Forum Post: How to resolve the capital gains tax controversy
Posted 12 years ago on March 4, 2012, 5 p.m. EST by Hotcrocodile
(2)
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How it should be done:
If you received the stock as a gift or were granted stock options for founding/leading a company, those should be subject to the regular income tax rates. If you are a retail investor who personally purchased shares (as a non-insider) in Company X via a brokerage to invest in the economy, those should be taxed at 5-15%.
Institutional trading firms and their "high frequency" transactions should be taxed at corporate income tax rates (i.e. up to 35%). Quite obviously they're not investing in the economy.
In the case of a very rich founder or CEO "diversifying his assets" like the Google guys did not too long ago, the initial cash out should be taxed at ordinary income tax rates before they purchase other assets.
Dividend income would depend on how the shares were initially obtained.
Of course, the republicans would never approve this.
"If you are a retail investor who personally purchased shares (as a non-insider) in Company X via a brokerage to invest in the economy, those should be taxed at 5-15%."
SORRY- but there is a serious flaw in your perspective and the tax law.
If ANYONE you buys and sells stock thru the "normal",
YOU may make a profit - but this is no different from gambling in Las Vegas
The company does not benefit, the country does not benefit.
All of these gambles should be taxed as ordinary income.
HERE'S THE NEW IDEA
If anyone buys stock -
as a new issue or secondary from the company itself,
and that company agrees to take that money and
invest in America,
hire in America,
buy in America -
when that original purchaser sells, who pumped money INTO the American system,
rather than just gambling -
THERE SHOULD BE NO TAX
When people purchase a stock, it raises its price which increases the value of the company. That benefits the company because if they need to raise more capital through additional stock offerings, those new shares will be worth more.
An investor values a company based on future earnings and potential. Which company would buy as a secondary?
a company with 10,000,000 shares @ $10
a company with 5,000,000 shares @ $20
a company with 5,000,000 shares @ $10
answer - not enough info given to solve this problem
I assume you have been in this long enough to see prices "pumped" up
to boost secondary offering prices
Prices go up when there are more buyers relative to sellers. I am not sure how much a company can really do to artificially inflate the price of their shares. Even if they knowingly provide false guidance, those prices will come right back down once they miss their earnings.
Prices have been manipulated FOREVER Why would YOU want to buy just because there are more buyers? Are the buyers right? Or are the brokers just pumping? It is much harder to evaluate the true value of a company
I agree, it is extremely hard to evaluate the true value of a company because it is not just objective measurements used in those calculations.
And I never said I would want to buy when there are more buyers. It could be a good time to sell if prices are going up.
No. Good investors do their homework and do not jump just because others are or based on a broker's phone call. The good investor is in for the long term , not short term. The true vauleof a public company can be obtained through financial statement analysis and understanding of market and economic conditions.
1861 income tax became law. It was started to fund the war, not social programs. If you went back to the original purpose,, we would be fine.
Tax capital gains by lengh of time owned. One day 100% tax progressing to six months same as normal income. Take the profit out of speculation.
count all capital gains as income ?
Cap gains needs to be considered with corporate and income tax rates.
Cap Gains=30% Top Corporate rate=35%. Tax breaks for domestic investment, emerging tech and markets making effective rate 18%. Current effective rate is about 11%. Top income rate=70%
i am okay with this completely
Consumption tax. Everyone will pay based on what they use.
terrible idea. poor people would pay a disproportionately high amount of their income towards the tax because they spend so much more of it on consumption rather than save or invest.
but i wanna be richer
..........................dave & charlie
Here is the "PLAN." Do what you CAN to get people out of BEING POORRRRRRRR. That should be your plan. Apparently it is not and that is your problem.
nah, i'm all for giving people all the opportunities to succeed, particularly in terms of equitable education opportunities and job training.
your plan makes poor people poorer. because consumption is a much higher percentage of their expenditures, they have little to no savings or assets, unlike more well off people who may consume more net but consume far far less as a percentage of their income.
it is quite stupid and indicates a total lack of understanding of regressive tax policies that punish the poor for being poor.
I think YOU own the track record on poor people getting poorer. Even during the times that the white house and both sides of congress are democrat,,, the poor get poorer and poorer. You have no good pie charts to show.
that's because both parties are bought and sold by corporations. at least the republicans dont hide being in their pockets.
i've hired about 200 people since my business launched ten years ago. my employees let me know all the time how grateful they are for the opportunities they've earned through me.