Money is called capital. America is great because under capitalism, businesses are started that create jobs and technology which helps around the world. People with ideas who are willing to work extremely hard are able to get capital (money) to start a business.

Under capitalism, you have the opportunity to make a lot of money like Steve Jobs did with Apple, but you do not need to be an inventor because ordinary people can buy shares in Apple.

Start-up companies get money from venture capitalists, who take a huge risk. If a company goes public, they raise money and the shares are traded on the stock markets. A company can raise additional money under a secondary offering.

If you buy shares in a good company, you will probably make a profit, but if you buy shares in a bad company, you will lose money. Example: Shareholders in Apple made money; shareholders in Enron lost it all.

Many Americans profit from successful companies because their retirement plans invest in companies by buying shares. The South Dakota Public Employees Retirement Plan, which includes teachers, is one of the best in the country. That is        because of two reasons: One, The plan has excellent management; two, capitalism allows the public to invest in companies.

America is successful because capitalism allows “Idea People” to get money from “Investors” who make a “Profit” from good investments.

Cheers for Warren Buffett who pays a lower tax rate than his secretary, because it means his money comes from investments that create jobs.

There are two types of income and two types of tax. Tax on ordinary income is progressive, which means that higher income people do pay a higher rate or percentage. Capital gains income (profit or loss). Short term gains are taxed the same as ordinary income but gains made from investments held for a longer time have a lower tax rate, and they should, because this money is invested in companies that produce jobs.

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There is a lot of risk when you invest in companies, and the tax should be lower because it gives you the incentive to invest. No investments means no jobs.    

Appreciate and say thank you to the people who pay a lower tax rate, because they are the risk takers who invest their money in businesses that create jobs.

     

 

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