query: Bed and Breakfast, Same Day Capital Gains UK

positive: The 'same day rule' in the UK is a rule for matching purposes only.  It says that sales on any day are matched firstly with purchases made on the same day for the purposes of ascertaining any gain/loss. Hence the phrase 'bed-and-breakfast' ('b&b') when you wish to crystalise a gain (that is within the exempt amount) and re-establish a purchase price at a higher level.  You do the sale on one day, just before the market closes, which gets matched with your original purchase, and then you buy the shares back the next day, just after the market opens.  This is standard tax-planning.  Whenever you have a paper gain, and you wish to lock that gain out of being taxed, you do a bed-and-breakfast transaction, the idea being to use up your annual exemption each and every year.  Of course, if your dealing costs are high, then they may outweigh any tax saved, and so it would be pointless. For the purpose of an example, let's assume that the UK tax year is the same as the calendar year. Scenario 1. Suppose I bought some shares in 2016, for a total price of Stg.50,000. Suppose by the end of 2016, the holding is worth Stg.54,000, resulting in a paper gain of Stg.4,000. Question.  Should I do a b&b transaction to make use of my Stg.11,100 annual exemption ? Answer.  Well, with transaction costs at 1.5% for a round-trip trade, suppose, and stamp duty on the purchase of 0.5%, your total costs for a b&b will be Stg1,080, and your tax saved (upon some future sale date) assuming you are a 20% tax-payer is 20%x(4,000-1,080) = Stg584 (the transaction costs are deductible, we assume).  This does not make sense. Scenario 2. The same as scenario 1., but the shares are worth Stg60,000 by end-2016. Answer.  The total transaction costs are 2%x60,000 = 1,200 and so the taxable gain of 10,000-1,200 = 8,800 would result in a tax bill of 20%x8,800 = 1,760 and so the transaction costs are lower than the tax to be saved (a strict analysis would take into account only the present value of the tax to be saved), it makes sense to crystalise the gain.  We sell some day before the tax year-end, and re-invest the very next day. Scenario 3. The same as scenario 1., but the shares are worth Stg70,000 by end-2016. Answer.  The gain of 20,000 less costs would result in a tax bill for 1,500 (this is: 20%x(20,000 - 2%x70,000 - 11,100) ).  This tax bill will be on top of the dealing costs of 1,400.  But the gain is in excess of the annual exemption.  The strategy is to sell just enough of the holding to crystallise a taxable gain of just 11,100. The fraction, f%, is given by: f%x(70,000-50,000) - 2%xf%x70,000 = 11,100 ... which simplifies to: f% = 11,100/18,600 = 59.68%. The tax saved is 20%x11,100 = 2,220, versus costs of 2%x59.58%x70,000 = 835.52. This strategy of partial b&b is adopted because it never makes sense to pay tax early ! End.

negative: We get the best offer to our customer different accommodation in Cuba. You can choose what is the best your business services. Holiday rentals, Vacation rentals, Casa particular, and Bed and Breakfast in Cuba. We offer more than 25 destinations because Cuba is more than just Havana and vinales. If you want to really get to know Cuba you should choose one of our accommodations, especially the casa particular in Cuba.

negative: These 'issues' don't exclusively relate to the 'sharing economy', the challenge of uncertainty would exist for any small business / independent contractor. It's not as if people didn't work as independent contractors in these industries before, it's just now the industries are being enhanced and overhead lowered, from technology.  For example:  Uber driver vs Medallion [Leasing] Taxi Driver  AirBNB landlord vs Apartment landlord, vacation rental landlord, or traditional bed & breakfast owner.  PostMates messenger vs traditional bike messenger

negative: All else being equal I wouldn't object to zero capital gains tax. Except not all else is equal. The differential between earned income and capital gains is enormous. This is more than enough to drive huge sums of money out of incomes and into capital gains. Private equity funds provides the simplest and most legal means of accomplishing this. There are more legally questionable methods, though not challenged at this time, involving carried interest.  Let's say an employer has $1 they can choose to pay an employee or divert it into capital gains. If the effective tax rate that employee pays is 40% that leaves 60 cents going to that employee and doesn't even count the other cost of that employee through unemployment insurance, etc. If they divert it then at the top rate it becomes 85%. So, even without other cost considerations that becomes a 25% surcharge on treating it as wages. More than enough incentive freezing out wages as much as possible in favor of capital gains. Which is occurring on a large scale.   So let's get back to the issues faced by granny selling her house. You say it's unfair for granny to pay 35% as opposed to 15% on the capital gains. Yet is it any more unfair than granny paying 35% on her earned income all those years she paid for the house? Wouldn't she be much better off if all those years she paid less on her earned income, at the expense of paying more on her capital gains, all with essentially the same overall federal tax receipts? So in essence you are arguing that she should be screwed less on her one time capital gains in favor of screwing her many many times that amount over the years leading up to that sale. Ouch.  So let's look at the difference between capital gains and income at the investor level. You have a wage earner that gets out of bed every morning and works at the beckoning of someone else daily. We'll suppose they are it the 35% tax bracket, under $400k. Is it more fair to charge them 35% than it it the person who invested their money and gets their paycheck while watching I Love Lucy reruns? I know it's almost never that easy but really, if working 40 or 80 or even 100 hours per week doesn't deserve the same break how do you justify it for the person who simply purchased their future income? Labor is after all hired to help produce capital goods. How is their contribution to those capital goods not part and parcel to the capital gains?  Even with these issues I still wouldn't have such a problem if markets, including wage and capital ratios, acted independently of these effective tax rates. But that notion is absurd, even if doing so require some illegal maneuvers. Which in many cases do not.   So yeah, I find your argument to be specious and quiet arbitrary at every level.

negative: Ofc it's for cost. Either better cost but lower talent or better cost and same talent.  That's my point for Ricardian theory.  At 4 percent, its hard to say many are out of jobs. Perhaps they are holding out for higher salary than what market thinks they deserve.  Regardless, there is nothing wrong with companies looking for lower cost. That's capitalism and that's what allows you to have better breakfast than kings did pre industrial.

negative: Seems that Europe is pretty sick and on it's death bed (both economically and morally; which for some reason these tend to be treated as separate entities these days)...   I've heard that a specter is haunting it's inner chambers, has been for some time, the specter of global capitalism (dead labour sucking the life out of living labour)

negative: my nine year old will pretty much have a tantrum if told he has to eat there (usually only at the airport for breakfast). He was iffy on the whole concept until one day when i got him a pancake sausage muffin breakfast thingy... it sealed the deal. He wouldn't even go for the lego movie themed cups after that.

negative: "At that point I was between relationships, and not really looking for one, so there was no ""spot formerly known as 'wet'"" to sleep in. I don't know if she ate breakfast or not. She would still be asleep when I left for the rec center at 6AM, then off to breakfast and class.   My friend who lived down the hall ""Bret the Voice"" noticed and would sometimes come over to hang out for a bit when she came over. We'd kick him out when it was time to sleep though.  It was a Cali-king sized bed I made from lashing two long twins together. Flannel sheets during the winter and lounging pillows on the floor made my dormroom The Place to hangout for my friends. Everyone called it ""The Bed of Lounging"". Every once in a while we'd have 4-5 people sleeping in it after a raucous weekend night.  No snoring I recall. I would fall asleep first and was the big spoon. I've never been able to sleep face-to-face with anyone, including my wife of 16 years.   The arrangement came to a halt when Bret the Voice and I moved out of the grad dorm the next year for a apartment off campus. Pam came over a few times to sleep, but not often because she couldn't just walk across campus. She had to drive. And by that time I was starting to get serious with a young lady from my art classes who was the most beautiful girl I'd ever been out with.  That's when I got a waterbed. They wouldn't let me put one in the dorm, even though I was on the ground floor. I asked..."

negative: But its not spare capacity. Lots of AirBNB owners are renting tons of properties, making scarcity worse.  Case in point, it can cost $50-$100 per person to AirBNB a bed for a night. That means anywhere less than $1,500 is good for profit making. It's even better when they rent out beds, which means they'll stack a room in a large house with 3 beds each. I've been to AirBNB locations where 14 people were individually renting. AirBNB person rented a dozen properties and spent all day and night cleaning. Pulled in six figures.

negative: I think Starbucks makes it difficult for Burger Places.  Years ago it was unheard of to spend 4 or 5 bucks on a drink.  Now Starbucks is taking fast food places out of the market unless they have something light, or that at least taste light. So a person can  feel comfortable eating at a Burger joint and still purchase Starbucks drink later in the day or vice versa.  Also, all the other fast food restaurants have been molasses like slow to breakfast. Fast food chains in the future need to carve the brand out of breakfast and prominent light tasting options. And they should be able to take some of Subways and Starbucks market share.

negative: For a long time, I thought that all the nice things that I live with I could only have because other people somewhere in the world went with less. That I had a nice life only because through magical economy and forced servitude, someone else had a bad life. Then I heard the parable of specialization.  There are 3 people. Alice is a farmer, Bob is a farmer, and Charlie is a candlestick maker. Every person needs to eat 1 potato and 1 egg every day to live. There is no money.  Alice has always had a knack for making eggs, and trained herself to become even better. Bob has a nice field with fertile soil, and so is quite good at making potatoes. Alice spends her morning making 2 eggs, and her afternoon making 1 potato, while Bob uses his morning to make 1 egg, and his afternoon to make 2 potatoes.  In the evening, Alice brings her 1 extra egg to Charlie, trades it for a 1-hour candle, goes back home to eat her 1 egg and 1 potato, and read her book for an hour before going to bed. Bob does the same thing, except he trades his 1 extra potato for a 1-hour candle. Charlie can make 1 1-hour candle in the morning, and 1 1-hour candle in the afternoon. He eats the 1 egg and 1 potato he got, and goes to bed.  One day, Alice and Bob meet at their fence, and talk about the books they're reading and how they can only read for 1 hour each night, and how much food they each produce. Then they get an idea and agree on a new plan.  Now, Alice spends her morning making 2 eggs, and her afternoon making 2 eggs, for a total of 4 eggs every day. Bob starts making potatoes only, and makes 4 every day. At the end of the day, Alice gives Bob 1 egg, in exchange for 1 potato. Alice then brings her 2 extra eggs to Charlie, and Bob brings his extra 2 potatoes. Charlie now starts getting 2 eggs and 2 potatoes every day. So he gets a lovely wife, Daniel, from the next county over, and trains her to make 1-hour candles. She's just as good as Charlie, and makes 2 per day.  So now, Alice gets 2 1-hour candles for her 2 extra eggs, and reads for 2 hours every night before bed. She's happy. Bob also gets 2 1-hour candles for his 2 extra potatoes, and reads for 2 hours before bed. He's also happy. Charlie uses the 2 eggs and 2 potatoes he gets to feed himself and Daniel every day, and Charlie and Daniel play in bed every night. Charlie and Daniel are happy.  And so, because of specialization, we start with 3 unhappy people, and end with 4 happy people and 0 unhappy people. Good lives can be gotten without making other people suffer.

negative: One bedding material that everyone totally loves is the bed cover as it makes your bedding tasks easier. You just need to spread it over the bedding and you will be done. Be that as it may, you can likewise do this with a great duvet cover.

negative: Based on my research, the answer is both. You would pay taxes on the bitcoin you mine as income, and then capital gains tax when you sell them for a profit (or capital loss if you lose value on the sale).  You can write off a portion of your electricity bill and hardware purchased for the use of mining as a business expense, but it's recommended that you consult a tax professional for determining the proper amount that is eligible for a deduction.  From Forbes: New Bitcoin are being issued by the system roughly every 10 minutes by   a process called mining. In mining, computers running the Bitcoin   software around the world attempt to solve math problems and the first   computer to come up with the solution adds the most recent   transactions to the ledger of all Bitcoin transactions, plus receives   the new bitcoins created by the system, called the block reward. If you are a miner and win the block reward, you must record the fair   market value of Bitcoin that day and mark that as an addition to your   personal or business income. Also note the date and timestamp at which   your coins were mined. Later, when you dispose of those Bitcoin, you   will subtract the date of acquisition from the date of disposal, and   you will be taxed a long-term capital gains rate on any Bitcoin you   held for more than a year, and a short-term capital gains rate on any   Bitcoin you held for a year or less. (The timestamp isn’t absolutely   necessary, but is helpful to validate the order of multiple   acquisitions or disposals within a day.) The amount you pay in taxes on a long-term capital gain will depend on   your income-tax bracket, while short-term capital gains are taxed the   same as ordinary income. From bitcoin.tax:  Another clarification in the IRS's March notice was how mining should   be treated. Mining is income, on the day of receipt of any coins and   at the fair value of those coins. This means that if you mined any   Bitcoins or alt-coins either solo, as part of a pool, or through a   cloud provider, you need to report any coins you received as income. Where it is less clear, is what that dollar value might be, since the   fair value is not always as easy to determine.  Bitcoins, Litecoins,   Dogecoins, are all examples of where there is a direct USD market and   so you can easily find out their value of any given day. However, a   newly created alt-coin that was mined in its early days has no direct   market and so how do you determine its value? Or for any alt-coin,   e.g. ABC coin, that has no direct USD market but does have a BTC   market. Does it have a value? Do you have to make a conversion from   ABC to BTC to USD?  Since there is no clarification yet from the IRS on   this issue you should discuss how to proceed with your own tax   professional. BitcoinTaxes has taken a prudent approach and calculates   value where a fiat or BTC market exists, converting an alt-coin to BTC   to USD as necessary. And from Bitcoin magazine: The IRS also stated mined bitcoins are treated as immediate income at   the market value of those mined coins on their date of mining. “Most don’t know they can write off any losses they have,” said Libra   founder Jake Benson. “The IRS allows you to offset income by up to   $3,000 per year on capital losses.  If you have losses and you aren’t   writing them off, then it’s like throwing money away. Nobody likes   doing taxes, but if you can owe less or increase your return, then   doing your Bitcoin taxes often results in a benefit. In fact, the   majority of our users are filing a capital loss, which means they’ve   actually saved money by using our tool.”  Benson also gives insight for miners.  “Mining is considered income, so know the price of Bitcoin at the time   you mined it,” he said. “If you make money on Bitcoin trading, the IRS   requires that you report gains with line level detail.”  The   appropriate form for that is 8949, a sub-form of schedule D. Gains and   losses, as outlined above, are treated like every other capital asset.

negative: "I'd agree that this can seem a little unfair, but it's an unavoidable consequence of the necessary practicality of paying out dividends periodically (rather than continuously), and differential taxation of income and capital gains. To see more clearly what's going on here, consider buying stock in a company with extremely simple economics: it generates a certain, constant earnings stream equivalent to $10 per share per annum, and redistributes all of that profit as periodic dividends (let's say once annually). Assume there's no intrinsic growth, and that the firm's instrinsic value (which we'll say is $90 per share) is completely neutral to any other market factors. Under these economics, this stock price will show a ""sawtooth"" evolution, accruing from $90 to $100 over the course of a year, and resetting back down to $90 after each dividend payment. Now, if I am invested in this stock for some period of time, the fair outcome would be that I receive an appropriately time-weighted share of the $10 annual earnings per share, less my tax. If I am invested for an exact calendar year, this works as I'd expect: the stock price on any given day in the year will be the same as it was exactly one year earlier, so I'll realise zero capital gain, but I'll have collected a $10 taxed dividend along the way. On the other hand, what if I am invested for exactly half a year, spanning a dividend payment? I receive a dividend payment of $10 less tax, but I make a capital loss of -$5. Overall, pre-tax, I'm up $5 per share as expected. However, the respective tax treatment of the dividend payment (which is classed as income) and the capital gains is likely to be different. In particular, to benefit from the ""negative"" taxation of the capital loss I need to have some positive capital gain elsewhere to offset it - if I can't do that, I'm much worse off compared to half the full-year return. Further, even if I can offset against a gain elsewhere the effective taxation rates are likely to be different - but note that this could work for or against me (if my capital gains rate is greater than my income tax rate I'd actually benefit). And if I'm invested for half a year, but not spanning a dividend, I make $5 of pure capital gains, and realise a different effective taxation rate again. In an ideal world I'd agree that the effective taxation rate wouldn't depend on the exact timing of my transactions like this, but in reality it's unavoidable in the interests of practicality. And so long as the rules are clear, I wouldn't say it's unfair per se, it just adds a bit of complexity."

negative: The Gordon equation does not use inflation-adjusted numbers. It uses nominal returns/dividends and growth rates. It really says nothing anyone would not already know.  Everyone knows that your total return equals the sum of the income return plus capital gains.   Gordon simply assumes (perfectly validly) that capital gains will be driven by the growth of earnings, and that the dividends paid will likewise increase at the same rate. So he used the 'dividend growth rate' as a proxy for the 'earnings growth rate' or 'capital gains rate'. You cannot use inflation-removed estimates of equity rates of return because those returns do not change with inflation.  If anything they move in opposite directions.  Eg in the 1970's inflation the high market rates caused people to discount equity values at larger rates --- driving their values down -- creating losses.

negative: Having a very high payout ratio is fine if there aren't any sensible investments available for the company, and citi already had their payout ratio somewhere in the 80% range.   The remaining excess is from them reducing the capital bed they were required to hold for the stress tests; cash that was essentially sitting around doing nothing.  [WSJ link](https://www.wsj.com/articles/BT-CO-20170628-711143) for u/LupusSuperius

negative: You can explain things in more detail with more thorough examples, links, references and diagrams on your site. This question just happened to be something I was thinking about recently.  You could also cover the tax consequences of capital gains on tax-free bonds, since I expect they are treated the same as other capital gains (short-/long-term) and are not tax-free.  Edit: My additional explanation of why municipal bonds are tax free in addition to federal bonds is clunky, perhaps you can approach it more concisely.

negative: Yes, you could avoid capital gains tax altogether, however, capital gains are used in determining your tax bracket even though they are not taxed at that rate.  This would only work in situations where your total capital gains and ordinary income kept you in the 0% longterm capital gains bracket. You can't realize a million dollars in capital gains and have no tax burden due to lack of ordinary income. You can potentially save some money by realizing capital gains strategically. Giving up income in an attempt to save on taxes rarely makes sense.

negative: In the US, the key to understanding the benefits of retirement accounts is to understand capital gains taxes and how they work. Retirement accounts are designed for making investments throughout your career, then after several decades of contributions, withdrawing that money to pay for your needs when your full-time employment has concluded. Normally when you invest money in a brokerage account, if the value of your investment increases, and you sell in less than a year, those investments are considered short-term gains and taxed as ordinary income. If you hold that same investment for over a year, the same investment is taxed at a lower capital gains rate (depending on which tax bracket you are in during that year, the amount due could be up to 20%, but much lower than your regular income tax rate). When you place your money in a retirement account, you are choosing to either pay the tax due on the income when you put it in the account, or put the money in tax free and pay the tax when you withdraw (these are called tax-deferred accounts). When you have money invested several decades, the raw dollar amount increases greatly, but inflation is also reducing the value of those dollars. Imagine you bought some bonds that payed 4% over 40 years, but inflation was 2% during those same years. When you sell those bonds 40 years later, you will owe capital gains on the entire gain even though half of the gain came from inflation. Retirement accounts allow you to buy and sell according to your investment needs and goals without any consideration about whether the gains are short-term or long-term, and they also allow you to pay taxes just once, either when you put it in, or when you take it out, with no worries about whether you're paying taxes on inflated gains.

negative: "PC Police in America would eat your shit for breakfast.  That is very offensive, yet historical term, to about .001% of our population.    However, our media will run with it instead of talking about actual issues until congress ""leap frogs"" real legislation (lol congress and real legislation in the same sentance) or they will use a back door channel to eliminate its use...see Washington Redskins."

negative: This is really an extended comment on the last paragraph of @BenMiller's answer. When (the manager of) a mutual fund sells securities that the fund holds for a profit, or receives dividends (stock dividends, bond interest, etc.), the fund has the option of paying taxes on that money (at corporate rates) and distributing the rest to shareholders in the fund, or passing on the entire amount (categorized as dividends, qualified dividends, net short-term capital gains, and net long-term capital gains) to the shareholders who then pay taxes on the money that they receive at their own respective tax rates. (If the net gains are negative, i.e. losses, they are not passed on to the shareholders. See the last paragraph below).  A shareholder doesn't have to reinvest the distribution amount into the mutual fund: the option of receiving the money as cash always exists, as does the option of investing the distribution into a different mutual fund in the same family, e.g. invest the distributions from Vanguard's S&P 500 Index Fund into Vanguard's Total Bond Index Fund (and/or vice versa). This last can be done without needing a brokerage account, but doing it across fund families will require the money to transit through a brokerage account or a personal account. Such cross-transfers can be helpful in reducing the amounts of money being transferred in re-balancing asset allocations as is recommended be done once or twice a year. Those investing in load funds instead of no-load funds should keep in mind that several load funds waive the load for re-investment of distributions but some funds don't: the sales charge for the reinvestment is pure profit for the fund if the fund was purchased directly or passed on to the brokerage if the fund was purchased through a brokerage account. As Ben points out, a shareholder in a mutual fund must pay taxes (in the appropriate categories) on the distributions  from the fund even though no actual cash has been received because the entire distribution has been reinvested. It is worth keeping in mind that when the mutual fund declares a distribution (say $1.22 a share), the Net Asset Value per share drops by the same amount (assuming no change in the prices of the securities that the fund holds) and the new shares issued are at this lower price. That is, there is no change in the value of the investment: if you had $10,000 in the fund the day before the distribution was declared, you still have $10,000 after the distribution is declared but you own more shares in the fund than you had previously. (In actuality, the new shares appear in your account a couple of days later, not immediately when the distribution is declared).  In short, a distribution  from a mutual fund that is re-invested leads to no change in your net assets, but does increase your tax liability. Ditto for a distribution that is taken as cash or re-invested elsewhere. As a final remark, net capital losses inside a mutual fund are not distributed to shareholders but are retained within the fund to be written off against future capital gains. See also this previous answer  or this one.

negative: You've never saved money?  Have you ever bought anything?  There probably was a small window of time that you had to pool some cash to buy something.    In my experience, if you make it more interesting by 'allocating money for specific purposes' you'll have better results than just arbitrarily saving for a rainy day.    Allocate your money for different things (ie- new car, emergency, travel, or starting a new business) by isolating your money into different places.  Ex- your new car allocation could be in a savings account at your bank.   Your emergency allocation can be in cash under your bed.   Your new business allocation could be in an investment vehicle like a stocks where it could potentially see significant gains by the time you are ready to use it.    The traditional concept of savings is gone.  There is very little money to be earned in a savings account and any gains will be most certainly wiped out by inflation anyway.  Allocate your money, allocate more with new income, and then use it to buy real things and fund new adventures when the time is right.

negative: More likely I miswrote.  Yes, we're talking about capital gains.  But who, outside of the moneyed elite, have enough capital gains to incur substantial taxes?  Many don't and never will despite how hard they work or how productive they are.  Also, doesn't taxing income more than capital gains discourage production?  I always hear how high capital gains tax discourages investment and growth.

negative: I wouldn't focus too much on dividends itself; at the end of the day what matters is total gain, because you can convert capital gain into income by selling your assets (they have different tax implications, but generally capital gains tend to be more tax efficient).    I think the more important question is how much volatility you can tolerate. Since your investment horizon is short & your risk tolerance is low (as in if you suddenly get much lower income than you planned from your investment you'll be in trouble), you probably want assets that have low volatility.   To achieve that, I'd consider the following if I were you: tl;dr If I were you I'd just hold a general investment portfolio with a lower risk profile rather than focusing on dividend generating assets.

negative: "With regards to ""the stock market,"" there are actually two markets involved here: PRIMARY MARKET Value is created in the primary market where capital is exchanged for a residual interest in an opportunity.  As a theoretical example, if a person operating solo (or with a small team) were to discover or create a breakthrough product, such as an retro-aging pill, that person likely wouldn't have the financial means to fully capitalize on his new-found idea.  Others with more capital may also soon discover his idea or improve upon it and exploit it before he has a chance to. For a real life example, a person studying at a California university during the 1990s discovered a method to index internet webpages and was approached by some students after a talk on the subject.  He returned to his native southern Europe country seeking funds to develop the web-indexing business and failed to do so.  Two of the students that approached him found capital readily available from investors in their campus sphere; their business is today one of the biggest in the world.  They had exchanged part of their residual interest for capital to develop their business. The primary market of the stock market works mostly same in creating value.  It is also dependent upon the secondary market. SECONDARY MARKET The secondary market indicates the day-to-day value of an enterprise.  That market allows shareholders to manage their risk appetites and the enterprise's operators to execute their shareholders' interest for gains.  In most cases, a secondary market reference will be used for pricing a primary market issuance.  Without that reference, capital would be allocated less efficiently creating additional costs for all involved, issuers and investors. Consider what would happen if you sought to purchase a house and the mortgage lenders had no indication what the property was worth.  This would make capital very expensive or possibly deny you access to credit.  By having an indication, all involved are better off.  That is value creating. There are some large developed economies' equity markets, such as that in Germany, where many large enterprises stay privately held and credit financing, mostly from banks, is used.  The approach has proven successful as well. So why do some nations' financial markets still rely on capricious stock markets when private credit financing may do just fine in many cases?  It's largely a matter of national culture.  Countries such as the Netherlands, the UK and the US have long had active equity markets in continuous use that investors have trusted for centuries. CONCLUSION When leaders of an enterprise wish to grow the business to a large size with investment from the stock market, they aren't limited by the size of their banks' capital.  Those leaders and their prospective investors will rely on the secondary market to determine values.  In addition, if the leaders raise equity instead of debt capital, they are usually accorded more flexibility to take risks since shareholders usually have their own flexibility to transfer those risks to other investors if for any number of reasons they choose to do so. Stock markets create value in many other ways.  The above are the main ways."

negative: Sure, all the income gains have gone to the top, along with gains in wealth from capital appreciation. However, the Fed's expansion of money supply doesn't change that one way or the other.   I suspect the root issue here is the erosion of wages by automation, which concentrates wealth and income among the elite. The Fed can't fight that alone, but Congress won't touch it as they depend on the same elite for campaign funding and TV exposure.

negative: Being from a working class background l found tipping repulsive but I can see benefits after seeing more and eating out with age but one thing still pisses me off: how unfair it is that breakfast and lunch servers get lesser tips while those overpriced dinner places get so much more tips for servers who work even less than the breakfast wait staff.

negative: > You also have to think about tax on dividends from these stock options, which is only 15%, which is paltry to regular incometax rate that the rich pay on their salaries  dividends is just cash being removed from companies and being paid out directly to the stockholder  if dividends get taxed at a higher rate, every company would just use that same cash to buy back shares since that would be more tax efficient - the stockholder would receive compensation in higher stock prices which they could then sell instead of receiving a dividend. Thus, they would pay capital gains rate instead of your new dividend rate.  The dividend rate must be the same as capital gains rate for this reason. They are not free money since the stock price gets decreased when a dividend is paid out - the company gets poorer when they pay out the dividend.

negative: Compared to most places in the suburbs, their coffee's actually come a long ways.  But yeah, their burgers are terrible on their own level. Just soft, greasy, mushy things that people who don't eat there on a regular basis almost unanimously agree make them nauseous after eating.  Not to mention the smell and the grease all over the bags and boxes of everything there. As for the breakfast, it's edible, but it says something when even an egg sandwich looks and tastes like overly processed unnatural garbage.  In new england most gas stations have some kind of grill inside. I don't know if I'd trust their burgers and such, but as for breakfast sandwiches, they're fresh, not microwaves, and it's a real egg cooked on a grill that blows mcdonalds or even dunkin donuts out of the water when it comes to breakfast.  But aside from that, there's been a pushback against this proud unhealthy eating because 'merica. I'm not surprised by this at all.

negative: Suppose that the ETF is currently at a price of $100.  Suppose that the next day it moves up 10% (to a price of $110) and the following day it moves down 5% (to a price of $104.5).  Over these two days the ETF has had a net gain of 4.5% from its original price. The inverse ETF reverses the daily gains/losses of the base ETF.  Suppose for simplicity that the inverse ETF also starts out at a price of $100.  So on the first day it goes down 10% (to $90) and on the second day it goes up 5% (to $94.5).  Thus over the two days the inverse ETF has had a net loss of 5.5%. The specific dollar amounts do not matter here.  The result is that the ETF winds up at 110%*95% = 104.5% of its original price and the inverse ETF is at 90%*105% = 94.5% of its original price.  A similar example is given here. As suggested by your quote, this is due to compounding.  A gain of X% followed by a loss of Y% (compounded on the gain) is not in general the same as a loss of X% followed by a gain of Y% (compounded on the loss).  Or, more simply put, if something loses 10% of its value and then gains 10% of its new value, it will not return to its original value, because the 10% it gained was 10% of its decreased value, so it's not enough to bring it all the way back up.  Likewise if it gains 10% and then loses 10%, it will go slightly below its original value (since it lost 10% of its newly increased value).

negative: "Many individual states, counties, and cities have their own income taxes, payroll taxes, sales taxes, property taxes, etc., you will need to consult your state and local government websites for information about additional taxes that apply based on your locale. Wages, Salaries, Tips, Cash bonuses and other taxable employee pay, Strike benefits, Long-term disability, Earnings from self employment Earned income is subject to payroll taxes such as: Earned income is also subject to income taxes which are progressively higher depending on the amount earned minus tax credits, exemptions, and/or deductions depending on how you file. There are 7 tax rates that get progressively larger as your income rises but only applies to the income in each bracket. 10% for the first 18,650 (2017) through 39.6% for any income above 470,700. The full list of rates is in the above linked article about payroll taxes. Earned income is required for contributions to an IRA. You cannot contribute more to an IRA than you have earned in a given year. Interest, Ordinary Dividends, Short-term Capital Gains, Retirement income (pensions, distributions from tax deferred accounts, social security), Unemployment benefits, Worker's Compensation, Alimony/Child support, Income earned while in prison, Non-taxable military pay, most rental income, and S-Corp passthrough income Ordinary income is taxed the same as earned income with the exception that social security taxes do not apply. This is the ""pure taxable income"" referred to in the other linked question. Dividends paid by US Corporations and qualified foreign corporations to stock-holders (that are held for a certain period of time before the dividend is paid) are taxed at the Long-term Capital Gains rate explained below. Ordinary dividends like the interest earned in your bank account are included with ordinary income.  Stocks, Bonds, Real estate, Carried interest -- Held for more than a year Income from assets that increase in value while being held for over a year. Long term capital gains justified by the idea that they encourage people to hold stock and make long term investments rather than buying and then quickly reselling for a short-term profit.  The lower tax rates also reflect the fact that many of these assets are already taxed as they are appreciating in value. Real-estate is usually taxed through local property taxes. Equity in US corporations realized by rising stock prices and dividends that are returned to stock holders reflect earnings from a corporation that are already taxed at the 35% Corporate tax rate. Taxing Capital gains as ordinary income would be a second tax on those same profits. Another problem with Long-term capital gains tax is that a big portion of the gains for assets held for multiple decades are not real gains. Inflation increases the price of assets held for longer periods, but you are still taxed on the full gain even if it would be a loss when inflation is calculated. Capital gains are also taxed differently depending on your income level. If you are in the 10% or 15% brackets then Long-term capital gains are assessed at 0%. If you are in the 25%, 28%, 33%, or 35% brackets, they are assessed at 15%. Only those in the 39.6% bracket pay 20%. Capital assets sold at a profit held for less than a year Income from buying and selling any assets such as real-estate, stock, bonds, etc., that you hold for less than a year before selling. After adding up all gains and losses during the year, the net gain is taxed as ordinary income. Collectibles held for more than a year are not considered capital assets and are still taxed at ordinary income rates."

negative: "There is also the aspect of [time taken during the day to eat.](https://www.forbes.com/sites/tombarlow/2011/04/15/americans-cook-the-least-eat-the-fastest/#3428a01f4162)  (Note:  Article from 2011.  I mean this overall message as a ""this is also a factor."")  Full breakfast?  No time, need to get to work, will grab drive through and a coffee on the way.  Lunch?  Half an hour?  If you don't take something from home (and who WANTS to take the time after work to make up tomorrow's meal,) you need something close and easy to wolf down.  Supper?  Ugh, so worn out from the day.  If a person doesn't even want to make up tomorrow's lunch, why go through complicated tonight."

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