3 ms·
> It's not worth investing money if 70% of the proceeds get taken away. Yes it is. As long as the 30% of the proceeds are higher than the proceeds of the best
by pg314 9y ago
> It's not worth investing money if 70% of the proceeds get taken away.
Yes it is. As long as the 30% of the proceeds are higher than the proceeds of the best alternative use of your money.
> This is why world wide, capital is taxed fairly lightly.
This is wrong. It is taxed fairly lightly because it is mobile. Tax it too much and it just moves abroad.
- Taek 9y agoI was just in a meeting yesterday with a fund that chose not to pursue lucrative investment opportunities because the tax situation was much worse than the other opportunities available. Tax is absolutely a huge part of the decision making for any substantial wealth management. Whether you buy property, bonds, or do something more creative is heavily influenced by the taxes you'll have to pay.
- rhino369 9y ago>Yes it is. As long as the 30% of the proceeds are higher than the proceeds of the best alternative use of your money. You aren't guaranteed proceeds. You can model investment as a probability function of profit. You should only invest when the expected value of the investing is greater than 0. But tax rates factor into the expected value. Would you bet on a 50/50 coin flip with 3:1 odds? Of course. How about if you were taxed 90% on proceeds?