On July 17 2012 21:17 DoubleReed wrote: The reason that capital gains tax is so low is because it is considered a double tax. That money was already made by the company and was already subject to corporate tax. It gets funneled to investors which is then subject to capital gains tax. So 'effective tax rate' for capital gains hides the corporate tax that was already taken out.
That's not what double taxation means. The term is deliberately misapplied by 1% lobbyists in order to create a false distinction between capital gains taxes and other taxes.
The idea that capital gains taxes are double taxation is a myth, as explained by the following sources (the former conservative and the latter liberal):
No it's double taxation. The term is not misapplied either - you'll find it used in textbooks aplenty.
If I invest in a corporation by lending to it, the interest expense is 100% tax deductible for the corporation while taxed at ordinary income rates for the individual. Here the cash flow generated by the business is only taxed once - at the individual level.
If I invest in a corporation by buying shares, corporate profits are taxed. If I receive any cash from the corporation I have to pay dividend taxes. So here the same cash flow is taxed twice (corp profits and dividends).
Capital gains are a bit more squishy to show as double taxation since the only cash flow is at the investor level when an asset is bought and sold. However, the value of a firm is the sum of all future after tax cash flows (profits) discounted over time. So the value of the company already includes taxes. So when you tax cap gains you are taxing future expected profits (that will already be taxed). If that sounds too theoretical think of it this way - if it turns out that those future expected profits were imaginary the shares will fall to $0 - and the cap gain tax the government collected will be wiped out by cap losses. So cap gains only exist if profits exist - which are already taxed - and therefore double taxation exists.
Try actually reading and responding to the points in the links I provided, instead of assuming I don't know what you're talking about. Your explanation is simply incorrect, for reasons that the links explain.
You might want to re-read what he wrote. He's correct. It can be considered a double taxation if it's taxed at the corporate level and then taxed again at the personal level. He's not referring to double taxation of the same person, he's talking about double taxation of the same corporate income.
Double taxation is the opposite of pass-through taxation. If there isn't pass-through taxation on the income, then there is double taxation. Essentially all money earned by investment in a C-Class corporation is subject to double taxations -- once at the corporate income level and once at the personal income level.
(edit: also that heathen republican blog appears to misunderstand what double taxation is -- it's not the idea that personal income gets taxed twice at the personal level, but rather that personal taxes are imposed on something that was already taxed at the corporate level... the other cited article talks about a misunderstanding of double taxation. they are right that double taxation does not multiply to make the income rate 45% on the personal level, however that's not really what his argument was here)
On July 19 2012 10:37 Signet wrote: Romney is a weak candidate for all the reasons you mentioned but nowhere near the worst. His record as MA governor was pretty good. I feel like he is making a similar mistake that Gore did, distancing himself from his successful record.
Kerry had similar problems, Gore should have won comfortably based of the state of the economy/nation but ran a pitiful campaign and was unlikable, Dole had similar personality/awkwardness issues. And these are just the recent candidates that I have an actual memory of -- is Romney really a worse candidate than McGovern or Goldwater? (I'll leave out Strom Thurmond since he was 3rd party and is too easy to pick on.)
Honestly, if the current state of the GOP didn't insist on such extreme, polarizing positions, I think Mitt would be a perfectly viable candidate.
The Republicans I feel bad for?
I think a McCain/Lieberman ticket (Lieberman was McCain's first choice) could have won this year.
Jeb Bush deserved a shot, but his stupid brother ruined the Bush brand wholly and completely.
I've said it a thousand times already, the GOP need a serious reboot. Forget about pandering to the crazies and attack the middle. There are plenty of voters that would vote for a socially and fiscally conservative approach to federal governance.
On July 19 2012 10:37 Signet wrote: Romney is a weak candidate for all the reasons you mentioned but nowhere near the worst. His record as MA governor was pretty good. I feel like he is making a similar mistake that Gore did, distancing himself from his successful record.
Kerry had similar problems, Gore should have won comfortably based of the state of the economy/nation but ran a pitiful campaign and was unlikable, Dole had similar personality/awkwardness issues. And these are just the recent candidates that I have an actual memory of -- is Romney really a worse candidate than McGovern or Goldwater? (I'll leave out Strom Thurmond since he was 3rd party and is too easy to pick on.)
Honestly, if the current state of the GOP didn't insist on such extreme, polarizing positions, I think Mitt would be a perfectly viable candidate.
The Republicans I feel bad for?
I think a McCain/Lieberman ticket (Lieberman was McCain's first choice) could have won this year.
Jeb Bush deserved a shot, but his stupid brother ruined the Bush brand wholly and completely.
I've said it a thousand times already, the GOP need a serious reboot. Forget about pandering to the crazies and attack the middle. There are plenty of voters that would vote for a socially and fiscally conservative approach to federal governance.
Damn, you are so right. They've moved so far right. A sensible, moderate republican with sensible policies would be nice.
On July 19 2012 10:37 Signet wrote: Romney is a weak candidate for all the reasons you mentioned but nowhere near the worst. His record as MA governor was pretty good. I feel like he is making a similar mistake that Gore did, distancing himself from his successful record.
Kerry had similar problems, Gore should have won comfortably based of the state of the economy/nation but ran a pitiful campaign and was unlikable, Dole had similar personality/awkwardness issues. And these are just the recent candidates that I have an actual memory of -- is Romney really a worse candidate than McGovern or Goldwater? (I'll leave out Strom Thurmond since he was 3rd party and is too easy to pick on.)
Honestly, if the current state of the GOP didn't insist on such extreme, polarizing positions, I think Mitt would be a perfectly viable candidate.
The Republicans I feel bad for?
I think a McCain/Lieberman ticket (Lieberman was McCain's first choice) could have won this year.
Jeb Bush deserved a shot, but his stupid brother ruined the Bush brand wholly and completely.
I've said it a thousand times already, the GOP need a serious reboot. Forget about pandering to the crazies and attack the middle. There are plenty of voters that would vote for a socially and fiscally conservative approach to federal governance.
I agree on all points besides social conservatism. Fiscal conservatism has its defenses, but social conservatism is essentially defined as "making things take longer", such as pain killers, then blood transplants, then organ transplants, then (non embryonic) stem cell research, etc. It's never a set of positions that appeal to the educated, which is becoming a bigger and bigger problem for the GOP as college enrollment continues to go up.
On July 19 2012 10:37 Signet wrote: Romney is a weak candidate for all the reasons you mentioned but nowhere near the worst. His record as MA governor was pretty good. I feel like he is making a similar mistake that Gore did, distancing himself from his successful record.
Kerry had similar problems, Gore should have won comfortably based of the state of the economy/nation but ran a pitiful campaign and was unlikable, Dole had similar personality/awkwardness issues. And these are just the recent candidates that I have an actual memory of -- is Romney really a worse candidate than McGovern or Goldwater? (I'll leave out Strom Thurmond since he was 3rd party and is too easy to pick on.)
Honestly, if the current state of the GOP didn't insist on such extreme, polarizing positions, I think Mitt would be a perfectly viable candidate.
The Republicans I feel bad for?
I think a McCain/Lieberman ticket (Lieberman was McCain's first choice) could have won this year.
Jeb Bush deserved a shot, but his stupid brother ruined the Bush brand wholly and completely.
I've said it a thousand times already, the GOP need a serious reboot. Forget about pandering to the crazies and attack the middle. There are plenty of voters that would vote for a socially and fiscally conservative approach to federal governance.
I agree on all points besides social conservatism. Fiscal conservatism has its defenses, but social conservatism is essentially defined as "making things take longer", such as pain killers, then blood transplants, then organ transplants, then (non embryonic) stem cell research, etc. It's never a set of positions that appeal to the educated, which is becoming a bigger and bigger problem for the GOP as college enrollment continues to go up.
Based on the way he phrased it I kinda think it was a typo ("socially moderate and fiscally conservative") but that is just my guess.
On July 17 2012 21:17 DoubleReed wrote: The reason that capital gains tax is so low is because it is considered a double tax. That money was already made by the company and was already subject to corporate tax. It gets funneled to investors which is then subject to capital gains tax. So 'effective tax rate' for capital gains hides the corporate tax that was already taken out.
That's not what double taxation means. The term is deliberately misapplied by 1% lobbyists in order to create a false distinction between capital gains taxes and other taxes.
The idea that capital gains taxes are double taxation is a myth, as explained by the following sources (the former conservative and the latter liberal):
No it's double taxation. The term is not misapplied either - you'll find it used in textbooks aplenty.
If I invest in a corporation by lending to it, the interest expense is 100% tax deductible for the corporation while taxed at ordinary income rates for the individual. Here the cash flow generated by the business is only taxed once - at the individual level.
If I invest in a corporation by buying shares, corporate profits are taxed. If I receive any cash from the corporation I have to pay dividend taxes. So here the same cash flow is taxed twice (corp profits and dividends).
Capital gains are a bit more squishy to show as double taxation since the only cash flow is at the investor level when an asset is bought and sold. However, the value of a firm is the sum of all future after tax cash flows (profits) discounted over time. So the value of the company already includes taxes. So when you tax cap gains you are taxing future expected profits (that will already be taxed). If that sounds too theoretical think of it this way - if it turns out that those future expected profits were imaginary the shares will fall to $0 - and the cap gain tax the government collected will be wiped out by cap losses. So cap gains only exist if profits exist - which are already taxed - and therefore double taxation exists.
Try actually reading and responding to the points in the links I provided, instead of assuming I don't know what you're talking about. Your explanation is simply incorrect, for reasons that the links explain.
You might want to re-read what he wrote. He's correct. It can be considered a double taxation if it's taxed at the corporate level and then taxed again at the personal level. He's not referring to double taxation of the same person, he's talking about double taxation of the same corporate income.
Double taxation is the opposite of pass-through taxation. If there isn't pass-through taxation on the income, then there is double taxation. Essentially all money earned by investment in a C-Class corporation is subject to double taxations -- once at the corporate income level and once at the personal income level.
(edit: also that heathen republican blog appears to misunderstand what double taxation is -- it's not the idea that personal income gets taxed twice at the personal level, but rather that personal taxes are imposed on something that was already taxed at the corporate level... the other cited article talks about a misunderstanding of double taxation. they are right that double taxation does not multiply to make the income rate 45% on the personal level, however that's not really what his argument was here)
Let me put it this way, would you argue that sales tax is a form of double taxation?
On July 19 2012 09:32 Lightwip wrote: As someone else suggested, it's also possible that he bet against the US currency. That would be absolutely damning if true.
That would be bad, but paying a lot less than in 2010 (13ish percent), or even nothing in taxes would be as well.
Here is the problem in my mind, the summary on tax releases.
After refusing to release any returns for his run in 2008, Romney finally releases a year (2010) of his returns, showing a very low rate.
People are upset about what they see in his tax returns and demand for more from the past, which Romney refuses.
After listening to calls about how George Romney (his dad) released 12 years when he ran for president, stating anyone putting out only a year looks like they're hiding something, or are deceiving the American people, Romney states he will put out a second year (2011). He claims he is following the standard of the democrats in 2004, when Kerry put out only two years of returns.
Irritated people point out that Kerry only put out two years in 2004 because he had already put out the 18 years before that when running for the Senate in the past, and thus Romney is being dishonest.
Romney sticks with two years for now, with it becoming a bigger and bigger issue, in the media and with online searches.
On July 19 2012 10:37 Signet wrote: Romney is a weak candidate for all the reasons you mentioned but nowhere near the worst. His record as MA governor was pretty good. I feel like he is making a similar mistake that Gore did, distancing himself from his successful record.
Kerry had similar problems, Gore should have won comfortably based of the state of the economy/nation but ran a pitiful campaign and was unlikable, Dole had similar personality/awkwardness issues. And these are just the recent candidates that I have an actual memory of -- is Romney really a worse candidate than McGovern or Goldwater? (I'll leave out Strom Thurmond since he was 3rd party and is too easy to pick on.)
Honestly, if the current state of the GOP didn't insist on such extreme, polarizing positions, I think Mitt would be a perfectly viable candidate.
The Republicans I feel bad for?
I think a McCain/Lieberman ticket (Lieberman was McCain's first choice) could have won this year.
Jeb Bush deserved a shot, but his stupid brother ruined the Bush brand wholly and completely.
I've said it a thousand times already, the GOP need a serious reboot. Forget about pandering to the crazies and attack the middle. There are plenty of voters that would vote for a socially and fiscally conservative approach to federal governance.
I agree on all points besides social conservatism. Fiscal conservatism has its defenses, but social conservatism is essentially defined as "making things take longer", such as pain killers, then blood transplants, then organ transplants, then (non embryonic) stem cell research, etc. It's never a set of positions that appeal to the educated, which is becoming a bigger and bigger problem for the GOP as college enrollment continues to go up.
Based on the way he phrased it I kinda think it was a typo ("socially moderate and fiscally conservative") but that is just my guess.
Sorry, I meant socially moderate -- like not pushing for the expansion of gay rights, social welfare etc.
On July 19 2012 10:37 Signet wrote: Romney is a weak candidate for all the reasons you mentioned but nowhere near the worst. His record as MA governor was pretty good. I feel like he is making a similar mistake that Gore did, distancing himself from his successful record.
Kerry had similar problems, Gore should have won comfortably based of the state of the economy/nation but ran a pitiful campaign and was unlikable, Dole had similar personality/awkwardness issues. And these are just the recent candidates that I have an actual memory of -- is Romney really a worse candidate than McGovern or Goldwater? (I'll leave out Strom Thurmond since he was 3rd party and is too easy to pick on.)
Honestly, if the current state of the GOP didn't insist on such extreme, polarizing positions, I think Mitt would be a perfectly viable candidate.
The Republicans I feel bad for?
I think a McCain/Lieberman ticket (Lieberman was McCain's first choice) could have won this year.
Jeb Bush deserved a shot, but his stupid brother ruined the Bush brand wholly and completely.
I've said it a thousand times already, the GOP need a serious reboot. Forget about pandering to the crazies and attack the middle. There are plenty of voters that would vote for a socially and fiscally conservative approach to federal governance.
I agree on all points besides social conservatism. Fiscal conservatism has its defenses, but social conservatism is essentially defined as "making things take longer", such as pain killers, then blood transplants, then organ transplants, then (non embryonic) stem cell research, etc. It's never a set of positions that appeal to the educated, which is becoming a bigger and bigger problem for the GOP as college enrollment continues to go up.
Based on the way he phrased it I kinda think it was a typo ("socially moderate and fiscally conservative") but that is just my guess.
Sorry, I meant socially moderate -- like not pushing for the expansion of gay rights, social welfare etc.
Welfare is really more of a fiscal issue than a social one.
On July 17 2012 21:17 DoubleReed wrote: The reason that capital gains tax is so low is because it is considered a double tax. That money was already made by the company and was already subject to corporate tax. It gets funneled to investors which is then subject to capital gains tax. So 'effective tax rate' for capital gains hides the corporate tax that was already taken out.
That's not what double taxation means. The term is deliberately misapplied by 1% lobbyists in order to create a false distinction between capital gains taxes and other taxes.
The idea that capital gains taxes are double taxation is a myth, as explained by the following sources (the former conservative and the latter liberal):
No it's double taxation. The term is not misapplied either - you'll find it used in textbooks aplenty.
If I invest in a corporation by lending to it, the interest expense is 100% tax deductible for the corporation while taxed at ordinary income rates for the individual. Here the cash flow generated by the business is only taxed once - at the individual level.
If I invest in a corporation by buying shares, corporate profits are taxed. If I receive any cash from the corporation I have to pay dividend taxes. So here the same cash flow is taxed twice (corp profits and dividends).
Capital gains are a bit more squishy to show as double taxation since the only cash flow is at the investor level when an asset is bought and sold. However, the value of a firm is the sum of all future after tax cash flows (profits) discounted over time. So the value of the company already includes taxes. So when you tax cap gains you are taxing future expected profits (that will already be taxed). If that sounds too theoretical think of it this way - if it turns out that those future expected profits were imaginary the shares will fall to $0 - and the cap gain tax the government collected will be wiped out by cap losses. So cap gains only exist if profits exist - which are already taxed - and therefore double taxation exists.
Try actually reading and responding to the points in the links I provided, instead of assuming I don't know what you're talking about. Your explanation is simply incorrect, for reasons that the links explain.
You might want to re-read what he wrote. He's correct. It can be considered a double taxation if it's taxed at the corporate level and then taxed again at the personal level. He's not referring to double taxation of the same person, he's talking about double taxation of the same corporate income.
Double taxation is the opposite of pass-through taxation. If there isn't pass-through taxation on the income, then there is double taxation. Essentially all money earned by investment in a C-Class corporation is subject to double taxations -- once at the corporate income level and once at the personal income level.
(edit: also that heathen republican blog appears to misunderstand what double taxation is -- it's not the idea that personal income gets taxed twice at the personal level, but rather that personal taxes are imposed on something that was already taxed at the corporate level... the other cited article talks about a misunderstanding of double taxation. they are right that double taxation does not multiply to make the income rate 45% on the personal level, however that's not really what his argument was here)
Let me put it this way, would you argue that sales tax is a form of double taxation?
You could make that argument if you want to, sure. The point is that if you want to talk about who pays their 'fair share' you should talk about all the taxes they pay - both explicitly and implicitly. Otherwise you end up just talking about who pays their fair share of a particular tax which is an odd concept and has little to do with paying your fair share to society.
On July 19 2012 10:37 Signet wrote: Romney is a weak candidate for all the reasons you mentioned but nowhere near the worst. His record as MA governor was pretty good. I feel like he is making a similar mistake that Gore did, distancing himself from his successful record.
Kerry had similar problems, Gore should have won comfortably based of the state of the economy/nation but ran a pitiful campaign and was unlikable, Dole had similar personality/awkwardness issues. And these are just the recent candidates that I have an actual memory of -- is Romney really a worse candidate than McGovern or Goldwater? (I'll leave out Strom Thurmond since he was 3rd party and is too easy to pick on.)
Honestly, if the current state of the GOP didn't insist on such extreme, polarizing positions, I think Mitt would be a perfectly viable candidate.
The Republicans I feel bad for?
I think a McCain/Lieberman ticket (Lieberman was McCain's first choice) could have won this year.
Jeb Bush deserved a shot, but his stupid brother ruined the Bush brand wholly and completely.
I've said it a thousand times already, the GOP need a serious reboot. Forget about pandering to the crazies and attack the middle. There are plenty of voters that would vote for a socially and fiscally conservative approach to federal governance.
I agree on all points besides social conservatism. Fiscal conservatism has its defenses, but social conservatism is essentially defined as "making things take longer", such as pain killers, then blood transplants, then organ transplants, then (non embryonic) stem cell research, etc. It's never a set of positions that appeal to the educated, which is becoming a bigger and bigger problem for the GOP as college enrollment continues to go up.
Based on the way he phrased it I kinda think it was a typo ("socially moderate and fiscally conservative") but that is just my guess.
Sorry, I meant socially moderate -- like not pushing for the expansion of gay rights, social welfare etc.
Welfare is really more of a fiscal issue than a social one.
It's kind of funny how far right has turned it into a social one. "Government-run healthcare is taking away our freedoms ... to pay way more and get worse coverage."
They've equated any social or government funded program with anti-Americanism.
On July 19 2012 10:37 Signet wrote: Romney is a weak candidate for all the reasons you mentioned but nowhere near the worst. His record as MA governor was pretty good. I feel like he is making a similar mistake that Gore did, distancing himself from his successful record.
Kerry had similar problems, Gore should have won comfortably based of the state of the economy/nation but ran a pitiful campaign and was unlikable, Dole had similar personality/awkwardness issues. And these are just the recent candidates that I have an actual memory of -- is Romney really a worse candidate than McGovern or Goldwater? (I'll leave out Strom Thurmond since he was 3rd party and is too easy to pick on.)
Honestly, if the current state of the GOP didn't insist on such extreme, polarizing positions, I think Mitt would be a perfectly viable candidate.
The Republicans I feel bad for?
I think a McCain/Lieberman ticket (Lieberman was McCain's first choice) could have won this year.
Jeb Bush deserved a shot, but his stupid brother ruined the Bush brand wholly and completely.
I've said it a thousand times already, the GOP need a serious reboot. Forget about pandering to the crazies and attack the middle. There are plenty of voters that would vote for a socially and fiscally conservative approach to federal governance.
I agree on all points besides social conservatism. Fiscal conservatism has its defenses, but social conservatism is essentially defined as "making things take longer", such as pain killers, then blood transplants, then organ transplants, then (non embryonic) stem cell research, etc. It's never a set of positions that appeal to the educated, which is becoming a bigger and bigger problem for the GOP as college enrollment continues to go up.
Based on the way he phrased it I kinda think it was a typo ("socially moderate and fiscally conservative") but that is just my guess.
Sorry, I meant socially moderate -- like not pushing for the expansion of gay rights, social welfare etc.
Honestly I'd prefer if it basically became Libertarians vs Socialists rather than Faux-Conservative-but-actually-really-crazy vs Centrists. But judging by how entrenched the right is right now, it's just a dream.
Lol, are you kidding me? The Left is the the side of radicals and the Right is the side of middle-of-the-roaders right now. As far as the politicians go.
I wish it was Libertarians vs Socialists instead of moderate compromisers vs Socialists. At least that way we'd stand a chance of keeping what little we have left of our inalienable individual rights.
You know, Rights? The ones to life, liberty, property, and the pursuit of happiness that America's founding fathers intended to be enforced, rather than blatantly violated, by our government?
Radicals are a good thing if they're radical for a good idea. (Not that I think the Libertarians are any good. They're full of contradictions. Like some who want anarchy and others who think we can be free in a communism. But I mean Radicals for a limited government that upholds the constitution. Laissez-Faire capitalism.)
On July 19 2012 20:41 Amaroq64 wrote: Lol, are you kidding me? The Left is the the side of radicals and the Right is the side of middle-of-the-roaders right now. As far as the politicians go.
I wish it was Libertarians vs Socialists instead of moderate compromisers vs Socialists. At least that way we'd stand a chance of keeping what little we have left of our inalienable individual rights.
You know, Rights? The ones to life, liberty, property, and the pursuit of happiness that America's founding fathers intended to be enforced, rather than blatantly violated, by our government?
Radicals are a good thing if they're radical for a good idea. (Not that I think the Libertarians are any good. They're full of contradictions. Like some who want anarchy and others who think we can be free in a communism. But I mean Radicals for a limited government that upholds the constitution. Laissez-Faire capitalism.)
Socialist might be one of the most over used, misunderstood terms in the last few years by conservatives.
I actually identify as a socialist, and your saying the democrat party is full of them? Socialism is not spreading a few dollars to the poor here and there, it's a full on economic system. Spreading a few dollars from taxes to the poor, is simply a social program, not a economy.
There are few, if any democrats in office right now that stand for or propose a socialist economy.
At least this as far as my definition of socialism goes, maybe the definition has actually changed to mean something else? Compared to most European countries, the United States democrats are pretty damn conservative.
On July 17 2012 21:17 DoubleReed wrote: The reason that capital gains tax is so low is because it is considered a double tax. That money was already made by the company and was already subject to corporate tax. It gets funneled to investors which is then subject to capital gains tax. So 'effective tax rate' for capital gains hides the corporate tax that was already taken out.
That's not what double taxation means. The term is deliberately misapplied by 1% lobbyists in order to create a false distinction between capital gains taxes and other taxes.
The idea that capital gains taxes are double taxation is a myth, as explained by the following sources (the former conservative and the latter liberal):
No it's double taxation. The term is not misapplied either - you'll find it used in textbooks aplenty.
If I invest in a corporation by lending to it, the interest expense is 100% tax deductible for the corporation while taxed at ordinary income rates for the individual. Here the cash flow generated by the business is only taxed once - at the individual level.
If I invest in a corporation by buying shares, corporate profits are taxed. If I receive any cash from the corporation I have to pay dividend taxes. So here the same cash flow is taxed twice (corp profits and dividends).
Capital gains are a bit more squishy to show as double taxation since the only cash flow is at the investor level when an asset is bought and sold. However, the value of a firm is the sum of all future after tax cash flows (profits) discounted over time. So the value of the company already includes taxes. So when you tax cap gains you are taxing future expected profits (that will already be taxed). If that sounds too theoretical think of it this way - if it turns out that those future expected profits were imaginary the shares will fall to $0 - and the cap gain tax the government collected will be wiped out by cap losses. So cap gains only exist if profits exist - which are already taxed - and therefore double taxation exists.
Try actually reading and responding to the points in the links I provided, instead of assuming I don't know what you're talking about. Your explanation is simply incorrect, for reasons that the links explain.
You might want to re-read what he wrote. He's correct. It can be considered a double taxation if it's taxed at the corporate level and then taxed again at the personal level. He's not referring to double taxation of the same person, he's talking about double taxation of the same corporate income.
Double taxation is the opposite of pass-through taxation. If there isn't pass-through taxation on the income, then there is double taxation. Essentially all money earned by investment in a C-Class corporation is subject to double taxations -- once at the corporate income level and once at the personal income level.
(edit: also that heathen republican blog appears to misunderstand what double taxation is -- it's not the idea that personal income gets taxed twice at the personal level, but rather that personal taxes are imposed on something that was already taxed at the corporate level... the other cited article talks about a misunderstanding of double taxation. they are right that double taxation does not multiply to make the income rate 45% on the personal level, however that's not really what his argument was here)
Let me put it this way, would you argue that sales tax is a form of double taxation?
That is not double taxation as the phrase is used in business law and taxation, no. However I think in some regards (at least from an economic standpoint), particularly as the term is used in politics, it may fit in certain contexts and situations.
On July 17 2012 21:17 DoubleReed wrote: The reason that capital gains tax is so low is because it is considered a double tax. That money was already made by the company and was already subject to corporate tax. It gets funneled to investors which is then subject to capital gains tax. So 'effective tax rate' for capital gains hides the corporate tax that was already taken out.
That's not what double taxation means. The term is deliberately misapplied by 1% lobbyists in order to create a false distinction between capital gains taxes and other taxes.
The idea that capital gains taxes are double taxation is a myth, as explained by the following sources (the former conservative and the latter liberal):
No it's double taxation. The term is not misapplied either - you'll find it used in textbooks aplenty.
If I invest in a corporation by lending to it, the interest expense is 100% tax deductible for the corporation while taxed at ordinary income rates for the individual. Here the cash flow generated by the business is only taxed once - at the individual level.
If I invest in a corporation by buying shares, corporate profits are taxed. If I receive any cash from the corporation I have to pay dividend taxes. So here the same cash flow is taxed twice (corp profits and dividends).
Capital gains are a bit more squishy to show as double taxation since the only cash flow is at the investor level when an asset is bought and sold. However, the value of a firm is the sum of all future after tax cash flows (profits) discounted over time. So the value of the company already includes taxes. So when you tax cap gains you are taxing future expected profits (that will already be taxed). If that sounds too theoretical think of it this way - if it turns out that those future expected profits were imaginary the shares will fall to $0 - and the cap gain tax the government collected will be wiped out by cap losses. So cap gains only exist if profits exist - which are already taxed - and therefore double taxation exists.
Try actually reading and responding to the points in the links I provided, instead of assuming I don't know what you're talking about. Your explanation is simply incorrect, for reasons that the links explain.
As I said, I’ve heard it twice just this week where a conservative states unequivocally that a person who earns capital gains pays the 15% rate on top of any income tax rate. It’s not a straw man – it’s a very real misconception held by some conservatives.
That would be a misconception - though I've never heard that one before.
There is another double taxation argument that basically says the corporation has already paid its taxes on profits, and the price of my shares of stock reflect it. To then tax me on the increased value of my stock is a form of double taxation. There is truth in this argument, but it’s also a bit of a distraction.
As the individual shareholder I am not personally taxed twice. The corporation has paid its taxes and I pay my own capital gains tax. Yes, the value of my share is discounted based on the amount of corporate taxes paid, but I am not paying tax twice. The corporation, similarly, is not taxed twice. Not to mention, this argument only applies to capital gains earned through the purchase/sale of stock and would not apply to other capital gains like interest earned.
Here's the problem: the taxation on the corporation does matter. If you own a small business as the sole owner as a sole proprietorship you ARE the business. The profit the business generates is your income and you pay taxes on it as your own income. The business itself pays no taxes. Corporations, on the other hand, are taxed themselves and any income that flows to the owner is taxed a second time as dividends. So two taxes on one stream of income (double taxation).
The CTJ article makes 3 arguments: my replies follow. 1) Some corporations pay no tax. This is irrelevant! The corporation pays the taxes it is supposed to. If you don't like the 'loophole' it uses then argue to close the loophole. 2) 2/3 of dividends are paid to tax-exempt entities. Another irrelevant argument! 3) Third, a capital gain from selling a corporate stock is not necessarily a form of corporate profit. Yes it is. As the CTJ article correctly points out the value can come from expected future profits. Therefore, and as I said in my previous response, the capital gain can only exist if the expected profits come true. And if they do, they will be taxed!
This is a pointless semantics argument.
Why does it matter that capital gains is "double tax"? Surely, the only thing that should matter is how much tax is paid and who pays it.
And it seems that you've agreed to the argument that businesses shift the cost of their taxes onto the shareholders and customers. So how is it double taxation when businesses have shifted the burden of the tax onto others? You can't have it both ways.
On July 17 2012 11:08 Danglars wrote: Obama's remarks in Virginia "If you've got a business, you didn't build that. Somebody else made that happen." ~ Obama, Roanoke Virginia last Friday
Ayn Rand answered this statement in Atlas Shrugged 1957. Talking about building a revolutionary metal that is stronger and lighter. The book is filled with scenes that speak out of today's world.
“He didn’t invent iron ore and blast furnaces, did he?”
“Who?”
“Rearden. He didn’t invent smelting and chemistry and air compression. He couldn’t have invented his Metal but for thousands and thousands of other people. His Metal! Why does he think it’s his? Why does he think it’s his invention? Everybody uses the work of everybody else. Nobody ever invents anything.”
She said, puzzled, “But the iron ore and all those other things were there all the time. Why didn’t anybody else make that Metal, but Mr. Rearden did?”
Randroid systems engage. All processes check, go for hilariously myopic book reference as deep-seated wisdom. Houston, we have a cognitive dissonance problem.
On July 19 2012 10:44 Defacer wrote: I've said it a thousand times already, the GOP need a serious reboot. Forget about pandering to the crazies and attack the middle. There are plenty of voters that would vote for a socially and fiscally conservative approach to federal governance.
Yeah it seems so much of the rhetoric I have seen is so incredibly divisive and attempting to pander to the Tea Party audience. It would be nice to see some responsibility and good honest conservatism rather than non-stop anti-Obama rants and crazy shit that sounds like slightly diluted Limbaugh...
Lol, are you kidding me? The Left is the the side of radicals and the Right is the side of middle-of-the-roaders right now. As far as the politicians go.
I wish it was Libertarians vs Socialists instead of moderate compromisers vs Socialists. At least that way we'd stand a chance of keeping what little we have left of our inalienable individual rights.
You know, Rights? The ones to life, liberty, property, and the pursuit of happiness that America's founding fathers intended to be enforced, rather than blatantly violated, by our government?
Radicals are a good thing if they're radical for a good idea. (Not that I think the Libertarians are any good. They're full of contradictions. Like some who want anarchy and others who think we can be free in a communism. But I mean Radicals for a limited government that upholds the constitution. Laissez-Faire capitalism.)
I'm sorry, I live in reality. It's clear you've never been. You talk about rights? How talking to the people who defend them? www.aclu.org
Yea, they are currently fighting a bunch of insane legislation from republicans. But hey they have an awesome police-taping app. Check it out.
EPT
