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openbox9
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join:2004-01-26
71144

openbox9 to waycoolphil

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Re: By the People for the People

said by waycoolphil:

But stockholders only pay capital gains taxes

Capital gains are irrelevant. Taxing earnings (typically dividends) is what you need to look at. Why should money be taxed going in and out of corporations and then again at the individual level? That's a lot of layers of taxation. Of course, fixing that problem would require gutting the tax code and history has proven that won't happen.
said by waycoolphil:

I would agree with you if stockholders had to declare stock and bond profits as regular income and pay taxes at that rate.

Dividends are taxed more inline with regular income and interest is taxed as ordinary income. I don't mind removing some of the individual tax breaks for dividends in exchange for lowering/eliminating corporate income tax rates.
waycoolphil
join:2000-09-22
Cathedral City, CA

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waycoolphil

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Most corporations pay no or little dividends. Investors make a lot more money from capital gains and it's taxed at a much lower rate. Stockholders do not become stockholders to reap the dividends. It's all about the price of the stock isn't it.
openbox9
Premium Member
join:2004-01-26
71144

openbox9

Premium Member

said by waycoolphil:

Most corporations pay no or little dividends.

Then there are no earnings. In that case taxing corporate income only decreases money reinvested into the business. That's even worse than double/triple taxing income with companies that distribute income to owners.
said by waycoolphil:

Investors make a lot more money from capital gains and it's taxed at a much lower rate.

You're confusing capital gains with how much money corporations make.
said by waycoolphil:

Stockholders do not become stockholders to reap the dividends. It's all about the price of the stock isn't it.

Some of my positions are to earn income, some are for growth. So, it depends.
waycoolphil
join:2000-09-22
Cathedral City, CA

waycoolphil

Member

Right. And honestly, what's the ratio?
waycoolphil

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waycoolphil to openbox9

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Many companies don't pay dividends because they know they can get away with not doing so as long as the stock price is rising. They create cash hordes.
openbox9
Premium Member
join:2004-01-26
71144

openbox9 to waycoolphil

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Ratio of earnings vs. growth for my holdings? Presently I'm sitting at about 80/20, growth vs. earnings.
openbox9

openbox9 to waycoolphil

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They reinvest the capital to grow the business. "Cash hordes" have been a horrible capital allocation strategy for the last few years. That's why investors pressure those companies to deploy the capital or return it to the shareholders.
waycoolphil
join:2000-09-22
Cathedral City, CA

waycoolphil to openbox9

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So if you were to sell your 80% if the market started to free fall like 2008 you wouldn't mind declaring any gains as regular income and paying that tax rate?
waycoolphil

waycoolphil to openbox9

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They can pressure all they want but that has been a very unsuccessful tactic. They pile up cash hordes all around the globe because they don't want to pay it out. They use the fact that they'd have to pay taxes on it if they brought it back here as an excuse to keep piling it up. That gives them a lot of power with foreign banks and governments. It's hard to say exactly who's going to win this Wall St. war of greed but it's not going to be "the people."
openbox9
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join:2004-01-26
71144

openbox9 to waycoolphil

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I don't have a problem paying income taxes for my income. I don't mind paying capital gains taxes for my capital gains. If taxes on my capital gains increase because corporations are worth more without tax liabilities, hence more value for owners, then I'm ok with it. Once again, I support taxing the money where it's earned/received, not the passthrough.
openbox9

openbox9 to waycoolphil

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said by waycoolphil:

They can pressure all they want but that has been a very unsuccessful tactic.

Not true at all.
said by waycoolphil:

They pile up cash hordes all around the globe because they don't want to pay it out.

Because they don't want to pay the US government taxes on money that wasn't earned in the US. All the more reason to not tax corporations' incomes. It's horribly inefficient and can be detrimental to our economy in this situation. Give corporations a tax holiday and see how quickly the overseas money comes home