re: When will the double tax on stock dividends and gains be removed such a pox.

Are you earning money? Yes? Then STFU and pay your damn taxes. You are not paying taxes on the money you put in. You are paying it on the earnings it returned to you.

Some of you are just ridiculous.

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It’s dead on accurate.

Tax 1) corporate income is taxed.

Tax 2) corporate income is spread to the shareholders as dividends. Where it is taxed a second time as personal income.

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The above has it right. Some of the other examples are not correct.

From Investopedia:

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Double taxation refers to income tax being paid twice on the same source of income. This can occur when income is taxed at both the corporate and personal level, as in the case of stock dividends.

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That is different from capital gains tax. Sure, you generally purchase the stock with funds that were already taxed, but you are only taxed on the *gains*, not the funds used to purchase the investment (that is your un-taxed 'cost basis').

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Also estate tax sunsets this year and will go down to @ $6 million from @ $14 million.

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Wouldn’t hold my breath on this. I despise the estate tax.

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We pay tax on income in this country, sir.

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Twice?

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Taxes on L/T capital gains, in most instances, are taxed at 15%

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21% federal.

The double tax is that the income from the shares is taxed as income, then if the shares are sold the gain is taxed at 21%. It’s really not double taxation, which is commonly used to describe the phenomenon in which corporate income tax is paid by a corporation and then the dividends are taxed at the shareholder level.

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Capital Gains is a very complex issue. Because we don’t index for inflation the capital gains tax yields bizarre results, ...

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Yes, few people get the 'bizarre' nature. Many (usually liberals) will claim that long term cap gains get 'beneficial' treatment. Well, sometimes yes, often no. They are generally taxed at 15%, instead of your marginal tax rate, so often-times lower. But... as you point out, inflation comes into play:

If I bought a stock 20 years ago, and it doubled, I pay 15% tax on the gains (so 7.5% on the amount I sold). And if I bought a stock 1 year ago, and it doubled, I pay the same 15% tax on the same gains. But... my 20 year old stock isn't really a gain, it didn't even keep up with inflation. So 'beneficial' treatment depends on circumstances. It is bizarre.

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yields bizarre results, which is probably the purpose; it allows savvy businessmen to manipulate ordinary income into capital gains to reap the low tax rate.

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Can you give an example of how this is done. Stock options?

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double taxation, which is commonly used to describe the phenomenon in which corporate income tax is paid by a corporation and then the dividends are taxed at the shareholder level.

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Right, the double taxation comes from the corp paying taxes, and then the investor paying taxes.So the gov taxed it twice.

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Can you give an example of how this is done. Stock options?

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I’m not very savvy financially, but stock options is certainly one way. And in a partnership we’ve used Profits Interests as a way to compensate W-2 employees in a way that will be taxed at lower rates. I’ve been in meetings with Private Equity guys who know every trick. They’ll discuss some way of shielding and my head is spinning.

I started a company, with partners, and we ran it for over two decades and finally sold. The liquid assets were taxed as ordinary income but the goodwill was taxed as capital gains. And the large majority was goodwill. It was great paying 21% instead of 39% income tax, and in Louisiana you don’t pay diddly if you are headquartered in state for more than five years. I felt like I was robbing Fort Knox.

Why is the sale of a business, developed without any material capital investment, taxed as capital gains? I’m glad we were able to take advantage of that, but it’s a scam. It seems that the way it should work is that the original capital investment should be indexed to inflation and subtracted from the sale price to get the taxable amount. The same should be done for any other capital investments. Then the net sale price should be subject to ordinary income tax. Maybe allow a ten year income averaging.

We got a great payday and paid a combined average tax of about 23%, while the average doctor, making a half million per year is paying 45% inclusive of state taxes. I’m glad I was on that side of it, but does that seem fair?

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The LTCG rate is 15% up to $583,000 of income. Then it goes to 20%. There is a 3.8% Obamacare tax on top of that.

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We were a partnership, and I don’t know how this happened, but we got a break on the 3.8% Obamacare tax and our marginal was right at 21%. Actually I do know how it happened…it was an 11th hour backroom lobbying deal the night before the Affordable Care Act passed that partially exempted certain businesses. Another reason it is a scam - a good scam, defined as one that benefits me.

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The gist of the topic is that revenue gained from taxed income should not be taxed again period. It’s government theft.

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But why are you singling out cap gains tax? People pay sales tax, excise taxes, property taxes on income that is already taxed.

Are you suggesting that income tax should be the only form of taxation?