First, if the company filed a valid tax return they were taxed the first time. If you think that that tax rate is improper that is a seperate argument.
Secondly, a shareholder is a proportional owner in the company. The value of that dividend belongs to the shareholder whether it is retained within the corporation or whether it is paid out to him. That this is a fact, and not a philosophical point is verifiable because under law the Specialist for a corporations stock must reduce that stock’s value by the value of the dividend the day it goes ex-dividend, and if it opens at that level it is considered a flat or unchanged opening. Similarly “selling a dividend”(an egregious sales practice) is an illegal sales practice as that dividend is already the property of the shareholder whether it is presently retained at the corporation or declared and paid.
The double taxation is the accounting equivalent of taxing withdrawals from a checking account.
A WSJ article might be accurate.
Your cite certainly did. It paid no never mind to the differences between corporate and individual taxation and simply says it doesn’t matter because they are the same dollars. I’m just following through. Really really bad argument there. Really bad.
An article likely will be, but an editorial will almost never be in my experience. (I.e., when I know enough about the subject, there are always important errors, omissions, or half-truths.)
By the way, here is a hard-headed analysis (which I have only read part of) on the Bush dividend tax cut proposal from the Brookings Institution:
Since so much of this seems to center around how to correctly define “double taxation”, it seems to beg one question: where is it written that “double taxation” is anathema? The Code of Hammurabi? Leviticus? From the level of Scylla’s unalloyed contempt, you’d think we were discussing some odious sexual practice.
Or is it a timeless moral certitude only recently re-discovered by Republicans?
Ahh, you’re right of course. Nothing’s wrong with double taxation, or triple taxation.
On April 15, when you file your taxes, what we should then do is have a new form for the remainder, and redo the whole thing again.
Sol let’s say you make 100k, and after taxes you are left with 70k. That 70k needs to be taxed. Go to another accountant or spend for hours and do another return so you’re left with 50. After that of course we can do it again. So you’re left with 30k. Then 20k, and then 5k, and then $3,000.
Then of course we can all move to Minnesota for the welfare benefits!
And then we never have to worry about tax reform benefitting the wealthy. We’ll just keep taxing again and again until we’re everybody has nothing and we are all equal. Than we can all be very proud of our progressive welfare system helping us out.
What a positively brilliant idea!
Yes. How silly of them. Fortunately for us we have Democrats like you full of such bright and wonderful ideas.
I’ve read it. I see nothing we haven’t covered, and there opening paragraph seems to agree with the proposition that initial taxation is the favorable solution.
The current tax is unfair, it is likely to help the stock market after a three year slump that has devastated consumer confidence.
It also encourages more prudent investment selections, by placing a premium on stable income streams rather than mad growth speculation. Already Microsoft has declared a dividend for the very first time today. It should reduce volatility in the markets and cause people to focus on things like present values rather than uncertain growth prospects.
In and of itself it is a good thing, and now is the right time to do it. The market needs sanity and a fingerhold from which to hang a value proposition.
The market is a leading indicator and at these levels the wealth effect becomes a reality.
I can’t help but see how confidence in a saner growing stock market where people make predictable income streams can’t help but add stability to the market and be a boost to the economy.
But yes, the rich do benefit. I said it for you, so you don’t have to.
Not all editorialists are liars. What makes Krugman dangerous to you isn’t that he lies, it’s that he tells truths that makes the people you support look bad.
Jshore has in the past substantiated enough distortions in the WSJ editorials that he’s justified in double checking their facts before he takes their word for them.
But you, on the other hand, have never shown that Krugman has ever told a lie, or even a significant distortion. Yet you feel free to call him names. That tells us more about you than it does about Krugman.
Unless they happen to be in the WSJ, right? Than they are all liars.
You live in a left-wing fantasy world. Do you believe in the tooth fairy. He’s a consistent liar and distorter who preaches to a choir of ignorant Republican hating morons. He lies his ass off and distorts things, and simply makes them up.
I studied everything he wrote concerning Bush and Harkens, and have over ten years of professional expertise in things like rule 144 stock transactions. I did the shit for a living, and Krugman was lying his little ass off and deliberately distorting the rest. His case was a deliberate fabrication that had nothing to recommend it other than the fact that Krugman lied in such a complicated matter that a layman wouldn’t know better.
It’s the most egregious type of obfuscatory lie, based as it is on the principle that your readership is too stupid and unsophisticated to understand your lie enough to catch you in it.
And he pulls this crap all the time.
I’ve presented no WSJ cites.
Untrue. Untrue.
I can recall 4 or 5 major things from Krugman’s first article against Bush that were well proven by myself to be lies; the whole thing about the criminality of the late filing of Bush’s sale of Harkens for example. But the real kicker was when krugman got greedy because the furor died down from his first article and he wrote that one about the Harvard/Harkens connection and Bush. In that one he didn’t even bother to make his lies complicated. It was so bad in fact even Elucidator eventually agreed it was wrong. That’s how bad it was.
He’s a consistently one-sided pundit who hides behind pretentions of academic credibilty to consistently publish lies and distortions to unsophisticated wide-eyed ignorant Republican hating liberals who will swallow any foul offering thrown their way.
I didn’t post it in order to bolster one side or the other as much as to give what seemed to be a fairly apolitical analysis of what Bush’s proposal does or does not do. Since you seem to have read it quite selectively though, I will bring your attention to the second paragraph:
And here are the concluding two paragraphs of the full report:
Well, not exactly. As much as I appreciate the honor done me by an off-handed insult, proud as I am to be numbered amongst those who dare disagree with The World’s Foremost Authority…still, not exactly
Krugman was wrong to suggest that Bush was legally culpable for the crime of insider trading. As you exhaustively demonstrated, the law is such that, absent a full confession written in blood and countersigned by the Pope, virtually nobody can be convicted. The proceedings of Harken were shady, dubious, uncertain in terms of ethics and prudence, but in strictly legal terms - kosher.
Ultimately, I came to the conclusion that GeeDubya was brought on board largely as Executive Doofus. Those Awl Bidness guys showed him a nice, shiny desk with a corporate cup full of sharpened pencils, told him what a sharp businessman they all thought he was, and then gave him the Mushroom Treatment - kept him in the dark and fed him bullshit. An environment in which he, naturally, flourished.
He didn’t know squat. Should he have known squat? Another issue entirely. But Krugman was wrong - no way on God’s green Bush could ever have been legally held culpable.
And, one must confess…at least some of that final condescension was due to sheer exhaustion. Truly, Scylla, if sheer adamantine stubborness is a virtue, your place in Heaven is secured.
—I believe (although Scylla can correct me if I’m wrong) that the supposed “inequity” that is being referred to is the “double taxation” of dividends.—
Two points, one already made, and the other I’m not sure has been.
First of all, it’s true that many dividends aren’t actually double taxed, and that dividends aren’t a huge deal to begin with (doing away with dividend taxation isn’t high on the list of bad taxes for even most conservative economists). But that says nothing about whether taxing them twice, even sometimes, is a good idea. Because, secondly, as we should all know, taxation distorts incentives. From the perspective of social welfare as a whole, two taxes at a slightly lower rate might well be worse than one tax at a higher rate. That’s the case because you’re getting a double whammy of potential distortions that might each of them encourage very different sorts of inefficient behavior: and you can’t measure excess burden simply by looking at the amount of money a tax takes in. I haven’t looked closely enough at the dividend issue to tell if this is the case or not, but the fact remains that you CAN’T simply conclude that two taxes with a slightly smaller aggregate rate are better than one big one (especially if the big one is clear).
Tax policy is dreadfully complex precisely because of all the different markets a tax, especially an industry specific factor tax, can effect, and hence the actual people a burden can fall upon (given the ability of people to avoid the tax by finding other ways to do things). Most neonates assume that if you tax something that the rich buy, you hurt mostly the rich. But there are plenty of real-world examples where that isn’t true at all: where the costs of the tax are almost entirely bourne by poor working people who MAKE the luxury items that the rich buy (and can easily substitute for).
Of course, this is pretty off course from the claim that tax cuts pay for themselves.
—Economic growth doesn’t come from buying stuff - the ability to buy more stuff is the result of economic growth. —
I try to make this point constantly, but people just wont listen.
Here’s an interesting example: you want to buy a car, and the government decides that it needs to supply some highway funds/police to accomodate this purchase. If the government gives you a tax cut, you can afford the car today, but the government will incurr a debt because of its present level of spending that it offsets today by borrowing. Someday, of course, you’re going to have to pay the government back in taxes, with interest.
If the government doesn’t cut your taxes, however, you’ll have to do the borrowing yourself: on some line of credit, with interest. The government might lower your taxes in the future (or it might not: the cut was certain in the previous example since it already happened, but it is by no means certain in this scenario, though we’ll ignore that for now), but the major fact is that there wont be a need to pay the government back in taxes, in the future, for the money they would have lost via a tax cut.
So, which scenario is better? Well, ask yourself this: who is likely to get a better rate on the borrowing it does? The government, using its line of credit, or you, using a credit card, mortgage, bank loan, etc.?
Beats me. But Jshore has certainly show enough distortions to treat them as untrustworthy sources.
Which, once again, dispite your hand waving, you have yet to do with Krugman.
You’re hardly ignorant. Your knowledge is just profoundly self-serving and missing important details that invalidate most of your deeply held prejudices. You also seem incredibly resistant to facts that don’t validate your prejudices. I suspect that’s why I outgrew the beliefs I see you spreading here, and you haven’t (yet)
Whatever the republican’s once were, the simple fact is that right now the republican party has been co-opted at the top by the worst sort of people. They are against nearly everything they claim to be for. They are criminals by any moral terms, but since they also write the laws, much of their criminal behavior is technically legal. Businessmen who sell access rather than create value, power brokers who have no interest an anthing but the perputuation of their power. The rot at the top of the republican party is so profound that I fear the party is a total loss.
The looters have control of the party and the country will have no health until they are removed from power. It’s a real shame that you persist in apologizing for them, they do not deserve your loyalty.
Bullshit. Everything Krugman said in that column was factually correct, you just don’t like his conclusions. You admitted as much in the thread you are refering to. Somehow it seems that the experts loose all track of their sense of fair and honest dealing, right and wrong, and begin to believe that the only measure of wrong is whether or not an act is prohibited by law.
Well I’m not that sophisticated, and neither it would seem is Krugman (or 'Luce for that matter). I consider one who witholds information from stockholders and profits by that act a criminal regardless of whether or not he can be convicted of a crime.
Krugman told no lies, nor even distorted facts. He merely pointed out what had happened, which is appalling enough. Insiders I guess get jaded by looking at immoral behavior so often that they start to think of it as normal. But the rest of us havn’t lost our moral compass. What’s really appalling about harken is what level of betrayal of the stockholders trust that is legal even normal.
Bullshit. We understand perfectly well. There are many ways that money can be legally transferred from stockholders to insiders. That doesn’t make it right, the real question is. Why cant you tell right from wrong anymore? Is your job that corrupting?
You did no such thing. Everyone else rejected your ‘evidence’, only you were convinced by it.
Bullshit luce never agreed that Krugman hadn’t told the truth. He only agreed that it was likely that no actionable crime had been committed. This is a statment about the weakiness of the law, not about the honesty of Bush (or Krugman).
What you keep failing to see is that he also made it clear the same point that I (and Krugman) have been making: That no moral, honest, man would have done what Bush did. There’s quite enough information to make a judgment on the character of Bush that makes him inelegible of any position of trust. 'Luce admitted that the burden of proof for conviction on insider trading is so high as to be impossible to reach in most cases. One can always make a plausible case that Bush was merely incompetent. But not proven isn’t the same thing as innocent, and the court of public opinion is far less tolerant of dishonesty and self-dealing that the law is.
Yes yes, we’re aware that you claim he lies, Hell, maybe you even believe it. But you keep failing to prove your point, so we’re stuck taking your word for it. And we have ample proof that YOU lie, including one clearly documented case just this last week.
(Actually, it’s remarkable how often you refer back to ‘things you’ve already proven’ that are only proven in your imagination. You should apply for a patent).
As for one sided. I’ll grant that, with the stipulation that he has only been so since Bush took office. If you look back to pre-Bush days, you’ll find he was a regular critic of the Clinton administration. He certainly does have a jones for Bush though.
On the other hand. Bush has been pretty one-sided too, so this hardly stacks up to much of a criticism. I mean, who else is an economist going to talk about but the guy with the power to make economic policy? It’s hardly Krugman’s fault that Bush can’t seem to talk about his own policies honestly.
Oh, and for the record. I’m not a liberal. I’m an honest republican. Well, OK. ex-republican, since the name is currently exemplified by corporate thieves and religious whackos, I refuse the association at present. Even so, I’m not a liberal in the sense you mean. (Though I guess I would like to think I am in the literal sense of the word - wouldn’t everyone?)
It’s a sad day when a republican can’t tell honest from liberal anymore.
Well said, Tejota. As one who speaks from the conservative wing of the extreme left, I concur. I, too, lament the loss of an honest opposition, which is essential for any healthy democratic process. We are human, all too human, and without a skeptical view of our dearly held opinions, no man, no party, no nation is safe. None of us are entirely immune to the creeping rot of self-righteousness, without the input, even the mockery, of honest disagreement to “vaccinate” us.
The Eagle cannot fly on one wing!
(Well, ok, maybe stirring metaphor isn’t my strong suit. I’ll just stick to genteel charm.)
The thing is that growth and spending are like Ying and Yang.
Your buying a car with borrowed dollars is not growth, but it promotes growth.
To see what I’m talking about, let’s multiply your example.
Let’s say there’s some kind of incentive, a tax-cut or what have you which is incentive enough to get 1,000 people to buy cars, that otherwise would not.
Ignoring the dynamics of inventory for this example, what does this mean?
It means you have some happy people at the dealership who have sold a 1,000 cars that they otherwise would not have. They have made profits, and those profits are presumably burning a hole in their pocket. Those are real profits, and when they spend them on stuff that is real growth.
There is also now empty spaces on the dealers’ parking lot. The dealers call Ford or whatever and say “SEND MORE CARS!”
Ford then employs a whole bunch of people to build these cars who make profits that burn holes in their pockets. When they spend those profits they otherwise would not have, that’s growth.
Those cars are also made out of raw materials that are purchased from other companies, or dug out of the ground by workers, and they all make profits doing it, which they all spend resulting in growth.
All that spending results in more growth, which means more stuff gets bought, which means more growth, which means even more stuff getting bought.
The end result is that we all become a bunch of fat cats driving Lamborghinis and lighting cigarettes with $100 bills.
And, it’s all thanks to you and the government for incurring the debts that made it happen.
