Posts filed under “Taxes and Policy”

What if You Were the World’s Greatest Trader® ?

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My Sunday Washington Post business section column is out. This morning, we look at the impact of taxes on personal trading accounts. The print version used the headline A harsh reality for all you stellar
active traders; the online version is So you’re the world’s greatest trader? Taxes will fix that.

The bottom line is that even a 40% gain over broad indices is insufficient to beat the taxman’s short term 30% bite.

Here’s an excerpt from the column:

“Imagine that 24 years ago, your best friend invested $10,000 in the S&P 500 and held on through last year. He would have amassed $76,266. That number includes taxes paid annually on whatever dividends came his way at the highest taxable bracket.

Compare that with you, the World’s Greatest Trader. Had you put that $10,000 into a trading account that same year and annually crushed the S&P 500 by 400 basis points, you would have amassed an after-tax return of only $69,197.

In other words, your passive-index buddy would have beaten you, the World’s Greatest Trader, by about 10 percent. (Note that I am ignoring all of your trading costs.)”>

The post included the spreadsheet we used to test this.  A screen grab is below, or you can download this and play with it yourself.

trader tax.xls
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click for ginormous version of print edition
spread

 

 

Source:
So you’re the world’s greatest trader? Taxes will fix that
Barry Ritholtz
Washington Post, July 27 2014 
http://wapo.st/1xjB4kW

Category: Investing, Taxes and Policy

The Global Retirement Dilemma

Source: Bloomberg Visual Data

Category: Taxes and Policy

How Fat is the Top Tail of the Wealth Distribution?

Category: Taxes and Policy, Think Tank, Wages & Income

Scotus / Potus Fail

Source: Gallup   Last month, we noted how Congress reached a record low in confidence from the American people. (I blamed you, the non-voting public for allowing the inmates to take over the asylum and turning this into the worst. congress. ever.) As it turns out, it’s not just Congress: Confidence hit a six-year low…Read More

Category: Legal, Taxes and Policy

Freeriding Corporations Need to Pay their Fair Share

Allan Sloan, editor-at-large for Fortune magazine, is angry. And with good reason: He is upset at a lot of U.S. corporate executives who are engaging in “inversion.” This is the process of moving the location of incorporation to a tax haven and skipping out on paying U.S. taxes (short list here). Even though the company…Read More

Category: Corporate Management, Taxes and Policy

Corporate America = UnAmerican

Today’s must read comes to us from Fortune, where editor at large Allan Sloane rails against “Positively un-American tax dodges.” Its your must read for today.     Let’s see if the our elected representatives can manage to stop behaving like 10 year olds long enough to resolve this.  

Category: Corporate Management, Economy, Really, really bad calls, Taxes and Policy

Inequality and Growth

Category: Economy, Investing, Taxes and Policy, Think Tank, Wages & Income

Category: Taxes and Policy, Think Tank

Why Does US Cell Phone Service Suck?

Yesterday on my commute to work, I became annoyed with the spotty coverage and slow connection provided by Verizon Wireless. I tweeted my frustration. Imagine my surprise when AT&T’s social networking Tinkerbell responded to me: “Connect when and where you want with our reliable 4G LTE!” I found that amusing. The reason I switched to…Read More

Category: Really, really bad calls, Regulation, Taxes and Policy, Technology

Why the federal gas tax is too low

Source: WonkBlog

Category: Energy, Taxes and Policy