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kdakota630 (29.72)

Peter Schiff - Why Buy the Cow?

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March 07, 2012 – Comments (3)

The communist revolutions in the 20th century sought to nationalize the wealth generated by privately held industries back to the “exploited” workers on whose backs the profits were supposedly derived. America has made the rejection of this idea and its support of free market principles the centerpiece of its economic narrative. However, as a result of our current and proposed tax policies towards corporate shareholders, our government collects a portion of industrial output that would inspire envy in even the most rabid Bolshevik.

The purpose of a corporation is to generate profits for owners (all other functions are secondary to this goal). Public corporations distribute these profits through dividends. But as a result of America's system of double taxation, where income is taxed on the corporate level and then again on the personal level, government receives a much bigger share of corporate income than the owners themselves. I also address this topic in my latest video blog.

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3 Comments – Post Your Own

#1) On March 08, 2012 at 10:46 AM, outoffocus (23.21) wrote:

I know this response will be very unpopular, but cry me a river.  Corporations are the most powerful beings in the US right now, to the point where the Supreme Court is granting them rights given to people under the Constitution.  Yea they have to pay a high tax rate, but for a set of beings that recieve the most overall in profts yet contribute the least overall in taxes (around 200 billion a year) they get their friggen money's worth.  So I could care less about their little tax problems.  Tell that to the middle class who bears the majority of the tax burden in this country.

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#2) On March 08, 2012 at 12:06 PM, amassafortune (29.60) wrote:

Romney paid 14%, I paid less than that, and we both live in the blue zone. This is a pretty good deal. $60K puts a slightly-above-average American into the top 10% of world earners. 

Sure, I'm converting my company to S-Corporation status to address the double-taxation of dividends Schiff despises. Then again, I get to write-off equipment over several years using the generous U.S. depreciation schedule. Net, net, still a good deal.

To top it off, I live in the U.S.A. and sleep each night with little concern that a machete-wielding horde will invade, or that some party official has been paid off to allow lead paint in the products I use. When I flip a lightswitch, I get light. When I turn on the tap, I get cleaner water than most.

Schiff lives in New York. That personal choice eats up a bunch of his earnings. Like Schiff, I am concerned that the Fed is silently eroding the value of cash, but I can counter some of that effect myselt.

outoffocus is correct. When I was solely a wage earner, half the benefit of my labor went to taxes. The U.S. system favors business even more than it did 20 years ago. Every American should own at least a small one, even if they still keep a regular job.      

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#3) On March 08, 2012 at 12:18 PM, outoffocus (23.21) wrote:

 amassafortune

Every American should own at least a small one, even if they still keep a regular job.     

I wholehearted agree.  I wrote this in a blog post a couple years ago: 

I've warned for a couple years now that the mortgage interest tax deduction was going away and should not be relied upon as part of ones decision to buy a home. I was often dismissed with hems and haws and "thats not going to happen".  All of the articles I've read this year confirm that prediction. So those of you who were depending on that schedule A for tax planning, I suggest you find another schedule. Schedule C maybe?

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