A Quote by Porter Stansberry
I can tell you what happens to countries that go bankrupt. I've been to Argentina. I'm familiar with the history of Mexico and Great Britain. We'll see the same things here shortly: inflation, huge tax increases, capital flight and, eventually, capital controls.
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Well, certainly the Democrats have been arguing to raise the capital gains tax on all Americans. Obama says he wants to do that. That would slow down economic growth. It's not necessarily helpful to the economy. Every time we've cut the capital gains tax, the economy has grown. Whenever we raise the capital gains tax, it's been damaged.
If, for example, each of us had the same share of capital in the national total capital, then if the share of capital goes up it's not a problem, because you get as much as I do. The problem is that capital in capitalist countries is very heavily concentrated, especially financial capital. So then if the share of income from that source goes up, that actually exacerbates inequality.
The financial doctrines so zealously followed by American companies might help optimize capital when it is scarce. But capital is abundant. If we are to see our economy really grow, we need to encourage migratory capital to become productive capital - capital invested for the long-term in empowering innovations.
Every time we've cut the capital gains tax, the economy has grown. Whenever we raise the capital gains tax, it's been damaged. It's one of those taxes that most clearly damages economic growth and jobs.
The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital... the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy.
Why do we fully tax some kinds of income from capital, like interest and dividends; partially tax other kinds like capital gains; defer tax on other kinds, like IRAs; and impose no tax at all on still other types of capital income, like interest on municipal bonds? This simply is not rational. These distinctions don't have any inherent logic.
One of the tax systems in the US is for wage earners. The government takes money from them out of each paycheck - so it knows how much they make, and those workers can't cheat to any significant degree. But the other tax system is for capital. Those with capital get to tell the government what they want to tell. They may get audited, but if their tax returns are of any size the government doesn't have enough of the smart auditors to figure out what's really going on. And there are the rules that allow you to do things like take in money today and pay taxes on it thirty years from now.
Of course, looking tough on inflation is part of any central banker's job description: if investors believe that inflation is going to get out of control, you end up with higher interest rates and capital flight, and a vicious circle quickly ensues.
The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital from static to more dynamic situations, the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth of the economy.
There is an old adage that the quickest way to drop your tax take is to increase taxes. If capital gains tax is going to be 50 percent, my contingent capital gains tax is going to be 250 million pounds.
No one making less than $250,000 under Barack Obama's plan will see one single penny of their tax raised, whether it's their capital gains tax, their income tax, investment tax, any tax.
I don't want to get into the 'who's a hostage-taker' discussion here, but what is the estate tax? It's a double tax on death. Economists will tell you that it's really not a tax that soaks the rich, but it's a tax on capital that deprives business investment and therefore job creation.
We have a legal system, and this is not something that happens all the time. We have capital punishment. America has capital punishment. Iran has capital punishment. Iran hangs people and leaves their bodies hanging on cranes. Iran put to death more than a thousand people last year. I don't see EU reporting on it.
It makes no difference to a widow with her savings in a 5 percent passbook account whether she pays 100 percent income tax on her interest income during a period of zero inflation or pays no income tax during years of 5 percent inflation. Either way, she is 'taxed' in a manner that leaves her no real income whatsoever. Any money she spends comes right out of capital. She would find outrageous a 100 percent income tax but doesn't seem to notice that 5 percent inflation is the economic equivalent.
A tax on capital is self-defeating, in that it slows down capital accumulation, investment and economic growth.
For every company that sees the value of their capital go up, there's another company that has been disrupted, and the value of their capital gets marked down because it's not going to compete in the same way.
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