Navy SEALS slam Obama.

[Danl]

The company who's earnings I draw my dividends from is paying taxes on those earnings before I get my cut.

So $200 in earnings for the company - $50/year in corp taxes for 10 years. Then I get dividends out of the after tax earnings and pay taxes on that money again (hence the old double taxation argument on dividends)

OK, but that's $500, not $5,000, right?

 

[volinbham]

OK, but that's $500, not $5,000, right?

My bad - will correct.

 

[T-TownVol]

Good argument. Insightful.

There is no reason to argue with your ignorance on this issue.

 

[lawgator1]

The company who's earnings I draw my dividends from is paying taxes on those earnings before I get my cut.

So $200 in earnings for the company - $50/year in corp taxes for 10 years. Then I get dividends out of the after tax earnings and pay taxes on that money again (hence the old double taxation argument on dividends)

Well, here it is. The argument I knew was inevitable: dividend income is double taxed because it is taxed as income to the company I invested in, then my portion of the remainder is taxed as income to me.

First, every dollar circulating is theoretically multitaxed. Whether it is in this form, or if I get a salary, pay my taxes, then spend it and pay sales taxes, or invest it and pay on the return. If we could somehow track every dollar as a discrete unit, tax it once, then never again no matter how it circulated at that point, the country would last three days, tops.

Second, you assume the the company is actually paying full tax on that dollar. We know that not to be the case in most instances, particularly of large companies, large enough to be traded for sure.

Third, so what if the company pays an income tax AND the stock holder pays one, as well ? Only investment class folks see anything wrong with that. And you can't articulate a legitimate reason why -- just that from the investors point if view they'd rather it weren't taxed again because then they'd have more money. That is hardly a compelling argument.

 

[therealUT]

Well, here it is. The argument I knew was inevitable: dividend income is double taxed because it is taxed as income to the company I invested in, then my portion of the remainder is taxed as income to me.

Correct.

First, every dollar circulating is theoretically multitaxed. Whether it is in this form, or if I get a salary, pay my taxes, then spend it and pay sales taxes, or invest it and pay on the return.

Wages are only taxed once as regards the activity of working. Wages paid, as part of expenses, work to reduce profit and are therefore not taxed as any part of Corporate Income. A single activity should only be taxed once, if at all, by a certain entity (e.g., the Federal Government should only tax your wages once; the State Government should only tax your wages once).

If we could somehow track every dollar as a discrete unit, tax it once, then never again no matter how it circulated at that point, the country would last three days, tops.

This is no more than a rhetorical device to divert the argument and you know it. A dollar is not an activity; working, investing, purchasing, etc. are activities. If you support taxing non-activities, then why not simply institute a dollar-amount tax across the board of which everyone, to include those who are not working, investing, or purchasing, is subject to?

Second, you assume the the company is actually paying full tax on that dollar. We know that not to be the case in most instances, particularly of large companies, large enough to be traded for sure.

Then close those loopholes. Prohibit companies from using losses in prior years to offset tax liability in the future.

Third, so what if the company pays an income tax AND the stock holder pays one, as well ? Only investment class folks see anything wrong with that. And you can't articulate a legitimate reason why -- just that from the investors point if view they'd rather it weren't taxed again because then they'd have more money. That is hardly a compelling argument.

This is a solid class warfare argument. What is wrong with being taxed twice on a single activity is that one is taxed twice on a single activity while everyone else is only taxed once. The income that the shareholders are entitled to is already being taxed at over 35% for most large corporations (well above most individual income tax rates); then, the shareholders must pay another 15% on "their share"...but, they have already paid a 35% tax on the entire pot, which means they have already paid a 35% tax on their share.

However, if you still think that is only worrisome and troubling for "the investor class" (even though a vast majority of Americans have holdings in mutual funds), then maybe you should think deeply about what it is that this "investor class" provides: capital. Without capital, businesses are going to have a very tough time staying in business; if they cannot stay in business, they cannot provide jobs.

The extra-taxes on capital gains are deterrent taxes; they are actually a disincentive to investing and, therefore, a disincentive to production. Without production, resources are not exploited and developed. Money is only a symbol of resources (it is not simply paper that is printed off); therefore, by the extra-tax is actually a deterrent to money. It is absurd.

 

[T-TownVol]

CG tax is a voluntary tax, just like a sales tax, and carries RISK that regular income does not. That is why it is taxed at a lower rate to INCOURAGE invetment. The only way that capital gains should taxed at the same rate as income is if income tax rate is LOWERED to the same rate as CG taxes. It is amazing that these two factors are always left out by the "raise CG taxes" idiots.

 

[T-TownVol]

Correct.



Wages are only taxed once as regards the activity of working. Wages paid, as part of expenses, work to reduce profit and are therefore not taxed as any part of Corporate Income. A single activity should only be taxed once, if at all, by a certain entity (e.g., the Federal Government should only tax your wages once; the State Government should only tax your wages once).



This is no more than a rhetorical device to divert the argument and you know it. A dollar is not an activity; working, investing, purchasing, etc. are activities. If you support taxing non-activities, then why not simply institute a dollar-amount tax across the board of which everyone, to include those who are not working, investing, or purchasing, is subject to?



Then close those loopholes. Prohibit companies from using losses in prior years to offset tax liability in the future.



This is a solid class warfare argument. What is wrong with being taxed twice on a single activity is that one is taxed twice on a single activity while everyone else is only taxed once. The income that the shareholders are entitled to is already being taxed at over 35% for most large corporations (well above most individual income tax rates); then, the shareholders must pay another 15% on "their share"...but, they have already paid a 35% tax on the entire pot, which means they have already paid a 35% tax on their share.

However, if you still think that is only worrisome and troubling for "the investor class" (even though a vast majority of Americans have holdings in mutual funds), then maybe you should think deeply about what it is that this "investor class" provides: capital. Without capital, businesses are going to have a very tough time staying in business; if they cannot stay in business, they cannot provide jobs.

The extra-taxes on capital gains are deterrent taxes; they are actually a disincentive to investing and, therefore, a disincentive to production. Without production, resources are not exploited and developed. Money is only a symbol of resources (it is not simply paper that is printed off); therefore, by the extra-tax is actually a deterrent to money. It is absurd.

Solid post!

 

[BeecherVol]

Well, here it is. The argument I knew was inevitable: dividend income is double taxed because it is taxed as income to the company I invested in, then my portion of the remainder is taxed as income to me.

First, every dollar circulating is theoretically multitaxed. Whether it is in this form, or if I get a salary, pay my taxes, then spend it and pay sales taxes, or invest it and pay on the return. If we could somehow track every dollar as a discrete unit, tax it once, then never again no matter how it circulated at that point, the country would last three days, tops.

Second, you assume the the company is actually paying full tax on that dollar. We know that not to be the case in most instances, particularly of large companies, large enough to be traded for sure.

Third, so what if the company pays an income tax AND the stock holder pays one, as well ? Only investment class folks see anything wrong with that. And you can't articulate a legitimate reason why -- just that from the investors point if view they'd rather it weren't taxed again because then they'd have more money. That is hardly a compelling argument.

Sure it is. You just don't agree with it.

 

[T-TownVol]

Sure it is. You just don't agree with it.

You forget, libs think all money belongs to the government and only they know how it should be allocated.

 

[therealUT]

Solid post!

Well, you know, even a broken clock...

 

[volinbham]

Well, here it is. The argument I knew was inevitable: dividend income is double taxed because it is taxed as income to the company I invested in, then my portion of the remainder is taxed as income to me.

First, every dollar circulating is theoretically multitaxed. Whether it is in this form, or if I get a salary, pay my taxes, then spend it and pay sales taxes, or invest it and pay on the return. If we could somehow track every dollar as a discrete unit, tax it once, then never again no matter how it circulated at that point, the country would last three days, tops.

There is a distinction here. The corporation is owned by groups of people. The earnings are taxed once within the corporation then again as dividends even though there is no additional economic activity. That is distinct from money in circulation being used for additional transactions.

Second, you assume the the company is actually paying full tax on that dollar. We know that not to be the case in most instances, particularly of large companies, large enough to be traded for sure.

If you read the example I did not apply the full tax to the earnings. Technically the tax rate is immaterial to the notion of double taxation.

Third, so what if the company pays an income tax AND the stock holder pays one, as well ? Only investment class folks see anything wrong with that. And you can't articulate a legitimate reason why -- just that from the investors point if view they'd rather it weren't taxed again because then they'd have more money. That is hardly a compelling argument.

If I owned 100% of the stock in a company and it earned $100K. Corp taxes (assuming it was set up as a corp) may run the company 28%. That's $28K. If I decide to take all those earnings as dividend then you want to treat that as regular income to me. If I'm at 28% marginal then that's another $20K on what's left. My earnings (since the company is all mine) are hit at an effective rate of 48% and I have about $52K from the original $100K in earnings.

It was only generated one time and dispersed to owners.

The same holds true if there is 1 owner or 1 million owners. There is no new income being generated - earnings are either dispersed or not dispersed. Dividends are not new income; they are the earnings of individual owners of the company - the company itself does not have income.

Technically, corp taxes should be zero and all dividends should be taxed as regular income or vice versa.

Let's say you and two other guys win the lottery. You pool the winnings and put it in a mutual fund via a partnership. Each year, the mutual fund yields "x" and the partnership pays "y" in taxes on it. If you 3 decide that you each want a draw on the partnership earnings should you pay additional taxes on the draw? It is not new income.

 

[T-TownVol]

Well, you know, even a broken clock...

heck, I even understood all the words

 

[lawgator1]

Correct.



Wages are only taxed once as regards the activity of working. Wages paid, as part of expenses, work to reduce profit and are therefore not taxed as any part of Corporate Income. A single activity should only be taxed once, if at all, by a certain entity (e.g., the Federal Government should only tax your wages once; the State Government should only tax your wages once).



This is no more than a rhetorical device to divert the argument and you know it. A dollar is not an activity; working, investing, purchasing, etc. are activities. If you support taxing non-activities, then why not simply institute a dollar-amount tax across the board of which everyone, to include those who are not working, investing, or purchasing, is subject to?



Then close those loopholes. Prohibit companies from using losses in prior years to offset tax liability in the future.



This is a solid class warfare argument. What is wrong with being taxed twice on a single activity is that one is taxed twice on a single activity while everyone else is only taxed once. The income that the shareholders are entitled to is already being taxed at over 35% for most large corporations (well above most individual income tax rates); then, the shareholders must pay another 15% on "their share"...but, they have already paid a 35% tax on the entire pot, which means they have already paid a 35% tax on their share.

However, if you still think that is only worrisome and troubling for "the investor class" (even though a vast majority of Americans have holdings in mutual funds), then maybe you should think deeply about what it is that this "investor class" provides: capital. Without capital, businesses are going to have a very tough time staying in business; if they cannot stay in business, they cannot provide jobs.

The extra-taxes on capital gains are deterrent taxes; they are actually a disincentive to investing and, therefore, a disincentive to production. Without production, resources are not exploited and developed. Money is only a symbol of resources (it is not simply paper that is printed off); therefore, by the extra-tax is actually a deterrent to money. It is absurd.

I don't agree that a company earning a profit and then paying a dividend is a "single activity," justifying taxing it only once. By that logic, my being paid for my labor, which simultaneously creates income to my employer, is a "single activity."

A company creates and sells goods and services and earns a profit, it should be taxed. A man buys stock in the company to earn HIS OWN profit, it should be taxed.

Calling it "one activity" is inaccurate.

 

[volinbham]

I don't agree that a company earning a profit and then paying a dividend is a "single activity," justifying taxing it only once. By that logic, my being paid for my labor, which simultaneously creates income to my employer, is a "single activity."

A company creates and sells goods and services and earns a profit, it should be taxed. A man buys stock in the company to earn HIS OWN profit, it should be taxed.

Calling it "one activity" is inaccurate.

working for a company and owning a bit of the company are two entirely different things.

All the company's earnings are owned by the individual stock holders (generally common stock holders). The company itself has no earnings on it's own because there is no "it's own".

The BoD (representing the owners) decides to either disperse the share of earnings to the owners or hold it for reinvestment.

All company earnings are the property of owners whether dispersed as dividends or not. All owners pay taxes on their earnings when the company pays taxes on earnings. It is as simple as that.

 

[lawgator1]

If I owned 100% of the stock in a company and it earned $100K. Corp taxes (assuming it was set up as a corp) may run the company 28%. That's $28K. If I decide to take all those earnings as dividend then you want to treat that as regular income to me. If I'm at 28% marginal then that's another $20K on what's left. My earnings (since the company is all mine) are hit at an effective rate of 48% and I have about $52K from the original $100K in earnings.

It was only generated one time and dispersed to owners.

The same holds true if there is 1 owner or 1 million owners. There is no new income being generated - earnings are either dispersed or not dispersed. Dividends are not new income; they are the earnings of individual owners of the company - the company itself does not have income.

Technically, corp taxes should be zero and all dividends should be taxed as regular income or vice versa.

Let's say you and two other guys win the lottery. You pool the winnings and put it in a mutual fund via a partnership. Each year, the mutual fund yields "x" and the partnership pays "y" in taxes on it. If you 3 decide that you each want a draw on the partnership earnings should you pay additional taxes on the draw? It is not new income.

1) Gets back to earlier issues we discussed in terms of requiring that all net income to a company be paid out to the individuals who own the company (stock publicly traded or private ownership) and tax it at marginal rate based on what tier it falls into.

2) I think sole proprietorships take care of this problem.

thus

3) What we are really talking about is publicly traded companies, or privately held companies that trade in publicly traded companies. That is to say, the choice to be publicly traded- and therefore the choice of some to trade in it -- separates out net income to a corporation as one taxable event, and then receipt of a dividend as a separate and distinguishable one.

 

[volinbham]

1) Gets back to earlier issues we discussed in terms of requiring that all net income to a company be paid out to the individuals who own the company (stock publicly traded or private ownership) and tax it at marginal rate based on what tier it falls into.

2) I think sole proprietorships take care of this problem.

thus

3) What we are really talking about is publicly traded companies, or privately held companies that trade in publicly traded companies. That is to say, the choice to be publicly traded- and therefore the choice of some to trade in it -- separates out net income to a corporation as one taxable event, and then receipt of a dividend as a separate and distinguishable one.

Sole proprietorships come with full liability. Even if you are a one person owned company setting up as a sole proprietorship is a good way to lose everything you own in one lawsuit.

The highlighted part makes no sense. Simply being publicly traded means earnings should be taxed twice?

The earnings (the income) only occurs ONE TIME. It is either retained in the ownership collective or dispersed among the owners. It is NOT NEW INCOME.

If I buy a stock that appreciates then sell it for more than I paid then I have NEW INCOME.

There is a real difference.

 

[lawgator1]

Sole proprietorships come with full liability. Even if you are a one person owned company setting up as a sole proprietorship is a good way to lose everything you own in one lawsuit.

The highlighted part makes no sense. Simply being publicly traded means earnings should be taxed twice?

The earnings (the income) only occurs ONE TIME. It is either retained in the ownership collective or dispersed among the owners. It is NOT NEW INCOME.

If I buy a stock that appreciates then sell it for more than I paid then I have NEW INCOME.

There is a real difference.

Sure it is. The dividend is new income to the stockholder.

The stockholder in a publicly traded company is not at risk to pay a judgment against the company. Sure, he might not make money on his investment, but there is a distinction between the corporate existence and the dividend earning of the investor.

 

[volinbham]

Sure it is. The dividend is new income to the stockholder.

Whose is it otherwise? Mr. Corporation? All earnings of a corporation are owned by the share holders - all of them. There is not some other entity which owns the earnings.

The stockholder in a publicly traded company is not at risk to pay a judgment against the company. Sure, he might not make money on his investment, but there is a distinction between the corporate existence and the dividend earning of the investor.

See above.

So you are the bread winner for the family and your wife stays home with the kids. Amongst your wife and yourself you've decided to be equal partners. You give her $200 week for whatever she wants to spend it on.

Should she be taxed on that $200?

Is that $200 new income to the household?

Is that $200 new income at all?

 

[lawgator1]

See above.

So you are the bread winner for the family and your wife stays home with the kids. Amongst your wife and yourself you've decided to be equal partners. You give her $200 week for whatever she wants to spend it on.

Should she be taxed on that $200?

Is that $200 new income to the household?

Is that $200 new income at all?

I don't really think that is a very good analogy.

Bottom line is that I view the income to the company as one taxable event, dividend income to the investor as another.

You view them as one event, reasoning that the act of paying the dividend is simply the act of distributing the net income out to the individual owners of the company.

I understand the argument, I just can't buy into that. Someone who owns 10,000 shares, or even 100,000 shares, or even 1 million shares, of Citibank has absolutely no say in what that company does. He has no risk,other than his investment, i.e. he is not liable for the company's debts.

Rather, he has chosen to buy the instrument that was at one time used to help fund Citibank's expansion into new areas of banking and finance. In my mind, there is sufficient separation in their respective roles, their respective risks, and their respective interests that Citibank earning a profit is not the same thing as the investor earning one, too.

 

[T-TownVol]

Sure it is. The dividend is new income to the stockholder.

The stockholder in a publicly traded company is not at risk to pay a judgment against the company. Sure, he might not make money on his investment, but there is a distinction between the corporate existence and the dividend earning of the investor.

and that judgement will not effect his dividend payment.....riiiight

it is all about risk and the fact that I pay a voluntary tax by makeing an investment that pays me a dividend....take away that smaller voluntary tax and make it bigger, I stop investing.....how much tax income does the government get from me then

 

[volinbham]

and that judgement will not effect his dividend payment.....riiiight

it is all about risk and the fact that I pay a voluntary tax by makeing an investment that pays me a dividend....take away that smaller voluntary tax and make it bigger, I stop investing.....how much tax income does the government get from me then

Hence the differential tax treatment.

You really have 2 different things going on. One is the question of should dividends be taxed at all. Philosophically I would say no but the government has decided otherwise.

Next is what do you want to accomplish with the tax policy - is it "fairness", is it "economic growth", is it "revenue maximization".

So far the only reason I've seen put forth for raising dividend tax rates is "fairness" and that is in spite of either economic growth or revenue maximization.

That's just plain dumb.

 

[T-TownVol]

Hence the differential tax treatment.

You really have 2 different things going on. One is the question of should dividends be taxed at all. Philosophically I would say no but the government has decided otherwise.

Next is what do you want to accomplish with the tax policy - is it "fairness", is it "economic growth", is it "revenue maximization".

So far the only reason I've seen put forth for raising dividend tax rates is "fairness" and that is in spite of either economic growth or revenue maximization.

That's just plain dumb.

and proven to hurt tax revenues instead of increasing them

 

[gsvol]

Leon Panetta | Barack Obama Memo | Bin Laden Raid | The Daily Caller

Former U.S. Attorney Michael Mukasey told Fox News Channel host Sean Hannity on Friday night that the Navy SEAL mission to kill Osama bin Laden was preceded by “a highly lawyered memo” from CIA Director Leon Panetta — one designed to insulate President Barack Obama if the operation failed.

As Mukasey first suggested in a Wall Street Journal op-ed, the Panetta memo appeared calculated to shift any future blame to Naval Special Operations Commander Adm. Bill McRaven.

“The president had a fallback if this didn’t work out,” Hannity said Friday. “He had a ‘CYA’ [Cover Your Ass].”

“There was a memo from Leon Panetta that described the authority that was given to McCraven,” Mukasey explained. “And it was to proceed according to the risks, only according to the risks that had been outlined to the president. And if he encountered anything else, he had to check back. And you better believe that if anything else had been encountered and the mission had failed, then the blame would have fallen on McCraven. That’s what that’s about.”

Asked by Hannity if the memo “was designed to protect the president politically,” Mukasey suggested that “there’s going to be more that comes tumbling out about that escapade. But so far, that memo is enough.”

“One definition of a great leader,” Mukasey added later in the interview, “is somebody who takes less credit than he should and takes more blame than he should. And that’s not what we’ve got now.”

 

[BearCat204]

Correct.



Wages are only taxed once as regards the activity of working. Wages paid, as part of expenses, work to reduce profit and are therefore not taxed as any part of Corporate Income. A single activity should only be taxed once, if at all, by a certain entity (e.g., the Federal Government should only tax your wages once; the State Government should only tax your wages once).



This is no more than a rhetorical device to divert the argument and you know it. A dollar is not an activity; working, investing, purchasing, etc. are activities. If you support taxing non-activities, then why not simply institute a dollar-amount tax across the board of which everyone, to include those who are not working, investing, or purchasing, is subject to?



Then close those loopholes. Prohibit companies from using losses in prior years to offset tax liability in the future.



This is a solid class warfare argument. What is wrong with being taxed twice on a single activity is that one is taxed twice on a single activity while everyone else is only taxed once. The income that the shareholders are entitled to is already being taxed at over 35% for most large corporations (well above most individual income tax rates); then, the shareholders must pay another 15% on "their share"...but, they have already paid a 35% tax on the entire pot, which means they have already paid a 35% tax on their share.

However, if you still think that is only worrisome and troubling for "the investor class" (even though a vast majority of Americans have holdings in mutual funds), then maybe you should think deeply about what it is that this "investor class" provides: capital. Without capital, businesses are going to have a very tough time staying in business; if they cannot stay in business, they cannot provide jobs.

The extra-taxes on capital gains are deterrent taxes; they are actually a disincentive to investing and, therefore, a disincentive to production. Without production, resources are not exploited and developed. Money is only a symbol of resources (it is not simply paper that is printed off); therefore, by the extra-tax is actually a deterrent to money. It is absurd.

Very good post and exactly to the point. How anyone can argue with this is beyond me.

 

[T-TownVol]

Very good post and exactly to the point. How anyone can argue with this is beyond me.

LG is in a Google frenzy right about now......calling Robert Reich.......Robert Reich please