A simple economic lesson... raise capital gains to 43% will do what?

[Rigby5]

When capital gains taxes are high, companies tend to reinvest their profit as opposed to distributing it to stock holders. This means that the company expands - it's real value goes up and with it the value of it's stock. As companies expand it created jobs and stimulates the economy.

Conservatives complain that capital gains taxes mean that profits are taxed twice - once when declared by the company, then again when distributed to the stock holders as capital gains.

But another way of looking at it is that the profit are only taxed half when declared by the company, and never taxed the second half if the company reinvests the money. They only get taxed the second half when distributed to stock holders.

I don't believe this is true.
I do not believe that money disbursed to stock holders is taxed when the company earned it.
That is one of the incentives for companies to declare dividends.

But if capital gains is taxed twice, that would explain why it is lower.
I never understood why is was at a lower rate than your other income.
It still makes no sense for it to be a fixed rate, as it should be progressive.

 

[bripat9643]

Fair is as I said. Equal.

Nope. Democrats don't believe that.

 

[Flopper]

But that would defy what I have been seeing the congressmen actually doing....they are buying value, dividend paying stocks to prepare for the situation. Just saying

i have been in investing in stocks since 1970 and I have seen a number of changes in the capital gains tax rates. I have not seen any effect on the market. 40% of major corporations are owned abroad. US capital gains taxes are not paid by foreign investors from abroad. They are tax access by their own country. Also you can avoid capital by 1031 exchanges, tax shelters such as 401ks, IRAs, etc.

 

[Flopper]

But that would defy what I have been seeing the congressmen actually doing....they are buying value, dividend paying stocks to prepare for the situation. Just saying

i have been investing in stocks since 1970 and I have seen at 4 or 5 changes in capital gains tax rates. I have not seen any effect on the market. 40% of major corporations are owned abroad. US capital gains taxes are not paid by foreign investors from abroad. They are taxed by their own country on capital gains.

 

[Flopper]

I don't believe this is true.
I do not believe that money disbursed to stock holders is taxed when the company earned it.
That is one of the incentives for companies to declare dividends.

But if capital gains is taxed twice, that would explain why it is lower.
I never understood why is was at a lower rate than your other income.
It still makes no sense for it to be a fixed rate, as it should be progressive.

You are accessed Capital Gains taxes on a stock in the year you sell the stock.
Mutual funds pay capital gains distribution yearly and they are taxed at the capital gains tax rate.
You are taxed at the capital gains tax rate on the sale of mutual funds. However you deduct all the capital gains distributions you paid.
For stocks you are taxed in the year you receive the dividend, even if you reinvest it.
Currently there are 3 capital gains tax rates, 0%, 15%, and 20% depending on your income.

 

[Flopper]

I don't believe this is true.
I do not believe that money disbursed to stock holders is taxed when the company earned it.
That is one of the incentives for companies to declare dividends.

But if capital gains is taxed twice, that would explain why it is lower.
I never understood why is was at a lower rate than your other income.
It still makes no sense for it to be a fixed rate, as it should be progressive.

Capital Gains from the sale of a stock is not taxed twice. However the company is taxes each year on their taxable earnings and the earning of the company certain has an effect on the price of the stock but the capital gains are not taxed twice.

 

[JohnDB]

Capital Gains from the sale of a stock is not taxed twice. However the company is taxes each year on their taxable earnings and the earning of the company certain has an effect on the price of the stock but the capital gains are not taxed twice.

Yes...
Dividends are double taxed....

Dividends are usually profits a company makes that are subject to taxes and then paid to investors who again pay taxes on the dividends.

However....
When mutual funds have to pay taxes for capital gains that effects their profit margin. Those reduced returns are felt by millions of retired people.

 

[LeftofLeft]

The Fed injecting trillions into the stock market had nothing to do with it, right?

That’s not the argument. Better yet, why don’t you show US how the only thing we needed was a Fed injection?

 

[JohnDB]

Either way I really would avoid FAANG or FANG ETF for a while till this all shakes out.

Diamondback energy? Meh...it had a good day today but I would hesitate before jumping back in that one as well.

 

[Flopper]

Yes...
Dividends are double taxed....

Dividends are usually profits a company makes that are subject to taxes and then paid to investors who again pay taxes on the dividends.

However....
When mutual funds have to pay taxes for capital gains that effects their profit margin. Those reduced returns are felt by millions of retired people.

Yes and No. Corporations may not legally deduct the dividend payments before taxes but there is another approach: a corporate structure called an income trust. Income trusts allow a firm to deduct dividends, or trust payments, before taxes are calculated and the dividends are paid from the trust. This is just one of thousands of little tax loopholes used by corporation to reduce their taxes.

 

[Flopper]

Yes...
Dividends are double taxed....

Dividends are usually profits a company makes that are subject to taxes and then paid to investors who again pay taxes on the dividends.

However....
When mutual funds have to pay taxes for capital gains that effects their profit margin. Those reduced returns are felt by millions of retired people.

Mutual funds (open-end) do not pay taxes on capital gains. They pay those gains to shareholders as capital gains distributions and the share holders pay the tax. Dividend from stocks in the fund are also paid to shareholders who must pay the tax on them. Mutual Funds do not in general pay any tax on their market activity.

 

[JohnDB]

Mutual funds do not pay taxes on capital gains. They pay those gains to shareholders as capital gains distributions and share the holders pay the tax. Dividend from stocks in the fund are also paid to shareholders who must pay the tax on them. Mutual Funds do not in general pay any tax on their market activity.

I've never held a fund or ETF that disbursed.

(The only one I'm currently holding is JO which is an ETN....minor difference but essentially the same thing)

 

[Flopper]

I've never held a fund or ETF that disbursed.

(The only one I'm currently holding is JO which is an ETN....minor difference but essentially the same thing)

Like mutual funds, ETF distribute both dividends and capital gains, usually at the end of the year. Index ETF like Index funds rarely have capital gains because they rarely trade but they have dividends which they distribute.

 

[Flopper]

Like mutual funds, ETFs distribute both dividends and capital gains. Index ETF like Index funds rarely have capital gains because they rarely trade but they have dividends which they distribute.

Not familiar with an ETN

 

[JohnDB]

Not familiar with an ETN

An ETN is basically a ETF except that it uses a financial instrument as it's base.

JO is a commodity ETF that gives exposure to Coffee commodities 3rd contract forward from spot market...but it's based on Treasury notes. So if and when money is collected it can sit in a Treasury note instead of being idle.

 

[JohnDB]

Not familiar with an ETN

How Exchange-Traded Notes (ETN) Work and the Risks to Investors

This can explain it better than me.

 

[Markle]

Yeah poor people are poor because they made bad decisions.

Proof you’re uninformed.

Why do you demand to boast of your ignorance

I'm sure you can find the exception but, as you know, the vast majority of folks living below the poverty line made bad decisions. Did not graduate high school, had kids too early, never got married, have substance abuse issues. Started smoking pot when they were 12 or 13.

Now please show us all where the majority of folks on welfare are high school graduates, waited until they had a job, waited until they were adults to get married, had kids a few years down the road.

Gipper,
Just out of curiosity, other than cash, what is the difference between a child raised in poverty and a child raised above the poverty line?

 

[Markle]

Keep dreaming, it will solve nothing.

Why is it the taxpayer's responsibility to pay for daycare the kid's parents refuse to pay?

 

[Blues Man]

Ok I get it. You've skimped your entire life saving a penny here and a dollar there.

BUT YOU WOULDNT HAVE TO DO THAT IF YOU WERE PAID WHAT YOU SHOULD BE PAID!

You're an idiot.

I just didn't waste money on shitty hamburgers, cigarettes and overpriced coffee and I have worked for myself since I was 18 and I retired at 50. But you go ahead and think that 7 dollar coffee makes your life better just stop whining when you're fucking broke all the time.

 

[Blues Man]

I haven't in a long time but it's still our debt. Putting it off for the next generation isn't the right thing to do.

It's not my debt.

Besides I don't expect to be paying any income taxes for the next 15 years. We're living off of our investments and since we have no debt at all we don't need to pay for anything but basic living expenses and the the stuff we do for fun.