Long story short, I’m frugal. I save what little money I make by living below my means. I’m a 23 year old near-graduating senior at UWG and have no debt.  I decided I’d do a little homework and move some of my savings to a good small-cap energy company to try and make a little money before I graduate.

My investment, BEXP, was bought out by a Norwegian (woohoo) energy company for a few dollars more per share than I originally paid.  After hearing about how long the buyout process takes, and how the buyout was being contested by investors as being too low, I decided to wait a few months before checking in on it. I’m fairly new to the investing thing, so I call Merryl Lynch, (don’t do business with them, had to talk to 6 different “specialists” to actually get the information I needed) and $278 (28%) has been removed from the account by Uncle Sam to account for potential tax liability. They don’t know how much money I make, so they just take out the maximum capital gains rate because of their inability to stick my name and social into their IRS database. (This is me being hyperbolic.)

Isn’t it awesome that the federal government has the power to seize $278 of my investments without even sending me a letter? What the hell is wrong with this country. Just found out that once my stock in BEXP got bought out by Staoil the government took nearly a third of the investment for potential tax liability, on my behalf, without so much as letter. What’s interesting to me, is I’m aware of capital gains taxes.  However, as much as I’ve railed against them it has never been more clear than today that absurdity of our federal tax system.  I paid income taxes and FICA taxes already on this money.  Why am I paying taxes on it again?  I could have bought a T.V. online or in Alaska, Delaware, Montana, New Hampshire, and Oregon and paid no taxes at all. Now, I know all of this is my fault for not knowing to send in a W-9, but I didn’t know any better.  Apparently I was mailed one but it was lost between me moving out of my ex-fiance’s house, etc.

In short, I’m pissed. If merely for the notion that the government can seize 28% of a private investment without notification.

Here’s a picture that shows you how much the government hates savings:

 

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