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I don’t think you understand how capital gains work... If you invest a dollar today and get ten dollars tomorrow you’ve gained 9 dollars. When were you taxed f
by endisneigh 6y ago
I don’t think you understand how capital gains work...
If you invest a dollar today and get ten dollars tomorrow you’ve gained 9 dollars. When were you taxed for that?
- enahs-sf 6y agoI think his point was the initial dollar you invested was at some point subject to income tax to get it.
- Jtsummers 6y agoThe (now gray) comment talks about being double taxed. That is, taxed twice for the same money. If I invest $100 (post-tax money) and sell the investment at $1000, I do not pay taxes on that $100. There is no double taxing. I do pay taxes on the $900 gain.
- foobiekr 6y agoThe problem is the gain may exist in nominal terms only. It’s possible to make a 100% nominal gain, which will be taxed, even if in inflation adjusted terms you lost 90% of the actual value in the process.
- medvezhenok 6y agoThe double taxation that some people talk about is actually corporate profits being taxed, and then that money being further taxed as capital gains / dividends - but I don't think that 's a fair criticism either.
- arrosenberg 6y agoThat’s a bad point, because the first dollar won’t be subject to cap gains, so there is no double taxation happening.
- ska 6y agoYes, but the capital gains tax doesn't apply to that dollar (it's right in the name). There is no double taxation here. There is a more nuanced question as to whether or not inflation should be incorporated into the calculations, but there are pros and cons there also.
- procombo 6y agoThey're saying if that growth occured over 60 years then you've just kept up with inflation. Might as well have just put it in a standard savings account and NOT get capital gains tax. *Well, maybe a standard money market account or bond.
- medvezhenok 6y agoBonds also incur capital gains tax) The point of the capital gains taxes/inflation is specifically to incentivize people spending money over saving (if too many people saved money the economy would contract). It's not a perfect tool, but it works somewhat.
- procombo 6y agoIncome from bonds issued by the federal government and its agencies, including Treasury securities, is generally exempt from state and local taxes.
- gizmo686 6y agoEarned interest is taxed as income at the federal level.
- procombo 6y agoOh, I know. Should it be taxed at the state level too?
- tartoran 6y agoWait, wouldn't you get taxed capital gains on a standard savings account? I'm genuinely curious even though right now saving accounts are not saving anything at all.
- leephillips 6y agoTax on interest is at a different rate than capital gains tax.
- ihsw 6y agoIf you invest a dollar today and get ten dollars tomorrow due to inflation rather than an actual gain in value, have you actually gained 9 dollars?