You think investors don't know that cap gains aren't adjusted for inflation? That's one of the central reasons that people are opposed to taxing cap gains as income.

Of course there's more risk. There's also much more potential profit. That's one of the main reasons why most of us start businesses. I sure as hell wasn't deterred from starting my business because of the risk involved. Those risks are a given. What's crazy is the idea that if I'd put my profits into the stock market, I should pay a lower tax rate when I cashed in than if I'd just paid myself more at the end of each year.

This is why people have taken to calling you a troll, so the fund manger may make ZERO- so may many other classes of people- but they don't get such preferential treatment- only the fund manager does- he gets the treatment that people who have money at risk- people who may actually lose money (ie., investors)- you never actually address this you just keep dancing around-

If the treatment of hedge-fund managers is so different than other businesses in which cap gains are involved, then why hasn't this alleged loophole been closed? I highly doubt that a high percentage of Americans are sympathetic to hedge-fund managers, and the Dems controlled the presidency, House, and Senate for all of 2009 and 2010. If this is so outrageous or different, why hasn't there been any movement on changing it?

So, if capital gains were indexed for inflation you'd be just fine with them being taxed as ordinary income? Of course you wouldn't, so why bring it up? Andy and I have already signed up to that position. I suspect most if not all would as well. In fact, I would be very much against Cap gains being taxed as ordinary income if they weren't indexed for inflation. So how's that?

As I said on the last page, it's absurd to suggest that lottery winnings should be taxed at the same rate as someone who risks five years and substantial money to build a company that might fail.

Why couldn't there be some middle ground in which cap gains are adjusted for inflation while also acknowledging that risk-free earnings should be taxed higher than earnings that carry some (or substantial) risk?

If the treatment of hedge-fund managers is so different than other businesses in which cap gains are involved, then why hasn't this alleged loophole been closed?

Hedge fund managers do get paid something besides their bonus on profits. If the troll is trying to argue something besides that then he is simply doing what he does best and most often.

Lottery winnings aren't risk free. You have to purchase a ticket which has very, very little chance of paying out.

Joe's idea of compromise. Give me everything I want, and nothing you want. While we're at it, why don't we lower the top tax brackets and also create more loopholes?

Hedge fund managers do get paid something besides their bonus on profits. If the troll is trying to argue something besides that then he is simply doing what he does best and most often.

Yes, buying a lottery ticket is the same as investing $100,000 in a start-up.

Was arguing about the carried interest loophole with a friend last weekend -- and his point was the same as Joe's -- "But there's no guarantee that I get a CI bonus!"... My response was "so you mean you don't even get a salary?" -- to which he responded "Of course, but it's not much". His definition of "not much" was roughly 8 times the US median income -- but, sure, when you compare it to a 6-7 figure bonus - I suppose it really is "not much".

See, this is the kind of question that you might want to look up the answer to before you argue your point.

Laws closing this loophole have been passed multiple times by the House since 2007, but were filibustered by Republicans in the Senate each time.

Except it's the opposite in what I am describing. On Wall Street, a fair number women are hired at junior levels that require the worst (longest/most unstable) hours. It is at the more senior levels that have more stable hours where you find less women.

Naturally. The junior females often get married and/or have children and leave the company before they stick around long enough to be eligible for the most senior positions. When those hiring decisions are made, the pool of females is more depleted than the pool of males.

See, this is the kind of question that you might want to look up the answer to before you argue your point.

Laws closing this loophole have been passed multiple times by the House since 2007, but were filibustered by Republicans in the Senate each time.

If the basis for your argument is the fact that no loophole exists because nobody has tried to close it, then I guess you can stop arguing now.

You're right. It's riskier. Mind you, it doesn't benefit society as much, but that's not what we are arguing. We are arguing risk (your choice BTW).

I'm not sure why Joe is even arguing on this little arcane tax issue, I suppose it's because he took a [misinformed]stand and he's gonna stand and fight on that hill come hell or high water...

OK, great. Let's make lottery winnings tax-free. Makes great sense.

The Dems had a filibuster-proof Senate for 181 days in 2009 and into 2010. Why wasn't this bill moved and passed then?

Joe's boilerplate response for everything "Liberals" want but couldn't get passed. Just how much legislation do you expect to get crammed into this period, a big chunk of which Congress was out of session?

Do you want to discuss politics or do you want to discuss me all day?

Sseriously folks, I don't know why you keep arguing with him, because it's clear you'll get nowhere.

As opposed to all the liberals who've admitted to changing their minds here. Give me a break.

Whose choice was it to spend a big chunk of it out of session? If the Dems cared more about vacation time than advancing their agenda, then you should be aiming your blame at Dems.

If folks here are really upset about the tax treatment of carried interest, they should be denouncing Democratic Senator Charles Schumer of New York, who resisted the efforts to eliminate the special treatment when the issue arose in 2007.

Generally, Republicans have suggested that tax reforms should be based on "fairer", flatter rates that come closer to treating income the same regardless of source, as was done in the 1987 tax reform under President Reagan with bipartisan support.

But look at some of the weights applied to the individual polls in Silver’s model. The most current Public Policy Polling survey, released Saturday, has Obama up only one point, 49–48. That poll is given a weighting under Silver’s model of .95201. The PPP poll taken last weekend had Obama up five, 51–46. This poll is a week older but has a weighting of 1.15569.

The NBC/Marist Ohio poll conducted twelve days ago has a higher weighting attached to it (1.31395) than eight of the nine polls taken since. The poll from twelve days ago also, coincidentally enough, is Obama’s best recent poll in Ohio, because of a Democratic party-identification advantage of eleven points. By contrast, the Rasmussen poll from eight days later, which has a larger sample size, more recent field dates, but has an even party-identification split between Democrats and Republicans, has a weighting of .88826, lower than any other poll taken in the last nine days.

Generally, Republicans have suggested that tax reforms should be based on "fairer", flatter rates that come closer to treating income the same regardless of source, as was done in the 1987 tax reform under President Reagan with bipartisan support.

Closing the carried interest loophole is tinkering at the margin in comparison.

Now that we've got the blame and punishment out of the way can we move forward and actually talk about this issue in a non-must defend Romney on every single issue/political issue kind of way?

As opposed to all the liberals who've admitted to changing their minds here. Give me a break.

I wasn't aware people were "blaming him" but in any case Romney wasn't and is not the issue on this topic and yet I'm betting there are a few people defending carried interest simply because Romney's name was used as an example.

You're singled out not because you stubbornly hold a position, but because you commit what Dave highlighted: "Intellectual dishonesty, moving goalposts, arguing strawmen, mischaracterizing people's positions, ignoring people's comments or questions that have been posed to you".

So when Misirlou argues that buying a lottery ticket should be considered even more risky than spending years building a business, he wasn't committing any of the above?

You've changed the discussion yet again. I'm talking about committing ALL or MOST of the things Dave describes.

It's like watching a train wreck that keeps going and going. That's why we're still around in this thread, I suspect.

In this instance, Joe K's position may not be typical of a majority of the GOP, although it is probably also true that there is not any real interest in addressing this as a stand alone issue.

So when Misirlou argues that buying a lottery ticket should be considered even more risky than spending years building a business, he wasn't committing any of the above?

So, are you arguing that business start ups have a lower success rate than winning the lottery? It's amazing we have any economy at all.

Since you're supposedly part of the serious, non-troll left here, it's kind of comical for you to suggest that spending one minute to buy a $1 lottery ticket should somehow be viewed in the same light as spending years and tens if not hundreds of thousands of dollars to start a business.

Gee, way to argue honestly.

I know most people here don't venture over to National Review, but this article raises some interesting questions:

Nate Silver's Flawed Model

Democrats are getting contributions from Wall Street for a reason, you know.

Also, when yesterday's IBD poll showed Obama at +6, Nate was just as quick to discount that as he was to discount Gallup's. His consistent position is that outlier results should be taken with a grain of salt, no matter which candidate or party they seem to favor.

And whatever subconscious bias Nate may have (as may we all), the idea that he is intentionally slanting his projections (in any direction) is ridiculous. Silver has utterly staked his professional reputation and career on getting these results as accurate as he can. No matter who wins, to the extent he gets it wrong he will suffer, and to the extent he gets it right he will prosper.

OK, great. Let's make lottery winnings tax-free. Makes great sense.

But whether he "talks" about it as much as you'd like, the nonpartisan discounting of outliers is built right there into his model! And he "talked about it" again yesterday when there was an outlier poll that favored Obama. I'm not really sure what your complaint is.

That works fine up here in Canada. We also don't tax game show winnings. That's why when they had the Canadian version of "Who Wants To Be A Millionaire", anyone who might have won the top prize on that (limited run) show would have actually won more than the American, even though (way back then) the Canadian dollar was worth much less (0.66 USD).

The current odds of winning the PowerBall are 1 in 175,223,510.00. The odds of winning any prize when buying a $2 PowerBall ticket are 1 in 32. Is it your belief that start-ups have worse odds than that?

No, it's my belief that spending one minute to buy a $1 lottery ticket isn't even on the same continuum as spending five years building a company.

This is undoubtedly true in the general sense, but if it's true that Nate's projections are seen on the left as something of a self-fulfilling prophecy, then this would be the time that Nate would be the most susceptible to allowing his bias to creep in. I don't think it's an exaggeration to say the Dems will go into full-blown panic mode if Nate substantially downgrades Obama's chances in Ohio, so it's at least curious that Nate seems to be giving the most weight to the oldest and most pro-Obama polls in Ohio and a couple other key states.

It's like watching a train wreck that keeps going and going.


It sounds like quite a show.

I saw a train wreck about 15 years ago or so on the side of the Hudson River in Hyde Park. About 10 to 20 cars fell into the river in the early morning hours.

How about spending 1 hour to buy $10,000 in lottery tickets vs spending 1 hour to buy $10,000 in AAPL options?

Yeah, it's so bizarre that Nate has Obama winning Ohio by 2 points. I mean, that's just totally out of line with the RCP average, which has Obama ahead by 1.9 points.

And it's just super suspect that Nate has the polling average in Ohio as Obama +3.0 and the adjusted polling average as Obama +1.8. I mean, it's like totally obvious that he's cooking the books to help the Democrat Party, amirite?

There was no reason whatsoever to post that article unless he was trying to reassure Obama supporters.

So it is not about risk, it is about effort? Is that your position now?

But as has been pointed out to you several times, beyond all partisnahsip issues, Silver's rep is based on getting it right, and the worst possible outcome from his POV would be predicting an Obama win and being wrong,

Thank god this place has non-snarky liberals to elevate the dialogue.

Cutting through the snark, yes, it's still interesting that Nate has Obama winning Ohio since Ohio tends to go +2.0 for the GOP candidate relative to the national polls.

I know most people here don't venture over to National Review, but this article raises some interesting questions:

The difference comes from the fact that Real Clear Politics gives equal weight to all of the polls it includes and uses only the most recent polls from each polling organization in a given timeframe.

The most current Public Policy Polling survey, released Saturday, has Obama up only one point, 49–48. That poll is given a weighting under Silver’s model of .95201. The PPP poll taken last weekend had Obama up five, 51–46. This poll is a week older but has a weighting of 1.15569.

The NBC/Marist Ohio poll conducted twelve days ago has a higher weighting attached to it (1.31395) than eight of the nine polls taken since.

He means that PPP’s polling results have tended to favor Obama less than they used to, and thus that the “house effect” of their democratic tilt has lessened. But this subjective measure fails to take into account the possibility that Romney is doing better among the same samples.

I am not a fan of unskewedpolls.com by any means

In that same post, Silver touts that a “SurveyUSA poll showing Mr. Obama with a one-point lead in Florida is really the slightly better result for him.” That SurveyUSA poll indeed had Obama up by one point, but had a Democratic party-ID advantage of nine points. In 2008 Democrats had a three-point advantage, and in 2010 the parties were even. So the SurveyUSA poll is good news only if you believe Democrats will not only improve on their 2008 turnout, but triple their turnout advantage over Republicans.

This is also true of Silver’s dismissal of Romney’s lead in Gallup this week. While Romney is likely not up by seven points nationally, as the poll predicted, you can’t dismiss it while at the same time giving a twelve-day-old Marist/NBC Ohio poll a higher weighting than eight newer polls when Marist has leaned Obama this entire cycle.

How about spending 1 hour to buy $10,000 in lottery tickets vs spending 1 hour to buy $10,000 in AAPL options?

How does buying lottery tickets benefit society in a way that's remotely comparable to investing in a business?

And by society, I don't mean stockbrokers.

This seems really strange — taxing work but not "free" money.

There's absolutely nothing at all "interesting" or "fishy" about projecting Obama to narrowly win a state where he leads in the polls. Do you find the RCP polling average in Ohio--which, again, is the exact same 2 point advantage 538 gives him--to be a product of bias?

The difference is also that RCP ignores the Ipsos/Reuters and RAND tracking polls.

This entire column can be boiled down to: "I haven't studied any of this, but I know Silver is doing it wrong because his analysis is not as favorable to Romney as I think it should be."

Do you mean people in tuxedos and ball gowns? Like, high society? Because that money could go to hiring a band for the fall cotillion.

It's a rare event that a lottery winner just hangs on to every penny of the money.

Now, you have switched your position and saying it is about effort (or at least that appears to be what you are saying). So is it now about effort, as opposed to the risk one undertakes? Is that now your position?

So it is not about risk, it is about effort? Is that your position now?

I always wondered why credit cards charge you a fee you use their cards as well as charging the owner of the shop a few to use their cards at the shop? Seems like a hell of a racket.

I haven't switched my position at all. Uncompensated effort is a major form of risk. It's absurd that this even needs to be explained.

but why don't Real Estate Agents and full commission sales reps- who run the risk of uncompensated effort, enjoy the same tax relief that fund managers do?

I always wondered why credit cards charge you a fee you use their cards as well as charging the owner of the shop a few to use their cards at the shop? Seems like a hell of a racket.
You just answered your own question.

Do they have invested money at risk?

I've been saying this in response to opponents of estate taxes for years. (And I don't buy the "double taxation" canard; just because the person who's getting the inheritance is a family member or designated beneficiary doesn't make the inheritance anything other than "income" from that person's perspective.)