"I actually believe in redistribution"

Discussion in 'Free Speech Alley' started by LSUpride123, Sep 24, 2012.

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  1. red55

    red55 curmudgeon Staff Member

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    Sure, just ask him. He can't explain his own statements, however.

    You are well read in philosophy, knowledgeable but hopelessly idealistic. Pragmatism does not enter into your philosophy. Your grasp of politics, especially international geopolitics, is really poor, though.

    There is a very good reason for that, he is full of shit about half the time.
     
    red55, Sep 30, 2012
    #121
  2. red55

    red55 curmudgeon Staff Member

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    you are confused. If I bought a share of Widget, then I am the investor. I bought that share with my money on which taxes have already been paid. The principal is not taxed again, even when I sell it. The $100 capital gain is new income when I sell it, currently taxed at 15%. Nothing has been taxed twice.
     
    red55, Sep 30, 2012
    #122
  3. gyver

    gyver Rely on yourself not on others.

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    the company that made the widget gets a corporate tax. The investor is taxed on profit he made for his investment, capital gains tax.

    Dividends are distributions of earnings to the owners of a corporation. Earnings are taxed at a corporate rate of 35 percent, one of the highest rates in the developed world. Earnings are then distributed to owners as dividends and are taxed at 15 percent.
    Assume you owned 100 shares of stock and your share of the pretax earnings is $1,000. These earnings get taxed at the 35 percent rate, leaving $650 for your dividend distribution. Once you receive your dividend, it gets taxed at 15 percent, leaving you with $552.50. The effective rate of this double taxation is 45 percent.
    Add state taxes at both levels and the effective tax rate exceeds 50 percent. On your share of $1,000 in earnings, you are left with less than $500
     
    gyver, Sep 30, 2012
    #123
  4. red55

    red55 curmudgeon Staff Member

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    And how is capital gains income doubly taxed? That was the issue.
     
    red55, Sep 30, 2012
    #124
  5. gyver

    gyver Rely on yourself not on others.

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    if i invest the $1000 into a company, when they use my money to make a product that makes a profit. some of my money also goes towards the corporate taxes paid for by the company. The remaining money is considered profit, to which i am owed a portion of. when i get my portion of the profit I have to pay the capital gains tax. my investment is therefore used to offset costs,(corporate taxes, salaries, advertisement,utilities and raw materials) then after all of that comes out of my money, the investment, i receive a portion of the profit as a reward for the initial investment. this profit I made is taxed, again, as capital gains. o_O so technically your capital gains is taxed once but your investment is taxed twice.
     
    gyver, Sep 30, 2012
    #125
  6. LSUsupaFan

    LSUsupaFan Founding Member

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    Your inability to understand does not equate to an inability for me to explain. You only accept explanations that agree with your liberal ideals. Facts and economic and finance world consensus be damned.
     
    LSUsupaFan, Oct 1, 2012
    #126
  7. red55

    red55 curmudgeon Staff Member

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    And he evades once again.
     
    red55, Oct 1, 2012
    #127
  8. LSUsupaFan

    LSUsupaFan Founding Member

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    I already answered your question silly. If you bothered to think about what other people write instead of immediately rattling off liberal talking points you would have understood the difference between capital gains income and ordinary income years ago. Do you want me to write the full treatisie again? I know you will just ignore it, but someone interested in learning something may stumble across it someday.
     
    LSUsupaFan, Oct 1, 2012
    #128
  9. red55

    red55 curmudgeon Staff Member

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    The problem with this line of thinking is the fact that around 69% of corporations paid no federal income tax and, according to the Wall Street Journal, the average corporate tax rate is 12.1% of profits, not 35%. Obviously if the company paid no taxes then it would be difficult to claim double taxation. This argument relies on the idea that stockholders bear 100% of the burden of this imaginary 35%.

    To earn money in the stock market, the companies I invest in do not have to make a profit. Stock prices often increase on the perception of future profit rather than actual profit. If I sell for a profit, the capital gain is mine alone as is the loss if I lose.
     
    red55, Oct 1, 2012
    #129
  10. red55

    red55 curmudgeon Staff Member

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    SUPA, post 103: All capital gains are taxed at least twice.

    RED, post 105: How? If I buy a widget for $100 and later sell it for $200, then I have made a $100 capital gains profit upon which I am taxed.

    SUPA, post 107: The income from the purchase and sale of a widget is likely not a capital gain.

    RED, post 108: OK, call it one share of a widget stock. How has it been taxed twice?

    SUPA, post 109: You have to go back to how the share was originally purchased. the money that purchased that share was taxed when earned. The gain on that investment is being taxed again. Double taxation.

    RED post 110: The gain on that share is income that has not been taxed before. The original share price is not taxed again, only the gain.

    SUPA, post 111: Your ignorance of financial concepts isn't my problem.


    . . . and there you have it. Can't answer a simple question.
     
    red55, Oct 1, 2012
    #130
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