Tax Bill

I'm a social liberal, and in general I think we should keep taxes in check on certain items. I am though, adamantly opposed to extending tax breaks on dividends and capital gains. What say you all on this?

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[lehighguy]

Why?

[Kurn, son of Mogh]

Disagree. In the case of dividends, its an example of double-dipping by the government. First they tax the corporations, Then they tax the after-tax distributions. Either make dividends tax exempt, or eliminate the corporate income tax.

Capital gains taxes would be more palatable if they were indexed. For example, a person who bought a home in 1975 for $40,000 and who sells it today for $400,000 has not really made $360,000 in income. One 1975 dollar does not equal one 2005 dollar. In the case of stock and bond transactions, I see no reason why that income needs to be treated any differently than any other income.

[SunOfBeach]

finally, a voice of reason. hallelujah.

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Disagree. In the case of dividends, its an example of double-dipping by the government. First they tax the corporations, Then they tax the after-tax distributions. Either make dividends tax exempt, or eliminate the corporate income tax.

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What about my income that I get from working at the corporation? The corporation's income is taxed, and then the money they give me for working there is taxed. That's double-dipping too, right?

I don't see a big difference between the investors in a corporation and the workers in the corporation (from a tax perspective, that is).

[adios]

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Disagree. In the case of dividends, its an example of double-dipping by the government. First they tax the corporations, Then they tax the after-tax distributions. Either make dividends tax exempt, or eliminate the corporate income tax.

[/ QUOTE ]

What about my income that I get from working at the corporation? The corporation's income is taxed, and then the money they give me for working there is taxed. That's double-dipping too, right?

I don't see a big difference between the investors in a corporation and the workers in the corporation (from a tax perspective, that is).

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Not quite right. You are paid for your time and effort. The cost incurred by your employer for your services is not taxed at at the corporate level. Your labor is part of the cost the corporation incurs to produce profits.

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Disagree. In the case of dividends, its an example of double-dipping by the government. First they tax the corporations, Then they tax the after-tax distributions. Either make dividends tax exempt, or eliminate the corporate income tax.

[/ QUOTE ]

What about my income that I get from working at the corporation? The corporation's income is taxed, and then the money they give me for working there is taxed. That's double-dipping too, right?

I don't see a big difference between the investors in a corporation and the workers in the corporation (from a tax perspective, that is).

[/ QUOTE ]

Not quite right. You are paid for your time and effort. The cost incurred by your employer for your services is not taxed at at the corporate level. Your labor is part of the cost the corporation incurs to produce profits.

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It could be argued that dividends are part of the cost of capital. A company that doesn't pay them, will find it harder to raise capital... which is a cost the corporation incurs to produce profits.

UPDATE:
Dividends:Investors :: Bonuses:Employees

[adios]

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Disagree. In the case of dividends, its an example of double-dipping by the government. First they tax the corporations, Then they tax the after-tax distributions. Either make dividends tax exempt, or eliminate the corporate income tax.

[/ QUOTE ]

What about my income that I get from working at the corporation? The corporation's income is taxed, and then the money they give me for working there is taxed. That's double-dipping too, right?

I don't see a big difference between the investors in a corporation and the workers in the corporation (from a tax perspective, that is).

[/ QUOTE ]

Not quite right. You are paid for your time and effort. The cost incurred by your employer for your services is not taxed at at the corporate level. Your labor is part of the cost the corporation incurs to produce profits.

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It could be argued that dividends are part of the cost of capital.

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Yeah but the stock holders own the corporation more or less and thus dividends are their rightfully earned profits. If dividends are paid irregardless of profits then I can see that argument. I believe companies that pay "special dividends" also can designate these dividends as long term capital gains, point being that companies do have some discretion.

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A company that doesn't pay them, will find it harder to raise capital... which is a cost the corporation incurs to produce profits.

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Why do you say this and it's irrelevant to whether or not dividends represent a corporations net profit to it's shareholders. Theoretically companies that don't pay dividends shouldn't need to raise as much capital btw.


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UPDATE:
Dividends:Investors :: Bonuses:Employees

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Totally disagree for the most part.

Shareholders == owners of the company.

Owners of the company are entitled to the companys net profits.

Net profits basically consiste of Revenue - (costs + taxes).


A companys net profits or portion thereof are paid out as dividends. For example if we look at REITs they are required by law to pay out 90% or more of their taxable income as dividends. REITS are not taxed at the corporate level. To say that dividends don't represent corporate net profits is baloney.

I think your support of government-sponsored theft is morally reprehensible.

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I think your support of government-sponsored theft is morally reprehensible.

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Stop using my roads.