Quote:
Originally Posted by maxtower
This is incorrect. The reason it is incorrect is because of the difference in capital gains rates and income rates.
If you are an investor you have a choice between investing in something that yields income or capital appreciation or both. The difference in the two tax rates can make some profitable, productive businesses generating income undesirable compared to investing in stocks for a year and making a lower return but saving on taxes.
So Zuckenberg won't try and create Facebook
The 2 store dry cleaner guy won't expand his local business to other markets
Mark Cuban won't invest in a new start-up or some other random business they he has the hots for?
because that was the argument being made...if we don't cut the taxes of people making 250K, then the economy will be majorly hurt and people won't have any interest in creating new businesses cuz then if they get super successful they'll have to pay 3% more in taxes on personal income over 250k.
of the 3 examples the multi-millionire is probably the only one who actually comes into play here
better to just work your way up and manage a local call center then risk that extra 3%.
What if instead of giving the rich a massive tax break of 3% we just give them a 1% tax cut?
Or 1.8% tax cut...or is that extra 1.2% the key part to everything?