somehow we lost sight of the American dream.  A house. Rich. Wealth.
Then the rest of society that decide not to chase that dream want to punish those that have pursued and realized that dream. Is that really fair?

somehow we lost sight of the American dream.  A house. Rich. Wealth.
Then the rest of society that decide not to chase that dream want to punish those that have pursued and realized that dream. Is that really fair?

Personally, I don't think it's fair. Isn't what you describe as textbook Socialism?

We live in a free country. One is free to pursue what he/she pleases or not as the case may be.

I'm not sure why there is all this talk about passive income compared to non-passive income? Passive income is taxed the same as earned or non-passive income except that wage taxes, SS and Medicare are not removed from the income prior to the owner receiving it. Otherwise it is added to your total income and becomes part of your Ajusted Gross Income (AGI) and is taxed at the same rate and just like any other non-passive income. And to say anyone who recieves passive income is rich is a fallacy as certain retirement income such as a pension is also considered passive income. Would you consider all the construction workers I know who never saved a penny and never invested in their lives that receive a pension when they retire as rich just because their pension is considered passive income? Seems like all my retired friends who receive a pension are barely making ends meet.

Passive income does not define rich people. Dividend income and interest income does not define rich people either as I had dividend income as a teenager. Every time I saved $100 from my car washing job I bought 4 shares of either SCE or PG&E. I certainly was not rich as I was earning $1.75/hour. I think smart people who invest their money properly or people who work hard all their lives to earn a pension (whether rich or poor) earn passive income. There are other forms of retirement income which is earned by hard working people earning small to moderate incomes all their lives also earn passive income. So I ask what does having passive income have to do with being rich?

did you sell your PG&E?

Personally, I don't think it's fair. Isn't what you describe as textbook Socialism?

We live in a free country. One is free to pursue what he/she pleases or not as the case may be.

Sorry. I meant that why do we always seem to target the rich when it comes to taxes? I hear "That's not fair" "They should pay more"
More for what? I don't agree with that. Why are the wealthy more responsible for taxes than others?

did you sell your PG&E?

Yeah I sold it many many years ago. I bought municipal bonds with the money. Better tax advantaged investment over the utility stock.

Sorry. I meant that why do we always seem to target the rich when it comes to taxes? I hear "That's not fair" "They should pay more"
More for what? I don't agree with that. Why are the wealthy more responsible for taxes than others?

Sorry, misunderstood.

Remember:  the government doesn't produce anything to contribute to the GDP.

Econ 131:  GDP Calculation via Expenditure Approach

GDP = Consumption + Investment + Government  + Net Exports
 
Where:

Consumption = All expenditures made by all private citizens

Investment = All non-financial related expenditures made by businesses for business

Government = All expenditures by the government less transfer payments

Net Exports = The difference between exports and imports made by the country


*  Hence, the expenditures of the government is a major contributor to the GDP of any country.

There is unlimited wealth in the US.

The belief of unlimited wealth in the US or any nation for that matter is a fallacy.

Essentailly, that proposition violates the foundational economic law of scarcity.  If it is generally accpeted that there is a finite amount of natural resources on planet Earth, then the GDP of any nation will be moderated by the amount of those resources it can acquire to generate commerce.  Based on that reality, there will be a finite amount of wealth that can be generated and acquired by the citizens of that country.  Consequently, how that wealth will be distributed equitably is the natural result of the above stated human condition.

The belief of unlimited wealth in the US or any nation for that matter is a fallacy.

Essentailly, that proposition violates the foundational economic law of scarcity.  If it is generally accpeted that there is a finite amount of natural resources on planet Earth, then the GDP of any nation will be moderated by the amount of those resources it can acquire to generate commerce.  Based on that reality, there will be a finite amount of wealth that can be generated and acquired by the citizens of that country.  Consequently, how that wealth will be distributed equitably is the natural result of the above stated human condition.

If you really believe the US economy and wealth is a zero sum game, you're living in the distant past.  Resources in the economy have shifted from real property to services and intellectual properties.  As such, if you have a better idea or new product idea, you can CREATE NEW WEALTH where it didn't exist before by bringing that idea or product to market.

You should read this.  It has examples and everything!   

https://www.forbes.com/sites/objectivist/2011/06/14/when-it-comes-to-wealth-creation-there-is-no-pie/#5a64c8e97a2c

Yeah I sold it many many years ago. I bought municipal bonds with the money. Better tax advantaged investment over the utility stock.

so you don't know who eventually owned it?

so you don't know who eventually owned it?

No idea. I graduated to muni bonds. I never looked back.

So, who own(s)(ed) it?

No idea. I graduated to muni bonds. I never looked back.

So, who own(s)(ed) it?

oops
i'm thinking of PGE
Portland general electric

bought by a small company you may have heard of


called enron

I have no problem with passive income being taxed the same as wages.  Do the passive investors use more public infrastructure?  Does the road they drive on cost more to maintain than the road we use?

No, it's not a matter of how the money was earned.  If someone has the financial acuity to make their income by working smarter, not harder, why punish them?  If that person is retirement age, they are ensuring they can maintain a comfortable standard of living in retirement instead of relying on Social Security and Medicare at tax payer expense.  Yeah, I know they paid into the system, but since the Congress raided the fund, the people drawing benefits are dependent on the people paying in now.

They are NOT taxed equally which is exactly my point. And I'm talking about capital gains, not investment income.

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They are NOT taxed equally which is exactly my point. And I'm talking about capital gains, not investment income.

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That's not what you said....

It has nothing to do with limits, it has everything to do with an unfair tax scheme.  Do you think it's fair that a person who earns a million dollars via wages is taxed more than a person passively earning the same million?

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If you really believe the US economy and wealth is a zero sum game, you're living in the distant past.  Resources in the economy have shifted from real property to services and intellectual properties.  As such, if you have a better idea or new product idea, you can CREATE NEW WEALTH where it didn't exist before by bringing that idea or product to market.

I am not denying that people can cash in the way you described.

However, even if people do generate an idea that leads to a new product or service, the new product will still need resources that is still finite and will be competing for the same finite amount of dollars held by consumers.  Hence, new innovators will achieve greater wealth, but will directly or indirectly render obsolete existing products and/or services in the process.

I am not denying that people can cash in the way you described.

However, even if people do generate an idea that leads to a new product or service, the new product will still need resources that is still finite and will be competing for the same finite amount of dollars held by consumers.  Hence, new innovators will achieve greater wealth, but will directly or indirectly render obsolete existing products and/or services in the process.

The value is not intrinsic to the raw materials of the new product.  The value is in the idea that created the product.  Raw materials, labor, factory space -- that's always fluid. 

I can't find a link, but on todays newscast on KGMB they reported that now 4 Hawaii banks are raising their minimum wage to $15 and giving bonuses due to the new tax bill.

I believe the 4 banks were BOH, First Hawaiian Bank, American Savings Bank and Central Pacific Bank.

oops
i'm thinking of PGE
Portland general electric

bought by a small company you may have heard of


called enron

LOL!!! Around the mid 90's I owned Enron stock for a day. I was doing day trading for a while. And Enron stock was climbing hard and fast at that time. So I bought some in the late morning and sold before the day was out. As I remember I didn't make much in it as I got in a little too late that day.

As a teenager I developed a liking for more local highly regulated electric companies at that time which is why I invested in PG&E (Pacific Gas & Electric). As a teenager I felt local companies (in SoCal where I lived at that time) were a good investment. Safe and paid a dividend. As I got older I started playing the market more and taking bigger chances With my money.

That's not what you said....

Earning in this context was meant as via asset inflation. See my original post where I directly mention cap gains.

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I can't find a link, but on todays newscast on KGMB they reported that now 4 Hawaii banks are raising their minimum wage to $15 and giving bonuses due to the new tax bill.

I believe the 4 banks were BOH, First Hawaiian Bank, American Savings Bank and Central Pacific Bank.

That's correct. Each bank gave $1000 year end bonuses except FHB which gave $1500. BOH raised its minimum wage, perhaps others as well but not certain.

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