Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Bill Clinton Scandal - SANITY CHECK -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (5208)	9/24/1998 5:09:00 PM
From: j_b	Respond to of 67261

<< Does that also apply to investments that you purchase>> Interesting question - I don't remember it being discussed. If you think about it, there is no difference between a bank account and the stocks you buy as far as their form - they are both investments. In one case you are "buying" a certificate of deposit, and in the other you are buying a piece of a business. I can't imagine that being treated as a taxable transaction, but then would you also exclude the outright purchase of, say, a fast food franchise or some other business? I suppose the easy way would be to follow current sales tax rules, where there is no sales tax on stock purchases. As for the insurance policy, that would have to be allocated between the investment portion and the insurance portion. That is already being done for a variety of tax reasons.

To: Lizzie Tudor who wrote (5208)	9/24/1998 5:43:00 PM
From: dougjn	Read Replies (1) \| Respond to of 67261

Michelle, there tend to be two goals behind U.S. backers of consumption taxes. One arguably noble, the other I think less so. (In Europe a major reason for consumption taxes is simply to augment the total government revenue stream, without making any one source too obscene.) The first reason is to organically exclude from taxation income which is spent on investment. The argument being that such investment increases the productivity of the entire society, and that freeing it from taxation would boost its level. Economists tend to think there is much truth to this. The second is to organically create an absolutely flat tax. The arguments publicly advanced for this involve simplicity. The true motivation is to avoid progressive taxation of the rich and high income earners, and some redistribution of income. As a high income earner, I think this is not just. Which doesn't mean I think unrestrained progressively is just either. A perfectly reasonable and just argument can now be made for rolling back at least some of Clinton's tax increase on high earners (you know, those add on rates above 28% federal that go as high as a whisker under 40%, effectively). It was a necessary political move at the time (I thought) to help balance the budget, not only through its direct revenue impact, but also by creating a political sense that budget cuts should then proceed, since the pain was being shared between the rich and the middle class, and poor. I also thought that the market benefits to investing high income people (never mind the dividend collectors) would handily exceed the costs. Doug

To: Lizzie Tudor who wrote (5208)	9/24/1998 5:44:00 PM
From: mrknowitall	Respond to of 67261

Michelle, <<OT>> where it really gets complicated for us as investors is that there is a huge segment of the financial services industry out there that lives or dies as per the tax code - leasing. Not to get too far afield, but keeping the economic engine going has been, IMO, somewhat as a result of the ability of industries to depreciate assets (as in, offset taxable profits) whether they had to spend their own capital or not. The old line, "don't tax him, don't tax me, tax that fellow behind the tree" is very appropriate in this game.