[0x0aff374668]

"Double taxation"

For such an in depth example you really missed this.

I make $100,000 in year X. That covers two brackets, and my effective rate is, say, 25% federal.

SO I have 75k left over.

I invest 5k.

It doubles to 10k.

I'm then taxed on the 5k I earned. Not the 5k I invested.

But do go on about double taxation.

[gnicholas]

> For such an in depth example you really missed this.

Like many HNers, I'm on here in my spare time, while not running my startup or caring for my kids. Please forgive my not including every argument and counter-argument here.

But to reply, if you bought stock on the stock market, then yeah that is double taxed because the corporation also pays tax on their corporate income. We could get into that whole can of worms, but it's frankly too complex and off-topic. The point of my post was to show some common arguments and counter-arguments.

[xyzzyz]

Yes, and if you buy a can of Coke at the store with the proceeds of the sale, you're then triple taxed when you pay sales tax, and then the business owner is quadruple-taxed when he books some part of it as a profit, just like his supplier is quintuple-taxed when he is paid by store owner for the Coke supply, and so on, and so on.

Clearly, this is absurd: it is universally recognized that transactions often create tax events. There's no "double taxation" rule that doesn't allow "the same money" to be taxed twice, it's just we don't tax the same transaction twice.

[gok]

The claim is that the thing you invested in doesn't magically double in value. It goes up in value because of other post-tax economic activity.

If you went to a roulette table at a casino, put $5K on black and it hit, you'd owe tax on that $5K because it's just income.

If you bought a company for $5K and then sold it a year later for $10K, its value typically increased because it was doing more business and therefore paying more taxes along the way.

Now, there are of course problems with this. Companies aren't purely valued on post-tax activities. In the event of real estate, it's even less convincing. If a vacation house doubles in value, it's unlikely this was due to the house's post-tax economic activity. So whether or not it's a double taxation is debatable but kind of irrelevant; it's remains a relatively fair way to raise revenue.

[harryh]

Do go on? Sure!

Read this: https://www.thebigquestions.com/2010/01/27/a-quick-economics...

[0x0aff374668]

Chug! Chug! Chug!

(the kool-aid)

That author had to jump through so many hoops to make an argument his chiropractor must be rich. Seriously, that entire article was nonsense from top to bottom.