The Stock Tax Two Step.

Have I got a deal for you. First you have to start a company. I don't care what the company does. Even if it does nothing but make cutesy lawn decorations. Of course you have to incorporate,but you can get all the info off the Internet. Then you go public and appoint yourself as CEO. That's the hard part. Then you give yourself or rather your company gives yourself stock options. Now to start with your stock is worth oh, I don't know, let's say one penny. Then you offer the stock to the public. When the value hits, say, ten dollars, you, the CEO, can sell a million shares and haul in ten million dollars. The company, you, claims only the value of one penny each and presumably claims a loss, but you the CEO claims only a penny each. No, I don't get it either, but high priced tax lawyers do get it and corporations and CEOs are making a killing over this. What it means is they're paying a whole lot less in corporate taxes and in many cases, no taxes. When they pay less taxes, you and I have to pay more taxes. That much I do understand. The government wants more each year, the corporations pay less each year. Where do you think all that extra money is gonna come from? I'll tell you this much. Santa doesn't have room in his sleigh for it. Well here's what I think. I think the government has three choices. It can charge us more in taxes (the preferred way) or it can borrow the money from China or it can reduce spending. Now if it reduces spending, a lot of people are going to be mad because either they get less from the government or their job is eliminated. If they borrow it from China, it means more interest payments. That leaves you and me. That's the way they wanted it in the first place. Funny how things always works out that way, isn't it?