Media company frenzy

[WarriorDad]

Cost go up. Wealth in the middle and lower classes has not. Wealth for the rich has gone up.

And that appears to mostly secondary to corporate policy and corporate influence/lobbying on government policy

This I would agree with, but not your first statement.  But also important to point out how wealth is derived, and a pay check is only one small component of it.  For the truly wealthy, a paycheck means nothing at all.

[Pakuni]

This I would agree with, but not your first statement.  But also important to point out how wealth is derived, and a pay check is only one small component of it.  For the truly wealthy, a paycheck means nothing at all.

Right, because for the truly wealthy, earnings are derived from investment income, which is taxed at substantially lower rates than a paycheck.
Just another way our system allows the rich to get richer at the expense of everyone else.

[Herman Cain]

Right, because for the truly wealthy, earnings are derived from investment income, which is taxed at substantially lower rates than a paycheck.
Just another way our system allows the rich to get richer at the expense of everyone else.

There is risk involved in investment income. Without those willing to take the risk , the economy will not expend and with it associated new technologies that benefit everyone.

[Pakuni]

There is risk involved in investment income. Without those willing to take the risk , the economy will not expend and with it associated new technologies that benefit everyone.

For the long-term, wealthy investor, there's almost no risk.

[GGGG]

For the long-term, wealthy investor, there's almost no risk.

Especially since capital losses are tax deductible.

[MU82]

For the long-term, wealthy investor, there's almost no risk.

Agreed.

If that investor puts it all in an S&P 500 Index fund or a balanced fund like Wellington, over the long term, he or she will have taken little to no risk.

Even if he or she invests in individual stocks, as long as he or she doesn't take any crazy risks, the market always moves ahead over time.

Not to mention the fact that for the person with $1 billion in assets, even a $500 million loss won't "hurt" him or her. But the person with $20,000 in assets, just having to replace the hot-water heater can result in incredible financial stress.

[Herman Cain]

Agreed.

If that investor puts it all in an S&P 500 Index fund or a balanced fund like Wellington, over the long term, he or she will have taken little to no risk.

Even if he or she invests in individual stocks, as long as he or she doesn't take any crazy risks, the market always moves ahead over time.

Not to mention the fact that for the person with $1 billion in assets, even a $500 million loss won't "hurt" him or her. But the person with $20,000 in assets, just having to replace the hot-water heater can result in incredible financial stress.

Especially since capital losses are tax deductible.

The vast majority of truly wealthy People have their wealth concentrated in a single company or stock holding. They certainly have risk. There are many variables that need to be managed to have a successful business and there is lots of uncertainty along the way.

Also the S and P 500 analogy is not really relevant, because the return depends on your holding period.  Take a look at the long term charts and you will see peaks and valleys. If you get in and out at the wrong time substantial losses can occur. If it was so easy everyone would be wealthy.

I am wealthy and can guarantee that the only guarantee I had was that there was risk along the way. I had to struggle to pay for the new water heater just like everyone else. I also guarantee I live a more modest life style than many middle class people. Part of the reason I got wealthy was because I was willing to explore opportunists that many others were not willing to explore .  Then I worked hard and made my own luck.  Even today I still have to take risks, but a business does not stay solid forever, it has to grow or it will die. Hence, risk comes into the equation.

[GGGG]

The vast majority of truly wealthy People have their wealth concentrated in a single company or stock holding. They certainly have risk. There are many variables that need to be managed to have a successful business and there is lots of uncertainty along the way.

Also the S and P 500 analogy is not really relevant, because the return depends on your holding period.  Take a look at the long term charts and you will see peaks and valleys. If you get in and out at the wrong time substantial losses can occur. If it was so easy everyone would be wealthy.

I am wealthy and can guarantee that the only guarantee I had was that there was risk along the way. I had to struggle to pay for the new water heater just like everyone else. I also guarantee I live a more modest life style than many middle class people. Part of the reason I got wealthy was because I was willing to explore opportunists that many others were not willing to explore .  Then I worked hard and made my own luck.  Even today I still have to take risks, but a business does not stay solid forever, it has to grow or it will die. Hence, risk comes into the equation.

Congrats.  Your investment income should still be taxed the same as ordinary income.

[Herman Cain]

Congrats.  Your investment income should still be taxed the same as ordinary income.

Investment Income has already been taxed before it gets to the individual.In effect it is taxed twice  Should be actually be no tax on capital gains as much of the capital gain in many cases is due to inflation and not real return.

 Ordinary income tax rates at all levels are much too high.  Does not reflect the self investment people have made in their own careers. Look at the people in the medical professions who spend hundreds of thousands getting those credentials. I would argue that for the first part of their careers they are just getting a return on capital invesments.

[GGGG]

Investment Income has already been taxed before it gets to the individual.In effect it is taxed twice  Should be actually be no tax on capital gains as much of the capital gain in many cases is due to inflation and not real return.

Nice try but no.

Ordinary income tax rates at all levels are much too high.  Does not reflect the self investment people have made in their own careers. Look at the people in the medical professions who spend hundreds of thousands getting those credentials. I would argue that for the first part of their careers they are just getting a return on capital invesments.

Also no.

People who make investments in careers like medicine, or take risks in the investment markets, reap the benefits with their income.  No need to have lower tax rates give them even more of an advantage.

[ZiggysFryBoy]

Investment Income has already been taxed before it gets to the individual.In effect it is taxed twice  Should be actually be no tax on capital gains as much of the capital gain in many cases is due to inflation and not real return.

 Ordinary income tax rates at all levels are much too high.  Does not reflect the self investment people have made in their own careers. Look at the people in the medical professions who spend hundreds of thousands getting those credentials. I would argue that for the first part of their careers they are just getting a return on capital invesments.

9-9-9, my man!

[dgies9156]

Not exactly what we are arguing here, but let's go back to the core issue -- the media acquisition frenzy. Corporate acquisitions happen because the Board of Directors believe the return to shareholders is higher in an acquisition that returns would be as a stand-alone entity. Pure and simple, that's it.

Whether it is AT&T (which time), Tronc or CBS, the media landscape is changing dramatically. The way most newspapers, for example, generated returns was classified advertising and display. It used to be said that circulation paid the cost of distributing the paper, classified kept the lights on and display made the publisher its return. Except for comparatively small communities, display and classified are largely gone to a more effective and better presentation -- the internet, texting and a host of new technologies.

The corporate sales HAVE to come because the shareholders don't get the rewards from staying independent they do from an acquisition. You can have the government step in, ostensibly on anti-trust grounds, but the barriers to entry in the media world have fallen so much that just about anyone with a PC can publish, film, broadcast or televise. The anti-trust argument is ridiculous on its face.

Some of you can scream about shareholder returns and excess profits (which I think is the underlying theme) but keep in mind that the corporate returns you complain about are what fuel growth in your IRAs/401Ks/SEPs and other investment plans. That corporate growth makes the investments in debt and equity your community makes keep your taxes lower and ensures that if a community is competitive, business, industry and jobs will find it. Unless you want the government dictating returns and moving toward a Swedish model (and be careful of what you want since Sweden is NOT a haven for new corporate investment and job creation), the market must dictate return and people must be paid for generating it.

 

[MU82]

The vast majority of truly wealthy People have their wealth concentrated in a single company or stock holding. They certainly have risk. There are many variables that need to be managed to have a successful business and there is lots of uncertainty along the way.

Also the S and P 500 analogy is not really relevant, because the return depends on your holding period.  Take a look at the long term charts and you will see peaks and valleys. If you get in and out at the wrong time substantial losses can occur. If it was so easy everyone would be wealthy.

I am wealthy and can guarantee that the only guarantee I had was that there was risk along the way. I had to struggle to pay for the new water heater just like everyone else. I also guarantee I live a more modest life style than many middle class people. Part of the reason I got wealthy was because I was willing to explore opportunists that many others were not willing to explore .  Then I worked hard and made my own luck.  Even today I still have to take risks, but a business does not stay solid forever, it has to grow or it will die. Hence, risk comes into the equation.

Congrats on your financial success, seriously.

Still, you didn't really refute a thing I said.

[Spotcheck Billy]

Agreed.

If that investor puts it all in an S&P 500 Index fund or a balanced fund like Wellington, over the long term, he or she will have taken little to no risk.

Even if he or she invests in individual stocks, as long as he or she doesn't take any crazy risks, the market always moves ahead over time.

Not to mention the fact that for the person with $1 billion in assets, even a $500 million loss won't "hurt" him or her. But the person with $20,000 in assets, just having to replace the hot-water heater can result in incredible financial stress.

I never understood why people think they have to heat hot water 

[MU82]

I never understood why people think they have to heat hot water 

I laughed.

And I would have laughed without the teal.

[TSmith34, Inc.]

Investment Income has already been taxed before it gets to the individual.In effect it is taxed twice  Should be actually be no tax on capital gains as much of the capital gain in many cases is due to inflation and not real return.

This is a silly statement but one that has been promoted for a long time.  It's nonsense.  Every dollar earned by anyone has "already been taxed."

I pay income taxes.  When I turn around and pay my car repair bill, should the repair shop's income not be taxed because my income was already taxed?  It is an idiotic claim, but a lot of idiots like to make it anyway.

[NWarsh]

This is a silly statement but one that has been promoted for a long time.  It's nonsense.  Every dollar earned by anyone has "already been taxed."

I pay income taxes.  When I turn around and pay my car repair bill, should the repair shop's income not be taxed because my income was already taxed?  It is an idiotic claim, but a lot of idiots like to make it anyway.

I like this!  To take it a step further, because companies pay their employees with money they earn from their incomes, then my salary should not be taxed because it was already taxed!

[GGGG]

The corporate sales HAVE to come because the shareholders don't get the rewards from staying independent they do from an acquisition. You can have the government step in, ostensibly on anti-trust grounds, but the barriers to entry in the media world have fallen so much that just about anyone with a PC can publish, film, broadcast or televise. The anti-trust argument is ridiculous on its face.
 

Recalling my macroeconomics classes, one of the hardest things to do in anti-trust law is to determine what actually constitutes an "industry."  I think you hit the nail on the head with this one.

[WarriorDad]

Right, because for the truly wealthy, earnings are derived from investment income, which is taxed at substantially lower rates than a paycheck.
Just another way our system allows the rich to get richer at the expense of everyone else.

It is a way to get wealthier, but by no means is it risk free as has been repeated over and over and over again through history.  I'm not suggesting you said that, but it does seem you are only presenting one outcome here.

[WarriorDad]

Congrats.  Your investment income should still be taxed the same as ordinary income.

Disagree strongly.  Ordinary income doesn't carry the risk of investing and investing is the engine of capitalism.  Tim Cook, whom I consider to be a liberal thinker and great CEO would shutter at your comments. 

[theBabyDavid]

The orange cheeto tried to stop AT&T but lost today.

The Crooked Traitor would have extracted a brib...uh...contribution to let it go through.

[GGGG]

Disagree strongly.  Ordinary income doesn't carry the risk of investing and investing is the engine of capitalism.  Tim Cook, whom I consider to be a liberal thinker and great CEO would shutter at your comments. 

Right.  However the rewards to that risk is wealth - not preferential tax treatment.

And I don't give a flying f*ck was Tim Cook thinks on the matter.

[Pakuni]

Disagree strongly.  Ordinary income doesn't carry the risk of investing and investing is the engine of capitalism.  Tim Cook, whom I consider to be a liberal thinker and great CEO would shutter at your comments.

There  literally are dozens of tax and other incentives that reward investment that involves actual risks, such as:
- Tax Increment Financing district funding
- Industrial development bond financing
- Enterprise zones
- Federally or state-backed low-interest loans
- Tax credits for job-creating developments
- Utility incentives
- R&D tax credits
- Local sales and property tax rebates

I could go on and on. If someone or some company wants to invest in a project or company that will stimulate the economy, create new products or create jobs, there are plenty of ways in which they will be rewarded or assisted by our various levels of government for that investment.
Taxing investment income differently than work income doesn't spur growth. It entrenches wealth. These people aren't going to put their millions in coffee cans and bury them in the backyard if the capital gains tax rises. Investment in the capital markets will continue to be the most effective means for them to expand their wealth.

[MU82]

Tim Cook, whom I consider to be a liberal thinker and great CEO would shutter at your comments.

Why would he shut the wooden things that protect windows at those comments?

[WarriorDad]

Why would he shut the wooden things that protect windows at those comments?

I shudder to think why.


It appears Disney has upped the ante again for Fox.