adequate, but boring. Yet look at the mess we’ve been in with first the tech stock crash at the beginning of the decade and then the housing bubble / financial industry catastrophe, now just past its third anniversary when 95% of Americans, and most of the top 2% as well, couldn’t keep pace with the gigantic expansion of the last decade. It’s more difficult to plan now, period. And there will still be ever more options for investors in the future. But if 95% of us can afford more options than we can now, we have a some way to cope. And perhaps a slower pace of business results, as I guess it might, most of us may be able to make more stable long term investments.
I believe the consumer market will be kicked into full recovery in 5 years or less if the middle class tax stimulus that appears apparent this year through the tax cuts can be turned into comparable wages over the next 4 after that. And by pushing up the capital gains tax to where we are seeing more revenue out of it, particularly in the stock market which gets a lot of the low capitol gains benefit. We would put the stock market to work more for everyone in this country, not only its investors, by getting more revenue of it and other such holdings to keep the government providing an expanding investment environment and to also use it to begin paying down the deficit.
What would happen if we essentially flipped the current rates of payroll tax with capitols gains taxes? Adjusting them, more or less, so that longer term capital gains taxes go up to the 25 to 28% range payroll taxes and payroll taxes down to 15% to 10% range. The purpose is to give the average American an additional 15% or so in their paycheck.
We haven’t had a payroll holiday in about 30 years. Perhaps it’s time to focus our greatest effort on getting more money in the hands of most of the populous. An economy falters when great amounts of money don’t flow adequately through the bloodstream. Tax cuts help, but not as effective in the end as having customers who can still afford to buy a little more out of pocket. Without sufficient consumer demand, there is no profit. In part provide a way for all consumers to pay more for a more modular, durable standard rather than only the cheap and disposable. How about some Mil-spec household goods baby? :) When was the last time you saw that segment of the market?
As for capital gains, there could be numerous ways of balancing short term investments against long term investments in this situation. At a higher rate perhaps some of the differences will dissolve. My understanding is that the purpose of capital gains taxes is to ultimately to encourage long term investing. The short term rates would continue to be even be higher (or within some balance struck between longer and shorter term rates). Perhaps, for a year or so, might it make sense to have a break on short term rates so that capital that needs to change hands can before higher rates go into effect. I don’t know. But in any case, putting the longer term rates higher than they are now, by about 10%, is more likely then to make people hold on to their investments.
Now all this would certainly mean a difference in how business is done in that segment of the market. Long term stodgy holdings were the rule when we grew to the world’s premier and first modern super power in the 50’s and 60’s. If so, it can’t be all that bad of a strategy. At worst, the gains you make come slower. Adequate, but boring. Yet look at the mess we’ve been in with first the tech stock crash at the beginning of the decade and then the housing bubble / financial industry catastrophe, now just past its third anniversary when 95% of Americans, and most of the top 2% as well, couldn’t keep pace with the gigantic expansion of the last decade. It’s more difficult to plan now, period. And there will still be ever more options for investors in the future. But if 95% of us can afford more options than we can now, we have a some way to cope. And perhaps a slower pace of business results, as I guess it might, most of us may be able to make more stable long term investments.
I believe the consumer market will be kicked into full recovery in 5 years or less if the middle class tax stimulus that appears apparent this year through the tax cuts can be turned into comparable wages over the next 4 after that. And by pushing up the capital gains tax to where we are seeing more revenue out of it, particularly in the stock market which gets a lot of the low capitol gains benefit. We would put the stock market to work more for everyone in this country, not only its investors, by getting more revenue of it and other such holdings to keep the government providing an expanding investment environment and to also use it to begin paying down the deficit.