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> It's purchasing an ownership claim on future earnings realized by the company. Which, as I said, can be realized via dividends or the sale of the company. I

> It's purchasing an ownership claim on future earnings realized by the company. Which, as I said, can be realized via dividends or the sale of the company. I looked up their dividend returns. It ain't much. Keep in mind that tax law highly incentivizes the avoidance of dividends. We'll see (or maybe not). This business of involving the general public in stock ownership is a new thing, it really is new ground to cover.

WalterBright 5y ago
> Keep in mind that tax law highly incentivizes the avoidance of dividends. Combining Biden's capital gains tax, Federal estate tax, Biden's stepped up basis for estates, Washington state's estate tax, and Washington state's new capital gains tax, the top estate tax rate is now 70%. This ensures that tax planning will dominate investment strategies, which usually results in suboptimal investing and subsequently a lower performing economy.
- skybrian 5y ago
  Whatever changes you think investors might react to need to be discounted by the likelihood of them being in a bill passed by Congress. It’s not something I know a lot about, but it seems likely that Congress will make substantial changes to Biden’s proposals?
  - bluGill 5y ago
    Changes depend on time. Biden is past the early magic 100 days and now members of the house (and 1/3rd the senate) are realizing that they need to prepare for their re-election campaign in less than a year. The longer things go on the more concerned they will be. The democrats have the government today. The most democrat heavy handed set of bills will ensure that republicans take a veto-proof majority of both houses. Different levels of watered down will have different effects. There is a reasonable chance that no matter what they do they will lose the house next election (even passing bills that the republicans would like to author but wouldn't dare!), but the exact set of laws they pass will have a big effect on both who shows up, and how voters change their votes.
aoeusnth1 5y ago
Or can be realized in a share buyback program, which are massive. Dividends and buybacks are just slightly differently structured ways to return profit to investors.
runako 5y ago
> can be realized via dividends or the sale of the company. Keep reading my comment. Share buybacks are another way of returning cash to shareholders. > involving the general public in stock ownership is a new thing, it really is new ground to cover. There have been discount brokerages for 50 years now. I guess that's "new" as compared to how long there has been money, but I don't know that it's "new" in the sense that we can't determine whether buybacks do have the effect of returning cash to shareholders (they do). Share buybacks have been allowed since 1934.

WalterBright 5y ago

> Keep in mind that tax law highly incentivizes the avoidance of dividends. Combining Biden's capital gains tax, Federal estate tax, Biden's stepped up basis for estates, Washington state's estate tax, and Washington state's new capital gains tax, the top estate tax rate is now 70%. This ensures that tax planning will dominate investment strategies, which usually results in suboptimal investing and subsequently a lower performing economy.

skybrian 5y ago
Whatever changes you think investors might react to need to be discounted by the likelihood of them being in a bill passed by Congress. It’s not something I know a lot about, but it seems likely that Congress will make substantial changes to Biden’s proposals?
- bluGill 5y ago
  Changes depend on time. Biden is past the early magic 100 days and now members of the house (and 1/3rd the senate) are realizing that they need to prepare for their re-election campaign in less than a year. The longer things go on the more concerned they will be. The democrats have the government today. The most democrat heavy handed set of bills will ensure that republicans take a veto-proof majority of both houses. Different levels of watered down will have different effects. There is a reasonable chance that no matter what they do they will lose the house next election (even passing bills that the republicans would like to author but wouldn't dare!), but the exact set of laws they pass will have a big effect on both who shows up, and how voters change their votes.

aoeusnth1 5y ago

Or can be realized in a share buyback program, which are massive. Dividends and buybacks are just slightly differently structured ways to return profit to investors.

runako 5y ago

> can be realized via dividends or the sale of the company. Keep reading my comment. Share buybacks are another way of returning cash to shareholders. > involving the general public in stock ownership is a new thing, it really is new ground to cover. There have been discount brokerages for 50 years now. I guess that's "new" as compared to how long there has been money, but I don't know that it's "new" in the sense that we can't determine whether buybacks do have the effect of returning cash to shareholders (they do). Share buybacks have been allowed since 1934.