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Originally Posted by kutulu
I'm not either and probably never will be but I still don't see anything wrong here. It is no different than him taking a job elsewhere and not selling his stock. That puts the govt at a disadvantage when looking for certain types of people.
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The point of this thread from the start was that "rich" people can avoid excessive taxation and that tax policy targeting the "rich" is ineffective. "rich" people pay what they want to pay or what they think is fair. Our tax policy really hurts the middle class and those attempting to move up from poverty. In some cases the marginal tax rates are actually above 100%.
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He's only "saving" on his taxes if he would have sold the stock over the next two years. Otherwise there was no change.
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In this case, he had a conflict of interest that may have impacted public policy. His actions and the actions of Geitner benefited a few at the expense of many. He benefited from the timing of the events that followed his appointment. And as politician talk about bonuses, under the radar we have stuff like this going on. I just don't think the playing field is fair.
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When he cashes out his govt securities he will be taxed at the typical rate using the prices he paid as the basis for calculating his capital gains taxes.
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He never has to cash out. He could use the govt securities as collateral for a loan, he could put them in a trust, he could do some other things to avoid or postpone the tax burden.
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I'm all for having a fair tax code and taking out loopholes that are wrong but I don't see this as one of those kinds of loopholes.
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Fair enough, we disagree. But at the root of the problem do we agree that at high tax rates people have great incentive to do things to avoid the tax and at lower tax rates people will be more inclined to simply pay the tax owed and move on. So, the irony is that the government may collect more in taxes at a lower more reasonable rates than at higher rates. There is a theoretical equilibrium tax rate were taxes collect is maximized. I think we should work to find that rate rather than playing the class warfare game of taxing the "rich". I also think we should eliminate excessively high marginal tax rates for people working their way up the socioeconomic ladder, for example the loss of the earned income tax credit could be a big disincentive for a poor person to make more money.