income and wealth

[JBA]

Originally posted by Montezuma
The original author of this tripe - whoever he is - forgot about capital gains, estate, and dividend taxes.

I'm in my 30's I have been paying Cap gains tax for 15 years. I have been an investor for that long. Cap gains is only paid when it is not in a tax free IRA, ROTH IRA, 401k, 403B etc. and only when a gain is relaized. I have been claming cap. loses for the last 3 years. Same is true for dividens tax

[Curval]

JBA...capital gains taxes are paid on deemed distributions or disposals as well as realised.

[JBA]

But they still have to be in an account that is taxable. Put them all in a tax free account, as mentioned and POOF no taxes.

[Curval]

Well, not really.

Let's assume for example that you formed a company in order to conduct a specific type of business.  You then transfer personal assets into that business.  So that you do not do this at below market value in order to avoid personal capital gains tax the IRS will "deem" the sale to have occured at market value and capital gains tax will be due on the transfer.  The assets will then have a tax "cost" at the deemed market value.

Stuff like that has nothing to do with stocks in a brokerage account.

[Montezuma]

Originally posted by JBA
Pat Kennedy's income as a congressman is around $140,000. His wealth is estimated at $500 MILLION.

Let me try to explain to you why that un-attributed essay you posted is a piece of crap.

The income tax argument is a red herring, and has nothing to do with what Pat said.  Pat, Warren, and the rest of the American aristocracy will earn extra millions from Bush's tax cuts that are totally unrelated to the income tax.  

Other than that, the rest of the essay is a poorly organized partisan screed filled with unsubstantiated claims.  It would only be persuasive to the ignorant.

Who wrote it?  Was it Ann Coulter?

[gofaster]

I didn't finish reading past the first paragraph, but I think it had something to do with being anti-rich or something.  A couple of sentences caught my eye:

One of the most basic confusions is between income and wealth. You can have high income and low wealth or vice versa. We have all heard of athletes and entertainers who have earned millions, that ended up broke.

Actually, they were wealthy when they had income.  MC Hammer went bust when he couldn't earn enough money to support his posse.  Tony Dorsett went bust after football when his oil investments didn't find any oil.  As long as you make more than you spend, the amount of wealth will equal the difference between what's coming and what's going out.

Income tax cuts apply to income, not wealth. So the fact that some rich people say they don’t need a tax cut means nothing because they are not getting a tax cut on their wealth, since their wealth is not being taxed anyway.

Property taxes come to mind.  So does Leona Helmsley.

Anyway, I fully support whatever position Montezuma takes.