Election is bumming out small businesses

While the merely rich making $500K-2 million end up paying the highest rates of all with the bulk of their income coming in as ordinary income.

No, I actually do not understand what you are trying to say. Can you re-phrase it in the form of understandability?

While the merely rich making $500K-2 million end up paying the highest rates of all with the bulk of their income coming in as ordinary income.

Whether we increase taxes or decrease them. Whether we eliminate most deduction or not, IMO, cap gain must be taxed at least at the level of regular income.

Why's that?

Opinions/beliefs like these normally do not have objective reasons but I will try to give you my rational.

We all have to pitch in to finance our government. Since it is possible to make money not for your work but by having your money work instead, we must tax cap gain. And we should respect and encourage those who work for a living as much as we do those whose money do the work. That requires that we tax cap gain at least as much as regular income.

But where do investors get the money that earns them capital gains? Isn't it income, originally?

Whether we increase taxes or decrease them. Whether we eliminate most deduction or not, IMO, cap gain must be taxed at least at the level of regular income.

Capital losses can only be offset to capital gains with the below limitations - hint: $3k isn't jack.

If your capital losses exceed your capital gains, the excess can be deducted on your tax return and used to reduce other income, such as wages, up to an annual limit of $3,000, or $1,500 if you are married filing separately.

If your total net capital loss is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you incurred it in that next year.

Houses are income tax free up to $250k in profit ($500k joint) if you lived in it for 2 of the past 5 years. Above that it is taxed as capital gains.

Fine with me. Flat tax, no deductions, no gimmicks.

1. I have no idea what your "hint" supposed to mean.

2. Here is ONE reason we should not co-mingle cap gain with ordinary income. Say you know about a few 50/50 investment. Equal chance that they might double or totally crash. So you invest in two of them $100,000 each. say you also make $100,000 a year in ordinary income. Say one of your investments double and one crashes. So you should come even and just pay income tax on $100,000. Say for making a point cap gain rate is 15% and ordinary income tax rate is 30%. So you cash the loser stock dec 31 and pay no income taxes. (Savings of $30,000.) Then you cash the other one on Jan 1, and next year your pay $15,000 in taxes -- a gain of $15,000 courtesy of Uncle Same and middle class taxpayer chumps. I am sick and tired of games that the super rich can and will play.

3. And once again.....house sales are not income-taxed, GAINS from houses are. No? And not when you roll over and by another house.

We can employ my suggestion without instituting a flat tax. We can eliminate deductions without instituting a flat tax.

I think the idea of a flat tax should get a fair treatment by people and not by snicking it into conversation and pretending that you cannot have many of the improvements unless you also institute a flat tax.

BTW: are you not of the opinion that is we increase tax rate on cap-gain the super rich would just stop gaining cap gain or moving it offshore? If you are, then why are proposing to make ordinary income and cap-gain taxes the same and thereby causing the super rich to gain their gains offshore?

and I will again point out the basics of how taxes work for probably the dozenth time.

If you make the majority of money on say long stocks and dividends (capital gains) of course their tax rate would be lower. Stock gain is not guaranteed, it's a risk. Then when you donate such vast amounts to charity on top of that.. your tax rate is going even lower. Plus interest on x, y and z etc..

Now the interesting part is we exempt certain people from this tax based on income.. For example If you sell your house and have lived their for 2 years.. you're exempted as long as you don't make $250k. Now imagine what would happen if all things were taxed equally. The government taking 15% off the sale of your home? People would go ballistic.

Notice also that Obama's tax rate has been declining significantly also.. why? because through his books sales he earned a large amount of wealth.. and that wealth is making money. Which is why he pays a less effective tax rate than his secretary.

So how do we make this fair? We increase the capital gains tax rate.. but allow people to minus losses from taxes. Example.. if I make $250k in income then lose $250k on stocks.. well my income is 0. Instead the government treats you like you made $248,500. The government want a piece of the pie when people do well.. but when people do poorly.. they close their eyes and pretend it didn't happen. But they still want standard taxes on your guaranteed income?

From the IRS web-site:

9. If your total net capital loss is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you incurred it in that next year.

Question: you gain $10,000 but lose $19,000 on your investments in 2011. So you pay no cap gain tax in 2011. It is now 2012. You carry over the extra $9000 to 2012. Say in 2012 again you gain $10,000 but this time no new losses. Do I read this correctly that you then pay cap gain taxes on only on $1,000 since it is assumed (according to the IRS) that you "incurred" the $9,000 loss in 2012?