Investment is correlated to the business cycle. In fact the business cycle is caused by easy money policies. When borrowing money is easy (low interest rates), businesses expand too aggressively and over-produce. Naturally, with excess production comes lower prices and business failures.

We know interest rates are low right now, but borrowing money is not easy at the moment because banks are not interested in loaning money to all but the very best risks. Besides, with interest rates higher elsewhere, most of the money that would have been available has left the country. With interest rates starting to creep back up, the money will return and I predict we will see some very nasty inflation.

But that said, lowering tax rates on capital gains has always produced an increase in government revenues from the capital gains tax, usually in the 2nd year because investment strategies need the time to catch up.

So lower tax rates do encourage investment, not by volume but by allowing investors to move their money into more profitable investments with less tax consequences.

Frankly, the capital gains tax is double taxation since the corporation had to pay taxes on it first.

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"Frankly, the capital gains tax is double taxation since the corporation had to pay taxes on it first" um you only pay taxes on the amount you gain.. that is not double taxation. money is transferred to you, just like income or inheritance and that means it's new money to you; therefore you pay tax.

No, you are part owner of the company that paid taxes on the profits. It is just distributing the profits to its owners.

So if you want to tax me on capital gains, then don't tax the corporation.

that rational is why capital gains is taxed at a lower rate than regular income, but it is still the amount of earning by you, personally, that is why you only pay when the gain is realized or you sell that part of your ownership. I also think the the revenue gains from a reduction in capital gains is pretty reliably shown to be temporary as people refrain from realizing those gains when they know a tax cut is imminent. the contraction of revenue after a capital gains tax hike is also only temporary as people have hurried to realize the gains before they pay more tax. Overall, people realize their gains based on greater market forces. Where the optimal capital gains tax rate is depends on many factors; but I've seen 25% widely bandied about.

Again, the owner of a business is taxed when his business is taxed. Why tax him again because he keeps some of the profits? Perhaps to encourage him to reinvest more of the profits into the business? But that is social engineering, government interference in the free market, call it what you want. The business owner now takes taxes into consideration when making what should be a strictly business decision.

I bought shares of a tech stock after the tech bubble burst, thinking it would come back with a vengeance. It didn't, but I held on to the loser longer than I should have because of tax consequences. Lower, or no capital gains taxes makes investing much easier for the little guy.

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Correction: I should have said taxing dividends is double taxation.

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Taxing capital gains is only legal because of the 16th amendment. I think that is an amendment that should be repealed. While repealing the 16th amendment would not necessarily eliminate the income tax, it would require big changes. For example, rental income would not be taxable, and I think for the same reason capital gains would also not be taxable. I would go even farther in amending the Constitution to make the individual income tax illegal, by including a statement in the amendment that a worker's wages were his property and thus any tax on wages and income is a direct tax subject to apportionment to the states.

maybe because all civilized countries tax capital?

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Not the US originally. Capital is property and a property tax is a direct tax. While the Constitution does not make a direct tax illegal, it forbids the federal government from collecting direct taxes from individuals.

Taxing dividends or capital gains are not double taxing as it's tax on a profit. You normally also get an offset if you make a loss. They;re also usually at a lower rate.

ee market. That can only come when you have equal taxation rates otherwise it's just another way for a business to look at lower operating costs which is why they move around the globe.

Phil: refer to previous discussion. If my business is taxed, then I am taxed. If I am taxed again for keeping part of my business profits, that IS double taxation.

So taxes on dividends are double taxation. Taxes on capital gains are a tax the founders of our nation did not want levied on individuals.

the world is bigger thasn the US

Yes it is, but the US doesn't have to do what the rest of the world does. In fact, we were quite successful because we were not like the rest of the world.

this is not US exclusive site, is it?

Of course not.

Ideally you have trade that is free of trade barriers that do nothing to keep jobs only inefficiencies, taxes around the world on doing business and taxing profits that are closely aligned but set to sensible amounts so that there is enough revenue to pay for social costs, health, education etc. This will need to happen soon especially as the rate of job losses to machines are increasing at a faster rate than ever before, inevitably. This is reality but will take strong political will and collaboration around the world. It is possible and has started with some new legislation to reduce corporations from shifting profits out of countries without paying taxes. It has a long way to go .

then spare me all your stories about a typical US discussion

Tell us about the Netherlands.

The US was successful partly due to having lower tax rates and encouraging more investment. Trouble is that came at a big cost to the people at the lower end. When the machinery and robotics come in the US will have a big problem with huge unemployment and the current social injustices that are far greater in the US than most of the civilised world will come home to roost. Trump has played on part of this fear but blames everyone else. If and I sincerely hope he never does get into power as it would be disastrous for the world including the US, it would show up the current problems even more quickly.

It's been a long time since my very enjoyable year working for a dutch company, but one thing was sure. Fairness was never far from their mindset. It's one thing to make profits, has to be done, but the really smart companies make the profits and share the wealth with their employees.

Phil, we have been automating for a long time. Yes, it causes some labor displacement. But automation has also opened up many new jobs. In a healthy economy the only constant is change.

They do that here too.

In the EU, we live longer and have better health care than in the US: https://pbs.twimg.com/media/CpbQWn9UkAAda-T.j\npg

Nah, you just don't have as much gang violence and automobile accidents.

Look at the costs

I wish we would. That is part of the problem. We have employer provided health care. Since virtually everyone with a job has health insurance paid for by the employer, the real costs of health care are hidden. There is little market incentive for the health providers to keep down costs.

True drwho but the rate of job losses to automation is rapidly increasing and will increase at a quicker rate until flattening out when it reaches the point that the machine can't take over - we can think in ways and see solutions in ways a computer never will. But expect to see rapid job losses in banking, accounting, manufacturing, telemarketing , even medicine although until the US food bosses stop thinking a big mac covers all the major food groups the US will be having a age of death that is coming down not up.

true again drwho, the cost of health and medicines are far higher for most, not everything in the US.

Nobody is forced to eat at McDonalds.

yet it is fundamentally unfair on the poorest in society.

Nobody forces the poorest in society to eat at McDonalds. Besides, they can't afford it anymore.

True, but start taxing bad junk food so that healthy fresh food is cheaper and you will achieve better health outcomes. The processed food industry makes money off ruining the health of its customers in the same way that tobacco did and alcohol does. Fortunately we are starting to realise this and make it public. I think we in Aus will get a sugar tax on sugary drinks like they brought in in the UK. Personally I think we need to go much further and much faster.

So the poor are too stoopid to know what to eat?

dr who, consult the graph in the link. There you have it included that hidden cost. But all other arguments you have are irrelevant, if you have more gang violence in tthe US, thats obviously the US choice and it is toytally relevant to include that in the figures

And remember, McDonalds is not cheap.

They lack the knowledge, not the same as stupidity.

MrO. your hospital statistics mortality statistic are only better than ours because of the deaths caused by gang violence and automobile fatalities. If you compare apples to apples we have competitive results.

the grapgh does not measure hospital statistics, read it.

Jamie Oliver did an amazing programme in the US where he tried to get better food into schools. He was met with derision and hostility from parents and food administrators. With that lack of support it was amazing that he achieved as much as he did. Those that changes were happier, healthier and will live longer. Ultimately though it is hard for the individual to know that JO was right when they were told such utter lies by the powerful food companies. It will take governments to start taxing and providing the reasons why the big mac will go up 50% for it to change.

And I repeat, if you have more gang violence in tthe US, thats obviously the US choice and it is totally relevant to include that in the figures. These are life expentency figures, not mortality.

And the violence comes from a lack of hope in having a future. It will get worse in the US if social justice doesn't start to change.

MrO. I can see that we spend more. And I can see that we have lower life expectancy. But what does that prove? I would argue that the costs could be contained if we returned our health care system to more of a free market model.

The life expectancy might be life style choice, like McDonalds or gang violence in the inner city.

Phil: hopelessness is not the source of gang violence. Lack of discipline at home and in school contributes. But insufficient punishment for violent offenders is probably the biggest reason there is as much gang violence as there is.

Sure. all those things are choices, that you are definding with a ref to the founding fathers as if that were an absolute truth, instead of another choice made 100's of years ago. Gun laws are a choice but the whole of the EU think they are mad. Cops armed like an army are a choice, but German cops kill less people in 10 years than the US in one day. So we think that you are very much making the wrong choice. And you say "returned" to a free market model - than in waht year was your system better if you look at the graph?

From your graph it looks like we were in the middle of the pack in 1970. After that it is not clear how we compared (notice the graph does not have a time axis, the only possible time comparisons are at the starting points and endpoints).

B.T.W. employer provided health insurance began during WWII because FDR imposed wage and price freezes. So employers found a loophole to compete for the best workers by offering "benefits" in addition to wages. The departure from a free market in health care began long before 1970.

The graph could have benefited from a logarithmic cost scale. It seems that comparing price ratios would be more useful than comparing absolute costs.

MrO, for some reason I can't get to your graph. Where did Australia and the UK come on the list. I imagine our costs are a lot more. We have vast areas to cover and an indigenous population that live in the most part in communities far from major health centres. Sadly they are also a long way behind on life expectancy primarily because we introduced alcohol to them 200 years ago.

Fortunately we have an amazing service called the Royal Flying Doctor Service funded through donations. Real life savers https://www.flyingdoctor.org.au feel free to donate

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Taxing dividends can only be considered double taxation if you accept that the corporation and it's shareholders are the same entity. Yes some countries do that but I thought the U.S. is different than Australia and Estonia. U.S. tax law does not accept that the dividends received by shareholders is the same economic activity as the profit paid to those shareholders. If you don't like this system you could always invest in Triple Tax Free Municipal Bonds.

Employee "provided" health care is not just a result of wage and price freezes. It is because Labor fought for it. The funny thing to me is how some people believe that it is/was a perk. That the employer is somehow benevolent by "giving" their employees health care coverage. Those costs to the employer are figured in to the total compensation costs of the worker.

So if you want to talk about "double taxation" to corporations what about how the worker who is being compensated for their labor through wages and benefits (in lieu of wages) now have to pay with their wages to maintain the level of health care they previously enjoyed without paying out of pocket. That is a pay cut.

And before the ACA when the worker had to start paying out of wages for health care through co-pays and deductibles in most cases coverage was diminished. You got less for what you were paying for.

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MrO and Phil - It's so refreshing to see a rest-of-the-world perspective from people who have lived outside the US. Some here like to cover their ears and eyes, and won't recognize (1) that the rest of the world can, and does, have wonderful contributions that work (e.g., healthcare), and (2) that the success of the US has less to do with the founding fathers, or that we're smarter, or better, and more to do with natural resources and natural borders.

The workers knew as did the employers that if they stood together they could get a better rate from a health insurance provider. So labor and management worked together. Labor accepted a lower wage in return for employer purchased group health insurance.

Diane Yup!! Merica!!!! I think some people in the U.S. should be forced to watch ala A Clockwork Orange style, Where to Invade Next and Meet the Donors: Does Money Talk?

But once again Greed and de-regulation kicked in. The health insurance lobbyists paid for deregulation and started offering lower cost plans stealing all the healthy customers away from companies like BCBS and offering plans with less coverage. Raking in huge profits. Then they started raising rates. More and more companies found that with these rate increases they were unable to pay for the insurance with what they had budgeted for their employees compensation. So they either did away with provided health insurance or started deducting the difference from wages.

The reasons given for the rate increases were higher health care costs yet those costs did not align with the increase in profits of the insurance companies. They also did not account for increased costs due to less people having health care insurance due to their increase in premiums and cutting of coverage like preventive care.

And Diane as you say the people in the U.S. were told to stop complaining. We have the greatest health care system in the world. When it was NOT TRUE. Xenophobia was used by the health care insurance lobbies propaganda to bilk the American People. It happens all the time. Tobacco Company propaganda and payoffs from lobbyists to Congressmen, Oil and Gas lobby propaganda that Climate change is a hoax and payoffs through lobbyists to Congressmen, In Meet the Donors one donor talks about how one sector netted a 2200% return on their "investment" by lobbying congress.

Having said all that. The real problem is... Many people in the U.S. believe and it is their RIGHT to believe that Government has no right to interfere in whether or not you have health insurance.

We need to fight for a new definition of unalienable rights.

Or just learn what unalienable means. I'd settle for that

un·al·ien·a·ble
ˌənˈālēənəbəl/
ad\njective
adjective: unalienable

another term for inalienable.

in·al·ien·a·ble
inˈālēənəb(ə)l/
adj\nective
adjective: inalienable

unable to be taken away from or given away by the possessor.
"freedom of religion, the most inalienable of all human rights"
synonyms: inviolable, absolute, sacrosanct; More
untransferable, nontransferable, nonnegotiable;
indefeasible
"that principle is an essential, inalienable part of having ownership"

Translate inalienable to
Use over time for: inalienable

unalienable is in the declaration of independence, inalienable is used interchangeably

DING. Not so easy. 16.

We could also learn the definition of Unafordable, as in the Unafordable Health Care Act.

:-(

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I love the name of the Affordable Healthcare Act. We can debate the "affordable" part, but "Healthcare" is euphemistic at best, in that the act does not guarantee care, it only guarantees insurance coverage for certain types of care, with defined limits, and substantial deductibles.

Just because you have insurance that does not mean or imply that you can get healthcare.

That graph came from ourworldindata.org, a publication of Oxford University. All details about data quality etc. can be found there, they use the best available data and methods.

That graph came from ourworldindata.org, a publication of Oxford University. All details about data quality etc. can be found there, they use the best available data and methods.

Opops, that second note had to be https://ourworldindata.org/financing-healthca\nre/

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Great link MrO thanks