There are two novels that can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.... John Rogers
Your "Let's say..." assumption doesn't hold water. These corporations should be paying 35% tax on those dividends. Of course, they're not because, as you point out, they're too busy finding ways around it. And Congress is too busy to close these legal loopholes. My point is that 35% + 15% = 50%. Don't penalize the individual investor because Congress has, yet again, let big business off the hook.[/QUOTE]Mostly false. Lets say that the double taxation on dividends issue in effect increases the capital gains tax rate to say 15.1% or so. Whoptie do.
I own 1000 shares of XYZ stock. I receive $10,000 in dividends over 10 years. I pay 15% tax on those dividends. In year 11, I sell those 1,000 shares for $10,000 less than I paid for it. Assuming I have no offsetting gains, I get to deduct $3,000 (I think) in losses every year until I've used up the $10,000. In the meantime, I've paid tax on $10,000 of dividends that were taxed as income when, in fact, I lost money.If you lose money overall, you owe no taxes. Losses offset profits.
I responded initially to Haymarket's post that no one had posted up any reasons why a 15% capital gains rate made sense. I posted up several. Don't like 'em? It's the best I can do.That the thread you are on shows one of the reasons that the double taxation argument doesn't really have much impact. In the case of Romney's money, there was nobody else paying taxes. Bain Capital didn't pay any taxes on the money. They just gave it to Romney and he paid 15% and that was that.
I personally think that the favorable treatment of capital gains needs revisiting...for all of the reasons you've pointed out. Our tax code is a freakin' mess. The capital gains tax is just one area. Corporate income tax is even more aggregious.
Thank you, Quazi!
the same pot of money is taxed twice by the same entity. there is no transaction when a corporation transfers money to its owners like there is when other transactions are taxed
when I earn income it is taxed by the government. when I hire you to cut my grass or do my taxes I pay you income. That money is again taxed but that is because it has been exchanged for services. Same thing If I buy a tennis racquet from Haymarket's tennis supply shop.
how about everyone paying the same flat rate on all income
how about no one being taxed in income but rather transactions
both of those are FAR MORE RATIONAL than this complex VOTE BUYING scheme that Congress loves in order to buy more power by using the tax code to reward supporters and punish those who vote for their opponents?
Yes, the picture is loud and clear the GOP has nothing to offer the working class to continue the tax cuts for the rich in November.2. That the term "rich" is overly vague and can be moved ever downward as liberal progressives start running out of upper income levels to fund their spending. Think AMT.
3. I always try to keep in mind the old adage...."They came for my neighbors things and I said nothing....."
Get the picture....?
Treat the earth well: it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our Ancestors, we borrow it from our Children. ~ Ancient American Indian Proverb
-- Seriously, though, the company pays you salary and gets to deduct that salary...they don't pay tax on it. You do. Business expenses are tax deductible. Another example: You pay your ex-wife alimony. You deduct it. She pays the tax. Can't think of any more examples off hand, but there are plenty. And I'm still laughing about the violin.
Thank you, Quazi!
This is what I know about politicians and taxed. None of them are actually playing much. If Romney ain't payin many then you can bet Obama, Clinton, and all them guys are not. They don't get in trouble for insider trading too.
And I do know that progressive property taxes hurt the poor schools too. The more you drop property taxes on the poor areas the worse the poor schools suffer.
The Crowd is not the sum of its parts.