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View Diary: Lottery Winners Taxed More than CEOs (42 comments)

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  •  Right, I just made up all this stuff... (1+ / 0-)
    Recommended by:
    unfangus

    Ok then --- Mitt Romney didn't REALLY pay a 13.9% tax rate on his $20+ million in deferred interest either. Everybody was lying, and the CEOs like Mitt Romney REALLY DO pay the top marginal income tax rates...and we were all lying --- including the IRS --- and Warren Buffett, who was also lying when he said his tax rate was lower than his secretary's. Everybody is lying. The Wall Street Journal was lying when they said more and more CEOs were being paid this way. Forbes is lying, and after stock option grants are vested for one year, they REALLY AREN'T sold and taxed as a long-term capital gains --- but are taxed at the top marginal tax rate. And SWAG investments are also taxed at the top marginal rate...NOBODY is getting a tax break and the Bush take cuts (and the 15% capital gains tax rate) was all one big frigging lie. Stupid me, and to think I believed all those damn liars.

    •  Yep, you are making it up (3+ / 0-)
      Recommended by:
      Balto, johnny wurster, coffeetalk

      None of what you cite has to do with options.

      Romney is taking advantage of the carried interest exception, as well as a loophole (since closed) in the valuation of property contributed to a trust.

      Buffett's tax rate is low because he owns Berkshire-Hathaway stock, not because of options.

      The compensatory portion of an option (or other equity grant) is taxed as ordinary income.  After the equity is taken into income (and taxed at ordinary income rates), subsequent gain is taxed as capital gain.

      So yes, stupid you.

      "Well, I'm sure I'd feel much worse if I weren't under such heavy sedation..."--David St. Hubbins

      by Old Left Good Left on Sun Mar 31, 2013 at 08:45:29 PM PDT

      [ Parent ]

      •  u @hole (1+ / 1-)
        Recommended by:
        unfangus
        Hidden by:
        johnny wurster

        It's my diary and I express my opinion, and whenever possible, I link to my sources of information. If you don't like what I write, why do you bother reading and commenting? Does insulting people give you a hard on? Why do you feel a need to "monitor" my posts and counter anything that I might say? I don't stalk your diary. Frankly, you're starting to sound a little creepy.

        •  Fuck you, Bud (0+ / 0-)

          What makes you think you're worthy of being stalked?

          You write a shit diary, make a few stupid posts, and you think you're immune from criticism?

          "Well, I'm sure I'd feel much worse if I weren't under such heavy sedation..."--David St. Hubbins

          by Old Left Good Left on Sun Mar 31, 2013 at 09:43:07 PM PDT

          [ Parent ]

    •  Mitt Romney and Warren Buffett (1+ / 0-)
      Recommended by:
      johnny wurster

      are not typical CEOs. Romney ran a Private Equity fund and his carried interest was taxed at long term capital gains rates. Romney had no stock options. Buffet is a founder of Birkshire Hathaway and owns founders shares, some of which he has held for decades. When he sells his shares they qualify for long term capital gains treatment, because he owns shares, not options. Buffett has had a salary of $100,000 for twenty five years, so his W2 income is an insignificant part of his total income.

      The value of a stock option that vests in one, or the more common four years, is taxed at ordinary income rates each year it is vesting. When vested if the executive exercises the option the difference between the taxable income that has become his basis and the current market price is taxed as W2, ordinary income. The executive now has a new basis at the current market price and all of the economic benefit has been taxed at the top marginal, earned income rate. At that point the executive has the same basis as you would, had you purchased shares in the open market on the same day the executive exercised his option grant. If that executive, or you, then held that stock for a year and sold it, the difference between the price on the day of exercise or your purchase, would be taxed at long term capital gains rates. Once exercised the executive becomes an ordinary shareholder subject to the same tax provisions as any other shareholder. However, all of his economic gain up to that point has been taxed at earned income rates.

      I have received non-qualified stock options, granted non-qualified stock options, been the chairman of the compensation committee of several public companies, and have consulted the best tax lawyers and accountants in the US on this topic. If non-qualified stock options could be structured to generate long term capital gains income I would have done it many times. PLEASE stop writing that senior executives in Fortune 1000 companies have their equity awards taxed at long term capital gains rates. IT IS NOT TRUE.

      "let's talk about that"

      by VClib on Sun Mar 31, 2013 at 09:00:16 PM PDT

      [ Parent ]

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