Pen Truth

Christopher Saikes

What are stocks? Stocks are a share in a corporation. When you hold/own a stock, essentially you are a part owner in that company. Why is government and industry so interested in the stock market? The stock market is an indicator, but just one, of an economy’s health.

However, generally purchasing a stock provides nothing directly to the economy, unless the stock purchase is an IPO.  When trading stocks none of the money that an investor spends trading open market stocks goes to the company that originally issued those stocks.

What is an IPO?   An IPO, or Initial Public Offering is a sale of a percentage of a corporation, or share.  An IPO is analogous to buying a fresh pack of Baseball Cards from the manufacturer. That manufacturer will not profit once the cards have been sold and later traded for a higher and higher price…

Wall Street traders want you to believe that their trading stocks creates jobs, but trading stocks is nothing more than trading Baseball Cards…. it creates no jobs, just Capital Gains, money from money….. just one of many types of Capital Investment.

What is Capital Gains, and Capital Investment? Capital Gains is the profit one makes off of investing money, (Capital Investment,) in stocks, machinery, supplies, oil, gold, etc. for the purpose of making a profit. A home, or gold coin is a Capital Investment, but the profits that the common person makes off of their Capital Investment is taxed at the regular rate… So if you make $100,000 off the sale of “your” Capital investment, your income tax will be taxed at a rate based on $100,000 PLUS your regular salary.

What are Dividends? Dividends are profits a corporation shares with the share holders, i.e. part owners.  Most stocks, Common Stock don’t pay dividends, but Preferred Stocks almost always do. Those dividends are the only Capital Gains that aren’t taxed like your regular income, they are taxed at a much lower rate.

The Stock Market is nothing more than people trading Baseball cards…. and the Wealthiest Americans don’t believe that they should pay taxes on the money earned….

So, when the Republicans, or the Koch brothers talk about eliminating Capital Gains Tax, they are not talking about the tax that you pay on your $100,000+, but the taxes they pay on their $100,000,000,000+.  That’s a lot of zeros.

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