So regular dividends derived from the stocks obtained from stock options are irrelevant to the benefit received from stock options. I see. I don't see many executives giving up these non-beneficial dividends, but you must know.

If you sell your shares within a certain number of years of obtaining them by way of a stock option, then there is a recapture as income at the full rate and much of the capital gain benefit is lost.

The American taxation of stock options is much more complicated. I do not profess to know how it works though. If they pay taxes as income, do they pay no taxes when they sell the shares?

Weird – I posted a longer response, but it disappeared. Anyway, taxation of dividends is obviously a separate issue, and it has nothing to do with how the shares were acquired.

FYI: http://en.wikipedia.org/wiki/Non-qualified_stock_…

Sorry, Ted. We both know you're much sharper than a 90-degree angle ;-). Tough day, and I was a bit miffed by the misguided quip in your original comment ("I'm sure you just omitted that for the sake of brevity"). No more angle references, I promise!

It seems more fair than regressive to me, but I think we're getting into philopshical differences.

Meh, the numbers don't matter, as the result is the same. On a flat tax system, the guy at the bottom end of the scale is much more closer to true hardship than the guy at the top end. And since there's always going to be a *lot* more guys at the bottom end then it makes some sense to lessen their tax burden and as such their risk of hardship if we're able to do so without significantly increasing the risk of hardship the few people at the top end feel.

Well, I suppose that's fair, but when you say "minimum living expenses" it doesn't conjure up images of being able to live decently and have extra money left over to deal with unexpected problems. If your "minimum living expense" is high enough that threat of uncontrollable hardship isn't a problem (and I'm ignoring the problem of how do we set what that minimum is given the vastly different annual living costs across the country) then I suppose it might work.

Of course, if we're talking high numbers like that, we're also probably talking very high rates of taxation on those who earn more.

Using the numbers from below suggests that if we just stopped collecting income taxes from the 50% of taxfilers who had incomes under $23K AND from the bottom 1/4 (ie up to incomes of about $35K) of the middle group the total tax take would drop by about 10%.

So, to regain that tax revenue the other 3/4 of the middle group and the high end group would need to increase their 'contribution' by a factor of about 1.15 or so.

The numbers are rough, but they should give you some idea of the magnitude of the impact of the changes that you threw out there for discussion.

You're stressing the moral element because the cost-benefit element doesn't work in your favour. And that's fine, I'm not going to argue the morality of it, because my morality likely doesn't match your own.

However, your economic element, while it seems to make a lot of common sense like heavier things falling faster than lighter things, doesn't seem to be terribly well supported by the evidence. When comparing per-capita GDP to tax-rates across the globe, there seems to be only a very weak correlation, with much stronger correlations found with the general education level of the populace, and also with corruption levels (negative correlation in that case).

And this is why I wasn't going to debate morality with you, because I do believe that a society has the right to demand resources from its participants, and as such, we are at a fundamental clash of beliefs.

You are welcome to attempt to challenge the veracity of my claim. I'll gladly look at any statistics you can find that challenge it. Be aware, however, that cherry-picking a few countries (and there are a few, I'll certainly admit) does not in any way challenge my general statement.

Except that I don't believe morals have anything to do with reasoning. So I'm not sure this premise will get us anywhere, but I'll try to come along with this line of discussion because it could be interesting.

As for society, I mean the collective of us — united by various things such as geographical location and compromises as to the limits of what we are allowed to do. When you live in a society, you receive multiple benefits thereof, and also the limitations thereof — as decided by the collective.

How? They're made up. Morality is all in our heads.

It's based on subjective opinion. Is it moral to have more than one spouse simultaneously? What about eating human flesh? Eating meat at all? Keeping slaves? To perform homosexual acts? Is it moral to divorce your spouse?

Depending on the time, culture, or even individual, these all have different answers. And we can be all high and mighty and think that we have the right answers now, but if we really think about it, we realize that's what they thought then, and if they were wrong, why can't we be?

You're confusing rationalization with reasoning. The two are very different. The moment you say something is "wrong" you're making a subjective, value-based judgement — one which, by it's very definition, isn't based on evidence. And you can use whatever rationalizations you like, but in the end, they come down to a fundamental belief idea such as "Each man is fully entitled to what he produces and none may legitimately take that from him" There's nothing in the universe that backs that up. It's a statement of belief.

Except ownership is not caused by creation. A beaver creates a dam. Does the beaver own it? A bear creates a pile of bear-crap. Does the bear own it? A human creates a dam. Does the human own it? A human creates a child. Does the the human own it?

Ownership is a distinctly human conceit. It has no empirical place in the universe. Nothing in the universe says that this post I make is mine. That's man and our society that's decided that. Decided it subjectively, based on our belief structures. That's why we decide that parents own their children, until the children somehow magically come to own themselves. Is there any physical change we can point to that says, "When this person circled the sun for the 16th time, they became the owner of themself?" No. It's purely a belief.

Your value is a premise. It is based on nothing that actually exists.

No. You're making the question up. This is the problem I'm trying to get through to you and I think I'll probably fail because you're so ensconced in your belief structures you haven't yet been able to understand that they're all in your head.

Now you're saying that use is ownership. Before you were saying that creation is ownership. See the problem? Because ownership does not actually exist beyond our own subjectivity, you can switch the defintions of what it is without realizing what you're doing.

Again, I bring you back to my questions which you avoided. When a beaver makes a dam, does the beaver own it? This wasn't just rhetorical. Think about it. If the beaver "owns" the dam, then what right do we have to destroy it if we want the water to flow? If the beaver doesn't own the damn, why not? Can only humans own things? If so, then you've just shown that ownership has no physical existance, merely a societal existance — ergo, it's made up.

Use is use. Creation is creation. Ownership is a man-made concept to try to control resources within a society.