Progressive Taxation Makes Economic Sense

[Stone]

I'm just curious,..do you have any investments?.....I do, and I don't pay anything on dividends /capital gains until I sell ...then its 15 to 35% tax depending on the type, you also have a foreign tax on some.....now if you could set it up so you only paid 15% across the board and still made money .....wouldn't you?

To me ...that's just smart money.

I don't pay anything on dividends ............ until I sell

How do you do that?
Qualified dividends are merely taxed at a lower rate..... with non-dividend distributions treated as a return of capital with the consideration of a capital gain when the stock is eventually sold.

 

[Codrus]

How do you do that?
Qualified dividends are merely taxed at a lower rate..... with non-dividend distributions treated as a return of capital with the consideration of a capital gain when the stock is eventually sold.

Maybe I'm doing it wrong .....but any dime that goes into it is automatically put back where it came from,( I don't profess to know all about it ) some sort of DRIP thing ,...the last time I paid tax on anything was when I sold some a couple years back...then becuase of the way it was setup i paid the lowest tax on the greatest amount ,the higher percentage was differed to the lowest amount ....or something ,..all legal ...and if your going to ask me how /why my income is setup up and figured for a low tax ...I probably can't answer that very well either .....I have people for that

 

[Stone]

Maybe I'm doing it wrong .....but any dime that goes into it is automatically put back where it came from,( I don't profess to know all about it ) some sort of DRIP thing ,...the last time I paid tax on anything was when I sold some a couple years back...then becuase of the way it was setup i paid the lowest tax on the greatest amount ,the higher percentage was differed to the lowest amount ....or something ,..all legal ...and if your going to ask me how /why my income is setup up and figured for a low tax ...I probably can't answer that very well either .....I have people for that

I've never been involved with a dividend reinvestment program, so I only know what I just googled up:

http://fairmark.com/capgain/basis/drip.htm


Taxation still occurs but it's difficult on a quick look to see how the rate compares to ordinary/qualified dividends.

 

[Alien Allen]

I have done dividend reinvestment in the past and always got a 1099