False. The value of the stock is determined by what someone would be willing to pay you for it. Your capital gains and losses are determined by what you bought the stock for and what you sold it for. Earnings & financials may affect what someone thinks the stock is worth, but earnings aren't the only thing that will move a stock price. Whether or not an individual recognized personal capital gains or losses is not simply a function of whether the company had positive or negative earnings.
I'm trying to help you but you just keep digging deeper.
If I bought $100,000 of GE @ 15 last year and sold this year at 20 I made $33,000 but GE didn't pay a ing penny in taxes.
If I bought $100,000 of a new startup biotech company @ $1 and 5 years later they announce FDA approval of a new cancer drug and I sell @ $20 I just made a cool 2 million, but the company never made a ing dime or paid a penny in taxes.
The value for capital gains are the purchase and sale prices.
Which is based on discounted cash flows
As owner of 0.00000384% of Apple, I can assure you that you can own Apple and still need to be here.lol. I sure as wouldn't be here if I did.
This.
DCF might be a widely used valuation method but that doesn't make capital gains tax double taxation. You own a share of the company's assets and you're paying taxes on those assets appreciating in value. Even though this isn't something anyone reports, the same tax law applies to more simple things. If I bought a TV for $2000 and sold it for $3000, I'm liable for $1000 in cap gains. It's the same concept.
This is also beside the point, but DCF valuation is based off expected future cash flows, so share value going up has a lot more to do with income that hasn't been earned yet.
GE is a rare exception who doesn't pay any taxes because they are in bed with Obama. You are taking cases which are not the norm and citing them.
I'm saying that if you invest in a company like walmart, walmart is taxed at the corporate level, and those earnings after taxes are what determine the value of the stock and therefore any capital gains or losses. And what do you, the investor do on those capital gains? pay another 15%
Elitist!As owner of 0.00000384% of Apple, I can assure you that you can own Apple and still need to be here.
If you wanna gripe about double taxation, dividends provide a much, much stronger argument than cap gains do.
It can be based on anything the person wanting to buy the shares wants it to be.
i'm talking about both
but none of those others would be fundamentally sound and you'd lose all your money pretty quick
dumb , GE has had a 1000-person tax dept from way before Barry.
The biggest welfare moochers in the nation are the Fortune 500, who use $100Ms of the avoided/evaded taxes to convince dumb s like all y'all that they must have more tax expenditures, suffer horribly from unfair double taxation, and that it's all the govt fault for "over spending".
Maybe. Maybe not. Someone who thought the iPod was super cool and used that as their sole reason for buying Apple back in 2006 has done really well for themselves. Someone who was crunching cash flow numbers and invested in AIG back in 2006 probably got killed.
That is just such a gross oversimplification. BTW, if the stock pays dividends (distributes profits) that is taxed at your ordinary income tax rate, and the examples I gave you were not exceptions. There are thousands of growth stocks whose stock price is high but earnings are low...stocks are priced on expectations of future earnings, not present and past earnings.
if paying taxes makes being a rich American sooooooooooooo miserable, why haven't any left yet?
you're free to go do that with your money
I wish it was that simple.
it's theoretical, not an exact science by any means but you don't have to explain that to me, i can consistently earn a solid return on the market even in a down market
I thought it was a great example.
AIG and GM were freaking blue chip before they suddenly weren't.
And yeah, buying a stock because you see a cool new tech product isn't that dumb.
I was an early adapter of google. Before that Yahoo was pretty much the only browser in town and their stock was crazy high. My parents stock advisor had gotten them in on Yahoo midway up and they had made a tidy profit on it.
When google came out it was so clearly superior to Yahoo I suggested they get their advisor to sell the yahoo and buy google and they then got to ride google on the way up. I didn't make the decision on earnings, I made it on superiority of product.
It's not that hard, nothing to beat your chest about.
What are you calling a solid return?
Last edited by SnakeBoy; 09-21-2012 at 01:40 PM.
If you can, good for you.
I've got a lock on a new product. All aboard!
Nearly two-thirds of U.S. companies and 68% of foreign corporations do not pay federal income taxes
The Government Accountability Office (GAO) examined samples of corporate tax returns filed between 1998 and 2005. In that time period, an annual average of 1.3 million U.S. companies and 39,000 foreign companies doing business in the United States paid no income taxes - despite having a combined $2.5 trillion in revenue.
The study showed that 28% of foreign companies and 25% of U.S. corporations with more than $250 million in assets or $50 million in sales paid no federal income taxes in 2005. Those companies totaled a combined $372 billion in sales for the largest foreign companies and $1.1 trillion in revenue for the biggest U.S. companies.
http://money.cnn.com/2008/08/12/news...rporate_taxes/
Many Fortune 500 cos. paid $0 taxes
Advocates for reducing U.S. corporate tax rates argue that lower corporate rates charged in other countries impede American compe iveness. Yet a new study finds that many of the nation's top companies are already paying less in U.S. taxes on their pretax profits than they do overseas.
In a study comprising more than half of the Fortune 500 list of the largest U.S. corporations, a quarter of those examined paid little or nothing in federal income taxes during the 2008-2010 period, despite registering profits in all three years.
Of those 280 companies, 78 corporations had at least one year during which their U.S. federal tax was zero or less, and many had more than one year paying no tax, despite recording profits; many of these companies also received tax rebates. In 2009 alone, 49 companies earned combined profits of $78.6 billion, yet paid no taxes - and collected tax rebates totaling $10.8 billion.
The study also disputes claims that the U.S. charges excessive corporate tax rates compared to other countries: Two-thirds of the corporations studied which earned significant foreign AND U.S. profits over the same three-year period paid higher tax rates to foreign governments on their foreign profits than they paid to the U.S. government on their domestic profits.
The study, conducted by Citizens for Tax Justice and the Ins ute on Taxation & Economic Policy and published Thursday, examined the tax payments of 280 companies from the Fortune 500 - those that recorded profits in 2008, 2009 and 2010. (Companies that registered a loss for at least one year were not included in the study.) These companies reported total pre-tax U.S. profits of $1.4 trillion, and many of the companies examined did pay close to the official corporate tax rate of 35 percent.
http://www.cbsnews.com/8301-201_162-20129155/study-many-fortune-500-cos-paid-$0-taxes/
The fortunate 400
Six American families paid no federal income taxes in 2009 while making something on the order of $200 million each. This is one of many stunning revelations in new IRS data that deserves a thorough airing in this year’s election campaign.
The data, posted on the IRS website last week, brings into sharp focus the debate over whether the rich need more tax cuts (Mitt Romney and congressional Republicans) or should pay higher rates (President Obama and most Democrats).
The annual report, which the IRS typically releases with a two-year delay, covers the 400 tax returns reporting the highest incomes in 2009. These families reported an average income of $202.4 million, down for the second year as the Great Recession slashed their capital gains.
In addition to the six who paid no tax, another 110 families paid 15 percent or less in federal income taxes. That’s the same federal tax rate as a single worker who made $61,500 in 2009.
Overall, the top 400 paid an average income tax rate of 19.9 percent, the same rate paid by a single worker who made $110,000 in 2009. The top 400 earned five times that much every day.
http://blogs.reuters.com/david-cay-j...fortunate-400/
Companies Desperately Fleeing Super-Low U.S. Tax Rates: Report
The 10 most profitable companies in the U.S., including Apple and Exxon Mobil, paid an average tax rate of just 9 percent last year, according to a study by the site NerdWallet.
If you want to get technical about it, many large companies essentially turn a profit on taxes, according to a recent Citizens for Tax Justice study.
And even as Obama was coming up with his proposal to cut corporate tax rates, the Congressional Budget Office pointed out that corporate tax receipts as a percentage of corporate profits tumbled to just 12.1 percent in fiscal 2011, the lowest rate since 1972.
http://www.huffingtonpost.com/2012/0...n_1839693.html
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