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BruceHildenbrand
Social climber
Mountain View/Boulder
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I for one am not saying it was stolen, just that stocks should be subject to regular taxation when it is sold.
It depends on the type of stock option. Non-qualifying stock options are treated just like earned income. You generate a taxable amount based on the difference between your option price and the price of the stock when you exercised the option. Any gain in value above that is capital gains. Most stock options given to employees of companies are non-quals.
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Dave
Mountain climber
the ANTI-fresno
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" why someone whose only income is capital gains and dividends taxes at a much lower rate than someone who works? Why are you avoiding that question? The same question that Warren Buffet has asked for decades. Why is ordinary income less sacred? You could say that ordinary earned income has already been taxed and is taxed again for Social Security, and then the Social Security payment is taxed a third time if you have other income once you are old. Why aren't you complaining about this triple taxation?"
OK, I'll answer this question -
I earn 50,000 dollars. It's taxed at a normal rate. Then I take 5,000 dollars and invest it. I risk losing money that has been taxed. But for that risk, why not reward that risk with a lower tax rate on long term gains? That money is, in theory, helping create business and new jobs in the economy that then generate new income (and taxes).
As Bruce noted, if I get stock options they are taxed at an ordinary rate.
Oh, and I don't like Social Security being taxed, when that situation applies.
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Dave
Mountain climber
the ANTI-fresno
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So, you are opposed to the family farm? The family business?
What is the difference between you making the choice to give your son or daughter money for a college education or a car (while alive) and making the choice to pass along a business?
You ever given your kid anything?
Can I steal it?
You are making the argument that I can - its "ill-gotten"... By your argument. I'll come take that lego set now...
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Splater
climber
Grey Matter
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Family farms and other small businesses already get a loophole exemption.
The estate tax starts above those levels.
For 10 years under Shrub, there was zero estate tax, even for billionaires. When are the heirs going to pay this back?
When is trumpy going to pay back the taxes due on all his fake losses over the decades?
Asking people to pay their full share of taxes is the fairest thing we can ask, since they are the ones who have benefited the most from our society.
How much of the Walton heirs' annual income is taxed at 38 to 47%? (the same Total rate as the middle class)
Why are you arguing that middle class income is Ill-Gotten, and should be taxed at a much higher rate than hedge fund managers?
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aspendougy
Trad climber
Los Angeles, CA
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What Dave said is true, that stock "wealth" can evaporate overnight. Elizabeth Holmes, the former CEO of THERANOS was once "worth 5-6 billion dollars" based upon the valuation of the company stock at that time. But when the technology was revealed as being essentially non-existent, she was unmasked as a liar and a fraud. Now she has virtually nothing. I'd take a hundred million in gold over 10 billion in stocks any day.
The Father of a childhood friend of mine had a big property with a walnut orchard, going back to WW 2. It is right off of HWY 17 in the Silicon Valley; He was Japanese; the U.S. Government sent him to an internment camp; he got his property back when the War was over. He left the property to his kids; they recently sold it for about 17 million dollars. Considering what the U.S. Government did to him, I'd say he had the right to leave it to his kids, and they can sell it to the highest bidder.
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Norton
climber
The Wastelands
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nicely done, Dingus
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Splater
climber
Grey Matter
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I earn 50,000 dollars. It's taxed at a normal rate. Then I take 5,000 dollars and invest it. I risk losing money that has been taxed. But for that risk, why not reward that risk with a lower tax rate on long term gains? That money is, in theory, helping create business and new jobs in the economy that then generate new income (and taxes).
You have really bought the koolaid served up by Wall street lobbyists. Small amounts like $5000 have never and will never be highly taxed. But why you think that is similar to the $1 billion earned per year by someone in the top .001% makes no sense.
Are you saying Warren Buffet is lying when he says his total tax rate is far less than his employees who earn less than 1% of what he makes?
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Splater
climber
Grey Matter
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"I for one am not saying it was stolen, just that stocks should be subject to regular taxation when it is sold."
It depends on the type of stock option. Non-qualifying stock options are treated just like earned income. You generate a taxable amount based on the difference between your option price and the price of the stock when you exercised the option. Any gain in value above that is capital gains. Most stock options given to employees of companies are non-quals.
If it were treated as earned income, it would be subject to OASDI + medicare taxes. 7.65% employee + 7.65% employer = 15.3% total tax rate.
If not, it's still being treated as sacred.
OASDI started as a 2% total tax rate in 1937, and only rose to 5% in 1959. So the tax rate was small enough and the benefits paid out were huge compared to what had been paid in since there were so many workers per retired person. So no one complained that the rich were basically exempt from the whole thing. As time went on, the OASDI tax rate rose to 12.4% total. SSI was added. DI was added, and any followup review of actual disability justifications was discarded. Medicare was added in 1966 and the tax for that rose to 2.9%. Benefits for the middle class became more and more subject to double taxation. Yet despite these massive taxes on the middle class, the cap remained engrained and unquestioned, and the rich and sacred unearned income were still exempt from what had become largely a welfare system paid for with a regressive tax on the middle class.
When are the wealthy going to pay back their lack of proper federal taxation over the last 50 years?
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Gary
Social climber
Desolation Basin, Calif.
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You are missing my point Gary. Don't show up to work for anybody. Instead, start your own business and be your own boss. When you want to go climbing, fire yourself. No worries, you can hire yourself back at the end of the day. I am talking about a system which allows that. I am not focused on individuals at either end of the spectrum who abuse the system.
Total agreement, Hubbard. You work, you reap the reward of that work, nothing more, nothing less.
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BruceHildenbrand
Social climber
Mountain View/Boulder
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If it were treated as earned income, it would be subject to OASDI + medicare taxes. 7.65% employee + 7.65% employer = 15.3% total tax rate.
If not, it's still being treated as sacred.
For non-qualifying stock options it is treated like earned income. A lot of the taxes you mentioned above have limits. Many people reach these limits with their normal income so the earned income from stock options aren't 'taxed' by these programs.
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Dave
Mountain climber
the ANTI-fresno
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"No. I’m good with tax free inheritance up to say 100x the annual average taxable income. Hell I’d go to 200x."
Why not 10x? Why not 2000x? Why is 100-200x the "right" number and another factor "not right"?
" Yes and I paid all due taxes on it. I’m no scum bag tax dodger. Are you?"
And that is the entire point. I paid taxes on the money I am passing along to my kids. Why pay again? Folks here all seem to agree that double taxation is wrong in principle. So what is the difference between money gifted to a child in life, versus in death? Nevermind the amount.
"No I’m saying inheritance tax over that threshold I proposed is taxed at 75%, investment and company holdings included. No exemptions. Real property included."
So my kid has to sell my farm and associated business that I built to pay the tax. Sh#t, That sucks. Why bother? Guess I'll just fire everyone when I turn 60, sell it all while I'm alive and go live on a beach. That sucks for them. oh well. Tax policy has consequences.
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madbolter1
Big Wall climber
Denver, CO
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Tax policy has consequences.
The only consequence that matters is that individuals and corporations should not have to "suffer" ANY of the consequences of their decisions or just bad luck. "Equality for all" MEANS absolutely equal outcome for all. And that MEANS continual "redistribution," however unprincipled it necessarily is.
100x, hell 200x, hell 500,000x, hell 1/2 times... whatever "gets it done."
The basic problem in our society now is that "society" has convinced itself that IT owns everything, and individuals just "lease it back" at whatever rate "society" says. And, even as a republic, we're pretty danged close now to mob rule. We're down to just two mobs now, and they swap now and then; each time "the other side" gets power, its top priority is to "redistribute" what "society owns" as IT sees fit. And BOTH mobs have convinced themselves that they and only they have the "obvious" high moral ground.
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rottingjohnny
Sport climber
Sands Motel , Las Vegas
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WOT alert....
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madbolter1
Big Wall climber
Denver, CO
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^^^ No reading comprehension alert. Reads with mouth open, one syllable at a time.
"Tttthhhheeaaa."
"The. Yeah, that's a hard one."
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madbolter1
Big Wall climber
Denver, CO
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Yeah, what did I do, dipping my toe into the cesspool yet again? No good can come of it, and now I've gotta go disinfect my toe.
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Splater
climber
Grey Matter
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"A lot of the taxes you mentioned above have limits. Many people reach these limits with their normal income so the earned income from stock options aren't 'taxed' by these programs."
And why do those taxes have limits? That only makes them a regressive tax on the middle class.
Once most of your income is above the payroll tax cap,
you are stealing from the middle class,
thanks to having better lobbyists.
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BruceHildenbrand
Social climber
Mountain View/Boulder
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From the Interweb:
"The 2018 wage base is $128,400, for a $7,960.80 maximum amount of OASDI tax. The Medicare hospital insurance tax of 1.45% each for employees and employers, or 2.9% for the self-employed, has no wage limit."
Social Security has a maximum payout of $2687/mo. Since there is a maximum payout it seems only fair that their be some sort of limit on the amount you have to pay into the system.
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Splater
climber
Grey Matter
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No it is not fair. If the income cap were raised (and not just on wages - it should be on ALL income) the benefit would also rise (but the payout formula is only 1/6 for that new revenue).
As I just posted 6 days ago:
It is incorrect to think there is a rational reason for the cap on income subject to Social Security tax. The only reason for the existing structure of Social Security tax and benefits is that the rich have better lobbyists.
1. If the income cap were raised, of course the max payout per month would rise a little. However the upper bracket of Social Security payout formula is only 1/6 of the lower bracket. So you would lose most of your money, just like what is already happening to the upper middle class. Why should the rich be exempt? The system is progressive from the poor to middle income level. But becomes highly regressive for income above the cap, meaning the rich get a much lower tax rate and are not doing their share to support society. And of course, social security is a payroll tax only paid on earned income. All unearned income is exempt, such as dividends and capital gains. Why? Because the rich have better lobbyists.
There are 3 brackets. If you are what the government calls upper middle income, you are in the upper of the 3 brackets. Your payout is only 1/6 for this income level compared to the lower income level. So it is COMPLETELY the middle class that is Subsidizing the relatively higher payout level to the poor. Right now effectively half of Social Security is a welfare system that transfers money from the middle class to the poor. WHY should the Rich be exempt from the same effect on all of their income? Answer: they have good lobbyists ...
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http://www.supertopo.com/climbing/thread.php?topic_id=3166385&msg=3169305#msg3169305
OASDI started as a 2% total tax rate in 1937, and only rose to 5% in 1959. So the tax rate was small enough and the benefits paid out were huge compared to what had been paid in since there were so many workers per retired person. So no one complained that the rich were basically exempt from the whole thing. As time went on, the OASDI tax rate rose to 12.4% total. SSI was added. DI was added, and any followup review of actual disability justifications was discarded. Medicare was added in 1966 and the tax for that rose to 2.9%. Benefits for the middle class became more and more subject to double taxation. Yet despite these massive taxes on the middle class, the cap remained engrained and unquestioned, and the rich and sacred unearned income were still exempt from what had become largely a welfare system paid for with a regressive tax on the middle class.
When are the wealthy going to pay back their lack of proper federal taxation over the last 50 years?
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