GOP's not-so-secret weakness: unfairness

If your argument is that capital gains from monetizing sweat equity is different than capital gains from gambling on the stock market and therefore should be taxed differently, I think almost everyone here would agree with you. I certainly would.

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What do you mean by that? This is not a faecetious question, I don’t understand what you are talking about. How is this money “taken from the rest of society” in a manner different from the way any expense is passed on to consumers; e.g., salaries of gas-station attendants and environmental fines are added to the price-per-gallon? If money doesn’t come from the rest of society at some point, where does it come from?

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It’s interesting that some folks seem to define “fair” in such a way that it seems to make no sense to strive for it.

“Justice” could be similarly defined, and yet the United States has a Department of Justice that oversees a justice system that – despite all of its many, many flaws – does allow Americans to strive for some level of justice.

There are many such subjective concepts embedded in our system of government. Security, Liberty, Happiness … hell, the concept of Life is a little fuzzy around the edges.

Sure, life is unfair. Life is also eventually fatal. When someone is murdered or dies of a condition that could have been helped, should we just shrug and say, “Oh well, everyone dies”?

Requires? No, not always.

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There’s nothing like a windfall profit to make someone suddenly have a strong opinion of the Capital Gains tax.

Presumably you were paying yourself to work while building the company, right? Do you think that labor deserved to be taxed higher than when you got your big payday? If so, why?

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That’s an advertising jingle, not a policy.

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We’re talking about conservatives here.

It is what we make of it. It’s a better sentiment than ‘I got mine, now you go blow’, which I believe is word-for-word in the GOP platform.

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This is the unfortunate hole in the “not-so-secret weakness” of the GOP. There are a lot of people who have decided that “fair” is just an empty word. Children think that “fairness” is making sure no one gets more than you do - I think politicians pushing this kind of agenda latch onto that and convince people there is nothing more than that to the concept of fairness. I’m not sure people think it is important to be fair. And voter turnout has been driven down to mostly include only inflamed authoritarian followers who will go along with whatever they are told.

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I love how some of the comments focus on “What is fair”. In truth many arguments in the political arena are around this very question…What is fair?

So lets analogize the argument and remove money from the equation to illustrate how fair is indeed fair and exactly how it works.

There are 3 of us that need to move some boxes. There are 3 boxes. One is a 20lb box, the next a 40lb box, and the last is an 80lb box. It wont be an easy task. Except…there are 3 of us here so if we work together we can get this done. We don’t want to over burden or under burden anyone, we want the workload to be fair. One of us is a strong and straping brute who can easily lift 300lb’s over their head, the next is a fit and average person able to lift 100lbs over their head, the last is older near elderly and only able to lift 50lbs over their head. So, if we want this move to go smoothly and the work fairly, who moves which box? If the strongest lifts the heaviest box they are moving MORE of the total cargo yes, is this unfair? If the elderly moves the lightest box they are moving the least of the total cargo, yes? Is that unfair to the others?

The answer is easily the obvious. Each lifts and moves the box that suits the strength they have to give. Its fair. period. End of story.

The richest 1% should pay more percentage in taxes on their income becuase they can…lift more because you are stronger. In the end, even if the rates were at 90% they would still have far more with their 10% left than the overwhelming majority of the 99% would have even if they had 0% taxes! The divide is so great its almost unimaginable.

And yet we continue this argument as if reason has fled entirely.

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True, but in this context I think it’s just bait.

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Here’s a good illustration of the difference between Equality and Equity

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Sure, that’s another issue: sales tax disproportionately hits the poor, so if you’re interested in fairness you probably want to eliminate it in favor of income tax. Property taxes mostly hurt the middle class, so there’s a fairness issue there too.

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You say that like it discredits the idea. On the contrary, the fact that children inherently understand the idea of fairness suggests that it must have some importance to humanity, evolutionarily speaking. Capuchin monkeys understand the importance of fairness, as do parrots, so I’m not sure why right-wing humans have such a problem grasping it.

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Secret weakness? Not as long as the rich are legally allowed to write the laws to benefit themselves.
The US has become only a facade of Democracy. It officially became a plutocracy with Citizens United.

But, if that elderly person hadn’t been such a feckless loser in their youth, they would have the cash to hire servants to move their share of the boxes. Anyway, we can take a lot of weight out of these boxes, as it’s just food and medicine for said elderly person, meaning the boxes are lighter.

This is ideal, because now the strong person has an extra hand to pull a wagon loaded with their children’s trust funds, 4th and 5th houses and lobbying money to make sure that the boxes are filled properly next time…

I mean that without the rest of society, you wouldn’t get your capital gains. Therefore there’s no moral reason they shouldn’t be taxed at least as much as regular income taken from the rest of society. You’re not magically generating wealth in a vacuum the way right-wing libertarians tend to imagine; rather, you’re extracting it from other people by leveraging your capital.

Next, consider the fact that earned income comes at least notionally from free trade, i.e. your income this month comes from people who freely choose to participate in making you wealthier in exchange for whatever you’re doing for them this month. Capital gains, on the other hand, tend to come from either speculation, capital leverage, or lending, all of which are things people tend to be coerced into participating in, if they have any choice at all.

If you want to own a home, for example, you basically have no choice but to make a banker wealthy, thanks to real estate speculation having driven prices up. Or you can rent, and make a capital owner wealthy. If you want to start a business to compete with an entrenched business, you basically have no choice but to make a banker rich so that you can borrow enough capital to let you compete with them and their leverageable capital, plus you generally have to borrow or rent the property you need as with home ownership. Perhaps you need a car to do your job, or you live somewhere where there isn’t a general store in walking distance or accessible via public transport? Well then, you’ll need a car. If that means you’re stuck making a banker wealthy for the life of the vehicle, well, that’s just hard luck.

And so it goes. As the old saying goes, “You have to have money to make money”; so those who have masses of capital find it vastly more easy to extract more of it from the rest of society than those who do not. For instance, Bill Gates’ ability to launch Microsoft and start demanding rent from every PC user was made much easier by his being a trust fund kid who could afford to drop out of college and buy the code that became MS-DOS with his pocket money. Hence the conclusion that those who get their income from capital gains are privileged compared to those who get their money by (say) digging ditches or building houses; hence the conclusion that it might be ethically justifiable to tax said income at a higher rate.

I mean, as one of those lucky enough to have a positive net worth and leverageable assets, I’m conscious that I did practically nothing to deserve any of the money I made owning and renting out an apartment. I didn’t even deal with maintenance work, I hired a rental service to do all that. I just sat on my ass and watched my investment grow thanks to property speculation and someone paying me rent every month. I totally deserved to pay more effective tax on those earnings than on the money I made from actually working.

(But I can’t resist pointing out that what I said about earned income being from people freely choosing to trade isn’t really true either, because many people are basically in wage slavery for their subsistence. Hence another benefit of Universal Basic Income (to mention it again) is that by making it so that nobody has to work in order to live, you transform the world of work and employment into a true free market of peers, rather than a rigged system where poor people are forced to work until death.)

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I wish I knew. All those details are important to the discussion, but they’re generally not reported. Perhaps someone can find better sources that detail exactly how they calculate their figures.

Milton Friedman’s butthole?

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It’s not “no different” than a trader making profit. It’s differing (and putting at risk) a reward for that hard work. I certainly can be convinced that public stocks ought to be treated as no different than wages for taxes purposes, but encouraging folks to start businesses (and create new wealth) is a commendable enterprise and one well-worth defending. Some limit to investments that are for bona fide capital and operating expenses might be worth exploring.

Is it “fair” in any cosmic sense? I suppose not. But it’s useful and – limited to folks putting money into new, speculative businesses – is good tax and public policy.