Bitcoin Forum

I was looking on the global stock exchange and found a company called  GIGAMINING.  Its price 1.581 and the weekly dividend is 0.02202454.  In the bitcoin world since it is all play imaginary tokens, there is no income tax, corporate tax, capital gains, or dividend tax.

But in the real world.  1st you pay sales tax, then the employees pay income tax, management also pay income tax, then you have business income.   Where does all this money go?  Mainly teachers and government workers that after benefits make $100K a year.  If you tax the workers more, the managers make less money.  However, if you tax the managers more, the workers also make less money.  You tax business income more both workers and managers make less.

So you go back to GIGAMINING.  I am going to neglect sales tax and income tax for the time being.  But that weekly dividend is earned business income.

So you have a .02202 dividend.  Now the business income tax is about 35% in the United States.  You dividend is now reduced to 0.0143.  Then after the corporate income tax you pay 15% on the dividend leaving you with 0.0122 dividend.  

Furthermore, if you are dealing with an inflationary currency, the value of the shares will also rise with inflation taking a capital gains hit.  Also, the company must use after taxed income to replenish cash reserves. These are probably bigger taxes than above and in the United States this inflation tax has averaged 8% over the last 30 years.  Since you must pay 8% on the cash you own and 8% on the stock inflation, you are effectively paying 16% additional tax.  This number comes off base corporate income too.   This leaves you with a dividend of 0.0082.

The reality is if the glbse was subject to the same laws as the nyse or nasdaq.  None of these mining companies would be formed!  The Corporations can't compete with individually owned companies.

The reality is Robert Reich, Paul Krugman, and Bernie Sanders are the reason why money is all going to the top.  The public corpration is being destroyed and all that is left are companies like "Panda Express" where the is only 1 owner.  Everybody else is the slave.  In the early days of bitmining there were people that owned large farms of bitminers.  That is the reality of these people - slavery!

Robert Reich wants you to be either a government worker or a slave.  All money moves to the top if you follow these planners.

You really really need an accountant if you are paying 50% tax in the US.

I'm not kidding.  What you are doing may be legal but it sets a bad example for the rest of us.  Stop and get an accountant.

In which jurisdiction is this the case?  In the U.S., this certainly is not true.

35% corp+15% dividends+16% inflation = 66% and everybody is paying it, I don't care what accountant you use.  Plus, that lost as income tax and sales tax.  A corporation run as an individual, only pays income tax, which is like 25% after loopholes.

Consider the scenario where corporations are taxed heavily and the super rich are taxed heavily, but the not super rich are taxed very little. Here's what happens:

Corporation receives revenue. Spends money on R&D to grow. Hires employees. Pays employees. Records $1 in profit. Basically pays nothing in taxes. Employees get all the standard write-offs, tax shelters, etc. and in reality don't pay nearly as much as you think.

The employees, making up the bulk of the population, then have disposable income. They go buy stuff, Stuff like what the corporation makes. The corporation has increased demand for its products. They grow. They don't layoff employees.

Mitt Romney pays 13% tax.  Warren Buffet pays less.  There may well be Americans paying 66% tax - I live in UK so have no way to prove otherwise - but they are people who haven't been able to afford accountants.

People work at a corporation as a choice.  They use the capital of someone else to earn more income than they could themselves.  Otherwise they would have a family business or work at home.

That is not how it works.  You can go to the GLBSE and just look at the IPOs.  Take RSM, you can buy shares at 0.40.  This buys the equipment and cards.  Yes, once all the equipment is bought the union thugs and the managers can steal the company, like they did at GM.  

What you are advocating is once RSM gets their equipment, they stop paying the dividend and the guy take all the equipment for his family and friends.  an employee is not all that important they can easily be replaced.  Then they use the profits for himself, building the economy.   What about all the investors most poor that put their money in the company hoping for a profit.  To buy a bike for Christmas for their kids.

Fool me once shame on you, fool me twice shame on me.  Capital will dry up, nobody will invest anymore because the semi-retarded teachers, employees that have no stake in the company,  and loser Robert Reich will steal it for himself.  Unemployment rises and the only solution is to tax more.  The only solution is for Reich to beg or steal more from the Koch brothers (the real earners) then take credit for how well they run the government.

Romney pays about 80% tax.  Warren Buffet pays about the same.  Since 2000, Romney most likely has lost money, yet has paid tax on capital gains that increased due to inflation.  Thus Romney since 2000 has paid infinite tax.

We should tax homes as investments.

RSM is run by me a one man band.  We pay no tax as this is a hobby and all conducted in BTC.  In the UK the only BTC tax you would pay is capital gains tax on the BTC you convert to GBP.  If we expand enough I will take on staff and they will be paid in shares or BTC which currently in the UK BTC alone or shares valued in BTC are not taxed.  Otherwise if the company couldn't continue all the FPGA hardware would be sold and paid in one big dividend to share holders.

It's not a stock, it a bond. A bond is debt.


No one owns any part of my company but me. A bond is debt. I pay interest payments (coupons) on this debt. Any business can pay it's debts as expenses before paying income taxes.

steelhouse, please get your facts straight before posting this stuff.

gigavps, but what you are talking about is a tax loophole in what is all basically corporate income.  I thought I knew it all, but you are correct all debt is taken out as an expense.  Thus, every corporation could issue a bond with each share, such that all gross corporate profit is distributed to shareholders/bondholders as a bond payment.  However, I am sure for the NASDAQ or NYSE you are breaking some sort of law.  Furthermore you don't have to perform the sarbanes-oxley and other type of record keeping that is putting incredible burden on corporations.

Do you know of any pre-tax bonds indexed to profits (inflation) that pertain to U.S. equities like Catepillar?

matthewh3, thanks for the info always wondered what happens in the end. 

But, the point of this thread is still valid.  If the GLBSE was a real exchange, you would not be getting a dividend.  You would be paying it all to corrupt politicans and corrupt corporate insiders looking to pay their bloated salaries.

Where are you getting 16% inflation?  The current US inflation rate is about 2.5%

Also, bitcoin transactions/income are taxable.  They are not different than any other barter income.  And you do have to report barter income on tax returns.

Also, paying obligations (bonds) is an expense, not a 'loophole' as you call it.

Home are taxed as investments.  It is called capital gain/loss on the sale of a home.

The 2.5% inflation includes productivity, population growth, use of the dollar by Somalia, Argentina, and other countries.  However, the increase in the national debt year-over-year has averaged 8% over the past 30 years.  Furthermore, many believe the inflation numbers are doctored, especially this year.  Especially since they removed gas from the equation (everyday price index).  In the long run all the national debt will translate into mortgage and consumer debt as soon as we reach the tipping point imho.

Now consider 8% as the long-term inflation rate, which it has to be since all federal and commercial bank debt is money.   Long-term the inflation rate has average 6% over 30 years.  But we are in recession and when employment hits, based on the "phillips curve" inflation will also hit.  Shadowstats puts the inflation number at 10% based on 1980 methodology.  

All corporations must hold cash for operations and for a rainy day.  Thus, they generally hold enough cash for a couple years. aapl has $110 billion in cash, and increased that by $12.6 billion.  If inflation is 10%, aapl loses $11 billion to inflation a year, or roughly a 25% hit to earned income.

Thus, for aapl it might be 30% or so.  But on average it is 15% or so.  Lost due to the government spending beyond the budget.

BTW, if you have $200,000 in investment and earn $20,000 in returns.  You most likely lost money considering inflation, dividend, and capital gains taxes.

The 99% have picked the wrong villian, it is not Mitt Romney!  It is Obama.  Obama could have supported the Japan system on health care and cut costs 75% for all and increase the nations life expectancy 6 years.  The Japan system is basically a low-cost fee schedule for every procedure.  Try $50 office visits and procedures that cost $1500 in US, might cost $200 in Japan.

What country had an average inflation of 6% in the last 30 years?  By 1982, Volkner had squeezed inflation out of the US system and it hasn't come back.

No inflation since 1982? That's longer than I've been alive and I'm sure the price level is higher than when I started buying things.

Doh! Of course there is inflation but not 6%.

Correction: Shadowstats puts the inflation number at 10% based on bullshit.

http://delong.typepad.com/sdj/2011/12/james-hamilton-on-shadowstats-and-niall-fergusons-claim-that-true-inflation-is-more-than-10-per-year.html
http://voxrationalis.wordpress.com/2011/05/15/the-absurdity-of-shadowstats-inflation-estimates/

etc. ad nauseum

if inflation is 10%, prices double every 7 years. this is clearly not the case. please have some sense and realize that wild and crazy claims might just not be true.

How the hell do you consider dividends a tax?


You must be using some other number than tax divided by income to get those kinds of numbers.

You are wasting your time.  Steelhouse has no idea how accounts work.  The poor sap thinks Romney is lying when he says his tax percentage is 14%. 

dividend tax.  There is a tax on dividends.   http://en.wikipedia.org/wiki/Dividend_tax
It comes after corporate income tax.  Romney also pay sales tax, tax on the workers known as income tax, tax on the materials and banks.

If you eliminate all those taxes Romney would take home 80% more.  The workers would also take home more.  The managers would take home more.  Only the violent ones like Robert Reich would lose out on all the money he steals.  What do you call someone who takes money for his union buddies and send students on vacation for 4 years.

As for inflation being 8%, the total amount of debt in the system in 1990 was $10.8 trillion.  Today it is $38.3 trillion (Z.1 - Debt Tables).   Debt is money.    You could buy a car for like $2000 in 1974.

Furthermore if you consider the whole pie of an average U.S. company.
The distribution is something like this
3% managers
40% workers and materials
55% government taxes
2% profits (Romney, Buffett, .. all make their money out of the 2%, with the 2% being 0% since 2000)

In most countries,  the corporation tax and the tax on dividends are combined and removed from your income tax bill.  I'm pretty sure that's how Romney is able to get his income tax rate down to 14%.

If you eliminate all the taxes you list, Romney would take home nothing.  He got rich by showing enterprise in a capitalist system were people with money are able to invest in people with ideas.  The legal infrastructure for this comes from taxes.  The educated staff, the roads, the lack of foreign invaders, the freedom to travel without armed guards, all these things come from taxes.  Take them away and Romney would be a dirt farmer in Mexico.

Not quite.

Romney (Bain Capital) made his money by purchasing companies, racking up massive corporate debt in those companies and bleeding them dry, then terminating employeesjobs, then selling off most of the assets of those companies and closing them down because the creditors would not lend any more $ to the company, then declaring bankrupcy in those companies so the remaining assets were split amongst the creditors for pennies on the dollar.

He got rich by fucking everyone from the employees to the people who lent them credit.

And that's how its meant to work.  You won't get rich by emulating Mother Theresa of Calcutta.  In Romney's case, he was the guy with ideas and he was able to offer guys with money a way to invest in him.  He got rich - his investors did too.  You can ask that he be a nice guy and care for the workers now that he is retired but when his job was to care for the shareholders, he did it right.

I think he gets a lot of unfair abuse just because he saw a big opportunity and took it.

The shareholders lost everything too.

The only ones who made any money was him and his partners.

Its not the way its supposed to work, although it was "legal".

I certainly couldnt have done it. Would never think of doing it. To treat you fellow man that way. He ruined alot of lives and was trusted because he promised to help those workers and those companies who needed some help, then stabbe dthem in the back.

He bought companies that were not competitive.  We know that because companies that are in good shape do not get sold to private equity vultures.  He proceeded to extract profit from these uncompetitive companies.  It may not have been done in a nice way, but there has never been a suggestion that he was dishonest or unethical let alone that he did anything illegal.

If you are going to exclude Romney for the way he did business, then you exclude all successful entrepreneurs and are left with a political class of lawyers and trust fund babies.

Is that really the best group of people to run a country?  Surely you need to cast the net wider and be willing to include people who have gotten their hands dirty?

There is right and wrong. Plain and simple. You cant explain it away or make it disappear no matter how much claptrap you type.

Legislation, or a lack thereof, does not define right and wrong.

You dont have to fuck anyone to be a successful entrepreneur. I do it every day. I am doing it right now, as are tens of millions of us here in the USA alone that do it everyday who do care about the people who allow us to succeed.

These are unnecessary abuses by greedy selfish people and they need to be put to task for those abuses.

So am I.  My customers and employees love me and I make what I consider great money from my hobby. 

But we both have to accept that there are people our there in rough trades, for example buying distressed companies, and making a ton of money by being ruthless in extracting value from them.  Provided they are honest, we should not disqualify them from trying to serve others in politics after they have quite their looting and pillaging in business.

I like Romney.  I would be the first to accept that his "The rich need more tax cuts" rhetoric is self-serving and that could well make him a bad candidate.  The fact that he is a self-made man from a tough industry does not make him a bad candidate.

The very wealthy pay less tax by a percentage of their income than the workers.  The main tax that effects the rich is capital gains tax and which is much lower than income tax.

People generally pay a payroll tax and an income tax in USA.
Romney pays payroll tax, corporate tax and dividend/cg tax.

You can eliminate the corporate tax, because corporations are not people.

But, if you look at your mining stock, if the laws apply to it like stocks on the NYSE.  Your dividend would be 35% smaller due to corporate tax.  Calling corporate profits a bond would not pass by the SEC.  The reality is the corporate tax is just a way for government to divide the business income tax such that it does not look like too big of a number.

They could lower the business income tax to 15% and raise Romneys tax to 35% and everyone would be happy.

What that would be creating is a perverse incentive for companies not to pay dividends.  That's fine if its what you really want to do.  But there are sound reasons for treating dividend income and capital gains at the same rate. 

In short, dividends take cash out of the company.  There is no fudging a dividend - the cash has to be there.  Rewarding shareholder by increased stock values only creates an incentive to fudge things to make the company appear more valuable and there is no reality check for years. 

Besides all the other points you are obviously incorrect on, you do realize how very wrong it is to add together tax rates to find your total tax, right?

Yes but bitcoins like gold are not taxed in the UK or the EU.  So as long as the dividend is in bitcoins or gold no tax on it.

Yes, they are approximations.  But, to say Romney pays less than 60% tax on corporate profits is a lie.  Since 2000, the average u.s. equity holder has paid about 120% in tax, as the price of the stocks adjusted for inflation have gone down, yet they still pay corporate tax and capital gains taxes.

Note, all profits come from a pie that is about 3% of the total revenues of a company.  California sales tax is higher.  The left honestly try to trick the public that the rich and corporations are making all the money.  The reality is it is the employees and government the takes almost all the profits and revenues.   This reality is the reason for the slow economic growth and high unemployment, and the new rise to sinister parties like nazism.

It may take you 20 years to realize this.  The best thing you can do to help the poor is cut government and education.

Your heart is in the right place but you are so far wrong its laughable. Romney is not a liar or a tax evader.  He genuinely pays 14% tax.

They should change the tax code.

We need to add corporate wage tax.  Set that at 20%.
Then you have payroll tax.  Set that at 15.3% uncapped.
Then you have corporate income tax. Set that at 35%.

Then end the IRS.


However, most taxes should go local, defense should be the only role of government. The ideal structure would be:

Corporate wage tax of 5%.
Payroll/Unemployment tax of 15.3% uncapped.
Corporate income tax. Set that at 20%.

Then end the IRS.