In The USA: the Next Revolution

[JarodParker]

His secretary is taxed in the 28 percent bracket. His long-term gains are taxed at 15 percent. That is income deferred for a year or more. Take income from said gains within the year they were acquired, and you get taxed at your earned income rate--35 percent. By the way, this is after government already takes 15 percent to 39 percent off all a company's taxable income (including capital gains).
So...bull.

So what? Why should he get a break because he chose to defer his income a year? And so what, he gets hit with a corporate tax... he chose that path because the advantages outweighed the tax savings he would have under other corporate structures.
Personally I like the smaller tax burden of long-term holdings and I'm on board with Dayuhan argument about encouraging investment. But I can see how people can find the disparity to be unfair.

You have a funny notion of ripped off. You get an adjustable-rate mortgage to buy a house you otherwise would've never been able to get, you default, and it's the bank's fault?

You're intentionally taking my statement out of context here. The rip-off is not in that the subprime mortgages were made available but the rabbit hole they lead down to. The top management at many big banks created an atmosphere where line employees were encouraged to qualify anybody with a pulse for a mortgage even by falsifying applications. They did this so they can have good quarters and rake in the bonuses. And I clearly stated that the subprime borrowers shares the blame as well.

MBS's were the only thing supporting your quest for ever expanding home ownership. So the banks ripped you off by innovating a product that all the models agreed should hedge against an increased risk of default by tripling subprime lending?

I never really bought the notion that everyone should be a homeowner.
And it doesn't matter what the models showed if the input was tainted. Those MBS's were improperly rated by the agencies who were in collusion with the banks.

And here we get to the rub. So people who lost money predicting the housing bubble collapse before 2008 are victims according to reasoning, right?

I never said that. My point was that if you're going to get paid ungodly sums of money as an executive, it should be based on a track record longer than just one quarter. They should not be able to uild a house of cards and walk away as it implodes. It's like a ship's captain having to be responsible for his wake inside the harbor. Salary and bonuses should be structured in a way that CEOs create profit in a responsible manner... I say this as an investor. Otherwise it's just a ponzi scheme.

Yeah, I guess that's why there were zero bank failures over the past 3 years. Guess ACA made out like a bandit on ABACUS. Lehman Brothers is having a banner year in 2011. Once again, do you understand that their are two sides to every deal?

Lehman failed because it was the first big bank to be hit and at that point the government did not have its act together to respond as they did in later instances. Most of the other failures are in smaller regional banks who were in fact more disciplined in their lending. And there are always bank failures, even in non-crisis times. Overall, the banks/bankers did not learn a lesson.

...in the end it's the tax payer who assumed all the risk...

That's not even remotely true. The taxpayer that assumes any risk is the 53 percent who pay federal taxes.

I don't seed how you can disagree with me here. I said "the tax payers assumed all risk" and you fired back with "the taxpayer that assumes any risk is the 53 percent who pay federal taxes"... aren't the 53% who pay federal taxes, taxpayers?

Of that, 75 percent of the risk goes to the 20 percent making $100,000 or more.

How did we go from the top 1% to the top 20%? $100,000? that's a nurse who works overtime, or a police lieutenant (sergeant in the big cities) or an engineer. These people share the outrage of the demonstrators.

But even then, the principle risk is held by Treasury bond holders.

You know people in the middle class are also bond holders right? 401Ks, TSPs and such.

Keep in mind that not everyone who's hurting right now took a subprime mortgage or was reckless in their personal finances or earned non-marketable degrees.