On Sat, 14 Mar 2009 10:49:30 -0500, GeoLane at PTD dot NET
GeoLane at PTD dot NET wrote:
snip
For anybody above the lowest tax bracket, stocks are a better place to
save than a savings account for tax reasons alone since stocks are
taxed at a lower rate than dividends in order to encourage people to
invest in our companies.
snip
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While widely touted, "investment" as used here is another
word/mind game. When you by a stock or bond on the secondary
markets you are investing in the "market" and not in a company.

Strictly speaking the only time buying a stock invests a dime
into a company is at the IPO. After that it is simply
speculators swapping stocks back and forth, with *NONE* of that
money going into a company for investment, economic expansion and
job generation. {question -- why then are secondary market
sales/speculation subsidized by the tax payer by the lower
"capital gains" rates? As this is not generating any "economic
added value" shouldn't the rate logically be *HIGHER* not lower?}

Even with an IPO, a significant fraction of the money is "creamed
off" by the underwriters, and even more is skimmed by the people
that got stock options before the IPO [such as high level
employees and venture capitalists] in that the money that is
raised by the sale of their stock goes to them and not the
company. The money [and the capital gains tax rate] received by
the executives and V/C may well be justified as they did create
the company, but it should not be confused with "investing" in
the company, as the company doesn't get a penny of it.


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).