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> They’re fundamentally different types of things happening. Long term capital gains and dividends are taxed at the same rate in the US. If a company doesn't c

> They’re fundamentally different types of things happening. Long term capital gains and dividends are taxed at the same rate in the US. If a company doesn't currently pay dividends its stock price goes up because of a combination of: a) inflation b) the expectation of future dividends c) stock buybacks (a dividend by another name) So long term capital gains are mostly either dividends or the expectation of dividends. > capital gains can only occur when you sell something you bought The ultra-rich can borrow against appreciated assets and never sell. Their heirs inherit much of it tax free and with a stepped up cost basis.

lazide 3y ago
This is getting really weird. The only dividends that can get taxed like capital gains are qualified dividends and they’re very rare. Because they are dividends from selling capital assets in a business or the like. All other types of dividends are taxed like income. Which is why the behavior around capital gains. The loan situation is very very specialized, and loans that aren’t paid back in a reasonable amount of time or have no interest get considered as either gifts or income by the IRS. For someone sufficiently high net worth, I’m sure there are ways to play various shell games for awhile in this - and if sufficiently frugal, even past their death. But property taxes still get paid every year, income taxes still get paid on income, and capital gains still get paid when there is an actual sale. for example, Elon Musk also eventually had to pay the largest tax bill ever as an individual to finance his shenanigans. $11 billion dollars. How does that fit in your theory?
- lotsofpulp 3y ago
  >The only dividends that can get taxed like capital gains are qualified dividends and they’re very rare. Because they are dividends from selling capital assets in a business or the like. All other types of dividends are taxed like income. This is incorrect. Lots of dividend income is classified as a qualified dividend. https://www.investopedia.com/terms/q/qualifieddividend.asp https://www.investopedia.com/terms/q/qualifieddividend.asp >A dividend is considered qualified if the shareholder has held a stock for more than 60 days in the 121-day period that began 60 days before the ex-dividend date. >This is getting really weird. It is not weird at all. We tax wealth all the time. Every state/county has a property tax, some even have a property tax on vehicles. The simplest explanation is this, does society benefit from people hoarding wealth? For how many years? 1 year, 5 years, 10 years? Multiple generations? Would it not be better if people were forced to get off their ass and continuously earn their keep? Or at least set marginal levels for the amount of wealth one can hoard? Sure, hit the ball out of the park and earn $10M, $100M, $1B. Enjoy it for 5, 10, hell even 20 years. But how does society benefit from this person or family creating an everlasting dynasty?
  - lazide 3y ago
    So you’re saying no one should be able to retire? And should have to work forever? Weird.
    - lotsofpulp 3y ago
      No, the government can exempt a certain amount that allows for a secure retirement. But it doesn’t need to allow for retirees to jetset around the world, buy luxury cars, and leave generational wealth behind.
- triceratops 3y ago
  > The only dividends that can get taxed like capital gains are qualified dividends and they’re very rare "A dividend is considered qualified if the shareholder has held a stock for more than 60 days in the 121-day period that began 60 days before the ex-dividend date."[1] I don't know where you got the idea that they're rare. You literally have to hold a US stock for a few months and any dividends from it are qualified. > How does that fit in your theory? That Elon Musk's impulsive behavior makes for bad tax planning? I hope I never get into a situation where my poor decisions create an $11b tax bill for me. 1. https://www.investopedia.com/terms/q/qualifieddividend.asp https://www.investopedia.com/terms/q/qualifieddividend.asp
  - lazide 3y ago
    Qualified dividends - huh, totally wrong on that one. Can’t be right on everything! [https://en.m.wikipedia.org/wiki/Qualified_dividend https://en.m.wikipedia.org/wiki/Qualified_dividend]

lazide 3y ago

This is getting really weird. The only dividends that can get taxed like capital gains are qualified dividends and they’re very rare. Because they are dividends from selling capital assets in a business or the like. All other types of dividends are taxed like income. Which is why the behavior around capital gains. The loan situation is very very specialized, and loans that aren’t paid back in a reasonable amount of time or have no interest get considered as either gifts or income by the IRS. For someone sufficiently high net worth, I’m sure there are ways to play various shell games for awhile in this - and if sufficiently frugal, even past their death. But property taxes still get paid every year, income taxes still get paid on income, and capital gains still get paid when there is an actual sale. for example, Elon Musk also eventually had to pay the largest tax bill ever as an individual to finance his shenanigans. $11 billion dollars. How does that fit in your theory?

lotsofpulp 3y ago
>The only dividends that can get taxed like capital gains are qualified dividends and they’re very rare. Because they are dividends from selling capital assets in a business or the like. All other types of dividends are taxed like income. This is incorrect. Lots of dividend income is classified as a qualified dividend. https://www.investopedia.com/terms/q/qualifieddividend.asp https://www.investopedia.com/terms/q/qualifieddividend.asp >A dividend is considered qualified if the shareholder has held a stock for more than 60 days in the 121-day period that began 60 days before the ex-dividend date. >This is getting really weird. It is not weird at all. We tax wealth all the time. Every state/county has a property tax, some even have a property tax on vehicles. The simplest explanation is this, does society benefit from people hoarding wealth? For how many years? 1 year, 5 years, 10 years? Multiple generations? Would it not be better if people were forced to get off their ass and continuously earn their keep? Or at least set marginal levels for the amount of wealth one can hoard? Sure, hit the ball out of the park and earn $10M, $100M, $1B. Enjoy it for 5, 10, hell even 20 years. But how does society benefit from this person or family creating an everlasting dynasty?
- lazide 3y ago
  So you’re saying no one should be able to retire? And should have to work forever? Weird.
  - lotsofpulp 3y ago
    No, the government can exempt a certain amount that allows for a secure retirement. But it doesn’t need to allow for retirees to jetset around the world, buy luxury cars, and leave generational wealth behind.
triceratops 3y ago
> The only dividends that can get taxed like capital gains are qualified dividends and they’re very rare "A dividend is considered qualified if the shareholder has held a stock for more than 60 days in the 121-day period that began 60 days before the ex-dividend date."[1] I don't know where you got the idea that they're rare. You literally have to hold a US stock for a few months and any dividends from it are qualified. > How does that fit in your theory? That Elon Musk's impulsive behavior makes for bad tax planning? I hope I never get into a situation where my poor decisions create an $11b tax bill for me. 1. https://www.investopedia.com/terms/q/qualifieddividend.asp https://www.investopedia.com/terms/q/qualifieddividend.asp
- lazide 3y ago
  Qualified dividends - huh, totally wrong on that one. Can’t be right on everything! [https://en.m.wikipedia.org/wiki/Qualified_dividend https://en.m.wikipedia.org/wiki/Qualified_dividend]