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/sigh I try not to get into these conversations so I'll be leaving with this, though feel free to take the last word.
Obama is trying to take from the haves. He supported the Buffet tax. A tax that only affects the rich, not the middle or poor classes.
Well since when do politicians ever agree on verbage. Some call Abortion murder, others call it free choice. Verbage is verbage. The fact of the matter is I now owe the government more money since I do not have nor desire health insurance. I will never use healthcare insurance, because it is stupid to use it. Unless it's part of a job package that I do not get a choice in.
I may not get politics, but I do numbers decently well and I scored very well in my business classes and graduated from WKU with my 4 year degree in Business Admin.
Business 101 tells us the sole purpose of creating a business is to make a profit. If a profit isn't reached, the company cannot sustain.
What does that mean. You will always give more to the health insurance companies then you get back.
What I have done since I was 19 was put 150$ of my paycheck into a bank account (completly seperate from my other savings.) where it is slowly gaining interest and fighting off inflation, via conservative mutual funds and when the CD market is above 3.11% I use CDs. This build up will cover my estimated health costs over a lifetime. How do I know this? When I was 19 I asked around to see what kind of quotes I could get, and I took the average and rounded up just a tad to get an even 150$.
Now I will be losing 250$ a year to pay a tax. You call it a penalty. I don't understand why your being like a politician arguing over verbage, defending a lie like so many political supports do.
Let's look at a dictionary. Look up the word tax. A penalty is a tax. A tax is a penalty.
Not going to argue verbage with you.
Also the government isn't very efficient due to beurcracy so why would I want the government controlling my health when I already don't want a business to do it? I prefer to look after myself, and am being denied the ability to do so.
I said at the start I like less regulation. I don't like Romney, in fact I think he is a liar like Clinton, Bush, and Obama.
But at least when he isn't lying to me, he will attempt to lower my 250$ a year tax increase- which means I get to buy more video games- which means my quality of life goes up.
I don't know alot about socialism or communism, never studied either and have only read 1984 and Animal Farm, which are bias books against it. I know that communism is a form of socialism, and that capitalism is better than socialism and therefore communism.
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On July 20 2012 11:11 Kaitlin wrote:Show nested quote +On July 20 2012 10:23 coverpunch wrote:On July 20 2012 09:22 Kaitlin wrote:On July 20 2012 09:13 coverpunch wrote:
But to complain about double taxation isn't a rhetorical device or bullshit. The real question is does the double taxation really discourage people from making investments? Most empirical evidence says no, investors are not motivated by tax savings.
Investors are not motivated by tax savings ? Let's eliminate the tax exempt status of municipal bonds, educational institutions, etc to test this "empirical evidence" coming straight out of your tail end. This is a big part of why "rich" people pay lower rates than their secretaries, however if you eliminate this feature, municipalities and educational institutions will have to raise even more $$ because the interest rates they have to pay for borrowing will immediately increase by over 200 basis points. If we taxed yields on muni bonds, it would be taxed as ordinary income because it's interest, not capital gains. If you buy and sell muni bonds right now, you have capital gains or losses. Jesus. And the rest of your post isn't coherent but I'll answer anyways. What I meant is that taxes aren't a deciding factor when rich people decide to invest. If you raised capital gains taxes even to 70%, it's not like rich people would instead just stuff their mattresses with money. But what you change is where they invest. To reiterate, the real problem wouldn't be rich people because some of them still like to take big risks (e.g. private equity, VCs). The bigger problem is that it shifts the analysis for institutional investors, who mostly get their funds from the 99% that have their savings in 401k's or mutual funds or pensions. Raising the capital gains tax may still be a desirable thing to do in the end but you have to factor in what effects it will have on those funds and the market. To put it shortly, there are no easy answers on tax policy. Raising capital gains tax is not an obvious solution. Just because you can't read doesn't make the material not "coherent". I said nothing of capital gains. You commented about investors not being motivated by tax savings. My statement of the existence of tax exempt bonds clearly argues the opposite. These bonds pay lower interest rates than would be required if they were not tax exempt. The tax exempt nature is exactly whey they can get away with lower rates, and thus demonstrates that people do consider tax consequences in their investments. Perhaps reading slower for better comprehension might help.
Uh, I reiterated my point if it wasn't clear before. Taxes aren't a deciding factor in whether you will invest or not. They influence where your investments will go, but people don't get discouraged from investing entirely because of taxes.
Municipal bonds are a bad example because the bulk of the benefit goes to the municipality, not the investor. If investors are willing to accept lower returns because of tax exemptions, then that's not related to the kind of motivation you're trying to show. That goes to the point that higher taxes will influence the risk that investors are willing to bear but not that people will refuse to invest because taxes are higher.
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On July 20 2012 11:21 DoubleReed wrote:
Yes and you clearly don't know much about socialism. Socialism =/= Communism.
But in practice, the countries that practiced "communism" were actually socialist. They never transitioned to the stateless utopian Communist ideal.
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In communism the means of production are owned by the state whereas in socialism the means of production are supposed to be owned by the people. Though the state is meant to represent the people, all current and attempted communist states have had totalitarian governments that don't represent the interests of the people. Feel free to correct me if I am wrong though.
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On July 20 2012 11:00 SayGen wrote:
a Lie is a lie.
Clinton lied. "I did not have sexual relations with that girl"
Bush lied and he was crucified about it. I couldn't even watch TV witohut hearing about it....
now Obama has lied.
3 presidents in a row have lied to us, and people still defend the liars.
I don't understand politics I guess. Shame an honest person can't run and win.
What are you blathering about?
Newsflash: EVERYONE lies or bends the truth or makes promises they can't keep. EVERYONE, Mr. Integrity. And not all lies are created equal.
If you're judging the integrity or merit of someone or their ideas based on the fact they might have lied at some point in their lives, than you need to grow up or fall on your sword right now.
Sheesh.
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Can this thread please not turn into trying to define what socialism and communism is..ugh T_T
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On July 20 2012 11:53 TotalBalanceSC2 wrote:
In communism the means of production are owned by the state whereas in socialism the means of production are supposed to be owned by the people. Though the state is meant to represent the people, all current and attempted communist states have had totalitarian governments that don't represent the interests of the people. Feel free to correct me if I am wrong though.
Nope. Communism generally implies a stateless society where everything is owned by the people...except there technically isn't private property either, Socialism implies the government/state controls the economy, supposedely for the good of the people, but could theortectically be a dictatorship or a society with even greater wealth inequality than a purely capitalistic one.
http://en.wikipedia.org/wiki/Socialism
http://en.wikipedia.org/wiki/Communism
Theoretically, a Democratic Socialist function would fit your definition (in that that the people vote in the controllers of the economy, and thus the people "control" the economy) but as you said, every attempt at true Socialism/Communism has resulted in a failed economy or oppresive dictatorship. The two most famous attempts: Leninism/Stalinism and Maoism, were originally classified as Communist because it sounded better to the average man, but in reality they were socialist dictatorships.
On July 20 2012 11:59 Mohdoo wrote:
Can this thread please not turn into trying to define what socialism and communism is..ugh T_T
If people would actually take the time to understand what the words mean, instead of just saying "Communism is evil" or "I'm a socialist", then we could avoid a lot of unnecessary bullshit.
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On July 20 2012 05:37 xDaunt wrote:Show nested quote +On July 20 2012 04:37 Defacer wrote:On July 20 2012 02:35 xDaunt wrote:On July 20 2012 02:19 paralleluniverse wrote:On July 20 2012 02:16 xDaunt wrote:
I can't take it anymore. I'll explain why what Obama said about "no one getting there on their own" is ridiculous and worthy of the ridicule that it is receiving. At best, it is a ludicrous strawman argument of the highest order. No one is arguing that the government has no role in providing basic infrastructure or that the basic infrastructure is unimportant. At worst, it demonstrates true antipathy towards fundamental American values.
For the life of me I don't understand how Obama could be stupid enough to go down this road. Elizabeth Warren already tried it out and got burned for it. This is an election where the economy is going to be the number one issue and there are already serious doubts about Obama's leadership on the economy. Obama's comments are precisely the type of thing that will drive voters away and sink him. I can't take it anymore. You've made 2 long paragraphs on Obama's statement, giving not a single reason why his statement is wrong. You may want to read a little bit closer. I'm not taking issue with the "factual accuracy" so much as the merits of the argument itself. I think you're reading way too much into some campaign trail hyperbole. All Obama seemed to be saying is that everyone benefits from the government, even so-called 'self-made' men and the extremely successful. He's just responding to the anti-government anti-tax hysteria that seems to have gripped the far right. I disagree. If all that Obama was saying was that everyone needs government to some degree for providing public goods and services, he very easily could have said as such without overtly (or accidentally, if you prefer) shitting on the accomplishments of entrepreneurs and others who have done well for themselves.
Here you go, this is the end of the quote that most people *cough* Republicans *cough* are editing out.
OBAMA: The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. There are some things, just like fighting fires, we don’t do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires.
I'm not going to disagree that he started his point sloppily and ended up with a gaffe-ridden mess. But usually when someone starts off a sentence with "The point is ...", I usually give them the benefit of the doubt and believe that's the point he's trying to make.
It's not that different than Romney saying he 'likes firing people.' Of course that's not what he actually meant. His point is that the free market has benefits for consumers. It was just a horribly constructed, off-the-cuff statement he was trying to make.
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On July 20 2012 10:59 sunprince wrote:
Small businesses don't distribute all of their earnings to the owner either. Some of that may used for expansion, capital investment, held as cash reserves, etc.
I think the confusion is on company organization. If you're talking about a sole proprietorship, partnership, or S corp, then uh, yes, all the earnings do get distributed to owners because the income passes through to them. It doesn't matter what you do with the money, the IRS considers it your income.
C corps are a separate legal entity that is taxed on itself. Because the corporation is separate, the owners can decide what to do with its earnings, whether that means giving it to the owners as dividends or allowing the corporation to use the money for itself. It's double taxation because the corporation is taxed on its own income then owners pay taxes on any dividends or if they sell their shares at a profit.
Is double taxation "wrong"? Depends on your perspective. It certainly feels unfair to shareholders of companies that pay eye-popping corporate tax bills. For those who favor the government, you get the kind of thing that Obama said, these companies owe their success to society and should pay for the privilege of doing business. Corporate taxes are a price for limited liability and capital gains tax the price of freedom to easily change ownership.
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On July 20 2012 11:42 coverpunch wrote:Show nested quote +On July 20 2012 11:11 Kaitlin wrote:On July 20 2012 10:23 coverpunch wrote:On July 20 2012 09:22 Kaitlin wrote:On July 20 2012 09:13 coverpunch wrote:
But to complain about double taxation isn't a rhetorical device or bullshit. The real question is does the double taxation really discourage people from making investments? Most empirical evidence says no, investors are not motivated by tax savings.
Investors are not motivated by tax savings ? Let's eliminate the tax exempt status of municipal bonds, educational institutions, etc to test this "empirical evidence" coming straight out of your tail end. This is a big part of why "rich" people pay lower rates than their secretaries, however if you eliminate this feature, municipalities and educational institutions will have to raise even more $$ because the interest rates they have to pay for borrowing will immediately increase by over 200 basis points. If we taxed yields on muni bonds, it would be taxed as ordinary income because it's interest, not capital gains. If you buy and sell muni bonds right now, you have capital gains or losses. Jesus. And the rest of your post isn't coherent but I'll answer anyways. What I meant is that taxes aren't a deciding factor when rich people decide to invest. If you raised capital gains taxes even to 70%, it's not like rich people would instead just stuff their mattresses with money. But what you change is where they invest. To reiterate, the real problem wouldn't be rich people because some of them still like to take big risks (e.g. private equity, VCs). The bigger problem is that it shifts the analysis for institutional investors, who mostly get their funds from the 99% that have their savings in 401k's or mutual funds or pensions. Raising the capital gains tax may still be a desirable thing to do in the end but you have to factor in what effects it will have on those funds and the market. To put it shortly, there are no easy answers on tax policy. Raising capital gains tax is not an obvious solution. Just because you can't read doesn't make the material not "coherent". I said nothing of capital gains. You commented about investors not being motivated by tax savings. My statement of the existence of tax exempt bonds clearly argues the opposite. These bonds pay lower interest rates than would be required if they were not tax exempt. The tax exempt nature is exactly whey they can get away with lower rates, and thus demonstrates that people do consider tax consequences in their investments. Perhaps reading slower for better comprehension might help. Uh, I reiterated my point if it wasn't clear before. Taxes aren't a deciding factor in whether you will invest or not. They influence where your investments will go, but people don't get discouraged from investing entirely because of taxes.Municipal bonds are a bad example because the bulk of the benefit goes to the municipality, not the investor. If investors are willing to accept lower returns because of tax exemptions, then that's not related to the kind of motivation you're trying to show. That goes to the point that higher taxes will influence the risk that investors are willing to bear but not that people will refuse to invest because taxes are higher.
Sure they do, just not entirely. It still happens though.
With muni bonds - if they weren't tax free the interest rate on the bond would be higher to compensate. So all the projects that a municipality could afford at 4.5% but not 7% either don't get done or are scaled back to smaller projects. It is true that some of the unspent money will be redirected to other investment projects but it is doubtful that 100% of it will. At the margin some investors will simply decide that they're better off spending the money than investing it for junk returns.
It's kinda like monetary policy. People still save even though rates are low, but certainly they are less inclined to save because of it.
Now would raising taxes on investments be a hugely damaging thing right now? Most likely not! Though I'd have to be against raising taxes only on equity - the tax code favors debt too much as it is.
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Well, the polls in this thread are actually just fucking depressing.
Damn TL sooooo damn liberal, lol.
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On July 20 2012 11:42 coverpunch wrote:Show nested quote +On July 20 2012 11:11 Kaitlin wrote:On July 20 2012 10:23 coverpunch wrote:On July 20 2012 09:22 Kaitlin wrote:On July 20 2012 09:13 coverpunch wrote:
But to complain about double taxation isn't a rhetorical device or bullshit. The real question is does the double taxation really discourage people from making investments? Most empirical evidence says no, investors are not motivated by tax savings.
Investors are not motivated by tax savings ? Let's eliminate the tax exempt status of municipal bonds, educational institutions, etc to test this "empirical evidence" coming straight out of your tail end. This is a big part of why "rich" people pay lower rates than their secretaries, however if you eliminate this feature, municipalities and educational institutions will have to raise even more $$ because the interest rates they have to pay for borrowing will immediately increase by over 200 basis points. If we taxed yields on muni bonds, it would be taxed as ordinary income because it's interest, not capital gains. If you buy and sell muni bonds right now, you have capital gains or losses. Jesus. And the rest of your post isn't coherent but I'll answer anyways. What I meant is that taxes aren't a deciding factor when rich people decide to invest. If you raised capital gains taxes even to 70%, it's not like rich people would instead just stuff their mattresses with money. But what you change is where they invest. To reiterate, the real problem wouldn't be rich people because some of them still like to take big risks (e.g. private equity, VCs). The bigger problem is that it shifts the analysis for institutional investors, who mostly get their funds from the 99% that have their savings in 401k's or mutual funds or pensions. Raising the capital gains tax may still be a desirable thing to do in the end but you have to factor in what effects it will have on those funds and the market. To put it shortly, there are no easy answers on tax policy. Raising capital gains tax is not an obvious solution. Just because you can't read doesn't make the material not "coherent". I said nothing of capital gains. You commented about investors not being motivated by tax savings. My statement of the existence of tax exempt bonds clearly argues the opposite. These bonds pay lower interest rates than would be required if they were not tax exempt. The tax exempt nature is exactly whey they can get away with lower rates, and thus demonstrates that people do consider tax consequences in their investments. Perhaps reading slower for better comprehension might help. Uh, I reiterated my point if it wasn't clear before. Taxes aren't a deciding factor in whether you will invest or not. They influence where your investments will go, but people don't get discouraged from investing entirely because of taxes. Municipal bonds are a bad example because the bulk of the benefit goes to the municipality, not the investor. If investors are willing to accept lower returns because of tax exemptions, then that's not related to the kind of motivation you're trying to show. That goes to the point that higher taxes will influence the risk that investors are willing to bear but not that people will refuse to invest because taxes are higher.
It certainly feeds into the argument of whether somebody is paying their "fair share" of taxes or not, or why some rich guy investing heavily into muni bonds pays lower rates than his secretary. Is someone not paying their fair share if their "taxes" paid are less because they are investing in munibonds ? Or bonds floated by universities ? These investments pay a lower rate of return because they are tax favored and therefore, it is mainly the high income people buying them, since lower income people are better off with regular interest income with their lower tax rates. However, I don't hear Warren "Hypocrite" Buffett telling that side of the story. He could, and probably does, invest heavily into these types of securities, and he turns around and ignores the lower income he's receiving for the benefit of these universities and munipalities, when he "calculates" his "tax" %.
It's bullshit. Much like claims that there aren't "tax increases" in the ACA, while they impose higher costs on businesses, which are passed on to consumers. It's all complete bullshit that people buy up because they are morons who can't look deeper into things than their reflection in a swimming pool. Nope, nothing under there, at all.
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On July 20 2012 11:40 SayGen wrote:
What does that mean. You will always give more to the health insurance companies then you get back.
What I have done since I was 19 was put 150$ of my paycheck into a bank account (completly seperate from my other savings.) where it is slowly gaining interest and fighting off inflation, via conservative mutual funds and when the CD market is above 3.11% I use CDs. This build up will cover my estimated health costs over a lifetime. How do I know this? When I was 19 I asked around to see what kind of quotes I could get, and I took the average and rounded up just a tad to get an even 150$.
Now I will be losing 250$ a year to pay a tax. You call it a penalty. I don't understand why your being like a politician arguing over verbage, defending a lie like so many political supports do.
Let's look at a dictionary. Look up the word tax. A penalty is a tax. A tax is a penalty.
Not going to argue verbage with you.
Also the government isn't very efficient due to beurcracy so why would I want the government controlling my health when I already don't want a business to do it? I prefer to look after myself, and am being denied the ability to do so.
That's very responsible of you, but there are a gigantic amount of people who won't ever be that responsible whether it brings them into poverty and eventually homelessness or not. Because of this, when they go to a hospital for emergency care, and they don't pick up the tab, since they can't, the government picks up the tab. As it stands, every tax payer in the country pays for people to get emergency care at a hospital. As it stands, when someone has no insurance, they go bankrupt, obviously don't pay, so we pay. Forcing people to have insurance forces people to do what you did and makes sure that the insurance company will pay for it instead of tax payers.
I think its also worth mentioning that cancer or aids or plenty of other illnesses can easily devour that savings account you have going unless its up to 10s of millions of dollars by now. I commend your responsibility and effort to be self-sufficient, but the fact is, there are plenty of illnesses that will eat that up like chump change. None of which you have *any* reason to think you'll never get. Eating healthy, exercising, etc, can lower your risk, but you're still rolling the dice.
I know that the insurance mandate seems pretty anti-republican, but I see it as an instance of self-accountability. Right now people are able to leach off tax payers by saying "fuck insurance, I'll go to the ER if I am ever in trouble, declare bankruptcy and basically pay all my bills with crappy credit". The mandate makes people pay one way or another. Whether they are paying the fine or buying insurance, they are paying.
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On July 20 2012 05:47 stk01001 wrote:Show nested quote +On July 20 2012 05:06 FabledIntegral wrote:On July 20 2012 04:19 paralleluniverse wrote:On July 20 2012 03:07 JonnyBNoHo wrote:On July 20 2012 02:24 paralleluniverse wrote:On July 20 2012 01:59 JonnyBNoHo wrote:On July 19 2012 22:09 paralleluniverse wrote:On July 19 2012 09:37 JonnyBNoHo wrote:On July 19 2012 09:03 sunprince wrote:On July 18 2012 12:59 JonnyBNoHo wrote:
[quote]
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. Ok. First your blogspot article: 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. The cost of all taxes get shifted to some extent. Regardless, the point of the double taxation argument is that tax rates can appear lower than they really are. Since the argument about 'fair share' often revolves around effective tax rates the double taxation argument is used to illustrate that effective tax rates do not include all the explicit and implicit taxes that a taxpayer is paying. The same can be said about tax-exempt bonds where the tax is implicit. How can I shift my income tax onto you? The burden of the capital gains tax ultimately falls on people. Tax rates are lower than what they historically are, and I don't see how "double taxation" should come into the argument. What is of interest is how much tax does one have to pay, how much revenue is the government making, and is it good economics to increase/decrease taxes. A discussion of these 3 points doesn't need to refer to "double taxation". I admit I haven't read far back enough to see who brought the issue up in the first place. It is relevant to the first point "how much tax does one have to pay" because double taxation or implicit taxes make it *appear* that someone is paying a lower tax rate than the underlying economics dictate. That's the extent to which it matters. Tax shifting occurs not when the tax itself is shifted but when the underlying economic burden of the tax is shifted from one party to another. So when your taxes go up it is not only you that suffers, but everyone you would have done business with (but can't now) as well. How much tax you pay in this case nominally is simply 15% of your capital gains, which can be compared with previous higher capital gain tax rates. What's the use of trying to work out how much you really pay, accounting for the hard/impossible to know tax shifting effect, unless you want to see how much more money you will have if capital gains tax is abolished? Capital gains tax isn't the only tax that has flow on effects, in fact, it's not the the only thing that has flow on effect. Basically everything has flow on effects. It's not "normally" 15%. It's 15% if you fall into particular criteria. If you are not within the particular criteria you do not qualify for that tax rate. Why do we have it like this? Because the criteria mandates your investment be in domestic companies - thus the money is used to spur the economy. You raise the tax rate and you thusly decrease investment in the U.S. economy (not specifically responding to you, especially since you aren't apparently in the U.S.). Almost all tax breaks or incentives exist so that investment gets pumped into the American economy rather than overseas. Actually, all long term capital gains are taxed at 15%, the only criteria is that it meets the definition of a "capital gain". There's already natural incentive to keep investments in the US because you have to pay both foreign and US tax on foreign investments,effectively getting double taxed. There are things that help offset this, like foreign tax credits, but the rules are complex (depending on the country) and it doesn't always work out ideally. The 15% rate is really designed to just help corporations and wealthy invidivuals to maximize their profits, it's not designed as an incentive to invest only domestically. The low rate is also there to help offset the risk of making investments, in that you can just as easily lose a ton of money, so you get rewarded for taking the risk with a lower tax rate. In a lot of situations when you make money from a foreign country and take that money into the US it's considered a dividend or ordinary income so it does get taxed at a different rate, but again if it's considered a long term capital gain the rate is 15%, period.
What ends up happening is that people give up their US citizenship to avoid that double taxation, as Eduardo Saverin did when he changed himself into a Singaporean shortly before his Facebook IPO windfall.
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On July 20 2012 14:22 Shady Sands wrote:Show nested quote +On July 20 2012 05:47 stk01001 wrote:On July 20 2012 05:06 FabledIntegral wrote:On July 20 2012 04:19 paralleluniverse wrote:On July 20 2012 03:07 JonnyBNoHo wrote:On July 20 2012 02:24 paralleluniverse wrote:On July 20 2012 01:59 JonnyBNoHo wrote:On July 19 2012 22:09 paralleluniverse wrote:On July 19 2012 09:37 JonnyBNoHo wrote:On July 19 2012 09:03 sunprince wrote:
[quote]
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. Ok. First your blogspot article: 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. The cost of all taxes get shifted to some extent. Regardless, the point of the double taxation argument is that tax rates can appear lower than they really are. Since the argument about 'fair share' often revolves around effective tax rates the double taxation argument is used to illustrate that effective tax rates do not include all the explicit and implicit taxes that a taxpayer is paying. The same can be said about tax-exempt bonds where the tax is implicit. How can I shift my income tax onto you? The burden of the capital gains tax ultimately falls on people. Tax rates are lower than what they historically are, and I don't see how "double taxation" should come into the argument. What is of interest is how much tax does one have to pay, how much revenue is the government making, and is it good economics to increase/decrease taxes. A discussion of these 3 points doesn't need to refer to "double taxation". I admit I haven't read far back enough to see who brought the issue up in the first place. It is relevant to the first point "how much tax does one have to pay" because double taxation or implicit taxes make it *appear* that someone is paying a lower tax rate than the underlying economics dictate. That's the extent to which it matters. Tax shifting occurs not when the tax itself is shifted but when the underlying economic burden of the tax is shifted from one party to another. So when your taxes go up it is not only you that suffers, but everyone you would have done business with (but can't now) as well. How much tax you pay in this case nominally is simply 15% of your capital gains, which can be compared with previous higher capital gain tax rates. What's the use of trying to work out how much you really pay, accounting for the hard/impossible to know tax shifting effect, unless you want to see how much more money you will have if capital gains tax is abolished? Capital gains tax isn't the only tax that has flow on effects, in fact, it's not the the only thing that has flow on effect. Basically everything has flow on effects. It's not "normally" 15%. It's 15% if you fall into particular criteria. If you are not within the particular criteria you do not qualify for that tax rate. Why do we have it like this? Because the criteria mandates your investment be in domestic companies - thus the money is used to spur the economy. You raise the tax rate and you thusly decrease investment in the U.S. economy (not specifically responding to you, especially since you aren't apparently in the U.S.). Almost all tax breaks or incentives exist so that investment gets pumped into the American economy rather than overseas. Actually, all long term capital gains are taxed at 15%, the only criteria is that it meets the definition of a "capital gain". There's already natural incentive to keep investments in the US because you have to pay both foreign and US tax on foreign investments,effectively getting double taxed. There are things that help offset this, like foreign tax credits, but the rules are complex (depending on the country) and it doesn't always work out ideally. The 15% rate is really designed to just help corporations and wealthy invidivuals to maximize their profits, it's not designed as an incentive to invest only domestically. The low rate is also there to help offset the risk of making investments, in that you can just as easily lose a ton of money, so you get rewarded for taking the risk with a lower tax rate. In a lot of situations when you make money from a foreign country and take that money into the US it's considered a dividend or ordinary income so it does get taxed at a different rate, but again if it's considered a long term capital gain the rate is 15%, period. What ends up happening is that people give up their US citizenship to avoid that double taxation, as Eduardo Saverin did when he changed himself into a Singaporean shortly before his Facebook IPO windfall.
Only a few actually do that.
Good riddance. They can just pay tariffs instead of taxes.
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On July 20 2012 14:16 Mohdoo wrote:
That's very responsible of you, but there are a gigantic amount of people who won't ever be that responsible whether it brings them into poverty and eventually homelessness or not. Because of this, when they go to a hospital for emergency care, and they don't pick up the tab, since they can't, the government picks up the tab. As it stands, every tax payer in the country pays for people to get emergency care at a hospital. As it stands, when someone has no insurance, they go bankrupt, obviously don't pay, so we pay. Forcing people to have insurance forces people to do what you did and makes sure that the insurance company will pay for it instead of tax payers.
Actually, saving $150 a paycheck since you're 19 is not that much. It's good, but god forbid he gets a serious illness that requires ongoing therapy, medication or treatment in the US. He would burn through his savings rather quickly.
But good on him anyway.
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On July 20 2012 12:06 coverpunch wrote:Show nested quote +On July 20 2012 10:59 sunprince wrote:
Small businesses don't distribute all of their earnings to the owner either. Some of that may used for expansion, capital investment, held as cash reserves, etc.
I think the confusion is on company organization. If you're talking about a sole proprietorship, partnership, or S corp, then uh, yes, all the earnings do get distributed to owners because the income passes through to them. It doesn't matter what you do with the money, the IRS considers it your income. C corps are a separate legal entity that is taxed on itself. Because the corporation is separate, the owners can decide what to do with its earnings, whether that means giving it to the owners as dividends or allowing the corporation to use the money for itself. It's double taxation because the corporation is taxed on its own income then owners pay taxes on any dividends or if they sell their shares at a profit.
S Corps are C Corps that have elected to be taxed at the shareholder level. They are both identically legal corporations. Your assumption that distributions flow out of S corps, but not C corps, couldn't be more wrong. Distributions are a cash flow matter and are independent of whether the entity is a C corp or S corp. Generally, S corps will distribute enough to pay tax on the income flowing out to shareholders, but that is just a matter of practice.
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On July 20 2012 15:04 Defacer wrote:Show nested quote +On July 20 2012 14:16 Mohdoo wrote:
That's very responsible of you, but there are a gigantic amount of people who won't ever be that responsible whether it brings them into poverty and eventually homelessness or not. Because of this, when they go to a hospital for emergency care, and they don't pick up the tab, since they can't, the government picks up the tab. As it stands, every tax payer in the country pays for people to get emergency care at a hospital. As it stands, when someone has no insurance, they go bankrupt, obviously don't pay, so we pay. Forcing people to have insurance forces people to do what you did and makes sure that the insurance company will pay for it instead of tax payers.
Actually, saving $150 a paycheck since you're 19 is not that much. It's good, but god forbid he gets a serious illness that requires ongoing therapy, medication or treatment in the US. He would burn through his savings rather quickly. But good on him anyway.
150$ is like a snowballs drop in hell should he ever get a serious illness or requires some more advanced treatment for other reasons... 150$ rofl... Have you checked how much even a day in a Hospital and/or Rehab costs... Let alone medication and actual treatment?
If your not a double-digit millionaire your better off with an insurance... Or your just playing the lottery with your live/health.
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I had a family member recently have arthroscopic knee surgery and was looking at the bill, if we had not had insurance the cost would have been around $20k.
Something to think about for the $150 a paycheck people out there.
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On July 20 2012 17:47 Saryph wrote:
I had a family member recently have arthroscopic knee surgery and was looking at the bill, if we had not had insurance the cost would have been around $20k.
Something to think about for the $150 a paycheck people out there.
Another example: an appendectomy in the US is $13,000.
In Canada, it costs $8000 for the exact same procedure, and exact same quality of service ... but it doesn't matter, because it's covered by our healthcare system.
The only reason US healthcare providers charge $13,000 is because it's an emergency medical service and they know they can get away with it.
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EPT
