Reply to Romney's tax rate under the Ryan plan would be 0.82%

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Someone needs to learn the difference between income tax and capital gains / dividend. Money was already taxed going into the investment.[/quote]

Oh boy.  [b]You don't pay tax on the initial investment, only the gain[/b].

Has turbotax made everyone complete tax idiots????[/quote]

pp means that the dollars you invested were already taxed once (unless you're investing through a retirement account). That's the economic and policy rationale for lower capital gains taxes.

In the case of dividends, the the profit is taxed twice -- once at the corporate level, and again when it is distributed.

E.g., A company has two shareholders and earns $100. The tax is $35. So, $65 is distributed evenly between the two partners as a dividend. They each receive $32.50, and then pay taxes again on that amount.

That's the double taxation argument.

Plenty of room to argue in there. Bain, for example, isn't a company but a partnership, so the $100 profit isn't subject to the $35 tax. However, some of its portfolio companies might be.

[/quote]Thanks for explaining that so clearly.  Question - Say I'm the shareholder.  The company first makes money and pays a tax.  Then I make money and pay a tax. Well the money is taxed twice but each recipient is only taxed once, correct?  That seems fair to me.  Or am I missing something?[/quote]

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