Stop disseminating false information about capital gains.

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Today you again proved you have little knowledge on the topic of stock options and taxation. A company cannot issue stock options to an employee and that employee immediately sell them and then pay long term capital gains. They will be taxed at ordinary income. You twist the way long term capital works, and if you choose to criticize those that actually do receive long term capital gains as income, at least research the tax codes.

Redwing's picture
Redwing
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Jun. 21, 2012 4:12 am

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Not immediately. No. They usually get to do something to drive up the price over their option price. You may be technically correct about the nit you have picked, but not about how stock options play a sick game in CEO compensation packages, otherwise known as criminal payoffs.

drc2
Joined:
Apr. 26, 2012 11:15 am

Option compensation packages also allow them to retroactivly assign the price of said packages. ESOPS include stock in lieu of pay, however some prevent the stock from being vested until retirement, then one is required to sell. Employees don't get to time their purchase or sale, only executives do, and they don't have to if they have the retro clause.

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douglaslee
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Jul. 31, 2007 3:01 pm

Not entirely true. Most packages have clauses in them to limit the sale by date and quanity. Executives are usually bound by this agreement far more than the office worker. My son is the CFO of a fortune 500 company and will pay taxes as ordinary income on options given to him years ago. When Hartmann speaks to capital gains, 401k plans, Roth IRAs, or ordinary IRA's, he is lost and full of half truths. It is no wonder he shoves all his money under his mattress. Thank God the amount of financial destruction he could do is limited to a portion of his tiny audience.

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Redwing
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Jun. 21, 2012 4:12 am

It depends on if it's Incentive stock options or Non qualifying stock options. Incentive Stock Options pay zero taxes when exercised and pay the 20% capital gains tax when sold. Non qualifying stock options pay the regular tax when exercised and then 20% capital gains tax on the DIFFERENCE of when it was exercised and when it was sold. The ISO's usually have to be kept for at least one year before selling. The NQSO's can be sold anytime.

Different companies have different rules for their stocks as well. Many have "Super stock options" for the higher executives. On top of that, there's always the Alternative Minimum Tax that many executives take advantage of for even more tax savings.

If your son is paying regular inome taxes on old stock options then he's getting screwed. Those should have been ISO's and not be subject to income taxes, only capital gains taxes.

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Bush_Wacker
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Jun. 25, 2011 6:53 am

Thom does not pose as a financial advisor, other than in the paid ads. His commentary on the economy is rarely about how to handle personal finances, and when it is he tends to have a large frame take on stocks v. the financial advice stuff.

For true damage, how can he compete with a Jim Cramer? Or, what did Romney teach us about economics other than that he confuses business technique with it?

And what have we learned from a long social experiment in Neoliberalism? That's Corporate Conservativism and Empire for you. Keeps promising the moon and delivers a turd sandwich. It is time to give Liberals and Democracy a chance. I would open the game to anyone who can say the Pledge of Allegiance and really mean the last six words.

drc2
Joined:
Apr. 26, 2012 11:15 am

My bad on the rate. I guess it's 15% Capital gains tax now. That's only if you are in the 25 percent tax bracket or higher. If you are below the 25 percent tax bracket your Capital gains tax is ZERO.

Bush_Wacker's picture
Bush_Wacker
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Jun. 25, 2011 6:53 am

Nobody is getting screwed. Everything is dependent on how your deal, and the company is set up. My point was, not everything is as Hartmann paints it, a straight 20% in 2013.

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Redwing
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Jun. 21, 2012 4:12 am
Quote drc2:

Thom does not pose as a financial advisor, other than in the paid ads. His commentary on the economy is rarely about how to handle personal finances, and when it is he tends to have a large frame take on stocks v. the financial advice stuff.

If I listened to Hartmann's paid ads I would be in gold. He told me today that I needed it because the U.S. could not sustain high unemployment and our economy was ripe for collapse because of debt.

I thought Glen Beck was the only one pushing Gold.

I guess anything for a buck.

Redwing's picture
Redwing
Joined:
Jun. 21, 2012 4:12 am
Quote Redwing:

Nobody is getting screwed. Everything is dependent on how your deal, and the company is set up. My point was, not everything is as Hartmann paints it, a straight 20% in 2013.

The Federal Government determines tax rates, not the company. If it's a long term capital gain, held for more than a year then you pay the long term capital gain tax. Which will be 20%. His company must have "paid" him already without actually paying him already. I don't know how you can do that but maybe you can.

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Bush_Wacker
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Jun. 25, 2011 6:53 am

So, lets see ...

The RW'er has graduated from telling other people what they should and shouldn't post on the message board to telling the host to not say something on his own show?

Get your own damn show AND THEN you can tell the host what to say!

WTF!!!

Other people have written posts in here when they feel Thom has said something inaccurate on the show, but I do not recall anyone else telling him to stop saying something.

Beck would probably ban someone for doing that!

miksilvr
Joined:
Jul. 7, 2011 11:13 am

He raises an important point we should never lose sight of: all of these guys are salesman for mattresses, car insurance, and refinance companies. If the mattresses aren't selling, they're off the air (witness Thom in Los Angeles.)

There are a million freakin rules in the tax code on disposing assets.

chilidog
Joined:
Jul. 31, 2007 3:01 pm
Quote Redwing:
Quote drc2:

Thom does not pose as a financial advisor, other than in the paid ads. His commentary on the economy is rarely about how to handle personal finances, and when it is he tends to have a large frame take on stocks v. the financial advice stuff.

If I listened to Hartmann's paid ads I would be in gold. He told me today that I needed it because the U.S. could not sustain high unemployment and our economy was ripe for collapse because of debt.

I thought Glen Beck was the only one pushing Gold.

I guess anything for a buck.

You should have signed up on this board years ago, Redwing. I was pushing gold when it was $350 an ounce because it was obvious to me the economy was heading into the pits That was before the financial meltdown. .You'd have done extremely well.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 3:01 pm

The important thing to remember about capital gains is that they should be taxed at the same rate as personal income like that great liberal Reagan did.. What a scam the 1% pulled when they claimed capital gains needed special tax to spur investment and growth!

http://www.businessweek.com/articles/2012-10-03/low-capital-gains-taxes-may-not-help-the-economy

"Neither candidate, though, contests the Bush administration’s basic logic: that a lower capital gains rate encourages investment, which creates jobs and helps the economy grow.

“If they found the relationship (between capital gains rates and growth), they’re saving it for a special time” —Leonard Burman

That doesn’t mean they’re right. Leonard Burman, who teaches economics at Syracuse University’s Maxwell School, presented a graph at the joint hearing that plotted capital gains tax rates against economic growth from 1950 to 2011. He found no statistically significant correlation between the two. This was true even if Burman built in lag times of five years. After several economists took him up on an offer to share his data, none came back having discovered a historical relationship between the rates and growth over those six decades. “I certainly did throw the gauntlet down for the true believers,” says Burman. “If they found the relationship, they’re saving it for a special time.”

More proof that the rationale behind the Bush tax cut doesn’t hold up comes from the Congressional Research Service, a nonpartisan group run by the Library of Congress. In mid-September CRS released a paper that analyzed economic growth and changes to the top marginal tax rates, both for personal income and capital gains, from 1945-2010. “The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth,” it concludes. “The top tax rates appear to have little or no relation to the size of the pie.”"

DynoDon
Joined:
Jun. 29, 2012 9:24 am

I wasn't around here, but Beck was pushing it for years. One ounce/ per month. Yes, it has added up, and there are HUGE tax advantages when you sell.

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Redwing
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Jun. 21, 2012 4:12 am

article/poor-option-stock-options

is about backdating options to assure they are low compared to today's price Its just insider trading and everybody does it.

More than 60 companies have disclosed investigations, including 40 grand jury investigations, into whether they've back-dated executive options to coincide with days when their stock prices were low. And a raft of shareholder lawsuits have been filed. At least 17 people have been fired or quit in connection with the unfolding scandal.

One lawsuit, for example, alleges that Apple Computer backdated stock option grants to 14 current and former officers, dating each grant just after a sharp drop and just before a substantial rise in Apple's stock price.

What's the big deal? Just this. If Apple or any other company back-date options for when share prices are especially low, executives who exercise the options get a windfall. They can buy shares at that extra-low price and then sell them after their price has risen. Seems unfair, right? Like insider trading, or outright stock manipulation, or worse.

Reagan's cap gains rate was 28% after '86

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douglaslee
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Jul. 31, 2007 3:01 pm

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