The ultimate vindication of Republican supply-side economics

[itfitzme]

I'm going to take money away from myself, then give it back to myself. With all the extra money I give myself, I'll be rich.

Perhaps you forgot that expanding businesses causes economic expansion. Since business will be expanding using their own money rather than government supplied Keynesian money the National Debt (ND) should nominally remain the same. So in addition to reducing unemployment this activity will increase GDP, lower ND to GDP ratio, and stabilize prices over the long run since business expansion will increase future supply to meet future expanded demand. More detail of the mechanics and benefits are delineated in my article. Try reading the last section to evaluate it fully. Reduce Unemployment with Little Price Increase

I hope that you will take the time to read more than the first sentence of my posting this time.

Interestingly enough, you admit that raising taxes on them is a loss to them. You even indicated that taxing them might induce them to expand (really?). then you say to give them their own money back. Why not just let them keep the money to begin with so that they can use it as capitol for whatever their business needs? I fail to see how taking it from them in the first place, only to give it back to them, does anybody any good. the initial taking of the tax money means that money isn't in the business owners hands to use. That's like telling me you are going to take my vacuum cleaner from me, but right after I vacuum my house, you'll give it back to me.

That must be what the point of the work "credit" is. The credit reduces their tax burden. That's how a credit works, it is subtracted from the taxes so the company never pays it. The government doesn't give it back, they never receive it in the first place.

It would be like you that I am going to take away your vacuum cleaner if you don't vacuum. Then, when you vacuum, you get to keep it.

So let's see how this works. The tax rate is 30%. If the company invests 5% in capital equipment for expansion, then get a tax credit of 5%. So when they pay their taxes, they pay 25%. The IRS then collects 25% instead of 30%. Yep, that is not the government taking it and giving it back. That is the government never taking it in the first place.

That was the key, the word "credit".

 

[Foxfyre]

Again you guys can post all the graphs and charts and statistics you want, but you won't be able to disprove the simplest truths of the matter.

--
The simple theory is that tax cuts increase GDP. And, the 2003 Bush Tax cuts demonstrate it in causing the annualized quarterly percent change in RGDP to be 6.7%. 6.7% is a statistic.

That's great. 6.7% sure seems like a big number. But we should compare it to something.

In quarter two of 1978 is was 16.7%. In quarter 4 of 1980 is was 7.6% followed by 8.6% in quarter 1 of 1981. The quarters from 1983 quarter 2 through 1984 quarter 2 were 7.1% to 9.3%. Quarter 2 of 2000 was 8%.

2003q3 isn't so big by comparison. The question is, why was the 2003 Bush Tax so low?

Why start with a "simple theory" then go find something that looks like it supports it? Why not start with something that is really big, then figure out what happened then and do it again?

Maybe we should do whatever we did in those quarters.

Here is a full list.

Quarter %Chg
1971q1 11.50%
1972q1 7.30%
1972q2 9.80%
1972q4 6.80%
1973q1 10.60%
1975q3 6.90%
1976q1 9.40%
1977q2 8.20%
1977q3 7.40%
1978q2 16.70%
1980q4 7.60%
1981q1 8.60%
1983q2 9.30%
1983q3 8.10%
1983q4 8.50%
1984q1 8.00%
1984q2 7.10%
1987q4 7.00%
1996q2 7.10%
1998q4 7.10%
1999q4 7.40%
2000q2 8.00%

Why not do these?

Only if you can show that 'what we did' is what produced the numbers. There is no way that a change in tax policy produces a radical change in a single quarter unless it is so radical that it triggers a panic.

The point I am trying to make is that tax policy is only one of numerous factors that affect economic activity and it generally takes some time before the effect is fully felt. Any any number of factors can also trigger a sharp uptick or downturn in any given quarter. If you have ever run a business, you know that. If you have not, then you are at the mercy of what you read and suppose.

Again your charts, graphs, and lists show the trends. But they in no way show all the factors that went into those trends. We can say based on experience that certain changes in tax policy cause certain effects, but you still have to look at the whole big picture to arrive at the reason for a strong GDP versus a weak one in any given quarter.

 

[alan1]

Perhaps you forgot that expanding businesses causes economic expansion. Since business will be expanding using their own money rather than government supplied Keynesian money the National Debt (ND) should nominally remain the same. So in addition to reducing unemployment this activity will increase GDP, lower ND to GDP ratio, and stabilize prices over the long run since business expansion will increase future supply to meet future expanded demand. More detail of the mechanics and benefits are delineated in my article. Try reading the last section to evaluate it fully. Reduce Unemployment with Little Price Increase

I hope that you will take the time to read more than the first sentence of my posting this time.

Interestingly enough, you admit that raising taxes on them is a loss to them. You even indicated that taxing them might induce them to expand (really?). then you say to give them their own money back. Why not just let them keep the money to begin with so that they can use it as capitol for whatever their business needs? I fail to see how taking it from them in the first place, only to give it back to them, does anybody any good. the initial taking of the tax money means that money isn't in the business owners hands to use. That's like telling me you are going to take my vacuum cleaner from me, but right after I vacuum my house, you'll give it back to me.

That must be what the point of the work "credit" is. The credit reduces their tax burden. That's how a credit works, it is subtracted from the taxes so the company never pays it. The government doesn't give it back, they never receive it in the first place.

It would be like you that I am going to take away your vacuum cleaner if you don't vacuum. Then, when you vacuum, you get to keep it.

So let's see how this works. The tax rate is 30%. If the company invests 5% in capital equipment for expansion, then get a tax credit of 5%. So when they pay their taxes, they pay 25%. The IRS then collects 25% instead of 30%. Yep, that is not the government taking it and giving it back. That is the government never taking it in the first place.

That was the key, the word "credit".

He specifically said to tax them (take the money), then give it back.

so they could get their tax losses back.

 

[itfitzme]

Again you guys can post all the graphs and charts and statistics you want, but you won't be able to disprove the simplest truths of the matter.

--
The simple theory is that tax cuts increase GDP. And, the 2003 Bush Tax cuts demonstrate it in causing the annualized quarterly percent change in RGDP to be 6.7%. 6.7% is a statistic.

That's great. 6.7% sure seems like a big number. But we should compare it to something.

In quarter two of 1978 is was 16.7%. In quarter 4 of 1980 is was 7.6% followed by 8.6% in quarter 1 of 1981. The quarters from 1983 quarter 2 through 1984 quarter 2 were 7.1% to 9.3%. Quarter 2 of 2000 was 8%.

2003q3 isn't so big by comparison. The question is, why was the 2003 Bush Tax so low?

Why start with a "simple theory" then go find something that looks like it supports it? Why not start with something that is really big, then figure out what happened then and do it again?

Maybe we should do whatever we did in those quarters.

Here is a full list.

Quarter %Chg
1971q1 11.50%
1972q1 7.30%
1972q2 9.80%
1972q4 6.80%
1973q1 10.60%
1975q3 6.90%
1976q1 9.40%
1977q2 8.20%
1977q3 7.40%
1978q2 16.70%
1980q4 7.60%
1981q1 8.60%
1983q2 9.30%
1983q3 8.10%
1983q4 8.50%
1984q1 8.00%
1984q2 7.10%
1987q4 7.00%
1996q2 7.10%
1998q4 7.10%
1999q4 7.40%
2000q2 8.00%

Why not do these?

Only if you can show that 'what we did' is what produced the numbers. There is no way that a change in tax policy produces a radical change in a single quarter unless it is so radical that it triggers a panic.

The point I am trying to make is that tax policy is only one of numerous factors that affect economic activity and it generally takes some time before the effect is fully felt. Any any number of factors can also trigger a sharp uptick or downturn in any given quarter. If you have ever run a business, you know that. If you have not, then you are at the mercy of what you read and suppose.

Again your charts, graphs, and lists show the trends. But they in no way show all the factors that went into those trends. We can say based on experience that certain changes in tax policy cause certain effects, but you still have to look at the whole big picture to arrive at the reason for a strong GDP versus a weak one in any given quarter.

Well, that's just a bunch of vague bs. You know it must be true because in theory it must be and you can just feel it.

So there are so many factors that go into effecting unemployment and GDP that it's not possible to show it, after all, the effect is there, it just can't be seen among all those other factors.

That is nothing but pure bs. What you mean is that there is no effect except that you believe it must be true.

The reality is that if you can't measure it, it doesn't mean anything. And if it means something, it is measurable.

"You still have to look at the whole big picture to arrive at the reason for a strong GDP"

In other words, you make it up as you go along, changing your mind every time something changes.

It reminds me of the daily stock market reports "Today's market was [bullish/bearish] as investors reacted to [insert headline here]". Now there is a job, just make it up as you go along.

 

[itfitzme]

Interestingly enough, you admit that raising taxes on them is a loss to them. You even indicated that taxing them might induce them to expand (really?). then you say to give them their own money back. Why not just let them keep the money to begin with so that they can use it as capitol for whatever their business needs? I fail to see how taking it from them in the first place, only to give it back to them, does anybody any good. the initial taking of the tax money means that money isn't in the business owners hands to use. That's like telling me you are going to take my vacuum cleaner from me, but right after I vacuum my house, you'll give it back to me.

That must be what the point of the work "credit" is. The credit reduces their tax burden. That's how a credit works, it is subtracted from the taxes so the company never pays it. The government doesn't give it back, they never receive it in the first place.

It would be like you that I am going to take away your vacuum cleaner if you don't vacuum. Then, when you vacuum, you get to keep it.

So let's see how this works. The tax rate is 30%. If the company invests 5% in capital equipment for expansion, then get a tax credit of 5%. So when they pay their taxes, they pay 25%. The IRS then collects 25% instead of 30%. Yep, that is not the government taking it and giving it back. That is the government never taking it in the first place.

That was the key, the word "credit".

He specifically said to tax them (take the money), then give it back.

so they could get their tax losses back.

Sorry, thought I read "credit" in there. It has to be a credit. It makes no sense otherwise.

 

[stans]

I'm going to take money away from myself, then give it back to myself. With all the extra money I give myself, I'll be rich.

Perhaps you forgot that expanding businesses causes economic expansion. Since business will be expanding using their own money rather than government supplied Keynesian money the National Debt (ND) should nominally remain the same. So in addition to reducing unemployment this activity will increase GDP, lower ND to GDP ratio, and stabilize prices over the long run since business expansion will increase future supply to meet future expanded demand. More detail of the mechanics and benefits are delineated in my article. Try reading the last section to evaluate it fully. Reduce Unemployment with Little Price Increase

I hope that you will take the time to read more than the first sentence of my posting this time.

Interestingly enough, you admit that raising taxes on them is a loss to them. You even indicated that taxing them might induce them to expand (really?). then you say to give them their own money back. Why not just let them keep the money to begin with so that they can use it as capitol for whatever their business needs? I fail to see how taking it from them in the first place, only to give it back to them, does anybody any good. the initial taking of the tax money means that money isn't in the business owners hands to use. That's like telling me you are going to take my vacuum cleaner from me, but right after I vacuum my house, you'll give it back to me.

"We could if we induced businesses to expand by raising their taxes and simultaneously making them eligable for tax credits for expansion so they could get their tax losses back".

Did you happen to read the word SIMULTANEOUSLY in the sentence that you quoted? Your argument could be construed as correct without it, although the plan's intent without the word "simultaneously" expressly included should be understood by someone who stops and thinks about the plan instead of blindly trying to invalidate it.


And businesses, especially public one's, will expand when their competition pays less taxes due to tax credits and SIMULTANEOULY begin to expand. Don't expand, pay more taxes , and then explain the losses to your stockholders as your stock price plummets because of lower income.

Read the last section of the referenced article to get the full picture and your comments will be appreciated.

"Why not just let them keep the money to begin with so that they can use it as capitol for whatever their business needs?"

Because they're pulling back in hard economic times doing nothing with their money. The plan induces them to expand which should be beneficial to them and everyone else. FYI, Andrew Carnegie, once the world's richest man and owner, creater, and builder of US Steel
in the last half of the 19th century, would only expand during economic downturns when no one else did, as now. His business was private so that expansion in downturns was his determination which he was extremely successful at.

 

[stans]

Gentlemen, I've been watching this battle of the cut and paste with some interest and I while I applaud the detail in the debate, I think you may be spinning your wheels or comparing apples to oranges or pick your metaphor.

There are so many factors involved such as dropping large numbers of people off the rolls entirely when the rates were reduced as happened in the Bush Administration to the phenomenon of the rise of the S Corp and LLCs as American business has tried to cope with the tax code--the number of C Corps have been declining for some time now--as well to the changing formulas for how the GDP is calculated.

And different kinds of taxes will not have the same effect as other kinds of taxes. Reducing payroll taxes for employees, for instance, has almost negligible effect on the GDP while reducing capital gains taxes with a guarantee of the rate for a reasonable period could show a considerable surge in economic activity that would likely show up in the GDP.
To really assess cause and effect of taxes, you almost have to look at each separate income generating group and their specific activity. There is a good discussion here with the summary posted:

If you go here http://www.irs.gov/pub/irs-soi/05in01aan.xls
and do a little arithmatic you will see that from 1980 through 2004 salaries and wages taxed averaged 22.3 times as much as capital gains taxed. So you're saying that less than 5% of the taxed money could account for significant gains in the GDP while 95% of the taxed money accounted for no gains. Dream on! Everything that you post is your biased personal opinion with absolutely nothing to back it up. When you reference something you don't give page or paragraph numbers so that what your referencing is easily identifiable. I won't try to convince you of anything anymore.

That isn't what I said at all, and if that is what you got out of my post, you probably need a remedial reading refresher. If you can just take it out of the microeconomic mentality and look at the larger picture of cause and effect, how various tax policy affects short term and long term behavior, and all the other variables involved, you come to much different conclusions than what you have seemed to be promoting here. Much more has to be considered than just figuring how much immediate revenue can be generated by increasing X tax on X.

I thought that the red highlighted text preceded by the sentence "And different kinds of taxes will not have the same effect as other kinds of taxes." said, reduce employee payroll effects and get no GDP increase while reduce capital gains taxes (with long term guarantees) and you COULD get increased economic activity. "Could", promising no cause and effect. Saying nothing. So now you interpret your inability to express yourself as my lack of reading comprehension. Comparing two types of taxes that you specified, I commented on EXACTLY what you said. Specifically, how did I not? You stated your unfounded opinion without checking the numerical facts. You cloud everything that you say up by stating combinations of effects that are so complicated that they are impossible to analyze. And, then you can state your unfounded opinion without being challenged. I just happened to be aware of the relative sizes of sources of government income and you got caught.

 

[Foxfyre]

If you go here http://www.irs.gov/pub/irs-soi/05in01aan.xls
and do a little arithmatic you will see that from 1980 through 2004 salaries and wages taxed averaged 22.3 times as much as capital gains taxed. So you're saying that less than 5% of the taxed money could account for significant gains in the GDP while 95% of the taxed money accounted for no gains. Dream on! Everything that you post is your biased personal opinion with absolutely nothing to back it up. When you reference something you don't give page or paragraph numbers so that what your referencing is easily identifiable. I won't try to convince you of anything anymore.

That isn't what I said at all, and if that is what you got out of my post, you probably need a remedial reading refresher. If you can just take it out of the microeconomic mentality and look at the larger picture of cause and effect, how various tax policy affects short term and long term behavior, and all the other variables involved, you come to much different conclusions than what you have seemed to be promoting here. Much more has to be considered than just figuring how much immediate revenue can be generated by increasing X tax on X.

I thought that the red highlighted text preceded by the sentence "And different kinds of taxes will not have the same effect as other kinds of taxes." said, reduce employee payroll effects and get no GDP increase while reduce capital gains taxes (with long term guarantees) and you COULD get increased economic activity. "Could", promising no cause and effect. Saying nothing. So now you interpret your inability to express yourself as my lack of reading comprehension. Comparing two types of taxes that you specified, I commented on EXACTLY what you said. Specifically, how did I not? You stated your unfounded opinion without checking the numerical facts. You cloud everything that you say up by stating combinations of effects that are so complicated that they are impossible to analyze. And, then you can state your unfounded opinion without being challenged. I just happened to be aware of the relative sizes of sources of government income and you got caught.

Sorry, but I prefer to blame reading incomprehension for those who can't seem to make their point without going ad hominem or making assumption about what somebody has or has not done or mischaracterizing what somebody else said. I see 'reading incomprehension' as more kind than other characterizations I could use for that particular phenomenon. Most especially when they think my opinions are too complicated to analyze.

But is being 'too complicated to understand', though accurate, preferable to over simplifying a very intricate, complicated economic principle given so many myriad variables? Awhile back Walter Willliams offered a terrific essay showing how complex our economy actually is by illustrating all the different components, and the hundreds or thousands of people involved in putting a single can of tuna on the grocer's shelf. And any one of all of those components will factor into the price that will be on that can of tuna AND the influence that it will have on the overall economy.

Tax policy is only one of all those various factors.

"Could" is the correct term in a free country where people are not required to invest or risk their capital. Reducing capital gains tax COULD provide incentive for those holding capital property to put it back into the economy, and the greater the incentive the more likely that will be. It does not REQUIRE them to do so, however, and if any number of other factors make it unattractive or impracticabl to do so, dropping the tax to zero won't generate economic activity. It is a guarantee that raising taxes will not provide incentive to generate economic activity while separate factors can generate economic activity despite a tax increase.

Currently Americans are sitting on trillions of dollars of investment capital both here at home and stashed overseas, because the risk of losing it if they put it back into the economy is too great. Create the right kind of business friendly environment, however, along with tax and regulation policy that provides some guarantees of stability, and that COULD provide incentive for that investment capital to be released and thereby end the current recession. The current administration seems gung ho to do the exact opposite of what would accomplish that, however.

 

[stans]

"Could" is ALWAYS meaningless economically because you prove or disprove nothing if you use it in an argument. You have no understanding of the meaning of cause and effect in economics. To prove something you have to either isolate it, which economically is next to impossible, or show that it works on the average more often than not. "Could" is an excuse to cloudy the waters. For example: Say that the last ten times that capital gains taxes were lowered by more than, say, 5% that GDP increased annually by 10% for the next 3 years. Say that on the 11th time CG taxes were reduced by more than 5% GDP decreased annually by 10% for the next three years. Are you going to say that was because investors decided not to invest? Why did they decide not to invest? Something else economically more powerful than decreasing CG taxes occured. And you haven't the faintest idea. You just state your unfounded opinions and have absolutely no understanding of economics.

Who said this? "Most especially when they think my opinions are too complicated to analyze." No statement of cause and effect, just meaningless opinions.

 

[EdwardBaiamonte]

You just state your unfounded opinions and have absolutely no understanding of economics.

it really very simple, just not to a liberal. A cap. gains tax will discourage investment, not encourage it.

here's a simple example that even a liberal can understand: if you put a tax on going to baseball games will that encourage or discourage people to attend games???

 

[itfitzme]

You just state your unfounded opinions and have absolutely no understanding of economics.

it really very simple, just not to a liberal. A cap. gains tax will discourage investment, not encourage it.

here's a simple example that even a liberal can understand: if you put a tax on going to baseball games will that encourage or discourage people to attend games???

Bullshit false choice question. It wouldn't do either. There is a sales tax on tickets to baseball games.

Investment in stock isn't made based on the tax, it's made based on the expected ROI.

This is why a wingnut positively cannot understand economics. It's too complicated.

 

[Foxfyre]

"Could" is ALWAYS meaningless economically because you prove or disprove nothing if you use it in an argument. You have no understanding of the meaning of cause and effect in economics. To prove something you have to either isolate it, which economically is next to impossible, or show that it works on the average more often than not. "Could" is an excuse to cloudy the waters. For example: Say that the last ten times that capital gains taxes were lowered by more than, say, 5% that GDP increased annually by 10% for the next 3 years. Say that on the 11th time CG taxes were reduced by more than 5% GDP decreased annually by 10% for the next three years. Are you going to say that was because investors decided not to invest? Why did they decide not to invest? Something else economically more powerful than decreasing CG taxes occured. And you haven't the faintest idea. You just state your unfounded opinions and have absolutely no understanding of economics.

Who said this? "Most especially when they think my opinions are too complicated to analyze." No statement of cause and effect, just meaningless opinions.

Okay. You obviously think your arguments are brilliant, because you cut and paste lots of numbers that you haven't supported with anything, and my arguments are ignorant and without substance or foundation because you can't a) understand them or b) dispute them or c) don't want to believe them. And that's okay. I'll concentrate on folks bright enough to follow my argument.

But the reason they could decide not to invest despite a CG reduction could include any or all of the following plus hundreds of other variables:

1) Government mandates (wages, materials used, mandatory union wages, etc. etc. etc.) enacted or threatened.
2) Unacceptable or unprofitable government regulation. (Oppressive environmental requirements for one.)
3) Obamacare that is a huge mandate/tax increase hanging over their heads.
4) Cap & Trade that will be put into effect as soon as the administration can stack Congress with enough people to pass it. (Another huge mandate/regulatory nightmare/tax increase hanging over their heads.)
5) Three years is nowhere near long enough for many high end projects. Ten years provides more incentive (which is why the Bush tax policy was so well received) and fifteen or twenty or implied permanent is far better.
6) Enacted or threatened other taxes or fees that affect the bottom line.
6) Other factors include but are not limited to availability of raw materials, unrest or disruption of markets, cost of transportation, availability of qualified labor, etc.

 

[EdwardBaiamonte]

Bullshit false choice question. It wouldn't do either. There is a sales tax on tickets to baseball games.

dear, the question was, if you put a tax on baseball tickets would sales go up or down??????? Are you afraid to answer the question, as a liberal?

Investment in stock isn't made based on the tax, it's made based on the expected ROI.

too stupid but perfectly liberal. The higher the tax the higher the ROI must be to meet ones net objectives. Or, to be even easier for a liberal: the more cap gains you tax the less there is to invest. In venture capital we say: the more the tax the fewer shots on goal we can take. This means fewer new ventures like Intel Apple Google HP Cisco, etc etc. Not so hard is it?

 

[Toddsterpatriot]

You just state your unfounded opinions and have absolutely no understanding of economics.

it really very simple, just not to a liberal. A cap. gains tax will discourage investment, not encourage it.

here's a simple example that even a liberal can understand: if you put a tax on going to baseball games will that encourage or discourage people to attend games???

Bullshit false choice question. It wouldn't do either. There is a sales tax on tickets to baseball games.

Investment in stock isn't made based on the tax, it's made based on the expected ROI.

This is why a wingnut positively cannot understand economics. It's too complicated.

Investment in stock isn't made based on the tax, it's made based on the expected ROI.


Interesting. So the tax doesn't change the expected ROI?

 

[Foxfyre]

You just state your unfounded opinions and have absolutely no understanding of economics.

it really very simple, just not to a liberal. A cap. gains tax will discourage investment, not encourage it.

here's a simple example that even a liberal can understand: if you put a tax on going to baseball games will that encourage or discourage people to attend games???

Bullshit false choice question. It wouldn't do either. There is a sales tax on tickets to baseball games.

Investment in stock isn't made based on the tax, it's made based on the expected ROI.

This is why a wingnut positively cannot understand economics. It's too complicated.

You honestly believe that a capital gains tax does not affect the ROI?

If you're running a lemonade stand and you have a 25% risk of losing your investment in lemons, sugar, and advertising, you might think that is an acceptable risk. But if the city tells you that they will take 30% of any profits you make, would you still consider it an acceptable risk?

 

[itfitzme]

Bullshit false choice question. It wouldn't do either. There is a sales tax on tickets to baseball games.

dear, the question was, if you put a tax on baseball tickets would sales go up or down??????? Are you afraid to answer the question, as a liberal?

Investment in stock isn't made based on the tax, it's made based on the expected ROI.

too stupid but perfectly liberal. The higher the tax the higher the ROI must be to meet ones net objectives. Or, to be even easier for a liberal: the more cap gains you tax the less there is to invest. In venture capital we say: the more the tax the fewer shots on goal we can take. This means fewer new ventures like Intel Apple Google HP Cisco, etc etc. Not so hard is it?

It depends on the price elasticity. The price elasticity depends on willingness to pay which is dependent on other factors, like alternatives.

In the case of a house, listed at $950k, raising the price to $1 mill often results in a faster sale.

What do you think it will do? Do you think it will go up or stay the same?

Of course, anyone that actually thinks about it, must be a liberal.

Just goes to prove it's all to complicated for a stupid wing nut.

 

[itfitzme]

it really very simple, just not to a liberal. A cap. gains tax will discourage investment, not encourage it.

here's a simple example that even a liberal can understand: if you put a tax on going to baseball games will that encourage or discourage people to attend games???

Bullshit false choice question. It wouldn't do either. There is a sales tax on tickets to baseball games.

Investment in stock isn't made based on the tax, it's made based on the expected ROI.

This is why a wingnut positively cannot understand economics. It's too complicated.

You honestly believe that a capital gains tax does not affect the ROI?

If you're running a lemonade stand and you have a 25% risk of losing your investment in lemons, sugar, and advertising, you might think that is an acceptable risk. But if the city tells you that they will take 30% of any profits you make, would you still consider it an acceptable risk?

Why not be realistic instead of making up bullshit examples?

You have $1mil to put into either bonds at 5% with near zero risk. Or you can invest in a stock portfolio at 20% with a 20% risk short term and near zero risk long term. The other alternative is to put it in a savings account at .75%. The capital gains tax is 35%.

The capital gains tax is raised from 35% to 40%.

Would you decide to keep the money in the bank, net negative compared to the cost of living, and give up making $120,000? Or would you choose the original option, caring less about the $10,000 that you "didn't make" because the capital gains tax went up?

What is the difference in risk, given a 5% increase in the capital gains tax?

What is the difference in cost benefit ratio between the three available options?

Is that how you think, "I could have made $120,000 dollars but the capital gains tax went up so I'm going to stick it all in a savings account"?

Or do you think, "Now that the capital gains tax has gone up by 5%, the stock portfolio is too risky so I'm putting it in bonds."?

Perhaps your right. The biggest joke between economists is the "rational economic agent". I'm sure that is exactly what investors do, get all passive aggressive and refuse to make money because that mean government punishes them for just trying to make money. Yeah, that's it. "I'm so mad!!!"

Really, you base your decisions on sunk costs and what didn't happen?

 

[itfitzme]

Bullshit false choice question. It wouldn't do either. There is a sales tax on tickets to baseball games.

dear, the question was, if you put a tax on baseball tickets would sales go up or down??????? Are you afraid to answer the question, as a liberal?

Investment in stock isn't made based on the tax, it's made based on the expected ROI.

too stupid but perfectly liberal. The higher the tax the higher the ROI must be to meet ones net objectives. Or, to be even easier for a liberal: the more cap gains you tax the less there is to invest. In venture capital we say: the more the tax the fewer shots on goal we can take. This means fewer new ventures like Intel Apple Google HP Cisco, etc etc. Not so hard is it?

Really, that's what you say in your venture capital investments? How has that capital investment program been going for you? You must be on your yacht, posting comments on this forum with your satellite internet connection.

 

[itfitzme]

it really very simple, just not to a liberal. A cap. gains tax will discourage investment, not encourage it.

here's a simple example that even a liberal can understand: if you put a tax on going to baseball games will that encourage or discourage people to attend games???

Bullshit false choice question. It wouldn't do either. There is a sales tax on tickets to baseball games.

Investment in stock isn't made based on the tax, it's made based on the expected ROI.

This is why a wingnut positively cannot understand economics. It's too complicated.

Investment in stock isn't made based on the tax, it's made based on the expected ROI.


Interesting. So the tax doesn't change the expected ROI?

Yeah, I can tell you carefully crafted that question based on your MBA, economics education, and years of investment experience.

You are as dumb as a nut.

 

[Toddsterpatriot]

Bullshit false choice question. It wouldn't do either. There is a sales tax on tickets to baseball games.

Investment in stock isn't made based on the tax, it's made based on the expected ROI.

This is why a wingnut positively cannot understand economics. It's too complicated.

Investment in stock isn't made based on the tax, it's made based on the expected ROI.


Interesting. So the tax doesn't change the expected ROI?

Yeah, I can tell you carefully crafted that question based on your MBA, economics education, and years of investment experience.

You are as dumb as a nut.

You made a stupid comment, I pointed out your stupidity.

Maybe you should create a chart with more bad numbers?