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JAFO writes:

I did not claim that there was no double taxation, I said it was irrelevant. Dollars are fungible; if you look at my two indiviudals (and further assuming that each is in the same tax bracket at all times), there is no difference between cash flow or total taxes paid by either indiviudal - that is why I consider it irrelevant. The net after-tax dollars available to each is the same --- why would either care which scenario gnerated it.

As I acknowledged before, if you make the loan interest for indiviudal 2 deductible - home equity, margin, etc. or you change the investmetn result for individual 2 (Opportunity cost), you can vary the result --- but the result is varying for some reason other than the double taxation.

I can agree to the irrelevancy part. My mistake. I thought you were insisting there was no double taxation. Without running the numbers, I'll accept at face value your claim on net dollars being the same between your two scenarios. It looks correct on the surface, and I'm too lazy. :-)


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