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PT6A posted:Hence why I said "taxable income." There should be a basic personal exemption which would render the first $X not taxable. Like a standard deduction? point of return posted:this worked better before donald trump's tax plan turned out to be basically the same as jeb!'s Trump's taxes are lower than Jeb's, both individual and corporate. Jeb actually tries to put forward something that's not a huge gently caress you, but still a nod to our corporate overlords. Jeb's top income bracket is 28% at $85,750 while Trump's is 25% at $150,000. Jeb's top corporate bracket is 20% while Trump's is 15%. For comparison, corporate taxes are currently in the mid thirties. Both want to get rid of estate taxes and the alternate minimum tax, but that's to be expected from a GOP candidate. lampey posted:What would the downsides be for racing capital gains at the same rate as normal income? The downside is that the intent is to reward investors for keeping their money in the market, instead of moving in and out as winds change. That's also some of the purpose behind tax-advantaged retirement accounts, which charge penalties for withdrawal before the age of 59½. But some people do want their capital gains taxed as income, particularly securities traders. With capital gains taxed as income, losses are fully deductible instead of only up to $3,000, the wash-sale rule doesn't apply, and you aren't taxed on each gain individually. Those are huge benefits. And if you make less than $200,000 annually, it's cheaper to have your capital gains taxed as income. But the IRS doesn't want people trading. They want people investing. As such, they make election bothersome and irrevocable for individuals. To get around that headache, many securities traders can set up corporate entities and elect mark-to-market accounting like any other corporation would (or trade through their retirement accounts). If you're dealing with a decent amount of capital gains, it's probably better to do so through an entity anyway, especially if your trading puts you in higher income brackets. Corporate taxes are based off profit, not income, and profit is what's left after employee payroll, medical, insurance, retirement, etc. Working for a company that cares so dearly for its employees can be nice. And hey, if the business environment in the United States isn't competitive, overseas corporations may be hiring.
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Nov 8, 2015 02:21
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Well, it's a balancing act, but it's not a subsidy. It's rewarding positive conduct. If there were no benefits to investing, fewer people would do it and economic growth would slow. And if there were no benefits to keeping investments in the market, the market would be more volatile and any crashes would be harder. In a crash, someone may see their previously profitable asset beginning to lose money, but they'll keep it in the market because they'll lose even more to taxes if they pull it out too early. If the asset is no longer profitable by the time they pull it out, well that's a capital loss and the IRS will let them recoup up to $3,000 in losses on their taxes. Money kept in the market keeps businesses open and people employed. What the IRS loses on one person's capital gains taxes, it makes up in other people's taxes. So long-term capital gains are considered investments and treated beneficially, while short-term capital gains are considered profiteering and given no benefit. Even things like capital gains tax deferrals can be positive. I remember reading that George Soros may currently owe some seven billion dollars in deferred taxes, due 2017. But the government will get substantially more in 2017 than if they taxed him annually, because the less frequently someone's taxed, the more they make over time, and the larger sum both they and the government receive in the end. It's a mutually beneficial arrangement. Consider the idle rich. They're either losing money or living off dividends from their investments. They may be sunbathing on a yacht all day, but their money's at work in someone else's pocket, and the government's collecting taxes off that person, the idle rich's dividends, anything either of them buy, and anyone either of them employ. For the IRS, it's a web of small revenue streams of greater value than a single large stream. And when that idle rich person dies, their heirs lose 40% of anything above five million dollars. That five million dollar leeway keeps the estate tax from hurting successful families who may have amassed a few million dollars in assets between houses, cars, businesses, etc, while still keeping any would-be aristocratic class in check.
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Nov 8, 2015 21:42
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How do you define useful economic activity? An American investor buys a thousand lots of stock in an American cellphone company, funding research and development and the ultimate fabrication of a South Korean computer chip to be soldered in China with Indonesian tin, all so an American consumer can uselessly tweet a pizza emoji for their own momentary enjoyment. But each level of the operation was priced, invested, and taxed by local authorities and businesses. In aggregate, countless people benefit, domestically and internationally, all from an American consumer's desire to tweet a pizza emoji, an American company's desire to profit, the American company's foreign supply chain's desire to profit, and the investor's desire to profit. Maybe some or all of these companies were founded whole or in part by grants from local government, in an attempt to spur economic activity. Who knows. And so the consumer works enough to buy a cellphone with their taxes-withheld paycheck, paying sales tax at the point of sale. The company profits, which local, state, and federal governments tax. After taxes, the company issues its investor a dividend, which state and federal governments tax as income. Later the investor sells their stock in the company at a profit to another investor, which state and federal governments tax as capital gains. Whether or not an economic activity is useful, money's still green.
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Nov 8, 2015 23:34
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Reicere posted:I would love to live in the world where only newly issues stocks were Many traders are superstitious, believing they can read patterns in the noise, talking about dojis and fibonacci ratios. They'll buy and sell from other traders based off the patterns they convince themselves into seeing on their charts, while other traders on different charts trade off completely different patterns. Both can make and lose money doing this. Both end up giving their brokerages lots of money in commissions. But traders, both human and computer, are also what provide market liquidity to speculators and investors, who are buying and selling for limitless other reasons. A stock issued a hundred years ago is still tightly connected with the activity of the current company. If the company's worthless, so's its stock. Fundamentals and future outlooks are constantly changing with each quarterly earnings report, press release, news article, and so on. A positive outlook brings capital, while a negative outlook takes it away. If a single outlook changes for one company, outlooks change for everything else as well. Everything effects everything, so buying or selling a stock moves other stocks, indices, currencies, commodities, futures... The larger the timescale, the more efficient the market, but from moment to moment the market is irrational and inefficient. Traders make their money by playing those inefficiencies and acting on news faster than others. But even on larger timescales you have inefficiencies and irrationalities. For example, Tesla Motors hemorrhages money with little to show for it, but their stock price keeps going up. Some want them to succeed and will keep feeding them money until they do. Others are following the herd, seeing numbers get larger. Some others maybe just think the cars are nice and others will find them nice too. There's infinite reasons why someone may buy or sell a stock. Traders and brokerages are just there to make it possible. Top City Homo posted:ill let robert reich explain it The password doesn't seem to work.
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Nov 9, 2015 02:29
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Ah yeah, I saw that on Netflix some time ago. Good show, I agree with a lot of it. Even something as simple as increasing wages and benefits across the board is a virtuous cycle that helps the economy and improves people's lives. Happy and healthy workers making good pay means more productive and satisfied workers working longer and buying more goods and services. But I suppose that creates a lot more waste, too. I don't think economic activity should undermine our responsibility to the biosphere and future generations. As is, it unfortunately seems to. And also unfortunately, it seems dangling a reward on a stick in some mutually beneficial direction is the only way to get people helping those they'll never come in contact with. Dissatisfaction is a major motivator. Someone will toil for satisfaction. If they're dissatisfied enough, perhaps they'll even toil for scraps. And maybe those meager scraps will keep them dissatisfied and willing to toil. But I think there's a layer of nationalism that must be overcome too. Is a happy worker in America more important than a happy worker in Bangladesh? Can a Bangladeshi be paid more if an American's willing to spend more? Would the American be willing to pay the Bangladeshi more if the American could afford to spend more? Would the poorest American happily accept a 39.6% global income tax to improve conditions in Bangladesh?
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Nov 9, 2015 04:01
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