Sam's Club

[rezman]

This is why we need to eliminate the income tax and just go with a wealth tax. Every person and company completes an annual 'net worth' statement and then pay taxes on that amount. If you live solely on cash flow and rent a place to live your taxes would be very low. If you live because your money makes you money you would pay a much higher amount.

How come if a person catches Barry Bonds homerun ball he instantly owes $200K in taxes, but if Walmart stock instantly goes up a few points the owners of Walmart stock don't get a tax bill. Weird how that works. I wonder who came up with these rules.

TaxProf Blog: More on Tax Consequences to Fan Catching Barry Bonds' 756th Home Run

Why not just a flat tax proportionate to what everyone earns? Say 20% ... If you only earn $2000 a year, you pay $400 in taxes. If you earn $2M a year, you pay $400,000. I guess that's just too simple.

As far as the baseball goes, it should only get it's taxable value from the money he gets if he sells it, not what someone thinks it's worth.

[HangryHippo]

Why not just a flat tax proportionate to what everyone earns? Say 20% ... If you only earn $2000 a year, you pay $400 in taxes. If you earn $2M a year, you pay $400,000. I guess that's just too simple.

As far as the baseball goes, it should only get it's taxable value from the money he gets if he sells it, not what someone thinks it's worth.

Unfortunately, probably because our "representatives" wouldn't let it be THAT easy...

Agreed on the baseball value. Just ridiculous.

[Just the facts]

Why not just a flat tax proportionate to what everyone earns? Say 20% ... If you only earn $2000 a year, you pay $400 in taxes. If you earn $2M a year, you pay $400,000. I guess that's just too simple.

As far as the baseball goes, it should only get it's taxable value from the money he gets if he sells it, not what someone thinks it's worth.

Define 'income'?

If I have 1,000 shares of CompanyX stock and it goes up in value from $10 a share to $1,000 a share should I get a tax bill for the 'windfall profit' even if I haven't sold any shares? You would probably say no. What if I take out a $10,000,000 loan against the now $1,000,000 worth of shares (that I originally paid $10,000 for) and used the money to buy more stock, and then I used the dividends from the $10 million worth of stock to repay my loan and provide a means of living. Would you count any of that money as income?

Now let's say all this falls apart on me and my $1,000 stock goes back to $10 and the people loaning me the $10,000,000 want their money now. Should Congress bail me out?

[rezman]

Define 'income'?

If I have 1,000 shares of CompanyX stock and it goes up in value from $10 a share to $1,000 a share should I get a tax bill for the 'windfall profit' even if I haven't sold any shares? You would probably say no. What if I take out a $10,000,000 loan against the now $1,000,000 worth of shares (that I originally paid $10,000 for) and used the money to buy more stock, and then I used the dividends from the $10 million worth of stock to repay my loan and provide a means of living. Would you count any of that money as income?

Now let's say all this falls apart on me and my $1,000 stock goes back to $10 and the people loaning me the $10,000,000 want their money now. Should Congress bail me out?

Heh heh.. It's easy to muddy things up.

If you invest in the market and your stocks go up, and you reinvest the gains, no I do not think the gains should be taxed. Now if you put your gains in the bank, then yes that would be taxable income.

[Just the facts]

Heh heh.. It's easy to muddy things up.

If you invest in the market and your stocks go up, and you reinvest the gains, no I do not think the gains should be taxed. Now if you put your gains in the bank, then yes that would be taxable income.

Should the purchase of stock be subject to sales tax then?

[mugofbeer]

Should the purchase of stock be subject to sales tax then?

No, because you will eventually pay taxes on the capital gains and dividends, whether in a non-retirement account or in a retirement account. If you die with it, you pass it to your children subject to estate taxes. Investing in stock is investing in a company. While some profit, just as many lose money. Would you tax someone who buys a coffee shop or a printing plant for the cost of the purchase?

[ctchandler]

Mugofbeer,
First, I like your name, second, money in IRAs, 401k/403b accounts are subject to income taxes, not estate taxes (much of which is exempt for we, the great unwashed), and the heirs have to pay in the year received. I could be corrected, but that's what I had to do when my mother died, and my financial adviser has told me that my boys will have to do the same. I would love for someone knowledgable on this forum to tell me otherwise.
C. T.

If you die with it, you pass it to your children subject to estate taxes.

[Just the facts]

Should the purchase of stock be subject to sales tax then?

No, because you will eventually pay taxes on the capital gains and dividends, whether in a non-retirement account or in a retirement account. If you die with it, you pass it to your children subject to estate taxes. Investing in stock is investing in a company. While some profit, just as many lose money. Would you tax someone who buys a coffee shop or a printing plant for the cost of the purchase?

I see you too have also confused buying and selling with profit and loss. If I buy collectable trading cards at the comic book store as an investment why do I have to pay a sales tax? Shouldn't I be able to buy them not only tax free but also with pre-tax dollars?