🚀 go-pugleaf

In article <atticus-2006960353430001@atticus.mindspring.com>,
	Andy Walton <atticus@mindspring.com> wrote:

>Many flat tax proposals -- including Forbes' -- exclude capital gains and
>dividend income. Hence, Steve Forbes and Ross Perot would pay no tax.
>Taxes would be assessed only on those who earn a wage, also known as those
>who work for a living.

Actually, taxes would be assessed on the person or entity that EARNS the
income, which means that Chrysler, Ford, Exxon, etc., would all continue
to pay hefty income taxes, but the millions of people who have their
retirement funds invested in the stocks of those companies would not pay
any taxes on dividends.


>In your example above, suppose you make $100,000. Your employer gives you
>stock options -- you decide that you can live on $50,000 a year, so you
>take $50,000 worth of stock. Your company has a good year, and at the end
>of the year, your stock is worth $200,000. 

Nice try to play on class warfare themes, but stock options would continue
to be taxable. The income generated >from< the stocks would not be taxable,
since that income has already been taxed at the corporate level prior to
filtering down to the stock holders. However, when the stocks themselves
were "given" as options to the employee, they would either be taxed as
income at that point, or taxed at income when the employee later sold
them.

In other words, Employee A received $50,000 a year in cash and $50,000
a year in stock options. He is still taxed at the $100,000 income level.
If his $50,000 in stock has a good year and makes $10,000, that money
is not taxed since it is already taxed at the corporate level. The
next year when the employee goes to sell the stock for $200,000, He will
be taxed on the $150,000 capital gain.

This is the way the flat tax proposals work, not in the manner in
which you attempt to goat people with class envy. The only difference
in capital gains taxes is the rate would remain the same except the
gain would be indexed for inflation.

MD
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