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How Your Vote Can Earn More than Stock (Part 2)

3 December 2007 - Features - Editor

How Your Vote Can Earn More than Stock (Part 1)

Free Cash Flows of Stocks Can Gain From Extravagant Corporate Deductions

You can turn the AMT story on its head. Learn from how influential Senators find innovative ways to pinch your wallet, and turn the heat on corporations instead! This will not produce satisfying revenge alone, but can free cash flow for stocks you own. You can gain if companies are taxed for paying executive class and deluxe hotel travel bills. Not all advertising campaigns and promotions are productive, so how about discouraging wasteful deductions?

Should a company enjoy conditional tax breaks if they commit to share rewards with small holders of stocks? The extraordinary fees some companies pay to deal with litigation can also serve as big drains on cash to service stocks. You can run a finger slowly over every cost line of a financial statement and find any number of leaks which detract from stock values needlessly.

Depreciation rates tell their own stories about how tax structures influence executive decisions from shop floors to board rooms. Companies make institutions of capital project planning so that they can claim corresponding tax benefits. There are no laws to funnel every drop of reserves in this respect to asset replacement. That is why the corporate sector has such elaborate Washington infrastructure to ‘influence’ tax planning. This is all to the good as long as your interests in stocks coincide with those of lobbies. However, the real lesson from this story is to indulge in some good old collective bargaining, so that your representative does not protect someone else’s stocks!

Fight for Your Financial Planning Rights!

Legislative changes can affect your fortunes more than simple trading in stocks. Credits, deductibles, and rates, effectively transfer resources from one section of society to another. There are deep effects on personal financing and stock value fronts as well. Changes do not occur at random, but depend heavily on legislative proceedings. That is why Washington and the people who rule that city have so much discretion with respect your financial planning prerogatives.

The IRS claims to work hard towards eliminating abusive tax shelters and transactions. That may be sincere at the administrative level, but the fact remains that are innumerable trade-offs when new tax laws are debated in Congress, or written in to the rule books by a President. Please join our forum and share your ideas on how changes in taxation can benefit your stocks and personal wealth.

 


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