Jack has pointed out that the dividends that Romney receives are after tax dollars having already been taxed at the corporate rate. Any thoughts on that?
That is more than fair.
What does Romney pay? 14% ??? That is WAY LESS than fair.
Money is taxed each time earned.
I buy a car. It is taxed. I sell it - it is taxed again.
Are you so certain that Romneys rate was EVER taxed at a high rate? I'm not. AND, even if it was - let's take Happy Jacks example. The hard working doctor pays MUCH MORE than the corporate rate. Now he invests some of what is left in stocks and buys and sells within a year (short term). He pays FULL INCOME RATES. Same goes if said doc lends that money to a friend for a mortgage - he pays full boat on the interest.
Yet Romney, who has the amount and wherewithal to skirt all that stuff, pays 14%.
I say it is not balanced. We all pay taxes each time we EARN money....except in the case of tax-frees.
You say you are a savy invester but you don't understabnd a very simple calculation.
I'm not trying too insult you, just trying to make you understand something.
a: Mitt and three partners found Pain Inc.
b: Each invested some combination of start up capital and personal capital e.g. talent, clients, ideas, connections etc.
c: In exchange each received 25% of the stock in Pain Inc.
d: Pain conducts business, pays expenses, bill clients.
e: Eventually Client receivables exceed expenses i.e. they turn a profit.
f: At the end of their first profitable fiscal year they have two options
(1) divide the profits 4 ways and pay it to the owners as a salary. In this case the profit is reduced to zero and the corp. pays no tax but the owners pay taxes at their personal tax rate. Taxed once
(2) Pay corporate taxes on that profit and then divide the remainder 4 ways and pay it as dividends to the owners and then the owners pay a second 15% dividend tax on the same money that was already taxed at the corporate rate. Double taxation.
An accountant needs to review each circumstance but in most simple cases like I outlined the salary approach puts more in their pocket.
Mitt Romney is not cheating anyone and the 15% dividend tax is not some secret rich guy loophole.
There is a smart way around this. Eliminate corporate taxes. Allow companies to retain a a percentage of their profits as working capital and require them to disperse the remaining profits as dividends and then tax dividends at the same rate as personal income. Problem solved.
Right now many companies like Apple are sitting on enormous liquid reserves. That is bad for the economy.