Cut the taxes of rich conservatives, and raise them on all liberals. Problem solved!

[Kasz216]

Aielyn said:

Kasz216 said:

Aielyn said:
As for this bit, I have to wonder - dividends are basically the point of the stockmarket to begin with. If you wanted to encourage long-term investment, wouldn't it make more sense to significantly lower tax on dividends, and raise them on the capital gains involved in stock price variations? This would discourage "playing the stockmarket", and encourage treatment of the stockmarket in the way that it is meant to be treated - as a mode of investment. But then, perhaps I'm not understanding it well enough, as I've not yet had the chance to actually invest in anything (if I had money, I'd be investing in Nintendo right now).

They already have a method for doing this in the United States.

That 15% capital gains tax rate only applies to long term capital gains that have been held for 1 year or Longer.

Short Term capital gains are taxed at the regular 35% that you'd pay on income.

That's not quite the same thing. I'm saying that it should be dividends that get the tax cut, and stock price profits should be taxed only at the highest rate (or even higher). It encourages investment in companies that you believe will do well, not in companies that you think will get a higher stock price (there's a difference).

I have a big issue with modifying taxes based on how long you hold the investments, in terms of implementation. It adds complexity that I just don't think is a good idea. On the other hand, it is fairly straightforward to distinguish between dividends and stock profits.

I am, of course, aware of the concern that would arise, in the form of usage of stocks and dividends to give low-tax money to the board of directors, and things like that. So there would need to be proper balancing of the tax rates, etc, to make it work correctly.

Except Dividends aren't always related to profit and profitability.  Companies need to profit to pay a dividend, but not all profiting companies do... and what they pay often doesn't change.

Espiecally young companies looking to grow.

The End Result would be a further tilting of the field to the "Big 30" of the Dow Jones and other huge blue chip companies while hamstringing startups and new IPOs. 

You'd end up with a more top heavy market.

Also, this would go hard against your strategy... since Nintendo historically is actually pretty bad with dividends as they fluctate widely.  Nintendo a classic equity play, buy low, hope they succeed on their next console, sell high before the next console generation.