31–40 of 44 posts
too little too late mister president. I agree with winterspeak in that what we need is severely reduced payroll taxes to stimulate aggregate demand.
Earlier quoted context omitted.
they should state that more clearly then, if that is their intention.. like this it seems to me as if an engineer who designs some important technological invention and starts a startup around it, would be excluded... Also, would it be that bad if a significant amount of companies changed their formal structure in order to take advantage of this? It would mean an across-the-board incentive to create (and grow) compan…
Yes, it matters. Most smaller companies tend to be service companies, because they don't have huge economies of scale. Most product companies tend to be larger -- it's easy to moonlight as a designer who figures out what box you should sell a lightbulb in, but you can't moonlight as the guy building the lightbulbs, because you need tens of millions of dollars to manufacture them profitably. A subsidy to small busines…
Also, the income of a service company is mostly going into the pockets of the service providers, and if those service providers are well-paid then they're more likely to save their marginal dollar instead of spending it. So from a Keynesian point of view, this is not the kind of business you want to throw money at during a recession.
too little too late mister president. I agree with winterspeak in that what we need is severely reduced payroll taxes to stimulate aggregate demand.
This makes no sense to me, even when I've seen it before. I'm the classic saver. I'm the individual who they want to spend more right now. I'm saving because it's not a certainty that my contract will be renewed right now. I could very well end up living off the savings I'm accumulating right now. If you reduce my payroll tax, I won't spend more. I'll save more. ___ If someone is unemployed, reducing the payroll tax…
I'm assuming that the form of savings that you pursue is not "stuffing money under the mattress", but to put the money in the bank, or invest in equities or bonds or commodities.
If you invest in commodities, that is of course spending on commodities.
If you invest in stocks or bonds, you're providing capital to other companies, who will then spend it. This is good, but since some of their spending will be on facilities, it may not be the kind of spending we want (i.e., consumer good). On the other hand, some of it may go to paying for employees, which is obviously a very good thing, and goes to decreasing the uncertainty that you're concerned about.
And if you put it in the bank, it's going to be loaned out to either consumers for their own spending, or to business as discussed above. (caveat: so far this year, banks have tended to increase their reserves rather than increase lending. I think that phase is done, though)
Earlier quoted context omitted.
they should state that more clearly then, if that is their intention.. like this it seems to me as if an engineer who designs some important technological invention and starts a startup around it, would be excluded... Also, would it be that bad if a significant amount of companies changed their formal structure in order to take advantage of this? It would mean an across-the-board incentive to create (and grow) compan…
Yes, it matters. Most smaller companies tend to be service companies, because they don't have huge economies of scale. Most product companies tend to be larger -- it's easy to moonlight as a designer who figures out what box you should sell a lightbulb in, but you can't moonlight as the guy building the lightbulbs, because you need tens of millions of dollars to manufacture them profitably. A subsidy to small busines…
so let me get this right... currently you pay capital gains (28%) on 50% of the worth of sold stock. this proposal would eliminate that if the stock is held for 5 years? correct?
no, people pay capital gains (15%) on 100% worth of sold stock. if you qualify for small business stock + 5 years discount currently, you could pay capital gains (15%) on 50% of the stock, and AMT (28%) on the remaining 50%, giving an average tax rate of 21.5%, worse than existing capital gains, which clearly doesn't make sense, so no one does it. under the new proposed system, if qualified, there would be NO capital…
Not really.
Most of us aren't accredited investors, so we can't buy stock in small companies without starting them, working for them, or being related to the founders.
Reduced taxation on small biz stock will make successful small biz more profitable, so it's a big deal for angels, VCs, and their limited partners, but because it doesn't increase the size of the investor pool, it just helps their returns.
This may have a modest effect on the number of funded small biz, but it won't help most of us.
You'd think that the super-genius' in the Obama administration would know about the accredited investor stuff.
Earlier quoted context omitted.
no, people pay capital gains (15%) on 100% worth of sold stock. if you qualify for small business stock + 5 years discount currently, you could pay capital gains (15%) on 50% of the stock, and AMT (28%) on the remaining 50%, giving an average tax rate of 21.5%, worse than existing capital gains, which clearly doesn't make sense, so no one does it. under the new proposed system, if qualified, there would be NO capital…
> the only restriction would be that you have to acquire stock in the company when it is worth less than $40M (easy) Not really. Most of us aren't accredited investors, so we can't buy stock in small companies without starting them, working for them, or being related to the founders. Reduced taxation on small biz stock will make successful small biz more profitable, so it's a big deal for angels, VCs, and their limit…
Earlier quoted context omitted.
This makes no sense to me, even when I've seen it before. I'm the classic saver. I'm the individual who they want to spend more right now. I'm saving because it's not a certainty that my contract will be renewed right now. I could very well end up living off the savings I'm accumulating right now. If you reduce my payroll tax, I won't spend more. I'll save more. ___ If someone is unemployed, reducing the payroll tax…
A sales tax break for goods originating from US is, in all ways, a trade barrier. You can expect global mutual treatment. That means decreased foreign demand for US products. So you end up sponsoring US companies that were not capable to compete with more efficient foreign companies. Which is in itself a more interesting problem. Most European countries have as high, or higher, standard in working conditions (and TAX…
I'm not sure that the public transport makes a difference with our car culture and low population densities. I can't really think of a good way to do a subway in LA, for example, though they tried.
Earlier quoted context omitted.
This makes no sense to me, even when I've seen it before. I'm the classic saver. I'm the individual who they want to spend more right now. I'm saving because it's not a certainty that my contract will be renewed right now. I could very well end up living off the savings I'm accumulating right now. If you reduce my payroll tax, I won't spend more. I'll save more. ___ If someone is unemployed, reducing the payroll tax…
The goal is not to get you (or any other particular individual) to spend more, but to increase aggregate demand. I'm assuming that the form of savings that you pursue is not "stuffing money under the mattress", but to put the money in the bank, or invest in equities or bonds or commodities. If you invest in commodities, that is of course spending on commodities. If you invest in stocks or bonds, you're providing capi…
(And I'm not convinced banks are finished increasing their reserves. Wells Fargo is still in the danger zone after acquiring Wachovia, as one example.)
In Canada, capital gains are 50% taxable and the first $750k of capital gains on small business stock (subject to fairly reasonable definitions) is exempt. I'm curious to know how this compares to other countries; could HNers from elsewhere please reply to this with the details from where they are?
http://en.wikipedia.org/wiki/Capital_gains_tax
http://www.globalpropertyguide.com/Asia/Hong-Kong/capital-ga...
it would be really interesting (for the people migrating to other countries for better opportunities) if someone compares cost of living in different countries based on their CGT ... may be this would really change the whole scenario ...
for example if a family wants to decide between new-zealand and canada and lets say that their total saving (as per history) is around 10 to 20% which they regularly invest in real-estate/stock then CGT can change their decision or help them to make decision; of-course there are other factors such as job opportunities, cost of living etc. But for large amount of immigrants CGT plays a big role after they settle down in a new country.
Earlier quoted context omitted.
The goal is not to get you (or any other particular individual) to spend more, but to increase aggregate demand. I'm assuming that the form of savings that you pursue is not "stuffing money under the mattress", but to put the money in the bank, or invest in equities or bonds or commodities. If you invest in commodities, that is of course spending on commodities. If you invest in stocks or bonds, you're providing capi…
However, the government is functioning like a corporation currently with its spending. (And I'm not convinced banks are finished increasing their reserves. Wells Fargo is still in the danger zone after acquiring Wachovia, as one example.)
The Austrian school says that recessions occur when the economy gets over-invested in some area. The recession occurs as we recognize that what we've invested in is not worth as much as we thought ("hey, these are just regular crackers!"). Then the values roll back as we get out of that dead-end while moving our investments into better values.
To the extent that this is true, our government is not helping. They're spending with abandon, but direction of the spending is either wildly shotgunned, or politically correct. With the decisions in the hands of the people and corporations making up the market (I think I can see you cringing as I say that), the processing of transitioning will in all likelihood be faster and much more efficient.