On Wed, 5 Nov 2008 15:01:49 -0800, "John R. Carroll"
wrote:


"Ed Huntress" wrote in message
...

"Mark Rand" wrote in message
...
On Tue, 4 Nov 2008 14:02:02 -0500, "Ed Huntress"

wrote:

snipped for sanity

Before we get too far off the track here, remember that the subject is
whether you can have a capitalist system with no growth. My assertion is
that you can't. Share prices versus dividends still leaves open the
question
of why someone would risk capital by buying equity in a company that
isn't
going to grow. Even if one company grows in such a system, it requires
that
another one decline. The stock market then becomes a gambling game -- or,
more likely, it dries up -- because it's a zero-sum game overall.


Someone would risk cash for income i.e. dividends.

But they don't. Dividends-only securities only work when there's a
guarentee for the principle. In other words, bonds, and some types of
preferred stocks. The high-risk equities market would dry up with no
growth. Where would the capital come from for new startups?

Well Ed I'll tell you.
The tax plan Obama is going to ask Congress to pass changes the capital
gains rate on any money put into a start up at ZERO.
Since passive income is taxed at capital gain rates, it will essentially be
tax free.

I'll bey you didn't know that G

JC

=============
Which is reasonable if the intention is to increase the
opportunity for employment, innovation, etc.

This occurs only on the start-ups, and to a much lesser extent
with IPOs [much of the IPO money goes for underwriting charges,
and sales of existing stock which does not fund any company
activity].

Secondary sales, i.e. by one "investor" to another, contributes
no money to the corporation but is a simple reshuffle in
ownership of existing assets.

Unfortunately, the huge majority of exchange stock sales (99%)
are secondary, although the excuse/rationale for the great
unwashed for this activity and special tax treatment is that this
somehow [magically?] provides funds for corporate
investment/development. This is one of the worst cases of "bait
and switch" I have ever seen.

I have no problem with low or even zero income taxes on profits
derived from direct investment into corporations/companies,
either from "capital gains" [one time sale of IPO stock] or even
dividends, but I have a great deal of reservation about any
special tax treatments for "profits" from the secondary market
speculation/manipulation, and indeed a *HIGHER* than regular tax
on these profits, particularly when held only a short time [i.e.
day trading] appears to be fully justified as this activity is
not only non- but counter- productive, and ties up considerable
capital and highly talented people in totally unproductive
activities. Why subsidize, at best useless, and most likely
harmful, activities?


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).