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Obamanomics Tutorial: By Aaron, Age 33

Kate passes along a wholly priceless Tutorial on Obamanomics by Captain Capitalism.

Good thing it's priceless, as you will learn by tutorial's end.

SECRET CODEWORD NOTE:

  • 'Capitalism' is codeword for: Capitalism
  • 'Priceless' is codeword for: Priceless (ie, non-taxable)
  • 'Obamanomics' is codeword for: Obama Economics

Just to be clear.


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Comments (13)

Obumble is gonna change "Tr... (Below threshold)
rodney dill:

Obumble is gonna change "Trickle Down" to "Sprinkle 'round." He's gonna take your hard money and Sprinkle it around.

I like the pitcheRs with th... (Below threshold)
LaMedusa:

I like the pitcheRs with thuh hammer and sickle. Scribblys and excrement tell me Aaron is smarter than Obamallama. Might want to visit tropical island soon, in case gains get hammered and sickled.

Wizbang Week-end Caption Co... (Below threshold)
Son of a Pig and a Monkey:

Wizbang Week-end Caption Contest Pre-emptive Strike:

After two weeks in a "summer-in-Atlanta" room-temperature casket, James Brown's zombie gets up and busts a move on national TV.

Most everybody in ... (Below threshold)
Mac Lorry:
Most everybody in the US, rich, poor, short or tall, own stock in one way or another. Most commonly this is done through our 401k, 403b and other retirement programs.

Let me start out by saying I'm voting for McCain, so you'll know where I'm coming from. That said I'm not sure where Captain Capitalism gets his information, but it doesn't seem to be accurate. Take the part I quoted above. Captain Capitalism cites that as related to capital gains, but if you make money in stocks as part of your tax deferred retirement plan you pay zero tax on the profit until you withdraw it. At that point the money you withdraw is treated as ordinary income, not capital gains. Most retied people, even with fat 401k accounts, find themselves in the lower tax brackets.

Second, many corporations pay only 15% tax on income, not 40%. Chapter S corporations pay zero percent, but they are not on the stock market, so I guess they don't count. The point is that we need accurate information even if it's part of the black art of tax law.

The taxes affects the value... (Below threshold)
jpm100:

The taxes affects the value of stocks and if they suppress the value of stocks, your 401(k) takes a hit because of the suppressed stock price.

I need a beer... (Below threshold)
Captain America:

I need a beer

Laughed my head off! Perfec... (Below threshold)
MPR:

Laughed my head off! Perfect!

Mac Lorry...He sai... (Below threshold)
Steve Schippert:

Mac Lorry...

He said the part you quoted not in a tax context, but in the context of the importance of the value of stocks.

The taxation he discusses within the context of its contributing to a lower stock price, which - as he illustrates - affects just about everyone, not simply the fabled and phantom-evil "rich".

Higher tax contributes directly to lower stock value, which contributes to lower retirement fund values, which means less money for you (presuming you are not directly trading and simply a 401(k) retirement investor).... THEN tax that more anyway whenever you pull it to use it.

Make sense from that perspective?

Mac Lorry <a href="... (Below threshold)
hcddbz:

Mac Lorry
http://www.workforce.com/section/00/article/25/83/58.php

Actually they has been a move to do away with the tax breaks on 401ks. They want the great Socail Securty Adminstation to manage all our retierment accounts. So they can manage it in the fair and just way they have done with the current Socail Securty system.

American Corporate Income Tax rate is currenlty 34%. Though Obama intend to raise it. That rate does not include other Federal tax companies need to pay.

http://www.taxfoundation.org/news/show/1175.html

But don't worry comrade we will not need money. The great workers paradise, free health care , free housing, free cars and free food. Just surrender your Liberty. We shall work on collective farms, While our leadrs get the same treatement of course they will have the best food, hosuing and medical care because some people are more equal than others. Come drink and sing the International. Rember question it and you are Racist, Uncle Tom, Oreo, Twinikie

Wait what is that I hear! A reminder that we shall always overcome the forces that threaten freedom.

Oh! thus be it ever, when freemen shall stand
Between their loved home and the war's desolation!
Blest with victory and peace, may the heav'n rescued land
Praise the Power that hath made and preserved us a nation.
Then conquer we must, when our cause it is just,
And this be our motto: "In God is our trust."
And the star-spangled banner in triumph shall wave
O'er the land of the free and the home of the brave!

ah, fantasy-based mockery: ... (Below threshold)
peabody3000:

ah, fantasy-based mockery: a classic neocon refuge from reason

=)

Steve,Mak... (Below threshold)
Mac Lorry:

Steve,

Make sense from that perspective?

The point I was making is that a significant amount of investment in stocks comes from 401k and other tax deferred savings plans. Increased tax on capital gains has no effect on someone deciding which mutual fund or other type of investment they will put their money into through their 401k. Thus, the effect of increased tax on capital gains is muted as it has no impact on holdings in tax deferred savings plans, nor for investors who don't hold stocks long enough to qualify for capital gains (day traders, as an example).

As for an increase in the corporate tax rate having an impact on the price of stocks, there's a school of thought that says corporations don't pay taxes, they just collect them. The tax is passed through to consumers and as long as every corporation faces the same taxes there's no competitive disadvantage, and thus, no impact on the price of the stock. Even foreign corporations doing business in the U.S. have to pay U.S. taxes on their U.S. earnings.

Where any higher cost of doing business in the U.S. hurts the economy is in job growth. Large corporations simply move operations off shore (including Mexico) and small businesses out-source to off shore suppliers. The Democrats say they oppose jobs moving off shore, so the way to characterize increased cost to business is that it causes more jobs to move off shore.

hcddbz,Ac... (Below threshold)
Mac Lorry:

hcddbz,

Actually they has been a move to do away with the tax breaks on 401ks.

These politicians will find out that messing with people's retirement is the third rail of politics. The Democrats complained mightily about privatizing social security, but they'll find just as much resistance to nationalizing private retirement savings.

American Corporate Income Tax rate is currently 34%.

It's not a flat rate for all corporations. Given the usual profit margin most chapter C corporations pay in the 15% rate. Yes the big corporations traded on the stock market pay more on their profits, but there are so many loop holes and gray areas that few pay anywhere near the 34% rate. It's like the movie stars who agreed to a fee based on a few percent of net and find that they get nothing even when the movie grosses millions. Profit is subject to creative accounting and the greater the potential profit the more the company can spend on creative accountants. Not even the government understands the tax code.

These politicians will find... (Below threshold)
hcddbz:

These politicians will find out that messing with people's retirement is the third rail of politics. The Democrats complained mightily about privatizing social security, but they'll find just as much resistance to nationalizing private retirement savings.

One hopes.
Though with the level of negative scenarios being presented y the media some will think a government grantee of 3% will be great as they believe all the money in the market will disappear.




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