Hacker News Reader

Comment by fortythirteen | Hacker News Reader

If capital gains taxes are raised, then someone who invests outside of a 401k or IRA gets double screwed.

Where does the double come from? Each dollar only gets taxed once... only the profit gets taxed when investing, not the principal, right?

If you make capital gains tax the same as income tax, then you're making the situation worse for people who invest their actual income over trust fund babies, not better.

It places another barrier on hard working people trying to move from middle to upper-middle or upper class status.

That doesn't explain how this person would have the same income taxed twice. Taxes are paid on gains, not the return of principal. Income would be taxed, and then the returns from the invested income would be taxed at a later date.

Taxed when you get your income (income taxes) and then taxed again when you withdraw (capital gains). Traditional 401k and Traditional/Roth IRA allow you to only be taxed once. (Defer income taxes until you withdraw or you take the income tax hit upfront but are not taxed on withdraw)

The problem is inflation. Taxes aren't calculated on constant dollars, and it's really not reasonable to tax inflationary gains.

How would you get double screwed? You would only pay income taxes on the gains.

the corporation also pays taxes on the income before distributing it to you.

Not if you're Apple, et al.

https://www.nytimes.com/2016/09/01/business/yesterday-outrag...

Thats because US corporate tax rates are ridiculous and so big corp plays games. Small corp of course are the real victims because they can't afford the army of lawyers and accountants to manage all the complex tax avoidance schemes so they get stuck with some of the highest corporate tax rates in the world.

I agree. That is part of the problem. But, I'd argue that even if US Corp rates were much lower (say 15%), Tim Cook, ever the optimizer, would still pursue the 1% rate they currently achieve.

I think rates should be lowered and and tax avoiders/dodgers should not be allowed to bid on govt contracts.

If Apple pays a dividend, it has to pay taxes on it first. You are confusing that with their overall tax rate. It's low because they have a pile of cash that they aren't paying out

It's in good part because of that cash pile (now above $250B) that Apple stock price is so high. And this post is about capital gains being taxed lower than income.

Time Cook pays himself in options, which influenced by untaxed cash hoard.

https://www.cnbc.com/2017/05/02/apples-cash-hoard-swells-to-...

Reply on news.ycombinator.com