Taxes

[HessStation]

Originally Posted by southparkcpa

OK..big company. Got it. 83b should have been used.

DAMMIT!!!









I actually might be leaving this company for another entrepreneurial venture. If I do, expect a PM.

[Winstonbiggs]

Originally Posted by Warfish

That is incorrect. Money put under a mattress is a net loss, as inflation and time value of money concepts will conspire to reduce the value of that inactive money.



Says the guy who considers money under a mattress an investment?



Thats not an argument against an equal-taxation system. How the income was earned does not make them different, they are both income. If anything, the fact that one stream requires personal labor, and the other does not would lead one to the idea that investment income should face a higehr tax rate, not a lower one, than that for labor.

There is no "deserve" in a tax system, there is only what we via our representatives feel tax rates should be to serve the purposes and operations of Government.

A decision to put savings under a matress is an investment decision based on preserving capital at all cost. People make decisions to take income below the rate of inflation all day long in a high risk environment.

Investment income is taxed at a higher rate then wages. The investment income was earned as wages at some point and taxed that taxed money that is invested and actually earns a profit will be taxed at the corporate level currently 35% and it is going to be taxed as a capital gain or dividend when distributed all the while being eatin up by inflation just like the person he decided to put their's under a mattress.

Additionally the losses are restricted. Cap gains are taxed at a much higher rate then wages or money that's spent that doesn't get taxed at all since we don't have a federal sales tax.

So I don't agree with your premise that income from investments or losses from investments are the same as wages.

[TheMikeIsHot]

Originally Posted by Winstonbiggs

A decision to put savings under a matress is an investment decision based on preserving capital at all cost. People make decisions to take income below the rate of inflation all day long in a high risk environment.

Investment income is taxed at a higher rate then wages. The investment income was earned as wages at some point and taxed that taxed money that is invested and actually earns a profit will be taxed at the corporate level currently 35% and it is going to be taxed as a capital gain or dividend when distributed all the while being eatin up by inflation just like the person he decided to put their's under a mattress.

Additionally the losses are restricted. Cap gains are taxed at a much higher rate then wages or money that's spent that doesn't get taxed at all since we don't have a federal sales tax.

So I don't agree with your premise that income from investments or losses from investments are the same as wages.

Maybe at some point money in investor accounts was earned by working. But for the most part, they do this for a living, no? They move from one investment to another, or continue to earn income via the initial investment?

If that's the case, this would be considered a man's job... and similar to a salesman, he will have good months and bad months. Yet the investor pays a significant'y lower tax rate because he's making his money differently.

[Winstonbiggs]

Originally Posted by TheMikeIsHot

Maybe at some point money in investor accounts was earned by working. But for the most part, they do this for a living, no? They move from one investment to another, or continue to earn income via the initial investment?

If that's the case, this would be considered a man's job... and similar to a salesman, he will have good months and bad months. Yet the investor pays a significant'y lower tax rate because he's making his money differently.

He paid more tax on his investment then the salesman. To give you an example if Warren Buffetts job is to own 50% of Berkshire Hathaway and the company is being taxed at 35% which comes right off the top of his corporate earnings and in addition he pays 15% cap gains tax, how in the world is he paying less then his secretary paying at a rate of 17%?

[Warfish]

Originally Posted by Winstonbiggs

A decision to put savings under a matress is an investment decision based on preserving capital at all cost. People make decisions to take income below the rate of inflation all day long in a high risk environment.

Again, just because you choose to call putting money under your mattress to devalue over time an investment, does not make it an investment. Words have meanings Winston, and that action is not an investment.

Investment income is taxed at a higher rate then wages. The investment income was earned as wages at some point and taxed that taxed money that is invested and actually earns a profit will be taxed at the corporate level currently 35% and it is going to be taxed as a capital gain or dividend when distributed all the while being eatin up by inflation just like the person he decided to put their's under a mattress.

Holy Christ, the same old dusty and crusty "I'm being Double Taxed" argument, with an added bonus of the new and improved "I'm actually being triple taxed"?

/facepalm

Best of luck with your investments Winston.

[HessStation]

Originally Posted by Warfish

Again, just because you choose to call putting money under your mattress to devalue over time an investment, does not make it an investment. Words have meanings Winston, and that action is not an investment.

Yeah, LOL, This! Winston's trying to throw curveballs.

[Winstonbiggs]

=Warfish;4685693]Again, just because you choose to call putting money under your mattress to devalue over time an investment, does not make it an investment. Words have meanings Winston, and that action is not an investment.

This is a clasic example of someone who doesn't understand risk and investing. Words do have meaning and because you don't understand them doesn't change that.

Holy Christ, the same old dusty and crusty "I'm being Double Taxed" argument, with an added bonus of the new and improved "I'm actually being triple taxed"?

The same old everyone chooses to spend and not save there is no upward mobility in saving let’s keep taxing to encourage people to take on debt and spend and wonder why so many people aren't prepared for their own rainy day.

Guess what there are tons of millionaires in this country who never made more than 50K in any year and there are tons of people in this country who made millions and are flat broke because they don't know when to put their cash under the mattress.


I'm not worried about my investments or my taxes. I know that if I have it I'm getting taxed for it because other people don't have it to tax. All this nonesense is just that. People who have wages, savings, investments and earnings who save money are going to pay for those who don't have, squandered or simple pissed it away on toys. There's no fair about it savers will be punished and spenders will be bailed out.

[HessStation]

Originally Posted by Winstonbiggs

This is a clasic example of someone who doesn't understand risk and inveting. Words do have meaning and because you don't understand them doesn't change that.



The same old everyone chooses to spend and not save there is no upward mobility in saving let’s keep taxing to encourage people to take on debt and spend and wonder why so many people aren't prepared for their own rainy day.

Guess what there are tons of millionaires in this country who never made more than 50K in any year and there are tons of people in this country who made millions and are flat broke because they don't know when to put their cash under the mattress.


I'm not worried about my investments or my taxes. I know that if I have it I'm getting taxed for it because other people don't have it to tax. All this nonesense is just that. People who have wages, savings, investments and earnings who save money are going to pay for those who don't have, squandered or simple pissed it away on toys. There's no fair about it savers will be punished and spenders will be bailed out.

This is just a silly argument in semantics. It's like calling a walk a hit even though you didn't swing, you're still on first. Whoa, that'd probably make more sense if I were high...in Colorado.

[Winstonbiggs]

Originally Posted by TheMikeIsHot

Maybe at some point money in investor accounts was earned by working. But for the most part, they do this for a living, no? They move from one investment to another, or continue to earn income via the initial investment?

If that's the case, this would be considered a man's job... and similar to a salesman, he will have good months and bad months. Yet the investor pays a significant'y lower tax rate because he's making his money differently.

So I have worked since I was in my early teens. Started saving money on a regular monthly basis since my early 20's and I still have a job and make wages yet I have accumulated savings while other who were in the same position as I didn't. Why should I pay more then someone who didn't save and invest?

You allready are willing to screw me out of the SS and Medicare beni's I paid into just like you now you want to take my savings. Don't get me wrong I'm willing to pay more and understand I will but don't give me your BS argument because it's BS.

[Warfish]

Originally Posted by Winstonbiggs

This is a clasic example of someone who doesn't understand risk and investing. Words do have meaning and because you don't understand them doesn't change that.

Perhaps I see our disconnect. If you will allow me to quote the always reliable Wikipedia:

Investment has different meanings in finance and economics.

In finance, investment is putting money into something with the expectation of gain, usually over a longer term.

In economics, investment is related to saving and deferring consumption.

I'm more a finance guy, and hence use that oft-used definition (which I believe mirrors the common laymans definition as well.

But strictly speaking, in economics, putting your money is a box full of dog**** and used tampons would, in fact, be considered "investment".

Hence I must admit that while I am not, in fact, incorrect in my use of the term, neither are you.

I'm not worried about my investments or my taxes.

I'm glad to hear that Winston. The rest of your wargarbl is too wargarbley for my tastes at this point. Perhaps we can exchange again down the road when you're feeling more reasonable and less "Angry Wargarbl taxes!!!!". As it is, I fit squarely in your "paying for it" group myself, although as a laboror, not an investor.

[parafly]

Originally Posted by Warfish

In finance, investment is putting money into something with the expectation of gain, usually over a longer term.

Just playing devil's advocate here ... what if your expectation is monetary deflation? Then putting your money under the mattress would indeed be an investment even in the financial sense.

[Winstonbiggs]

Originally Posted by Warfish

Perhaps I see our disconnect. If you will allow me to quote the always reliable Wikipedia:



I'm more a finance guy, and hence use that oft-used definition (which I believe mirrors the common laymans definition as well.

But strictly speaking, in economics, putting your money is a box full of dog**** and used tampons would, in fact, be considered "investment".

Hence I must admit that while I am not, in fact, incorrect in my use of the term, neither are you.



I'm glad to hear that Winston. The rest of your wargarbl is too wargarbley for my tastes at this point. Perhaps we can exchange again down the road when you're feeling more reasonable and less "Angry Wargarbl taxes!!!!". As it is, I fit squarely in your "paying for it" group myself, although as a laboror, not an investor.

If you took a million dollars of invested money in stocks before the crash of 2008 and put it under your mattress instead of a bank that would have been a very prudent investment. Just like those who put money back into the market after it crashed while others were taking it out after the lost their ass and putting it under their mattress.

Sorry fish you have failed the basic sell high and buy low. Like most people they buy high and sell low. There are times in life the mattress is most certainly a great investment and we just went through a short period where that was proven out and may well go through it again.

You fail to understand that investing has risk and risk tollerance is part of investing. If Banks aren't safe and we are seeing a full boat deflation like we just went through a few short years ago when you were most certainly an adult with some cognitive recognition, you would get it. You aren't as dumb as you are acting here for the sole purpose of being argumentative.

[Winstonbiggs]

Originally Posted by parafly

Just playing devil's advocate here ... what if your expectation is monetary deflation? Then putting your money under the mattress would indeed be an investment even in the financial sense.

How about what if you were alive in 2008?

[Warfish]

Originally Posted by Winstonbiggs

If you took a million dollars of invested money in stocks before the crash of 2008 and put it under your mattress instead of a bank that would have been a very prudent investment.

Except there is no situation where the ONLY two options were "invest in stocks" or "put under mattress".

Under literally every circusmtance, "under mattress" is a poor investment, as the value of that money dimished over time.

The only exception would be a severe and long-lasting period of monetary deflation, so string that it overcome the inherant loss in the time value of money for money not invested in a vehichle that offered some form of return. The Financial Crisis of 2007/2010 did indeed have deflationary effects, primary due to enegery costs falling, but it was not long lasting enough or strong enough to overcome the loss incurred by a conscious non-investment of funds into a safe investment vehicle over the same period.

Sorry fish you have failed the basic sell high and buy low. Like most people they buy high and sell low. There are times in life the mattress is most certainly a great investment and we just went through a short period where that was proven out and may well go through it again.

I too am sorry, but thats simply not correct. "Under Mattress" may have been a better decision than say, shoving it down stripped panties or buying Enron stock, but it was not and is not a good investment, and it has nothing to do with buy/sell high/low.

Money under mattress is an almost 100% losing decision. While it may be a safer decision that strippers or stocks, it's still a net loser outside of very breifs period in U.S. financial history. There is no shortage of safer and safe options that exist. It is not a two-option-only scenario.

You fail to understand that investing has risk and risk tollerance is part of investing.

I'm well aware of the fact, which is why I do not personally waste my own money in investing. As you've seen with most of my predictions over the years, I'm quite poor at it, and would lose money.

This is not, IMO, relevant to the question of taxation on investment income.

If Banks aren't safe and we are seeing a full boat deflation like we just went through a few short years ago when you were most certainly an adult with some cognitive recognition, you would get it. You aren't as dumb as you are acting here for the sole purpose of being argumentative.

Banks were never "not safe". Not a single person lost money from an FDIA insured bank. And your era of deflation was not long enough or strong enough to warrant a "sit on your money" investing tactic.

I'm not trying to be argumentative with you Winston, you're clearly VERY angry about something at current, and think you need to put me in my place to vent it. But you're simply incorrect with your under the mattress analogy. It does not meet the common finance definition fo an investment, and over almost any period it is a net loser when many net winner investments existed.

In any event, we're well derailed from a moral question of taxation principles and if/why labor income should/should not be taxed at a different rate (and if so what rates) from investment/capital gains income.

Originally Posted by parafly

Just playing devil's advocate here ... what if your expectation is monetary deflation? Then putting your money under the mattress would indeed be an investment even in the financial sense.

Indeed. In the same sense that buying a lottery ticket and winning would be a betetr investment, but just like deflation, it is not something that could in any form be counted upon and certainly is not something that was indicated to be a long-term situation in the United States. It also ignores the fact that "under the mattress" returns 0% outside of deflation, while any number fo other safe investments return deflation+ a return during the same period, even the dreaded 2008 Winston is harping on.

By all means, if all of you wish to "invest" by sticking your money under your pillow, by all means do so. If you think thats the ebst investment, who am I to tell you otherwise.

[palmetto defender]

Originally Posted by Warfish

Except there is no situation where the ONLY two options were "invest in stocks" or "put under mattress".

Under literally every circusmtance, "under mattress" is a poor investment, as the value of that money dimished over time.

The only exception would be a severe and long-lasting period of monetary deflation, so string that it overcome the inherant loss in the time value of money for money not invested in a vehichle that offered some form of return. The Financial Crisis of 2007/2010 did indeed have deflationary effects, primary due to enegery costs falling, but it was not long lasting enough or strong enough to overcome the loss incurred by a conscious non-investment of funds into a safe investment vehicle over the same period.



I too am sorry, but thats simply not correct. "Under Mattress" may have been a better decision than say, shoving it down stripped panties or buying Enron stock, but it was not and is not a good investment, and it has nothing to do with buy/sell high/low.

Money under mattress is an almost 100% losing decision. While it may be a safer decision that strippers or stocks, it's still a net loser outside of very breifs period in U.S. financial history. There is no shortage of safer and safe options that exist. It is not a two-option-only scenario.



I'm well aware of the fact, which is why I do not personally waste my own money in investing. As you've seen with most of my predictions over the years, I'm quite poor at it, and would lose money.

This is not, IMO, relevant to the question of taxation on investment income.



Banks were never "not safe". Not a single person lost money from an FDIA insured bank. And your era of deflation was not long enough or strong enough to warrant a "sit on your money" investing tactic.

I'm not trying to be argumentative with you Winston, you're clearly VERY angry about something at current, and think you need to put me in my place to vent it. But you're simply incorrect with your under the mattress analogy. It does not meet the common finance definition fo an investment, and over almost any period it is a net loser when many net winner investments existed.

In any event, we're well derailed from a moral question of taxation principles and if/why labor income should/should not be taxed at a different rate (and if so what rates) from investment/capital gains income.



Indeed. In the same sense that buying a lottery ticket and winning would be a betetr investment, but just like deflation, it is not something that could in any form be counted upon and certainly is not something that was indicated to be a long-term situation in the United States. It also ignores the fact that "under the mattress" returns 0% outside of deflation, while any number fo other safe investments return deflation+ a return during the same period, even the dreaded 2008 Winston is harping on.

By all means, if all of you wish to "invest" by sticking your money under your pillow, by all means do so. If you think thats the ebst investment, who am I to tell you otherwise.

Not trying to argumentative (that would never be me) but money under the pillow or mattress CAN be a sound investment policy in certain cases.
I have a fairly substantial monthly investment income. I have not invested one penny over the past 5 months anticipating an Obama (unffortunately) win. Rather I have allowed the monies to accumulate at essentaiily zero return.
With the stock market in an almost free fall, I am now in a position to strike and invest at what will be favorable prices on stocks with outstanding dividend yields. A positive strategy. There are many solid strategies in which to invest. It depends on one's goals and objectives.

[Axil]

Originally Posted by palmetto defender

Not trying to argumentative (that would never be me) but money under the pillow or mattress CAN be a sound investment policy in certain cases.
I have a fairly substantial monthly investment income. I have not invested one penny over the past 5 months anticipating an Obama (unffortunately) win. Rather I have allowed the monies to accumulate at essentaiily zero return.
With the stock market in an almost free fall, I am now in a position to strike and invest at what will be favorable prices on stocks with outstanding dividend yields. A positive strategy. There are many solid strategies in which to invest. It depends on one's goals and objectives.

I still don't think allowing money to accumulate (increasing liquidity) is an investment. Is it part of your investment strategy? Yes. Is it an investment in and of itself? No, because you have no reasonable expectation of return, you're increasing your liquidity in order to make investments in the future.

However, this is somewhat irrelevant to topic of the thread. I think Warfish's preference to argue semantics is indicative of the weakness of his position on the issue as a whole.

[Warfish]

Originally Posted by Axil

I think Warfish's preference to argue semantics is indicative of the weakness of his position on the issue as a whole.

I have to have a position for it to be weak. The only position I take on taxation is for a Universal Flat Individual Income Tax (combined with a termination of business income tax), or a Consuption Tax system.

With that said, when taxes rise on the top 2% of income earners, and the tax rate rises on capital gains/investment income, I'm not going to shed many tears either.

[palmetto defender]

Originally Posted by Axil

I still don't think allowing money to accumulate (increasing liquidity) is an investment. Is it part of your investment strategy? Yes. Is it an investment in and of itself? No, because you have no reasonable expectation of return, you're increasing your liquidity in order to make investments in the future.

However, this is somewhat irrelevant to topic of the thread. I think Warfish's preference to argue semantics is indicative of the weakness of his position on the issue as a whole.

Aha, there you are incorrect. I have now amassed substantial capital to be executed reurning a much higher rate of return than say five months ago. Amassing capital IS an investment strategy.
Also, had I invested on a continuing basis rather than accumulate I would have had a negative YTD return on those funds. When I execute it will be positive (probably - there are never definites).
Warfish is ok btw- he likes to argue. Not that he needs my endorsement - LOL

[Axil]

Originally Posted by Warfish

I have to have a position for it to be weak. The only position I take on taxation is for a Universal Flat Individual Income Tax (combined with a termination of business income tax), or a Consuption Tax system.

With that said, when taxes rise on the top 2% of income earners, and the tax rate rises on capital gains/investment income, I'm not going to shed many tears either.

Oh, but you do have a position.

Here are a couple of your opinions that i have a hard time with.

Originally Posted by Warfish

If anything, the fact that one stream requires personal labor, and the other does not would lead one to the idea that investment income should face a higehr tax rate, not a lower one, than that for labor.

While investment income and income earned as a wage are both income, that is all they have in common. I do not believe they ought to be taxed the same as they are not the same. I have laid out my reasons in previous posts. I do not believe the "income is income" argument is very compelling.

Originally Posted by Warfish

There is no "deserve" in a tax system, there is only what we via our representatives feel tax rates should be to serve the purposes and operations of Government.

But of course there is a "deserve" in a tax system. Voters vote for many reasons. Most of them selfish, however the concept of fairness in the tax code is something both sides of the aisle strive to monopolize. My views on taxes have never been completely utilitarian. For example I am against any form of death/estate tax merely on principle. I don't know weather these taxes help or hurt the economy, i just believe they are morally reprehensible.


I believe at one point we discussed tax reform previously, and i mentioned my support for the consumption tax, and far less enthusiasm for a "flat tax". This is one of the major reasons i believe a consumption tax is vastly superior than a flat tax. Every issue discussed in this thread magically disappears when a consumption tax system is utilized.

[Axil]

Originally Posted by palmetto defender

Aha, there you are incorrect. I have now amassed substantial capital to be executed reurning a much higher rate of return than say five months ago. Amassing capital IS an investment strategy.
Also, had I invested on a continuing basis rather than accumulate I would have had a negative YTD return on those funds. When I execute it will be positive (probably - there are never definites).

As i mentioned in my previous post, i agree. Amassing capital is part of an investment strategy. It is just not an investment.

Example: I shift funds from stock A to stock B

Methodology:

I own stock A: my funds are invested.

I sell stock A: Those funds cease to be invested.

I but stock B: Those funds are once again invested.

Yes this is semantics. I like semantics. I interact with computers a lot. Computers are really interested in semantics. Drives my wife nuts.

Originally Posted by palmetto defender

Warfish is ok btw- he likes to argue. Not that he needs my endorsement - LOL

Warfish is one of my favorite posters. I have to antagnoize him a little bit now and again to get his attention.