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Old 04-17-2013, 01:11 PM   #41
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A discount is a discount. What makes you so sure a family would not invest? Maybe skip out here and there on the latest upgrade for something and allocate those dollars towards investments.
No way, I need my shiny new whiz bang!
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Old 04-17-2013, 01:38 PM   #42
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At the same time, it also makes it cheaper, relative to higher income households, to buy stock because all income gets taxed under regular rates, which are progressive. That effect is permanent.

It's relatively cheaper for lower income individuals to buy additional stock compared to higher income individuals because our personal income tax code is progressive.
But who cares if it's relatively cheaper? How is that an incentive to buy something you can not afford? Let's say there's a surcharge for people in the top tax bracket on Ferraris. They have to pay $5000 more for a Ferrari than I do. Does that mean I'm going to buy a Ferrari?
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Old 04-17-2013, 01:46 PM   #43
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But who cares if it's relatively cheaper? How is that an incentive to buy something you can not afford? Let's say there's a surcharge for people in the top tax bracket on Ferraris. They have to pay $5000 more for a Ferrari than I do. Does that mean I'm going to buy a Ferrari?
Oh man don't even get me started on the worthless crap these families buy but shouldn't be able to afford.
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"They". Again with this idea that white people are a singular organism with a single will.

Individuals make choices and take actions. Sometimes their race informs their choices and actions, sometimes it does not.
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Old 04-17-2013, 01:56 PM   #44
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Oh man don't even get me started on the worthless crap these families buy but shouldn't be able to afford.
For example?

Wouldn't you say that spending necessary for the economy anyway?

http://reason.com/24-7/2013/04/15/co...pending-slumps
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Old 04-17-2013, 01:57 PM   #45
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I didn't contradict myself at all. You're confusing a short term effect with a structural effect and you overlooked an operative term. By definition, if a company doesn't pay taxes any more, its shares will automatically jump to reflect the new underlying fundamentals of profitability. That's a one-off. It only happens once when we repeal the corporate income tax.

At the same time, it also makes it cheaper, relative to higher income households, to buy stock because all income gets taxed under regular rates, which are progressive. That effect is permanent.

It's relatively cheaper for lower income individuals to buy additional stock compared to higher income individuals because our personal income tax code is progressive.
Any profit you enjoy from the sale of a stock held for at least a full year is taxed at the long-term capital gains rate, which is lower than the rate applied to your other taxable income. It's 15% if you are in a 25% or higher tax bracket and only 5% if you are in the 15% or lower tax bracket. Profits from stocks held for less than a year are taxed at your ordinary income tax rate.

Ordinary dividends earned on your stock holdings are taxed at regular income tax rates, not at capital gains rates. (Source)



At the end of the day your middle income household still has the same amount of money to invest. The difficulty involved with investing remains the same. That's actual fact not a relative one.
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Old 04-17-2013, 02:02 PM   #46
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But who cares if it's relatively cheaper? How is that an incentive to buy something you can not afford? Let's say there's a surcharge for people in the top tax bracket on Ferraris. They have to pay $5000 more for a Ferrari than I do. Does that mean I'm going to buy a Ferrari?
The barriers to retail investing have never been lower. And many brokerages offer reduced fee or commission free trades on many exchange traded funds.

Stocks aren't Ferraris nor are they priced like Ferraris. The current price of 1 share of an S&P 500 ETF is about 150 dollars right now with zero commission. Are you really telling me a middle income family can't afford to occasionally purchase 1 share every now and then? Is 150 dollars literally life or death for the average family? Or could they simply just drive to a beach in Florida instead of Disney World for their family vacation? Or not opt for a premium cable package. Cut back on the amount they eat out, etc.

Or even before they get married, young workers, who have a ton of discretionary income, could start saving early and getting a head start on building their net worth. We've made it easier than ever to invest. But at some point, people are just going to have to suck it up and actually do it.
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Old 04-17-2013, 02:05 PM   #47
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The barriers to retail investing have never been lower. And many brokerages offer reduced fee or commission free trades on many exchange traded funds.

Stocks aren't Ferraris nor are they priced like Ferraris. The current price of 1 share of an S&P 500 ETF is about 150 dollars right now with zero commission. Are you really telling me a middle income family can't afford to occasionally purchase 1 share every now and then? Is 150 dollars literally life or death for the average family? Or could they simply just drive to a beach in Florida instead of Disney World for their family vacation? Or not opt for a premium cable package. Cut back on the amount they eat out, etc.
What's their return on the 150? How long will that money be set aside?

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Or even before they get married, young workers, who have a ton of discretionary income, could start saving early and getting a head start on building their net worth. We've made it easier than ever to invest. But at some point, people are just going to have to suck it up and actually do it.
True. But being able to get something cheaper 20% than someone who makes 500% more than you do is still not an incentive to buy something.
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Old 04-17-2013, 02:06 PM   #48
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For example?

Wouldn't you say that spending necessary for the economy anyway?

http://reason.com/24-7/2013/04/15/co...pending-slumps
iPads, iphones, gaming systems, leasing new cars, etc. Sure it's great for the economy but to blatantly say families don't have discretionary funds for potentially investing is foolish.
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"They". Again with this idea that white people are a singular organism with a single will.

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Old 04-17-2013, 02:16 PM   #49
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What's their return on the 150? How long will that money be set aside?


True. But being able to get something cheaper 20% than someone who makes 500% more than you do is still not an incentive to buy something.
Not all stocks are hundreds of dollars...
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Old 04-17-2013, 02:19 PM   #50
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iPads, iphones, gaming systems, leasing new cars, etc. Sure it's great for the economy but to blatantly say families don't have discretionary funds for potentially investing is foolish.
If you're a firm believer in quality of life then one might argue that those are investments in ones emotional well-being.
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Old 04-17-2013, 02:20 PM   #51
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iPads, iphones, gaming systems, leasing new cars, etc. Sure it's great for the economy but to blatantly say families don't have discretionary funds for potentially investing is foolish.
iPhones are priced just like any other phone. You can get a refurbished iPhone 5 for $149 and a 4S for $49. Is that exorbitant?

If a gaming system keeps your kids at home and out of trouble, is that a bad investment?

If a car lease gets you reliably to work without having to worry about buying and later selling a used car or worrying about repair bills, is that?

Who are you to judge how people spend their money. Why don't you instead figure how much money you could put away while supporting an entire family on rapier's $53k/year.
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Old 04-17-2013, 02:20 PM   #52
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Not all stocks are hundreds of dollars...
Use any number you want. Show me how much a family will make in the stock market by investing an cable bill's worth of money each month.
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Old 04-17-2013, 02:23 PM   #53
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Use any number you want. Show me how much a family will make in the stock market by investing an cable bill's worth of money each month.
My cable bill (Triple Play) is like $250 a month. If I was more fiscally conservative I would dump that into my IRA. I would hope after 10-15 years that earnings would significant. But you know... 'Murica.
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Old 04-17-2013, 02:26 PM   #54
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My cable bill (Triple Play) is like $250 a month. If I was more fiscally conservative I would dump that into my IRA. I would hope after 10-15 years that earnings would significant. But you know... 'Murica.
I get by with basic cable. My internet bill is $53. Let's assume I don't need the internet. How much will I gain by investing in stocks versus putting that in a savings account?
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Old 04-17-2013, 02:37 PM   #55
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I get by with basic cable. My internet bill is $53. Let's assume I don't need the internet. How much will I gain by investing in stocks versus putting that in a savings account?
The interest rate on savings is almost nonexistent. $53.00 / month @ an annual interest rate of 6.5% over 10-years where interest is compounded monthly and you're looking at an additional $2,613.71 in your in addition to the $6,360 you invested (less applicable taxes and fees).
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Old 04-17-2013, 02:40 PM   #56
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I get by with basic cable. My internet bill is $53. Let's assume I don't need the internet. How much will I gain by investing in stocks versus putting that in a savings account?
It depends upon what you're willing to invest in and how much risk you're going to take. You could very well lose money
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Old 04-17-2013, 02:42 PM   #57
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The interest rate on savings is almost nonexistent. $53.00 / month @ an annual interest rate of 6.5% over 10-years where interest is compounded monthly and you're looking at an additional $2,613.71 in your in addition to the $6,360 you invested (less applicable taxes and fees).
Hmm... I get $2384.82 in gains.

How much would a person have earned if they had started putting that money in the stock market 5 years ago?
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Old 04-17-2013, 02:57 PM   #58
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If you're a firm believer in quality of life then one might argue that those are investments in ones emotional well-being.
Maybe. I'm just uber conservative and choose not to spend my money on those things. I splurged a little on my 11 year old M3 for which my salary can comfortably maintain the car.

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iPhones are priced just like any other phone. You can get a refurbished iPhone 5 for $149 and a 4S for $49. Is that exorbitant?

If a gaming system keeps your kids at home and out of trouble, is that a bad investment?

If a car lease gets you reliably to work without having to worry about buying and later selling a used car or worrying about repair bills, is that?

Who are you to judge how people spend their money. Why don't you instead figure how much money you could put away while supporting an entire family on rapier's $53k/year.
I have no say on how people spend their money. Relax. I was stating that a typical family can splurge on luxuries and still get by okay. Don't get pissy about rapier and I stating that a family can invest with an income of $53k annually. It all comes down to personal decisions and how people value things in life.

Edit: how many members is the "entire" family you speak of?
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"They". Again with this idea that white people are a singular organism with a single will.

Individuals make choices and take actions. Sometimes their race informs their choices and actions, sometimes it does not.

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Old 04-17-2013, 02:58 PM   #59
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My cable bill (Triple Play) is like $250 a month. If I was more fiscally conservative I would dump that into my IRA. I would hope after 10-15 years that earnings would significant. But you know... 'Murica.
$250?
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Old 04-17-2013, 03:06 PM   #60
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Any profit you enjoy from the sale of a stock held for at least a full year is taxed at the long-term capital gains rate, which is lower than the rate applied to your other taxable income. It's 15% if you are in a 25% or higher tax bracket and only 5% if you are in the 15% or lower tax bracket. Profits from stocks held for less than a year are taxed at your ordinary income tax rate.

Ordinary dividends earned on your stock holdings are taxed at regular income tax rates, not at capital gains rates. (Source)

At the end of the day your middle income household still has the same amount of money to invest. The difficulty involved with investing remains the same. That's actual fact not a relative one.
Yes, but it's more expensive for higher income households to invest. Which reduces their incentive to save and invest. Theoretically that should bring down equity prices a bit, though probably not enough to offset the increase in corporate profits(since it's the top 15% of American households own something like 97% of all equity wealth).

Anyways, I don't see why you're trying to move the goalposts. My original post never said this would make it easier for ordinary families to invest. The proposal levels the playing field and makes capital structures more economically efficient. The macro-level effect is positive and benefits the economy as a whole.

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What's their return on the 150? How long will that money be set aside?

True. But being able to get something cheaper 20% than someone who makes 500% more than you do is still not an incentive to buy something.
**** it, I give up. If you say that it isn't worth it for the average family to invest, I'm not going to convince you otherwise. But if you and people like you keep complaining about the widening wealth gap between the rich and poor, you've got no leg to stand on.
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