3 ms·

Is average Joe in US free from taxes from dividends if he reinvests? If not, then it's bad for him too.

• vkou 8y ago
  He has very few savings to invest, and derives almost no benefits from this, compared to his wealthy neighbour. Tax advantages for shareholders are a transfer of wealth from the poor to the rich.
  • ryandrake 8y ago
    Around 50% of Americans hold no stock at all, including indirect holdings like pensions, 401k etc.
    • refurb 8y ago
      24% of American are under 18, so wouldn’t be expected to hold stock. That means 2/3rds if adults do, which is pretty good!
      • ryandrake 8y ago
        The figure is 50% of US adults, my bad.
  • gnicholas 8y ago
    > Tax advantages for shareholders are a transfer of wealth from the poor to the rich. You can call this a wealth transfer, but only if you're willing to accept that every decision in the tax code is a wealth transfer. Graduated rates? Wealth transfer to the poor. Lower rates for long-term capital gains? Wealth transfer to the rich. Refundable tax credits? Wealth transfer to the poor. Unfortunately, going down this road isn't terribly productive from a tax policy perspective since it doesn't actually tell us what the right choices to make are. Where should LTCG rates be, compared to OI rates? Should they be subject to FICA/Med withholding? How do we weigh this against the desire to incentivize people to save? It's not as simple as labeling everything as a wealth transfer in one direction or the other.