From: byer@adobe.com (Scott Byer)
Newsgroups: rec.bicycles.soc
Subject: Re: Gas subsidies and taxes (was Re: Bicyc
Date: 14 Sep 92 17:02:52 GMT
Reply-To: byer@adobe.com (Scott Byer)
Organization: Adobe Systems Incorporated

Ted Lemon writes

> If you read the article that I most recently posted, you'll see that
> I don't disagree with you on this subject.   I think that a long-term
> capital gains tax reduction is a good thing.   However, no capital
> gains tax, which you seem to favour, doesn't seem like a good thing
> - it would mean that people who work to earn a living don't pay as
> much tax as people who live off of their investments, and that hardly
> seems fair.

Nor is it fair to tax me twice for my earnings - once through income
taxes, and then, when I try and have my savings keep up with inflation,
I get taxes on that gain - most of which *is* inflation.  And this is
what happens to the small middle-class investor who is just trying to
keep up with inflation.  It's the small guy that the capital gains
tax hurts the most.

And even if the capital gains tax is indexed to inflation, why should
any earnings I get from investing wisely be taxed, when that money
has already been taxed?  It should be outside the system at that point,
so that I am free to do with as I please.

If someone is industrious enough to work up a capital base large enough
to live off of the investment income, more power to them.  That's
*hard* work.  Paying attention to investments enough to consistently
gain income to live off of is harder than most of the jobs that people
'work' at.  And it's very likely that their continued investing of
the money that would have been taxed would help the economy far more
than the government's redistribution of that skimmed capital - if they
didn't invest wisely and in productive technologies, they wouldn't be
able to live off of the capital gains, would they?  Someone who doesn't
pay full-time attention to their investments is heavily 'taxed',
through inflation, fees, and other overheads incurred.

>> U.S.'s income taxes, when all added up - federal, state, and local,
>> very nearly 50%.

>  Only if you're on the hump - 50 - 250k.   Taxation beyond that point
> gets much lower.

That only indicates that deductions have gotten out of hand.  It
*doesn't* indicate that we should go around trying to 'tax the rich'
- doing that always has second order effects such as increasing the
complexity of the tax code, adding deductions which incorrectly direct
the money of the people taxed to go after those deductions, and in
general ends up hitting the middle class the worst.

If you want a fair tax system, simplify it.

> In overall percentage of the GDP, the U.S. is *at* the bottom (according
> to Harper's Index, FWIW).

Oooh, *that's* a real argument for increased taxation. :-)  No, that
just indicates that the U.S. is efficient at producing things, not
that taxes are low.  The U.S. would be even *more* efficient at producing
things if taxes were lowered - especially those taxes (like capital
gains) that discourage investment in future efficiency.

--
Scott Byer                             NeXTMail: byer@mv.us.adobe.com
Adobe Systems Incorporated               These are *my* opinions, and  
1585 Charleston Road, P.O. Box 7900        do not necessarily reflect
Mountain View, CA 94039-7900             the opinions of my employer.
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