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

To: J_F_Shepard who wrote (622790)	8/4/2011 12:10:22 PM
From: TimF	Read Replies (1) \| Respond to of 1584613

"The percentage of wealthy people that run hedge funds is very small" So what they don't pay taxes at same rate you or I do. So its not a very significant issue, and to the extent its an issue at all, at most it would support changing the specific controversial tax provision in question, not to generally argue for higher tax rates on the wealthy or that pulling down the rich helps the poor. Its irrelevant to the point that some rich guy buying a Ferrari doesn't hurt me, or poor people in any practical way. Also, even if we change the topic to that specific controversial tax provision, the idea that they pay lower tax rates than a person with an average level of income and deductions is rather questionable, since the typical American pays less than 15% of their income in federal income taxes. Beyond that the hope for realizing a lot more income from them by raising their tax rates, is probably a futile one. First of all you have the general Laffer curve issues, and beyond that in this case your trying to increase the tax on one specific way of setting up the deal, when the people your trying to tax are those who set up the deal. Increase the rates on the pseudo capital gains they realize now, and they will just change the deal so they make actual capital gains. You might get a little more tax revenue (assuming you don't reduce the number of deals, or cause them to happen under the taxation of other countries, which is a big assumption), because they will have to get some upfront income representing their investment in the deal from which they receive capital gains, but most of the money would still be taxed at capital gains rates. So not only are you only talking about increasing the tax burden on a very small number of people, it would also increase on only a small portion of their income.