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1 - I have already paid tax on the money. 2 - In making the investment, I stand to lose (or gain) 3 - The lost money is not an expense Given all of this, I exp
by ratboy666 5y ago
1 - I have already paid tax on the money.
2 - In making the investment, I stand to lose (or gain)
3 - The lost money is not an expense
Given all of this, I expect that the capital gain rate is specified as lower to encourage me to invest.
If the capital gain rate were higher than the income rate, I would not make risky investments. I could use my money to invest in my own business -- where I have expenses available. And, take an income. Any loss would then be an expense.
I just wouldn't invest in other business.
How would you encourage investment behavior?
- ryandrake 5y ago> 1 - I have already paid tax on the money. Money is taxed over and over all the time. Your income gets taxed, then it's taxed again when you spend it, then it's taxed again when the store owner reports it as earnings, and on and on. There's no rule that once a dollar is taxed it shouldn't be taxed again. But, for some reason, it's only shareholders who complain about how unfair "double taxation" is [1]. 1: https://www.thepatriotaxe.com/spot-the-double-taxation/ https://www.thepatriotaxe.com/spot-the-double-taxation/
- ratboy666 5y agoI like your cartoon. The difference with the dividend flow is that the payment was made... not for a good or service (which all the other flows have in common) but tax on a repayment. Not a fixed, negotiated payment either... A repayment that is, interestingly, not in the control of the shareholder. Thus differing from a loan. I would no longer purchase stocks -- I would then prefer bonds (loans). Which means I would take risk into account, and this would stifle (some) innovation. I don't mind taxation at all!