416. Do I Hear FLAT TAX! Do consider.

Along comes the AP again to get eveybody's panties in a ruffle. This time re taxing investment gains and why the rich get a break. Their article raises issues which might be true, like double and triple taxing of income before it goes into an investment AND more double taxes once its there and/or sold. The author went out of his way to find somebody to quote the fact that everybody pays double taxes, like it is right! Well, it isn't! I too have SAVED a bit by being frugal for over 40 years. I could have spent it and gone in debt like many people who now cry for help. I didn't. Instead, I invested it. That is, money I earned through salary which was already taxed. Taxing savings, like bank accounts, or bond interest, or stock dividends is an additional on-going tax each year. What gripes me is that capital gains are taxed to the fullest amount. Say I had $10K in gains -- I am taxed on all $10K. However, if my loss is $10K, I can only claim up to $3K per year and the rest gets carried over from year-to-year. In other words, the government wants to benefit fully on my gains in a year, but won't let ME benefit from losses.

So, the rich obviously have a lot of investment tied up. They are probably well diversified. Yet, they do occur losses for the risk they take in investing. Plus, it IS WORK to manage a good portfolio. I cannot back the clowns in this article who think investments should be taxed more. Its water-over-the-dam by the time it gets invested. Taxing MUST be at making time. High paid executives and some privileged employees get perks like stock options or discounts on purchased company stock. Companies DEFER paying on taxes in these forms, as do the recipients! You want to tax salaries? Tax these too in the year they are handed out! All options should be taxed as a gain (stock price - strike price of option) immediately!

Regardless, a way to get past all this double taxation and controversy over what is taxed and who is paying what IS THE FLAT TAX. Once again, go to the BOOKS category and look far back for the reference on the Flat Tax.