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Do you know the difference between taxes on income and capital gains?

Gracie - Proud Conservative 2012/01/25 03:16:13
I know that President Obama needs stupid people. So, do you know why Warren Buffett's secretary pays a larger percentage than he does? Do you know the difference between taxes on income and taxes on capital gains?
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  • Ramon 2012/01/26 07:28:42
    Ramon
    +1
    He didn't pay much in income taxes because he gave himself a lower salary and paid income taxes on that...he made most of his investments.
  • Gracie ... Ramon 2012/01/26 17:37:04
    Gracie - Proud Conservative
    +1
    Exactly, if anything they should be questioning the $100,000 salary for a CEO to avoid taxation.
  • Ramon Gracie ... 2012/01/26 23:49:28
    Ramon
    +1
    Yeah...he purposely arranged his salary structure so that most of his salary came from dividends and stock options (so he would be taxed at that lower rate) then he has the gall to complain that the government isn't taxing him enough.
  • Gracie ... Ramon 2012/01/26 23:52:20
    Gracie - Proud Conservative
    +1
    Typical, huh?
  • Ramon Gracie ... 2012/01/26 23:58:25
    Ramon
    +1
    That's right... I'm sure he thinks we're all that stupid to believe his political rhetoric.

    warren buffett not enough taxes funny
  • Gracie ... Ramon 2012/01/26 23:59:59
    Gracie - Proud Conservative
    +1
    I think he's cutting a deal with them to get the IRS off his back for back taxes.
  • Ramon Gracie ... 2012/01/27 00:02:05
    Ramon
    +1
    Maybe...for some reason people don't want to mention how his Berkshire Hathoway company is doing on it's taxes.
  • Ms. Mom... Ramon 2012/02/07 00:17:14 (edited)
    Ms. Mom - profits employ, taxes destroy
    Dividends would be issued on existing shares of stock... right? And, did you know that those dividends are TAXED at marginal tax rates as income.... Unless of course you invest in 'tax free' bonds in which case your dividends are not taxed because 'da govment' is trying to intice you to invest your hard earned money.

    Next.... You don't know what you are talking about... Anytime stock options are issued - , any net gain in price from the offer price is treated as INCOME annually! Yet any net loss is not! The jerks!

    Example: Company A gives key employees options at $10.00 per share. The current price is $9.75 per share... The key employees hold their options until the unfortunate tax date when uncle sam comes calling... The share price is now $15.00 because those key employees did a hell of a good job! The DIFFERENCE in share value is reported as income that you have not received yet and you must pay the ta even though you have not sold the stock and possess the money! The jerks! The only way to pay the capital gains tax is to purchase those shares (which probably are not fully vested - meaning you haven't worked long enough) and hold them for over 12 months which can lead to disaster - just ask the dot-comers who purchased shares thinking they would hold them 12 months and ...

    Dividends would be issued on existing shares of stock... right? And, did you know that those dividends are TAXED at marginal tax rates as income.... Unless of course you invest in 'tax free' bonds in which case your dividends are not taxed because 'da govment' is trying to intice you to invest your hard earned money.

    Next.... You don't know what you are talking about... Anytime stock options are issued - , any net gain in price from the offer price is treated as INCOME annually! Yet any net loss is not! The jerks!

    Example: Company A gives key employees options at $10.00 per share. The current price is $9.75 per share... The key employees hold their options until the unfortunate tax date when uncle sam comes calling... The share price is now $15.00 because those key employees did a hell of a good job! The DIFFERENCE in share value is reported as income that you have not received yet and you must pay the ta even though you have not sold the stock and possess the money! The jerks! The only way to pay the capital gains tax is to purchase those shares (which probably are not fully vested - meaning you haven't worked long enough) and hold them for over 12 months which can lead to disaster - just ask the dot-comers who purchased shares thinking they would hold them 12 months and live like a king... They ended up losing their shirts because many of the share prices tanked within 6 months!

    So, before you hastily decide you know everything.... you might want to bone up on your tax law!
    (more)
  • Ramon Ms. Mom... 2012/02/07 06:29:25
    Ramon
    +1
    Well, I researched it and found out how he'll be dodging the tax named after him. He's transferring (donating) his wealth to charitable trusts which are owned by his family...so the wealth stays in the family and it's not taxed.

    http://online.wsj.com/article...
  • Gracie ... Ramon 2012/02/07 14:32:46
    Gracie - Proud Conservative
    +1
    Just like Billary Clinton!
  • Ms. Mom... Ramon 2012/02/07 15:17:05 (edited)
    Ms. Mom - profits employ, taxes destroy
    +1
    Buffet is giving away his money to charitable trusts, including the Bill Gates foundatioin.. There are laws which dictate how that money can be used... Do you think Buffet can go out and buy a new house, boat, or car with money from a charitable trust? I don't think so... unless he wants to go to jail.

    I am not trying to defend buffet - I think he has so much money he feels guilty - but I will defend capitalism and economic mobility - it should be easy for the poor to get rich and the rich to become poor... but in social welfare states it gets increasingly hard... and the upper middle class pays the price in fact so much so that it is nonexistent.

    Buffet in his divine wisdom with so much guilt and money is destroying the very system that allowed him to achieve!
  • Ramon Ms. Mom... 2012/02/07 19:18:27
    Ramon
    Well call me cynical by I can't bring myself to believe that there is no benifit that Warren Buffett has for himself in this....mark my words, Warren Buffett will be doing just fine....in fact he will find a way to be doing better that a lot of his counterparts.
  • Ms. Mom... Ramon 2012/02/08 00:27:35
    Ms. Mom - profits employ, taxes destroy
    I am sure he takes advantage of a very good tax accountant... as he should... as do I... as should anyone who owes taxes.
  • Ramon Ms. Mom... 2012/02/09 06:53:56
    Ramon
    But he thinks he should pay more taxes doesn't he??
  • Ms. Mom... Ramon 2012/02/09 13:51:17
    Ms. Mom - profits employ, taxes destroy
    +1
    lol - me thinks he is kissing obamabutt for favors - can you say we have been keystoned?
  • Ramon Ms. Mom... 2012/02/11 05:57:20
  • Ms. Mom... Ramon 2012/02/07 00:06:16 (edited)
    Ms. Mom - profits employ, taxes destroy
    +1
    So, let's think for a minute... the money that he 'risked' as an investment..... Did he pay taxes on it when he earned it or did he just wiggle his nose and voila - investment money appeared?

    I think we know the answer.
  • La 2012/01/25 23:15:42
    La
    Sure, your wages v your lottery winnings ;) I don't think it's acceptable that Warren's secretary should pay more tax than him :/
  • Gracie ... La 2012/01/25 23:26:39
    Gracie - Proud Conservative
    I don't really think lottery winnings is the usual capital gains. It's the profit on the sale of stocks, bonds or property for the most part. She doesn't pay more taxes than him, she might pay a higher percentage but we don't really even know that do we? If you sold some property and made a profit would you want it lumped in with your wages to put you in a higher tax bracket that could eat up your profits? Who would invest if that was the case?
  • La Gracie ... 2012/01/26 12:07:21
    La
    +1
    It was an example :) I'm aware that not many people win the lottery.

    >she might pay a higher percentage but we don't really even know that do we?

    Oh I'm sorry, I thought you made this question and brought up the issue of the discrepancy between Warren's taxes and his secretary's....
  • Gracie ... La 2012/01/26 17:38:18
    Gracie - Proud Conservative
    Yes, but there has been no proof of what she pays. If she pays the percentage they say she does it means she makes between 200 and 500K. Hardly the poor little secretary, huh?
  • davidh BN-0 2012/01/25 19:49:58
    davidh BN-0
    +2
    Income that you WORK for is taxed at a higher rate than what you "Win" by getting lucky in the stock market (Or any other investment). One is earned, the other given. That's the difference.

    Why should those that EARN a living WORKING be punished?
  • Gracie ... davidh ... 2012/01/25 23:02:27
    Gracie - Proud Conservative
    +1
    I guess you're discounting the fact that you could indeed "lose" on investments also? I'm all for lowering the tax rates on those earning a living but not in favor of raising capital gains taxes. If I have a piece of property and sell it at a profit I don't want it putting me into a higher earning tax bracket for that year and eat up my entire profit. I guess what you're saying is that you think you're earned income is affected by someone's capital gains? How so?
  • davidh ... Gracie ... 2012/01/26 17:09:44
    davidh BN-0
    You can also lose when it comes to gambling, but you are taxed for what you win over a certain amount. It is extra money that is not truly Earned. It is based solely on speculation or luck. Not the amount of time you have put into it.

    ? I never said that earned income is affected by capital gains. I am simply stating that preferential treatment is shown to those that do not truly work for their money (As in they do not put forth the hourly effort to make their money), while those that have the least are left to break their backs and are left with a higher percentage taken out of what they have EARNED.

    "Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise." --Thomas Jefferson to J. Madison, 1785.

    "What more is necessary to make us a happy and a prosperous people? Still one thing more, fellow citizens--a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned." --Thomas Jefferson: 1st Inaugural, 1801.
  • Gracie ... davidh ... 2012/01/26 17:42:16
    Gracie - Proud Conservative
    +1
    I'd have less of a problem with taxation if they followed the "frugal government" ideas of Thomas Jefferson. Capital gains support a great many RETIRED people who are living on a lifetime of work. To say that they don't work for their money and it is somehow unearned is ridiculous. I see the whole debate as more class warfare.
  • davidh ... Gracie ... 2012/01/26 18:43:53
  • Gracie ... davidh ... 2012/01/26 21:54:21
    Gracie - Proud Conservative
    +1
    Watch this video....it makes the point that you can't tax your way out of debt and for every dollar you take out of the private sector, by taxation, is a dollar that can't increase the GDP. The middle class is under attack by the bottom more than the top. People on the government dole affect your life more negatively than the people at the top. Whether you believe it or not, the rich do spend their money and it benefits all of society. We have a spending problem, not a revenue problem. If you raise taxes they'll just waste and spend more, you know it's the truth.

  • davidh ... Gracie ... 2012/01/31 19:55:05
    davidh BN-0
    You are aware that those that earn more also GET more from the government, right?

    http://www.zompist.com/richta...
    "
    The FDIC and the S&L bailout obviously most benefit investors and large depositors. A neat example: a smooth operator bought a failing S&L for $350 million, then received $2 billion from the government to help resurrect it.
    "

    Beyond all this, the federal budget is top-heavy with corporate welfare. Counting tax breaks and expenditures, corporations and the rich snuffle up over $400 billion a year-- compare that to the $1400 budget, or the $116 billion spent on programs for the poor.
    http://wweek.com/portland/art...
  • Gracie ... davidh ... 2012/01/31 23:45:05
    Gracie - Proud Conservative
    +1
    I'm not for any bailouts. Crony capitalism is like a virus right now. This is what happens when you let the government pick winners and losers.
  • davidh ... Gracie ... 2012/02/02 19:38:03
    davidh BN-0
    Same with allowing those that have the largest incomes to pay a smaller percentage. Even though they receive larger returns upon retirement, use interstate travel more, have more for our soldiers to defend, etc etc. That is nothing but a bailout. Only it has lasted 30 years.
  • Gracie ... davidh ... 2012/02/02 22:50:21
    Gracie - Proud Conservative
    +1
    They aren't paying taxes on income, they are paying taxes on investments that are made with money that has already been taxed once. Not everyone who has capital gains is rich and not every one is fortunate enough to have a profit on investments. It's a risk and if you overtax it they'll just keep it out of the market or not make investments and then you'll lose more than less taxation. Capital is essential in economic growth and your quest to punish the successful will breed less success. That will really help us all.

    We're still funding the root of the problem, Fannie Mae and Freddie Mac and NO ONE on the left sees any problem with that. Let's get government out of the bailout business and lower taxes is not taking revenue, it doesn't belong to the government first, it belongs to it's rightful owner. Private property is sacred and heavily progressive taxation is a Marxist idea.
  • davidh ... Gracie ... 2012/02/03 16:27:04
    davidh BN-0
    Did I say anything about over taxing? NO. I was talking about taxing the same as income. Because no matter how you look at it, the profits are Income. And they do not tax the initial investment a second time, they tax the PROFIT. as in, no double taxing. And the amount taxed for those in the lowest income tax brackets are taxed a lower amount.

    And guess what, capital alone does NOT spur economic growth. Taxing your working class (You know 95% of the population) while keeping wages stagnant while cost of living goes up, is what kills economic growth. Because with 95% of your population not increasing spending, demand doesn't increase. When demand doesn't increase, need to produce stagnates. When the need to produce stagnates so does growth.

    Lowering taxes IS taking revenue. If you base a budget on the amount of income coming from taxes then you cut them while keeping spending the same or increasing by waging 2 wars, the deficit explodes. And that was spending OUTSIDE the country, so no increase in revenues to the economy, or taxes.

    And taxes pay for these little things called ROADS, and Bridges, and Police, and Fire Departments, and military, and Schools, etc etc etc. Everyone wants to enjoy the perks but noone wants to help foot the bill.
  • Gracie ... davidh ... 2012/02/03 19:30:34
    Gracie - Proud Conservative
    +1
    First of all, 47% of Americans pay no income taxes and many get money back that they didn't even pay in. What do they owe to society and all the services that they use disproportionately?

    Many of the people who live off investments and pay capital gains are people who are no longer working, like retirees. You want to tax them at the same level as someone working on money invested that they've already paid on? Or, do you really just want to tax the rich?

    All those services that you speak of are supposed to be paid for on the state and local level. I pay for them with my property and sales taxes. That's the way it was intended until we subverted the Constitution and the federal government turned their enumerated powers into unlimited powers.

    Keep on taxing the jobs right out of the country. Now there is the lost revenue if you're looking for it.
  • davidh ... Gracie ... 2012/02/03 20:07:24
    davidh BN-0
    "
    The 47% statistic is not all Americans pay no taxes, but single filers who will pay no federal income taxes. According to the Center On Budget and Policy Priorities the real reason why 47%-51% of Americans paid no federal income taxes in 2009 is,

    The 51 percent figure is an anomaly that reflects the unique circumstances of 2009, when the recession greatly swelled the number of Americans with low incomes and when temporary tax cuts created by the 2009 Recovery Act — including the “Making Work Pay” tax credit and an exclusion from tax of the first $2,400 in unemployment benefits — were in effect. Together, these developments removed millions of Americans from the federal income tax rolls. Both of these temporary tax measures have since expired.

    The combination of the recession and the Obama stimulus cut taxes to low and middle income Americans led to fewer Americans owing federal income tax in 2009
    "

    "The truth is that 86% of Americans pay taxes. In one recession strapped year (2009), less than half of single filer taxpayers paid federal income taxes.

    Millions of Americans are not being told the truth that almost 90% of us pay taxes, and that much of the reason why there were fewer people paying federal income taxes in 2009 was that Barack Obama signed the largest tax cut in US history.
    "
  • Gracie ... davidh ... 2012/02/04 04:11:02
    Gracie - Proud Conservative
    +1
    That's a very slick piece of propaganda. Notice how it mixes income taxes with other taxes. We're debating income taxes and not payroll taxes, sales taxes or any other taxes.

    The excuse that the 2009 income taxes are different than any other year is an outright lie. Every year since 1987 and actually before that the percentage that the bottom 50% pays is less and less. It was 6.07% in 1987 and by 2007 it was 2.70%.

    http://www.taxfoundation.org/...
  • davidh ... Gracie ... 2012/02/06 19:32:10
    davidh BN-0
    Most of those that get refunds get back money they paid in. As in you are taxed throughout the year and you file a return and you get the money back that you paid in. You may get back the exact same amount you paid in or more, but you still paid in throughout the year.

    I am one of those that will be getting back the money I paid in, based on being in a family of 5, head of household, etc tax credits. But does that mean I paid nothing in taxes this year? NO, that means I paid in taxes (Payroll, Income, State Income, etc), the government spent the money and even gained interest off of what I paid in. And at the end, I get back what I paid in. I have tax liability but I also have various deductions that bring what I owe to minimal or even nothing (haven't done my taxes yet, so I don't know)

    The point is, I DID pay income taxes even though I qualify as a 0 income tax payer.
  • Gracie ... davidh ... 2012/02/07 00:01:50
    Gracie - Proud Conservative
    +1
    Really, you think that because you don't have your withholding set up correctly, it makes you a taxpayer? You said you get it all back so that means NO you don't pay income taxes. Payroll taxes are Social Security and Medicare taxes and you will get that money back if you live long enough. Thanks for thinking someone else owes you and your family of five a free ride.
  • davidh ... Gracie ... 2012/02/07 15:39:18
    davidh BN-0
    Actually Yes. Considering the money is spent and draws interest throughout the year. I am a tax payer. And I have chosen to claim 0 on my W-4 for just that reason. I have the maximum taken out. I am owed nothing. I gladly pay what is asked. If I get back what I put in, I could care less. I ask for nothing and cut my checks short in order for the money to be in the system throughout the year.

    It is the equivalent of giving an interest free loan to the government.

    http://money.howstuffworks.co...
    "
    At the end of each pay period, Joe's company takes the withheld money, along with all of withheld tax money from all of its employees, and deposits the money in a Federal Reserve Bank. This is how the government maintains a steady stream of income while also drawing interest on your tax dollars.
    "
  • davidh ... Gracie ... 2012/02/03 20:09:07
    davidh BN-0
    Taxes do not cost jobs. Lack of demand cost jobs.

    Do tell How Taxes Cost Jobs?
    Fri Jul 22, 2011 5:45 PM EDT
    By John Franklin Mason

    Corporations and Conservative Politicians have been saying forever that "Taxes" cost jobs while also saying "Taxes are Passed on to the Consumers resulting in higher consumer cost." Okay, understand, got that, we all heard it before so what has Passing on Taxes to Consumers have to do with Corporate Profits and Corporate hiring when what you are admitting is taxes is a consumer financial burden and not one of the Corporation.

    Tax cuts and incentives have went to Corporations that have had Executives and Managers who received in total hundreds of millions of dollars in Executive Bonuses while their Corporations received tens of million in total for tax cuts and Hundreds of millions in government improvements to the infrastructure environment serving Corporate facilities.
  • Gracie ... davidh ... 2012/02/04 04:14:35
    Gracie - Proud Conservative
    +1
    Again, let's stop all the tax credits and incentives. You guys scream about these and then get up and propose more? We've given away billions in the bogus green industry and it bothers no one? The government has to STOP picking winners and losers and let people pay what they should. On one side of their mouths they propose tax increases to successful industries while the other side gives money to the losers. It makes absolutely no sense as we can see by the losses of just the last year. Solyndra anyone?

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