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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: combjelly who wrote (319555)	1/8/2007 10:17:17 PM
From: TimF	Respond to of 1578962

Maybe that is why I compared against other possible instruments. Hmm... You mentioned that a broad portfolio would likely produce higher rates of return than tax free bonds, even with double or triple the current capital gains rate. That's hardly much of an argument. A broad portfolio is going to on the average, out earn bonds whether or not the bonds are tax free. there is a lot of room to raise the rate without changing the balance. What do you mean by that? There isn't some balance to tip, with no change before that and massive change after that. You have continual change at the margin. Well in a small market a small change in tax rates or other factors effected the expected rate of return might actually not effect any investment decisions, but the markets we are talking about are hardly small, and a number of the decision makers in the markets are highly aware of even small changes in factors that effect their returns. Tax something and you get less of it (less then you would have without the tax, not necessarily less then you previously had). Tax investment capital (by taxing its returns) and you get less of it, and you also shift the incentives causing people to put effort to avoid, minimize or delay the tax rather then putting effort in to finding the investment that is best (in their opinion of course) on its own merits.