There is a periodically-fashionable argument in the United States that a key obstacle to economic growth is the "double-taxation" of corporate earnings: once at the corporate level, and a second time when profits are distributed to shareholders and (eventually) reported on their individual income tax returns. This argument is typically made by people who, for ideological or … [Read more...] about Why do we tax corporate profits?
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Market capitalization doesn’t matter because share prices don’t matter
There is a tendency in financial journalism to refer to a company's market capitalization as what the company is "worth," or its "value." This tendency is most pronounced when people describe a private company raising capital, for example describing Uber as "worth" $62.5 billion. These valuations are arrived at by comparing the price paid to the share of the … [Read more...] about Market capitalization doesn’t matter because share prices don’t matter
The boring reason you might take out student loans while getting a free education
Last week I wrote about the simple path anyone can follow in order to go to college for free (and explained why I think almost no one takes it). Some commenters objected to the fact that in passing I mentioned the benefits of the income-based repayment option for loans made directly by the federal government, claiming that an education paid for with such loans … [Read more...] about The boring reason you might take out student loans while getting a free education
An investment strategy doesn’t work just because you, personally, find out about it
One of the most important things you can learn as you study finance and investing is that the markets do not care about you. This is, on the one hand, terrific news: if the market cared about you, you might find it an angry and vengeful, rather than benign, master. The flip side is that your personal development as an investor has absolutely no effect on … [Read more...] about An investment strategy doesn’t work just because you, personally, find out about it
Why I make $18,500 every year
While the income tax code is packed full of adjustments and credits for "reservists, performing artists, and fee-basis government officials" and those engaging in "domestic production activities," the only income tax benefit a low-income self-employed person can deliberately trigger is the retirement savings contribution credit. By saying someone can … [Read more...] about Why I make $18,500 every year