While I fully agree with your last paragraph, I'll take issue with your first couple.
First, just because you would not change your investing strategy in the face of a doubling of capital gains rates does not mean that others wouldn't and shouldn't. Investing strategy should always take tax rates into consideration. Few people in the top 1% have such little saved that it can all be tax deferred. The majority have significant assets in taxable instruments. This is particularly true of entrepreneurs with substantial company stock. The rest of us can at least take advantage of tax-managed mutual funds.
Wovel never said most of what you are refuting. They stated quite clearly that in their situation, they wouldn't feel the need to change their investment strategy based on the tax changes. They made no mention of how that would broadly apply to you as an individual.
There is also the fact that tax sheltered plans are not the only legal way to defer, or even eliminate, the bulk of taxes leveled on capital gains. But you are correct in stating that tax diversification should be just as important to most investors as asset diversification and allocation. YMMV.
Dennis: What I object to is you automatically treatin' me like an inferior!
Arthur: Well, I am king!
Dennis: King, eh? Very nice! And how'd you get that then? By exploitin' the workers! By hangin' on to outdated imperialist dogma which perpetuates the economic and social differences in our society!
So how would you change the system? Give us some hard rules you think people investing their time and money into a company should be limited to. Should people not be allowed to be rewarded for being smarter than other people, even if that intelligence is about knowing when an opportunity arises? Should Bill Gates be capped at $100k a year, for example, simply because you don’t think that value is “sickening”? How do you think this would change how people and companies innovate if the chance to truly succeed in a free market is taken away?
Okay, here are a few suggestions.
**Greater democracy for shareholders. Corporate governance rules are skewed overwhelmingly in favor of management. It is very hard for shareholder groups opposed by management to propose a change in the by-laws. There should be limits on management's ability to use corporate resources to stifle opposition. The corporation belongs to the shareholders not management, so the corporations resources must be used to promote the shareholders' interests not management's. And it is in the shareholder's interests that all proposals to the board be fairly heard not just the ones sponsored by management.
**It should be illegal, unless the person is a majority shareholder, for the CEO to be Chairman of the Board. That totally defeats the concept of the Board overseeing the CEO.
**It should be illegal for CEOs to sit on each other's boards. This is probably the no. 1 reason why executive compensation has reached obscene levels. We profess to be a country that believes in free competition. There is no free competition in the market for executive services. That market is ruled by I scratch your back, you scratch mine.
**Compensation committees must have significant representation beyond the CEO's handpicked lackeys. It should include representatives of the employees, pension and mutual fund companies invested in the company, and other independent shareholder groups. And very important: no single bloc should have a majority of the comp committee's votes.
Godamighty, is this how it's going to be now? A generation of Limbaugh/Beck/Palin trained know-nothings screaming "Communist!" every time anyone mentions any options beyond a entirely phantasmagorical "free market" that, had it actually existed, would look more like the exploitations of the 19th century than anything recognizably modern?
The funny thing is, given the level of just bone deep ignorance on display, if we actually ever did throw what's left of the middle and working classes to the wolves and just went the full laissez-faire, these same people would be screaming bloody murder about how they'd been screwed by the government. Because millionaire Rush told them so. Wait, did I say "funny"? I meant "soul crushingly depressing."
Oh, and just for efficiency's sake, I am of course a vile elitist etc.
You guys are just showing your extreme ignorance of any kind of political history or polisci knowledge. But hey, what does the average American know about politics or history anyway? .......
.......You guys just don't have the history or the knowledge to know what you're talking about.
......The basic unfairness of capitalism as a system for distribution of wealth and happiness has been documented over and over in everything from history books to fairy tales since it's very inception. The generalised blindness of Americans, and the fact that you may not have had access to a good political history class in college notwithstanding.
Other countries envy our success and try to emulate us, when possible. Even China, to the extent they can. South Korea went free market capitalism and is booming.
There is no other system on earth that produces as much wealth and freedom and liberty. We have flaws, but name another country with an Apple.
America is exceptional. Many of us went to college. Many still champion capitalism.
We have a mixed economy with chunks of socialism thrown in here and there. But broadly, we are a free market, entrepreneurial economy that thrives on capitalism.
You guys are just showing your extreme ignorance of any kind of political history or polisci knowledge. But hey, what does the average American know about politics or history anyway?
Every European country, and most Asian/African countries (in other words most of the rest of the world), has had socialist periods, communist periods, and capitalist periods in their history and are well aware of the differences between all three. The USA has only ever been capitalist and it has routinely for it's entire existence ridiculed, demonised, criticised, and sometimes even destroyed other nations who don't ascribe to their politics or to capitalism in general. You guys just don't have the history or the knowledge to know what you're talking about.
The average American citizen doesn't even have the correct definition of "socialism" or social democracy," and has no direct experience with it. It's just a buzz word used as a pejorative in almost the same way that you would call a rude poster on the forum a name like *ssh*le or whatever.
Capitalism is not a meritocracy. If it was, money and IP would not be inheritable for starters. People can get in control of the "purse strings" without necessarily doing anything but being born into the right family, and if you go look up the facts of the matter, you will find that this is true for the vast majority of those currently sitting on top of the capitalist heap.
The basic unfairness of capitalism as a system for distribution of wealth and happiness has been documented over and over in everything from history books to fairy tales since it's very inception. The generalised blindness of Americans, and the fact that you may not have had access to a good political history class in college notwithstanding.
You have some fairly substantiated arguments, but fail to draw them into a cohesive conclusion. Would you like to talk about history? Does U.S success not demonstrate the merits of Capitalism itself?? Does the failing of communist countries not demonstrate the merits of Capitalism???
Just because individual x inherits his/her fortune, doesn't rule out individual y from earning his/her fortune- the two are not mutually exclusive.
Liberal/communist sympathies demonstrate great "moral fibre", but do nothing to improve a country. The wealthy of America are already bailing out the rest of the country, why keep testing them?
And to demonstrate your ignorance (in thinking I am "an average American") I would like to point that i'm a tried and true Canadian, and have lived in Canada my whole life. I don't want to sound "ignorant" and assume you don't know much about Canadian politics, fiscal management, etc, but I'll give you the cole notes version:
We are "a more liberal America". Our wealthy pay a little more of the tax burden, and our tax rates in general are a lot higher. As a result, we have pretty strong social programs, health care, and a a crap ton of people leeching social assistance.
What have our grand liberal gestures helped this country achieve? Well a lot of people think we are nice....that means something I guess.
IF a person was smart to create something and then make billions..why not? that is the reward for ingenuity..We have more control, there is less creation, less jobs...
The idiot that says that education would be better if the wealthiest would be over taxed does not have a clue of how economy and the financial growth works, your thought is very close to what the FORMER Soviet Union thought and they went down the drains..
A company like microsoft created millions of jobs, therefore, billions of dollars are already going into taxes, local and national, plus billions are spent every year direct or indirectly by people connected with microsoft, these are billions of dollars!
If Steve Ballmer gets paid 1 bilion or 10 billion, he deserves it! he and microsoft, the same that apple and many large companies are creating billions of revenue in the world, I would not be writing this here if it was not for any of this companies..
The word? jealousy, it has created communism and many other form of governments that destroy free enterprise and in the process get the country in ruins...
I am procapital, I don't apologize, I am proud of this system, it is not perfect, but it is the closest to perfection.
For those who wrote nobody deserve the money they are earning, see that the contributions that this people make, not only in taxes, but in social activities are bigger than many countries budgets.
Instead complaining, just find a way to create more wealth, and therefore more prosperity. I came to the US without knowing English, now I am creating wealth.try to to the same, you are a victim or a creator, there is not middle ground, What are you choosing?
Microsoft confirmed Friday that CEO Steve Ballmer intends to sell almost one-fifth of his stake in the software giant, starting with sales this week that total $1.3 billion
Well, those wishing for Microsoft stock to move are about to get their wish!
OMG.... this is one of the few decisions I would agree with Ballmer on.... hell... if I were in his position I'd sell half. Don't blame anyone who would rather pay 18% Capital Gains tax on $1.3B over 39.5%.... Thank you butthead BO.
They certainly aren't growing new revenue sources. They haven't had a new significant source of revenue - ever! And their cash cow of Windows/Office is under serious attack.
Before today?s agreement, announced by Mayor Michael Bloomberg and Microsoft CEO Steve Ballmer, New York had more than 40 separate license agreements, along with other, separate support deals. Under the licenses, the city paid for a the full Microsoft Office suite ? including Word, Excel, PowerPoint, Outlook and other tools ? even if many employees used only Word and Outlook.
Under the new deal the city will pay only for the applications employees use.
Pay particularly close to that last line. I know we will be using this article in our upcoming renewal discussions for our enterprise agreement. MS is great at offering bundles of lots of things for big money - utilization of them and getting your moneys worth is another thing entirely.
The crack in the dike has appeared, and a few fingers here and there aren't going to help. While I have no doubt that Ballmers move is primarily motivated by the insane changes to our tax code that are coming, if Ballmer seriously believed in what he said his alluded to gains would still probably offset even the new capital gains taxes.
No matter how he protests, his move speaks volumes
It stuns me as well. People simply do not grasp the enormous benefits that SJ has bestowed upon planet Earth by applying his vision and other talents into Apple.
It is worth billions. It's capitalism in action. Entrepreneurialism is America's competitive advantage.
We don't have equal wealth in this country because we don't have equal talent and ambition.
For all the bashing of capitalism and America, I find it fascinating that few manage to correlate that there might be a reason that indoor plumbing didn't resurge for the masses from the time of the Romans until the birth of America.
There were many reasons for that - but the "evils" of capitalism are not one of them. I'm just amazed at how ignorant of history and how biased people's perceptions of it are. Simply stunning
The mix if capitalism, freedom and social climate created a perfect storm that literally changed the world.
I tell you guys, a prosperous Amerika for me is two third sweat shop, one third moral rot. Apple does it in China while it could sweat it out in California, what a shame for the "gotcha" third in us?!
If you think the gap between rich and poor is so bad now, I encourage you to go back in time to the middle ages and commiserate with the common folk of their day about how bad you have it now
Comments
Capitalism is the foundation of the USA. The people complaining here about it want a communist society instead of a capitalistic one.
Stop embarrassing yourself.
Spend your time more wisely: Look up a dictionary for what these words mean.
While I fully agree with your last paragraph, I'll take issue with your first couple.
First, just because you would not change your investing strategy in the face of a doubling of capital gains rates does not mean that others wouldn't and shouldn't. Investing strategy should always take tax rates into consideration. Few people in the top 1% have such little saved that it can all be tax deferred. The majority have significant assets in taxable instruments. This is particularly true of entrepreneurs with substantial company stock. The rest of us can at least take advantage of tax-managed mutual funds.
Wovel never said most of what you are refuting. They stated quite clearly that in their situation, they wouldn't feel the need to change their investment strategy based on the tax changes. They made no mention of how that would broadly apply to you as an individual.
There is also the fact that tax sheltered plans are not the only legal way to defer, or even eliminate, the bulk of taxes leveled on capital gains. But you are correct in stating that tax diversification should be just as important to most investors as asset diversification and allocation. YMMV.
Arthur: Well, I am king!
Dennis: King, eh? Very nice! And how'd you get that then? By exploitin' the workers! By hangin' on to outdated imperialist dogma which perpetuates the economic and social differences in our society!
So how would you change the system? Give us some hard rules you think people investing their time and money into a company should be limited to. Should people not be allowed to be rewarded for being smarter than other people, even if that intelligence is about knowing when an opportunity arises? Should Bill Gates be capped at $100k a year, for example, simply because you don’t think that value is “sickening”? How do you think this would change how people and companies innovate if the chance to truly succeed in a free market is taken away?
Okay, here are a few suggestions.
**Greater democracy for shareholders. Corporate governance rules are skewed overwhelmingly in favor of management. It is very hard for shareholder groups opposed by management to propose a change in the by-laws. There should be limits on management's ability to use corporate resources to stifle opposition. The corporation belongs to the shareholders not management, so the corporations resources must be used to promote the shareholders' interests not management's. And it is in the shareholder's interests that all proposals to the board be fairly heard not just the ones sponsored by management.
**It should be illegal, unless the person is a majority shareholder, for the CEO to be Chairman of the Board. That totally defeats the concept of the Board overseeing the CEO.
**It should be illegal for CEOs to sit on each other's boards. This is probably the no. 1 reason why executive compensation has reached obscene levels. We profess to be a country that believes in free competition. There is no free competition in the market for executive services. That market is ruled by I scratch your back, you scratch mine.
**Compensation committees must have significant representation beyond the CEO's handpicked lackeys. It should include representatives of the employees, pension and mutual fund companies invested in the company, and other independent shareholder groups. And very important: no single bloc should have a majority of the comp committee's votes.
The funny thing is, given the level of just bone deep ignorance on display, if we actually ever did throw what's left of the middle and working classes to the wolves and just went the full laissez-faire, these same people would be screaming bloody murder about how they'd been screwed by the government. Because millionaire Rush told them so. Wait, did I say "funny"? I meant "soul crushingly depressing."
Oh, and just for efficiency's sake, I am of course a vile elitist etc.
You guys are just showing your extreme ignorance of any kind of political history or polisci knowledge. But hey, what does the average American know about politics or history anyway?
.......You guys just don't have the history or the knowledge to know what you're talking about.
......The basic unfairness of capitalism as a system for distribution of wealth and happiness has been documented over and over in everything from history books to fairy tales since it's very inception. The generalised blindness of Americans, and the fact that you may not have had access to a good political history class in college notwithstanding.
Other countries envy our success and try to emulate us, when possible. Even China, to the extent they can. South Korea went free market capitalism and is booming.
There is no other system on earth that produces as much wealth and freedom and liberty. We have flaws, but name another country with an Apple.
America is exceptional. Many of us went to college. Many still champion capitalism.
We have a mixed economy with chunks of socialism thrown in here and there. But broadly, we are a free market, entrepreneurial economy that thrives on capitalism.
You guys are just showing your extreme ignorance of any kind of political history or polisci knowledge. But hey, what does the average American know about politics or history anyway?
Every European country, and most Asian/African countries (in other words most of the rest of the world), has had socialist periods, communist periods, and capitalist periods in their history and are well aware of the differences between all three. The USA has only ever been capitalist and it has routinely for it's entire existence ridiculed, demonised, criticised, and sometimes even destroyed other nations who don't ascribe to their politics or to capitalism in general. You guys just don't have the history or the knowledge to know what you're talking about.
The average American citizen doesn't even have the correct definition of "socialism" or social democracy," and has no direct experience with it. It's just a buzz word used as a pejorative in almost the same way that you would call a rude poster on the forum a name like *ssh*le or whatever.
Capitalism is not a meritocracy. If it was, money and IP would not be inheritable for starters. People can get in control of the "purse strings" without necessarily doing anything but being born into the right family, and if you go look up the facts of the matter, you will find that this is true for the vast majority of those currently sitting on top of the capitalist heap.
The basic unfairness of capitalism as a system for distribution of wealth and happiness has been documented over and over in everything from history books to fairy tales since it's very inception. The generalised blindness of Americans, and the fact that you may not have had access to a good political history class in college notwithstanding.
You have some fairly substantiated arguments, but fail to draw them into a cohesive conclusion. Would you like to talk about history? Does U.S success not demonstrate the merits of Capitalism itself?? Does the failing of communist countries not demonstrate the merits of Capitalism???
Just because individual x inherits his/her fortune, doesn't rule out individual y from earning his/her fortune- the two are not mutually exclusive.
Liberal/communist sympathies demonstrate great "moral fibre", but do nothing to improve a country. The wealthy of America are already bailing out the rest of the country, why keep testing them?
And to demonstrate your ignorance (in thinking I am "an average American") I would like to point that i'm a tried and true Canadian, and have lived in Canada my whole life. I don't want to sound "ignorant" and assume you don't know much about Canadian politics, fiscal management, etc, but I'll give you the cole notes version:
We are "a more liberal America". Our wealthy pay a little more of the tax burden, and our tax rates in general are a lot higher. As a result, we have pretty strong social programs, health care, and a a crap ton of people leeching social assistance.
What have our grand liberal gestures helped this country achieve? Well a lot of people think we are nice....that means something I guess.
The idiot that says that education would be better if the wealthiest would be over taxed does not have a clue of how economy and the financial growth works, your thought is very close to what the FORMER Soviet Union thought and they went down the drains..
A company like microsoft created millions of jobs, therefore, billions of dollars are already going into taxes, local and national, plus billions are spent every year direct or indirectly by people connected with microsoft, these are billions of dollars!
If Steve Ballmer gets paid 1 bilion or 10 billion, he deserves it! he and microsoft, the same that apple and many large companies are creating billions of revenue in the world, I would not be writing this here if it was not for any of this companies..
The word? jealousy, it has created communism and many other form of governments that destroy free enterprise and in the process get the country in ruins...
I am procapital, I don't apologize, I am proud of this system, it is not perfect, but it is the closest to perfection.
For those who wrote nobody deserve the money they are earning, see that the contributions that this people make, not only in taxes, but in social activities are bigger than many countries budgets.
Instead complaining, just find a way to create more wealth, and therefore more prosperity. I came to the US without knowing English, now I am creating wealth.try to to the same, you are a victim or a creator, there is not middle ground, What are you choosing?
For a moron running a company that doesn't matter, that's an impressive response.
Stop embarrassing yourself.
Spend your time more wisely: Look up a dictionary for what these words mean.
He already has, in the Talk Radio Dictionary (the only one that matters).
BTW, taxes in the US are net regressive. A person could look it up.
Microsoft confirmed Friday that CEO Steve Ballmer intends to sell almost one-fifth of his stake in the software giant, starting with sales this week that total $1.3 billion
Well, those wishing for Microsoft stock to move are about to get their wish!
Time to follow the bosses lead
OMG.... this is one of the few decisions I would agree with Ballmer on.... hell... if I were in his position I'd sell half. Don't blame anyone who would rather pay 18% Capital Gains tax on $1.3B over 39.5%.... Thank you butthead BO.
Excellent and insightful point.
Microsoft is not a dying company.
They certainly aren't growing new revenue sources. They haven't had a new significant source of revenue - ever! And their cash cow of Windows/Office is under serious attack.
Example: http://gcn.com/articles/2010/10/20/n...loud-deal.aspx
Before today?s agreement, announced by Mayor Michael Bloomberg and Microsoft CEO Steve Ballmer, New York had more than 40 separate license agreements, along with other, separate support deals. Under the licenses, the city paid for a the full Microsoft Office suite ? including Word, Excel, PowerPoint, Outlook and other tools ? even if many employees used only Word and Outlook.
Under the new deal the city will pay only for the applications employees use.
Pay particularly close to that last line. I know we will be using this article in our upcoming renewal discussions for our enterprise agreement. MS is great at offering bundles of lots of things for big money - utilization of them and getting your moneys worth is another thing entirely.
The crack in the dike has appeared, and a few fingers here and there aren't going to help. While I have no doubt that Ballmers move is primarily motivated by the insane changes to our tax code that are coming, if Ballmer seriously believed in what he said his alluded to gains would still probably offset even the new capital gains taxes.
No matter how he protests, his move speaks volumes
I don't care even if you're SJ himself, the system that allows those kinds of payouts is sickening.
Unless your getting them
What has Warren Buffet achieved?
Seriously, you can't be that ignorant, can you?
It stuns me as well. People simply do not grasp the enormous benefits that SJ has bestowed upon planet Earth by applying his vision and other talents into Apple.
It is worth billions. It's capitalism in action. Entrepreneurialism is America's competitive advantage.
We don't have equal wealth in this country because we don't have equal talent and ambition.
For all the bashing of capitalism and America, I find it fascinating that few manage to correlate that there might be a reason that indoor plumbing didn't resurge for the masses from the time of the Romans until the birth of America.
There were many reasons for that - but the "evils" of capitalism are not one of them. I'm just amazed at how ignorant of history and how biased people's perceptions of it are. Simply stunning
The mix if capitalism, freedom and social climate created a perfect storm that literally changed the world.
First $50,000 of income is tax free. Next $200,000 at 15%, remainder at 25%.
How about we drop the whole income tax thing and just tax sales? Then all those people being paid under the table get to pay their fair share.
We can eliminate the IRS and a good chunk of the "financial services" industry overhead from our economy as well.
I tell you guys, a prosperous Amerika for me is two third sweat shop, one third moral rot. Apple does it in China while it could sweat it out in California, what a shame for the "gotcha" third in us?!
If you think the gap between rich and poor is so bad now, I encourage you to go back in time to the middle ages and commiserate with the common folk of their day about how bad you have it now