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Capital Gains Tax is also a form of triple taxation. If you invest in a company and make a capital gain of $100 million, the capital gain is valued at $100m be

by srgseg 16y ago

Capital Gains Tax is also a form of triple taxation. If you invest in a company and make a capital gain of $100 million, the capital gain is valued at $100m because that's the expected increase in profit take of that company over its lifetime. That profit will be taxed once through corporation tax, and then a second time through dividends tax. Capital gains tax is a third tax on these profits.

asdf333 16y ago
slightly inaccurate. The dividends tax is the same as the capital gains tax in the sense that they are both applied only once at the shareholder level. so unless i have something wrong, its a double tax. not a triple tax. (corp tax + cap gains or corp tax + dividends)
- srgseg 16y ago
  You're correct about (corp tax + cap gains or corp tax + dividends). What I'm pointing out is that this theoretical future $100m in value is being taxed once through capital gains tax for the person that created the value, then a second time via corporation tax when that value manifests itself as a profit, then a third time when someone tries to take that profit as a dividend. And possibly fourth when estate tax is paid. That's a lot of tax.
  - ewjordan 16y ago
    ...and before the coin drops into the company's coffer, it's already been taxed as income against the person that earned it to spend, and before that as corporate tax against the corporation that employs that person, and as income tax against the people that bought that company's products, and so on. Income tax taxes every transfer of wealth from one entity to another. That's just the way it works, the government takes a cut of the profit that anyone realizes at every hop. I can't fathom any reason that income I obtain by betting on Apple should somehow magically be more exempt from taxation than income I obtain by betting on poker, working a dead end finance job, or selling my old crap on eBay, all the money from any of those sources has already been taxed dozens of times.

by srgseg 16y ago

asdf333 16y ago

slightly inaccurate. The dividends tax is the same as the capital gains tax in the sense that they are both applied only once at the shareholder level. so unless i have something wrong, its a double tax. not a triple tax. (corp tax + cap gains or corp tax + dividends)

srgseg 16y ago
You're correct about (corp tax + cap gains or corp tax + dividends). What I'm pointing out is that this theoretical future $100m in value is being taxed once through capital gains tax for the person that created the value, then a second time via corporation tax when that value manifests itself as a profit, then a third time when someone tries to take that profit as a dividend. And possibly fourth when estate tax is paid. That's a lot of tax.
- ewjordan 16y ago
  ...and before the coin drops into the company's coffer, it's already been taxed as income against the person that earned it to spend, and before that as corporate tax against the corporation that employs that person, and as income tax against the people that bought that company's products, and so on. Income tax taxes every transfer of wealth from one entity to another. That's just the way it works, the government takes a cut of the profit that anyone realizes at every hop. I can't fathom any reason that income I obtain by betting on Apple should somehow magically be more exempt from taxation than income I obtain by betting on poker, working a dead end finance job, or selling my old crap on eBay, all the money from any of those sources has already been taxed dozens of times.