Six Reasons Why the Capital Gains Tax Should Be Abolished

[gblackmon84]

BULLSHIT!! If Warren Buffett buys 100,000 shares for $1 each, that $100K that he used is already post-tax money, NEVER TO BE TAXED AGAIN. If he sells his shares 5 years later for $500K, he isn't taxed on the $100K just the $400K profit at the cap gains rate of 15%. If the value of the shares stays the same and he gets back $100K after 5 years, he pays NOTHING.

The dividends argument is even weakr, since my employer also pays taxes before he pays me. I don't complain that I'm gettn double taxed

[DONGOE]

What gives the government the right to tax anything and everything?

The people need to get the government under control.

WAKE UP AMERICA !!!

[Teadon86]

I still guess that if your kind of people, let us put it like that, would run the government you still would put down tax on people because you suddenly realised that people understand and feel the need to pay taxes for security, healthcare, army, a judicial system, education and public goods.

[DONGOE]

@Teadon86 - "your kind of people" - what exactly is my kind of people? That's an ignorant comment. If you want to pay more taxes, feel free to pay more, but l feell that the people who spend our tax dollars are wasting a huge percent of our tax dollars. I, therefore, want to see them get their spending of OUR tax dollars under control

We are waaaay over taxed; anyone who doesn't agree with that should have the option to pay more, but don't force those who don't to do so.

[mehseemeh]

Okay I'm just an ignorant college student but, why don't we just add capital gains to income at the end of the year? So if you make 30,000 working and 15,000 in capital gains, you pay tax on 45,000 instead of one percentage on work and the other on gains?

[durhamdf]

@mehseemeh This is how it probably should be, but the argument to have a lower capital gains rate was that it encouraged people to invest in the stock market which was good for growth. The second argument for the lower rate was that it is a double taxation since the money invested had already been taxed at the normal income rate when they originally earned it. The problem with that second argument that worldnewsbbc1 mentions above is that they aren't taxed on the principle, just earnings on top

[DillonDee1]

Please dont buy into this guy's sorry-ass BULLSHIT!

I have had Capital Gains in most tax yrs, but it's just as likely that instead of being taxed double on CG it's just as likely that I'm not taxed at all

Say - 10 yrs ago my wife & I bought a house for $500K & sell it now for $1M - we have a $500k cap gain TAX FREE!

Say - 20 yrs ago my dad bought a farm for $500k & I inherited it last yr & sell it for $10M - I have over $9M CG TAX FREE!

i could go on!

[audioblogs12]

Just to make it clear, do improvements on a product count as a capital gain? If I were to buy a stack of CD-Rs averaging about 25 cents per CD, put some of my own software on it to sell it, and sell it for about $1.00 per CD, would that be a capital gain? If I were to buy some raw steel and fashion a hammer out of it to sell it, would that be a capital gain? If I were to buy cake ingredients and sell a cake, is that a capital gain? Or does the change in value by my work make it different?

[Eterna1snow]

So what happens when Warren Buffet, who makes all his money in capital gains pays absolutely nothing in taxes?

[nrshaffer21]

@Eterna1snow He can pay whatever he wants, you can go to the treasury website to pay more taxes if you wish, not to mention he already makes tremendously generous donations to charity

[Eterna1snow]

@nrshaffer21 Fine, say a stock broker who doesn't want to pay anything in taxes (and really, who does) but he makes billions?

[nrshaffer21]

@Eterna1snow why steal from him?

[Eterna1snow]

@nrshaffer21 Why let him pay absolutely nothing in taxes? HE MAKES BILLIONS.

[Eterna1snow]

@nrshaffer21 BTW, taxes, by definition, mean that SOMEBODY has to get stolen from. Why should the middle working class have to pay but a BILLIONARE doesn't have to?

[hapz3000]

bush lowered cap gains tax for them for a while im not sure what they did to help create jobs..the mortgage industry was a big fraud the whole time with temporary jobs. are you sure that letting peeps make a BIGGER fortune on cap gains tax will create jobs. they may stay status quo and buy yachts/ property which = no real jobs. bernie madoff enjoyed unlimited freedom/prosperity didnt create very many. technology seems to advance itself with status quo then monopoly = walmart best buy etc

[hayden50]

very informative, subbed

[deadrepublicantv]

I can't believe how many tax lovers are posting here. Have you looked at your checks recently?!?! Do you really ENJOY getting that big chunk taken out? What are you getting for nearly half your income? Enough with the Obama Kool Aid already! Don't you get your money is going into a big black hole?!?!?

[DirectInjected]

@deadrepublicantv I'm a Canadian, taxed at nearly 50%. I'm fine with it. Being privileged enough to earn enough money to qualify for the high tax rates, I believe it is my duty to support my society. Society allows me the salary I have, and so I reciprocate. However, it seems that the US is not mature enough to have a well-rounded society.

[luftwaffle]

@DirectInjected Stop giving other people credit for your work. Your society only "allows" you the salary you have because of the rule of law. A peaceful society in which people can earn a living is reward enough for being a productive, law-abiding citizen. You don't owe anything more to that cause. Being productive creates wealth, so working to create a product creates wealth for you and your customers. You don't owe them anything more.

[DirectInjected]

@luftwaffle It's more than that though. Consider what paying taxes does in terms of infrastructure. I want my society to be more intelligent, so I don't mind paying for schools. I want my society to be healthier, so I pay for public healthcare. I want my society to continue to grow in ways other than just dollars, so I pay taxes to turn dollars into social change. I may not owe anyone anything, but I *want* to pay the taxes I do so that I can help improve society.

[luftwaffle]

@DirectInjected Yes, everyone wants a nice society. That is not the question - the question is whether or not doing that through taxes is A.) efficient and B.) moral. Schools for example. The U.S. spends the 3rd most in the world per pupil but is middle of the pack in terms of outcomes. If a person wants to send their child to a private school, they have to pay for that AND their contribution to public schools. Is that fair? There's a difference between intentions and outcomes.

[DirectInjected]

@luftwaffle Considering that I went to private school, but pay for public schooling, I do think it's fair. Society must have the mechanism through which anyone who wants to go to school can, who wants healthcare has access to it, who needs food receives it, etc. This does not mean that if someone has no food they should be fed filet mignon, but that they should not be allowed to starve. Taxes may not be efficient, but it's currently the best we've got. Are taxes moral?

[luftwaffle]

@DirectInjected Basically what I'm saying is this: If we stopped spending on schools and healthcare etc., would those things become worse? Or, if people kept their money, would they be able to afford private schools, and their own healthcare? If healthcare wasn't subsidized (about 50% of healthcare dollars come from govt.), wouldn't prices be forced down so that people could afford it, like EVERY OTHER PRODUCT? No one thinks beyond the first order effects.

[DirectInjected]

@luftwaffle That depends on how you like streets and policemen, an army and so on. If the government didn't pay for healthcare programs in your country, people would die. If the people on medicaid or medicare saved the 15% of their taxes, a large number still wouldn't be able to afford it, and therefore the system would not get better. The insurance industry can only be kept in check if there is a government, non-profit oriented system to compete with. Private industry is not always the best.

[deadrepublicantv]

APPRECIATION IS NOT INCOME!  PERIOD!

[deadrepublicantv]

The capital gains tax is just offensive! Investment involves risk, the appreciation is the reward for taking the risk!

[bbmak1125]

We should be more like Hong Kong. No capital tax, but only regulatory tax.

[peapodsss]

The best way to promote growth: NO corporate taxes, NO taxes for anyone making above 1 million, 20% flat tax for anyone under 1 million, 60% tax rate for those making less than the national average income (they are lazy and need to contribute more), remote ALL entitlements for the poor, elderly, or disabled, they are all lazy and leaching off the government, jail all homosexuals this is a christian nation, any leftover taxes should be forming into a bonus packages for banks.

[worldnewsbbc1]

There is not double taxation of income that is saved and invested. You buy a stock for $100. Your basis is 100. The stock goes up to 110 dollars. You are taxed on $10. The initial 100 is untaxed.

[medlock01]

@worldnewsbbc1

Except the company who earned the money which allowed the stock to go up is taxed at the corporate level.

Didn't you watch the video? Capital gains are not beneficial to the economy, just the opposite. Instead of worrying the government doesn't have enough, how about worrying that businesses aren't getting enough investment capital and retired people aren't making enough on their investment assets.

[fatdanios]

Very helpful video, thank you!...And the tie is cool! ;~)

[ElDukerino1]

This is very biased assessment of capital gain taxation which is fine & dandy on some level (I'm no fan of taxes), but here are some distortions.

1.) It's not double taxation (the investment basis isn't taxed, only the gain).

2.) Off the top of my head, I know Switzerland has capital (ie wealth) tax which most likely amounts to what is effectively worse than a 1x capital "gains" tax (I imagine it's the same for the other countries).

3.) This doesn't count any of govt spending as investment.

[12FlyMe]

Dan has always been a liar and shill for con artist.

He calls his plan a FLAT TAX? Flat my behind. Flat as Pike's Peak, flat as Dolly Parton.

Why tax hard work 10000 times higher than we tax credit swaps and naked shorts, leverage buy outs and dirivitives?

Here is a clue - tax it all the same. Right now, already, unearned income is not taxed nearly enough -- real work is tax 300% higher.

Rather than be ashamed -- these con artist are trying to have ONLY work pay taxes.

[PissedFechtmeister]

@12FlyMe I'm pretty sure they want to abolish the income tax too.

[12FlyMe]

@PissedFechtmeister You mean the Fairtax?  Go learn what a crock that is.

Google Fairtax fine print.

[PissedFechtmeister]

@12FlyMe No I mean abolish the income tax. I could be wrong though.

[swu880]

so hence why u dont give it a damn penny if u value ur money. cuz it will snatch it from you, spend it, put YOU into massive amounts of debt and then laugh its head off at you.

[Engineer245]

Corporations don't move their manufacturing off shore to reduce their tax exposure. They move off shore to decreased manufacturing cost. When an off shore empoyee makes $0.25 to $0.50 and the materials cost 50% less there is no way to keep manufacturing here. Beleive me I know. I was the cost analysis person for a major corporation for many years. I tryed my damdest to make our US Manufacturing facilities look competitive. However when profit trumps all other corporate morrality all is lost !

[Engineer245]

No, income is income no matter what toll is used to produce income so it gets taxed.

[solgoode1]

this guy is great. excellent video

[wylear]

Governmants must generate revenue somehow and if not through capital gains, then where else? Increased income or consumption tax? Consumption taxes are regressive and punish the poor more severly. Income is already taxed above capital gains. This is grossly unfair. Only the wealthy have the means to seriously invest. The only fair system is to have exactly equal income and capital gains tax

[Reckless3057]

@wylear Or you could just cut government expenditures. Just putting it out there...

[XCdawg]

The government does not leave you alone if you spend today. There is a sales tax in almost all states. You are still taxed by someone. It is not as much but it is misleading to say that the "government leaves you alone" if you consume now.

[kurgen99]

The ultra wealthy already pay only an average of 17% because their income derives from dividends and the sale of stocks and bonds. Abolishing capital gains would make their tax rate 0%.

[digitaldud]

@kurgen99

Yes that's the idea, everyones tax rate should be 0%. You should only pay tax when you consume, a sales tax.

[BrandonCRC]

@kurgen99 Not everyone who invests is super wealthy, you would realize this if you weren't an idiot.

[tjieff]

dan mitchell for President

[alexboricuakid21]

If the capital gains tax were to be abolished the tax rate on the mega wealthy would effectively be 0. Most of them rely solely on investment for income so for someone like Warren Buffet were to sell his holdings in Berkshire Hathaway he would have made 60+ billion dollars without paying a single dime in taxes. This is absolutely absurd and only benefits the aristocracy in this country.

[angpetru]

@alexboricuakid21 Your reasoning is incredibly flawed. Here's why:

1)Did the money they have invested originally come from capital gains? No, which means they already paid a tax on that income.

2)When they make money from capital gains will they not get taxed when they inevitably spend it? No, they will get taxed when they spend it.

3)If Buffet sold his assets, would he have MADE 60 billion dollars IN PROFIT as you imply? NO, he will simply be converting the value HE made into liquid capital.

[nicknomo]

@angpetru

No, alex is right. Its still INCOME. They only get taxed when they sell and make a profit. We tax income in this country. The capital gains tax is in fact already lower than what people pay on income tax. If you ask me, it should be treated like normal income.

Btw, when you buy something, you only pay sales tax (a fraction of income tax!).

If cap gains tax was eliminated, we'd lose a ton of tax revenue. We have 10 trillion to go before we clear our debt you know...

[swu880]

@nicknomo

yeah and thats why u should abolish all such ridiculous taxes! Have u not learned? the govt HAS NO MONEY! none! it is a parasitic institution filled with thieves, murderers, liars, con artists and now include sexual predators and molestors!

It must STEAL every penny it has! And every dollar that it gets seems to magically translate into thousands of dollars of debt for the victim(taxpayer). The govt will spend as much as it can get away with!

[MrPolysyllabic]

Some aspects of this position are flawed. But, as far as job creation and prosperity I would agree that a full repeal of Capital Gains Tax is needed. But, to offset, an increase in individual income tax is tantamount to the goal of creating a greater national infrastructure. I am still disgusted at the use of the term "Death Tax" because Estate transfer is not a capital gain, and should be treated just like any individual income thus impacted by the graduated income tax system.

[DRDFOX]

The double taxation argument is flawed. A dollar after tax is not taxed again, simply the gain on that. The inflation point is true though, and indexation relief would solve this . The bottom line though is: 1. Why should those who earn on gains pay less than those whose money is derived from eatned income? 2. There is always someone who loses disproportionately via any form of tax and this is why there are differenet soucrces of tax rather than a solution such as a single consumption tax.

[Jackshenz]

Ahhhhhh! how did i get to this video!?! I don't give a fuck! lol

[Slipknotyk06]

the way this guy talks reminds me of Adam Sandler in Little Nicky

[DystopianUtopia]

Dan Mitchell is a legend, great video.

[RalphNelson]

Low taxes are always good. No taxes are better.  If Uncle Chang pays for government services, then it's like a subsidy for business. Everyone knows that if you subsidize something, then you get more of it. So it's good.

Of course are children might not agree when Uncle Chang expects them to pay for our irresponsible borrowings. THERE'S A STORM COMING! Hopefully we'll all be dead and our children will have to pay

[grkameeni420]

but can get complicated since corporate investment is partially deductible). If you leave it to your descendants, you will pay estate tax on it, but the basis for tax purposes is stepped up to the market value at death, so that if they sell it right away, they pay no cg tax. If they hold it for longer and then sell, they will pay cg tax only on the increase in value since death. There is some possibility for double taxation with personal income tax and estate tax, though.

[grkameeni420]

Sorry, but your double taxation bit is incorrect. There is never a case where a dollar of income will be subject to the capital gains tax, the corporate tax, personal income tax, and estate tax. If you invest in something and sell it within your lifetime, you pay personal income tax on the part you invest and cap gains tax on the return. Thus, each dollar you receive from this investment is taxed once at your level (there is some double taxation with the corporate income tax,

[krakendahed]

Reason number seven: so people whose sole income is from capital gains won't have to pay taxes.

[RuflessRecords]

Much more important than removing the capital gains tax is establishing a flat sales tax or flat income tax. And rightwingers too cowardly to cut any govt in order to pay for these tax cuts/changes can shut up and not even start the discussion.

[a4finger]

Great video, Dan Mitchel is right

[fortsmith1]

I agree.

[DickeyRogers]

this video is making me angry

[ArtinEmil]

The government over complicates everything. Even a simple concept like theft! A little kid can understand what theft is. The government needs thousands and thousdands of pages using fancy words like "capital gains", "corporate", "income", "sales", and so forth to steal your money. They cannot even steal efficiently.

[1PrinceWilliam]

@ArtinEmil lol so true. That's the only thing you can count on the government for and they'll come through every time...inefficiency.

[littlebier8]

It's also irrational from the perspective of the taxman- every time the capital gains tax is increased, the revenue collected from it goes down. Tax hikes lead to less revenue. This is because people will hold onto stocks and capital that they otherwise would have sold, because of the higher rate of taxation. There's less activity to be taxed because people are deferring collecting any capital gains- they won't sell with taxes so high; they'll wait until the rate is lower.

[QuickDrawMcGraw72]

The original income is taxed once. Capital gains tax is on a *separate* income from investments. That is taxed once and at a lower rate than regular income for most investors. That equals 1 each. Not double taxation in my book. Would you call paying income tax on 2 jobs double taxation!?

[popcur]

I predict the economy will not recover, while Obama is in office. Wrong steps following wrongs steps to help get us out of this reccession.

[emeihongshen]

This is robbery period.

[NSResponder]

One mistake near the end, he says that the president should eliminate capital gains tax. That's not up to the executive, it's up to the congress.

-jcr

[phillipstr07]

@NSResponder yeah, but the Bush tax cuts are known as the "Bush Tax Cuts". It was his "vision" that created those tax cuts...

[kmg4]

India and China both have 0% long-term capital gains tax. Who is the socialist now?

[billyjoeallen]

I completely agree that capital gains tax should be abolished, but why the hell focus on that rather than the personal Income tax? Do rich investors and corporations deserve more direct advocacy than working individuals?

[ajpmathwiz]

@billyjoeallen You haven't seen the other videos then. This is just one of many videos that addresses what's wrong with our current tax system.

[electroplate]

@billyjoeallen You missed one of the main points of the video. When corporations and investors are taxed into the ground, less jobs will be created. Corporations won't hire anyone when more of their money is being taken away with taxes. Of course the personal income tax should be reduced as well. However, the rich vs. poor argument with regard to capital gains doesn't hold up. Lowering the capital gains tax will benefit the working class just as much as corporations and investors.

[tms5018]

It's not double taxation though. You are only being taxed on the gains, not on your basis. I don't know, I just want all taxes to be low. How about one or two low rates on all types of income. And it must be indexed for inflation.

[maxellmusic]

Why do conservatives even call it "Capital Gains Tax?" It should always be referred to as "Double Taxation Tax." Conservatives should run on,... they are against double taxation. Let the Progressives try to defend their double taxation policy.

[continuityofliberty]

Imagine if gold and silver were not "illegal" money. People wouldn't have to deal with any of this - opt out of banks, no wall street or other investments, and no capital gains tax on gold and silver because you cannot tax inflation on existing money as nobody would know how much you'd saved.

A guy could squirrel away a bit here and there and be his own bank while watching his savings grow in value as the economy expanded.

[ajpmathwiz]

@continuityofliberty You can buy anything you want with gold or silver today, provided that you can find someone willing to accept them.

[continuityofliberty]

@ajpmathwiz My point was simply that our system is structured to funnel all financial transactions through banks, wall street, and various Governmental arms.

We have no option but to try to protect the value of our earnings by playing in their sandbox according to their rules and under their scrutiny. With Gold and Silver as currency we'd have the ability to ignore their little games.

* As far as I know it's illegal to purchase goods with gold and silver, but I could be mistaken.

[ajpmathwiz]

@continuityofliberty There is nothing illegal about bartering (though bartering is still taxed). However, you do have the problem that gold and silver are not legal tender, which means that you can't compel your creditors to accept them (or to credit you market value for them). The government won't accept them as payment for taxes, but if a store is willing to take alternative forms of payment, you are free to do business with them in the medium of your mutual choosing.

[4thstuning]

As usual, Dan Mitchell makes a strong case for rational policy. This country needs to do an about face from big government, big deficits, big taxes, and rent seeking, otherwise more of us will be crossing the poverty line...in the wrong direction!

[GWHH19]

right on man

[IRONMANAustralia]

Ask anyone if it would be fair to pay tax on a gambling windfall, (from a heavily taxed casino), in which you're risking already taxed income, (and not be able to claim the outlay as an income tax deduction if you lose).

Heads I win, tails you lose indeed.

I wouldn't be surprised to find this chiselled into marble somewhere in DC: "Taxes, taxes, everywhere, so let's all have a drink!"

[IRONMANAustralia]

Some people want govt to control the wealth of the nation, rather than "rich" individuals. Because they don't realise that being "rich" doesn't mean you are personally consuming more of the pie, it only gives you the right to direct that section of the pie.

There's no real way for "the rich" to "consume" wealth into oblivion. Unless they bought a car and smashed it I suppose, but what kind of idiots would do that?

... Oh wait ... the government did with it's Cash for Clunkers programme.

[grraadd]

Inflation is really murderous yet sneaky......

But even little educated people understand that when you tax the employer to the ground there will be no work for employee.... they live in the real world - not like some "scholars" and "professors".

[Yakko77]

Makes too much sense. Therefore it'll never happen... under this Admin. at least. Big govt Statists like Obama think we can tax this nation into prosperity. It's insane of course but these are insane times.