sandy
New Member
Posts: 8
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Post by sandy on Jun 28, 2006 6:56:28 GMT -6
I'm a Capitalist and have managed to end up in my retirement from carefully investing in real estate and stocks. I want the government out of my investments and leave me alone to make my money and leave it to my children.
Is this a dead issue at this time? I'm told that everyone who needs it should be given my hard earned money when I die. My taxes have been used on welfare programs that changed the incentives of several ganerations of Americans. I took the time and trouble to find the best damn education I could for my kids who then sailed through the universities. I borrowed money on my home so many times I had to check who carried the papers from year to year. Through this mess, I paid over 35% of my income to my state and federal governments.
I support many charities and do it monthly. Now my government wants to tell me that they will handle my charitable donations instead of leaving it up to me.
Am I off base here? I'm a fish out of water on social issues and government spending and being a Free Enterprise Capitalist labels me as a traitor to America.
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Post by unlawflcombatnt on Jun 28, 2006 15:02:44 GMT -6
Sandy,
I, too, am a capitalist.
You make valid points about having made money and not wanting the government to take it. However, I think your view of what constitutes "welfare" is too narrow, because you appear to limit it to social welfare and to money given directly to the poor. The actual amount of money that goes to such programs is relatively small, somewhere in the $20-40 billion/year range. (I might be slightly off on those numbers. Feel free to correct me if you can find a better source.)
The amount of direct and indirect "corporate" welfare, however, is tremendous. Taxpayer funds that go directly to defense contractors are much larger than that going to welfare (TANF.) The defense budget is over $500 billion per year. Much, if not most of this goes to Defense contractors. This is simply overt Corporate Welfare. Taxpayers are the exclusive source of Defense Contractors income, and the exclusive source of Corporate profits and stockholder dividends.
Military salaries and pensions, as well as state and local government salaries, are also funded by taxpayers' money. Money invested by the receivers of these salaries was ultimately provided by the taxpayer. A retired military person, though fully deserving of the money he has received, still made his or her money from taxpayer funding. As such, successful and profitable investments off of that money were definitely made possible by the taxpayer.
Taxpayer funds are the exclusive funding source for Federal Highways. Again, taxpayer money is the sole source of funding for such programs and the sole source of Corporate profits and stockholder dividends. The current Highway bill, with a 5-year price-tag of $286 billion over 6 years, provides $47.6 billion/year of taxpayers' money to highway construction contractors.
The Medicare Prescription Drug Plan is another massive Corporate Welfare program, with an estimated annual cost now of $70 billion per year. Again, this is a direct taxpayer handout to the Pharmaceutical Cartel. Profits and stockholder dividends made from this massive giveaway program are funded exclusively on the taxpayers' dime.
School construction is another state taxpayer giveaway to construction companies. Books, computer equipment, and office supplies for schools also come directly out of the taxpayers' pocket. Again, profits and stockholder dividends made from this can be directly attributed to taxpayer funding.
The Real Estate industry is an indirect beneficiary from taxpayer funds. Allowing mortgage payment deductions, and excluding huge amounts of capital gains from home resale, is certainly an indirect giveaway by the government which is funded by the taxpayer. Loan guarantees by the Federal government, as well as the implied guarantee of bank bailouts for the large banks that fail, is done on the taxpayers' dime. Though technically private, the Federal Reserve enables banks to be profitable by loaning them money at discount rates, enabling them to continue making loans. Again, this is almost direct assistance to the banking industry, as well as industries that borrow from banks. And who stands behind the Fed? The government and the taxpayers who fund it.
401Ks and IRAs are another type of indirect government subsidy to business, Corporate America, and Wall Street. Taxpayers are given tax reductions for this "investment," while business reaps the benefit of these government encouraged taxpayer-handouts.
The various public utilities are simply guaranteed monopolies granted by the government. And the profits they make are the result of the government allowing them to keep this monopolistic control of individual markets
In addition to the above-mentioned Corporate Welfare, there are the benefits businesses receive from infrastructure maintenance and a stable monetary system. These are all funded by taxpayers.
Furthermore, the clearly anti-free market concept of patent protection also protects business and Corporate America, increasing their profits and stockholder dividends. In many cases, such as with the Pharmaceutical cartel, patents are almost always extended well beyond their original end date. This prevents competition, and increases the market share and prices that Pharmaceutical companies can charge for drugs. (And don't forget that much of payment for pharmaceutical companies comes from Federal, state, and local government-funded insurance plans. Again, another taxpayer giveaway to Corporate America.)
The point to all of this is that the very profitability of companies, as well as stockholder dividends, has been greatly enhanced at the taxpayers' expense, as well as anti-competitive protections provided by our taxpayer-funded government. In other words, the amount of money a person makes and accumulates is definitely enhanced by government "interference." Without such interference, business would not be as profitable. As such, most American businesses and individuals owe at least some of their profits and profitability to taxpayer funding. And those who have profited more have benefited even more.
Though the concept of "it's my money and I should keep it" seems reasonable at first, it's somewhat of a misconception. No businesses would profit without a stable political system, stable monetary system, or government provided infrastructure.
If you can honestly say that none of the above factors helped you make the money you have, I'd say you should keep all of it. But I doubt that'll be the case. Everyone from Warren Buffet to the local convenience store manager has benefited in some way from the government. And those who've made the most have generally benefited the most. In my opinion, those benefiting more should pay more.
In addition, taxation is not only a matter of "fairness." It's also a matter of where taxes should be targeted in the best interests of the economy. Giveaways and tax breaks for the poor go directly back into the economy 100%. Giveaways and tax breaks for the most affluent do not go 100% back into the economy. So there needs to be some compromise between "fairness" and economic benefit. This needs to be considered as well when deciding who to tax and how much.
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huck
Contributor
Posts: 81
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Post by huck on Jun 29, 2006 4:53:19 GMT -6
I'm a Capitalist and have managed to end up in my retirement from carefully investing in real estate and stocks. I want the government out of my investments and leave me alone to make my money and leave it to my children. If it were just money that you left that might be one thing, but it will most likely be some sort of active investment you leave them. Now what is the basis for that? I know why you want to leave them your gains, but i think even you agree capital gains should be taxed as long as income is taxed. If you were to sell your investments you would take your buying price (or basis) and subtract that from your selling price to determine your profit, and that is what you owe taxes on, right? But if you leave an investment to them, and they sell it, what is their basis? Will they even know how much you paid for it, is it fair to use the value at the time they received it? These questions are the center of the estate tax problem, yet few understand that. Along with estate taxes comes a fresh-basis for what was received, pretty much if they sell it the day the get it they owe no tax. I think it is fair to consider each member of a society responsible in part for the general costs of running that society. I think it is good we built highways and have a defense structure. I look at things like welfare, disability, veterans, farm support as a form of hedge or insurance that the people that need this support now don't come and rob me because they are so hungry they will rob me blind. They are costs of doing business. With that as a given, it just becomes a matter of who pays and who gets, while we may disagree on that part, I suspect we both seek a notion of fairness. I don't see it as unfair that gain be the baseline of some taxes, be it income or capital gain. But estate transfer has many places where the gain of one can be transfered tax free to someone else. I don't think that is fair, but the estate taxes we have now may not be the best solution. Thats not quite right, while you don't "owe" it till you sell or "realize the gain", it is not unfair to ask that somehow you "pay taxes" on the gain you made on your investments before they were transfered to your estate. If you paid 20K for a house that is now worth 100K, it is not unfair to expect taxes to be paid on the 80K gain. It may be unfair to expect them because you died, but more fair to expect them when the investment is converted back into "cash", but this can only happen if your basis is properly transfered with the estate. but of course this is more paperwork and room for cheating as well. I'm not sure if this is a complaint or not, it could be worse, and is in many other places. Ive done about the same (i guess, in my head) and I'm not complaining, i like roads, and defense, and free schools even free meals, or free "roofs" for those down on their luck. Nobody Ive ever known on food stamps wanted them, the people on disability didn't get very much at all, and were hurt on the job. Yet i agree there are welfare queens and deadbeats, but i think its maybe 1 in a 100, or 1 in 500. Distribution of this assistance via "cash" isn't the problem, rent-support and food stamps make a lot more sense than projects or bars of cheese. I'm sure you question if food stamps work better than charity, but in terms of fairness and coverage my bet is on the food stamp program. Neither of us wants people to die, its a matter of who does what. I'm a fan of land use taxation, where farm land pays less taxes than a mall, and the granting of "tax-deductible" status to NGOs is a method of letting you support who you want at the "expense" of those that do not. Some states even allow some of such donations to be subtracted from your taxes, not your income. Taxes are also not uniform because we "allow" them to subsidize certain projects, and I'm not sure its all bad, for i like the idea people own a lot of their houses, and people are tempted to give more to a charity because of the tax deduction. It is all a matter of fairness, defense contractors deserve a fair profit, and it is fair to expect the support networks are not taken advantage of. Why is it getting so out of hand, everyone seeing only in black and white, good vs evil? I may see you as wrong but does that mean i have to hate you too? it only invites you to hate me back and where does that get us? Your viewpoint is valid, so is mine, dialog and compromise are much less emotionally draining. Welcome Sandy
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