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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (42838)	4/21/2010 11:09:27 AM
From: TimF	Read Replies (1) \| Respond to of 71588

2019 is plenty long enough for (those few who are affected) folks to rearrange their compensation programs to totally avoid this tax on "Cadillac plans". Sure its plenty of time, but they probably don't want to do it, and unions have plenty of power in the Democratic party. It merely regularizes the treatment of various forms of compensation Not it doesn't. It treats expensive insurance plans differently from cheaper plans. If it was an elimination of all tax breaks on insurance plans, combined with a lower tax rate so as not to be a net tax increase, than maybe I could get behind it, but it isn't. Its a specific penalty on the more expensive plans, combined with no compensating cut. And I believe that all forms of earnings* are potentially investment drivers* What does that even mean? Sure someone may invest their after tax income from wages or salary (is that what you mean?), so higher taxes on such income probably does reduce investment, but not as much as a direct tax increase on the investment. And the taxes on investment (and also corporate taxes) also reduce income for the person who only gets wages. Then there is the fact that having the same rate on capital gains as ordinary income isn't taxing all money the same since the owners of corporations (the stockholders) pay twice. And treating all income the same, would mean exposing it all to the same rate but we don't have that in our system. We don't have a flat tax. And there is the practical point that capital is more mobile and responsive than labor. Increase investment taxes and you distort investment, and you also chase it away or reduce it. This effect also occurs for labor but its weaker. So I think low taxes on capital are rather vital. If having equal taxes on capital and labor is considered an important goal, than the only way to achieve that without causing damage is to reduce spending so that we can also have low taxes on labor income.