Keep 15% Capital Gains---But Tax CEO Stock Income At Income Tax Rates When Received As Pay

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Thom today you pointed out that CEO pay is being made in the form of company stock. You then asked why not boost the 15% capital gains tax rate up to the much higher regular income tax rate of 35% so that these CEOs would start paying their fair income taxes like the rest of us.

If you do some research you will find out the various reasons in favor of keeping true investment capital gains attractive to "real" investors. But these CEOs are not investors at all. They are employees that are being paid in stocks. So the right answer is simple... If their annual pay is made in stocks valued at 100 million dollars then insist they cough up 35 million in income taxes that year. It might require they sell a few stocks but so what? It was "income" so initially it must be taxed. Why on earth isn't it being taxed at 35% as it was received as income that year???

After they pay their fair share of their true income as taxes that year their stocks would then hopefully increase and when they sell the stock only the increase would be taxed at the 15% capital gains rate. Because it is now a fair investment like the rest of us make. After all they are free to do as they wish with their pay. Including keep it as a stock investment.

But as it stands these CEOs are initially fraudulently recieving income catagorized as a capital gain from investment when the initial payout was anything but. It was initially "pay" or "income." So here's a simple answer: Tax it as income!

DoctorFine
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Jul. 17, 2012 2:36 pm

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