The former communists running Russia apparently understand tax policy better than the buffoons in charge of U.S. tax policy. Not only does Russia have a 13 percent flat tax, but the government has just announced it will eliminate the capital gains tax (which shouldn’t exist in a pure flat tax anyhow). Here’s a passage from the BBC report:
Russia will scrap capital gains tax on long-term direct investment from 2011, President Dmitry Medvedev has said. …Mr Medvedev told the St Petersburg International Economic Forum that long-term direct investment was “necessary for modernisation”. …Its oil revenues fund, which has been financing the deficit, is expected to end next year, and the government wants to attract more foreign investment to boost the economy.
Sounds like President Medvedev has watched the Center for Freedom and Prosperity’s video explaining why there should be no capital gains tax. Now we just need to get American politicians to pay attention.
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They’re running off oil and LNG exports and don’t have to make tough decisions the way we do.
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Tax is essential, otherwise how is the country going to grow. You just can’t tax on individiuals alone, its dumb!
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Here is my commentary if you would like to follow it.
http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&discussionID=22702258&gid=48265&commentID=18158097&trk=view_disc
Its the funniest thing that I read your statements and read the original article and I posted a commentary that explain why the government here in America need to decrease taxes for business. And the article is referring to capital tax reduction which is very similar to what I suggested. While I can see why people would have a problem with this reduction we have to realize business are small and large and in between. Therefore we might be decreasing taxes for people who gross 3M a year to a multi-billion company.
It seems as though we are giving away a lot by doing this but consider if the companies follow the plan. When the government reduce taxes for these business it leaves money available for them to hire much needed employers for the lesser position. Thats the goal of our Current President Barack Obama to take the Stimulus plan provided for President George Bush and add more jobs into our eoonomy.
Now the problem is when the companies decide to keep the money they save instead of reinvesting it in people. Its a chance we would have to take though.
Because in order for our economy to spend more and increase profit in the companies and organization we must have the money to pay for it and the jobs to gain money to pay for it.
I still cant believe the Russians was thinking and doing the same thing that I was thinking.
I will add your Weblog on my ‘Blog Friends’, if you request on my blog comments (freessay.blogspot.com). great for ur weblog brother.
“[Europeans have] free healthcare for all, free education for all, social security for all,”
They are not free. They are simply been paid by the productivity of other people. For better or for worse there is no way to heavily tax productive people, especially those who engage in exceptional work, and force them to lift the standard of living of other people, while, at the same time, keeping them motivated to engage in exceptional work. The end result is a society of muted incentives to production, a society that grows at 1-2% per year constantly loosing ground in a world that grows at 4% per year on average. Because of the compounding effect of growth, after 20-30 years of very mediocre sub par growth, societies that grow at 1-2% will not look as enviable. This is the big picture of what you are starting to see in the current European crisis: The decline and worldwide economic marginalization of the welfare state and the low productivity/growth that it entails.
In Europe, people who truly need help from others are perhaps 3-6% of the population. Not 60%. The remaining 54% are people who choose economic mediocrity, pursuit of non economic activities that increase their own personal standard of living (but otherwise offer nothing to the rest of society) and are the majority that is responsible for European slow growth and eventual economic marginalization.
Before Americans decide that the grass is greener in Europe they should go there, not just to visit the museums, but also to try to find a job, start a company, live in an apartment, haul their 2-3 kids in and out of public transportation just to get groceries etc. And remember, as I said, Europe growing at 1-2% in a world that on average grows at 4% will not look that enviable in 30 years. Hopefully the US will escape that fate.
great. no taxes for the big ones. soon russia will become the next usa: no taxes, no healthcare, no free education, no social security, nothing. that’s how we republicans like it here in the states, no taxes, no nothing.
we laugh at european idiots who pay taxes and have free healthcare for all, free education for all, social security for all, more vacations, more respect for each other, less crime, etc, etc.
waow… the great post today. thank you.
[…] Russia Getting Rid of Capital Gains Tax The former communists running Russia apparently understand tax policy better than the buffoons in charge of U.S. tax […] […]
That’s good news for the Russians. I agree with your point and I like your clear explanation, but I must say your sharp suit and that background make you look like a shill for Wall Street’s crooks and liars. I doubt whether this video will convince anybody but hardcore libertarians.
BTW, it’s a bit misleading to state that welfare states like the Netherlands have no capital gains tax. European countries are quite creative in devising various ways of taxing capital or income from capital. In the Netherlands, the goverment assumes that capital will have a 4% yield, and above a certain threshold, 30% of that fictitious yield is taxed, which amounts to a tax of 1,2% on capital. This is a pretty simple system which doesn’t discourage risk-taking as much as a capital gains tax does, but if your stocks are dropping or you have a savings account yielding interest below the inflation rate, you will have to pay up even though you are losing money.
@ sure: absolutely. And I’ll remember your infinite wisdom as I apply for employment from our poorest people.
It’s empty-headed fools like Sure that got us in the fix (aka: Obama) that we all enjoy today.
So Russia has a 0% capital gains tax.
The US will soon have a capital gains tax approaching 50% in states like CA and NY.
Who won the Cold War again? Or is this the bizarro universe.
Because, what this country really needs is less taxes on the rich. Absolutely!
Medvedev and Putin are lowering their own taxes. That’s what you *don’t* want from your governors. Doing what’s best for them, but not what is best for the people
Medvedev and Putin are lowering their own t
[…] they understand economics better than the “intelligent” leftists that rule America. Russia is going to scrap the capital gains tax. The former communists running Russia apparently understand […]
Yes, but the Russians aren’t trying to nationalize every sector of their economy. Obama, when not golfing, has a vested interest in keeping the U.S. economy in the toilet. The worse it gets the more he can try to loot and grab.