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Tom Dworzanski

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  • A Horse Called VaR (Value At Risk) [View article]
    Well said.
    Feb 29 03:04 PM | 2 Likes Like |Link to Comment
  • What The Obama Capital Gains Increase Means To Investors [View article]
    Thanks for the reply.

    No, I did not make any adjustments for taxes in the ROE numbers, though I did consider it and came to the conclusion that it is best not to. I considered using various corporate tax rates, however since ROE itself takes into account corporate taxes and is in-fact an after-corporate-tax measure, using ROE as-is would simply imply that corporations are to pay their individual normal rates as in the past. The problem with corporate taxes is there are such a wide range of rates for all these companies. From the near-zero paid by General Electric to the full 35% paid by Wal-mart, I decided it's best to just leave taxes be as they are now for the purposes of this article and to focus only on the individual income tax issue.

    As for the corporate income tax proposals, that's exactly what I was referring to when I said "some balancing relief" in the last paragraph. I think some degree of change in corporate taxes is essential to offset these higher personal income taxes (if they are even to be considered), however that debate is only beginning and it was not within the scope of this article.
    Feb 26 04:33 PM | Likes Like |Link to Comment
  • What The Obama Capital Gains Increase Means To Investors [View article]
    Good point.
    Feb 26 03:14 PM | Likes Like |Link to Comment
  • What The Obama Capital Gains Increase Means To Investors [View article]
    Thanks for the reply.

    This does assume people are not using retirement vehicles like IRAs, but as I state in the article, those vehicles have limits so hiding all your investments in them is not possible for most wealthy investors. As you point out, there are some exceptions like REITs, BDCs, and many others but the point of this article is to talk about typical corporate equity investing. I didn't claim anything about who buys what. I just looked at the blue chips as a whole. I will say however that buying only REITs would be highly foolish unless someone really knew what they were doing and didn't depend on that money to survive.
    Feb 26 03:12 PM | 2 Likes Like |Link to Comment
  • What The Obama Capital Gains Increase Means To Investors [View article]
    Thanks for the reply.

    You are correct that this assumes a top tax bracket and I think I made that obvious. Regardless, unless a person's tax bracket is 15% or below (they earn less than $35,350 in 2012), they will have a capital gains and dividends income tax hike with a corresponding rise in their required rate of return.
    Feb 26 03:06 PM | Likes Like |Link to Comment
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