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quote:

1. The money that you are investing in the stocks of this company that you are hoping to get dividends, is money that you've already paid taxes on.


Exactly. Also, the money used by the company to pay dividends to its stockholders has already been taxed as well.

The idea behind these tax cuts is that the population, when 'given' extra money, will turn around an spend a certain percentage of it (about 70 to 80%), saving the rest (say, in my case, a GeForce4). This money goes to companies (for this example, NVidia), increasing their revenue. After taxes, it is used by the company as investment (more jobs!), paid to shareholders as dividends (shouldn't be taxed again, IMO), or saved. The employees and shareholders would then spend this extra money (seeing movies, for example), or save it. The companies (theatres and film studios) would, after more taxes, spend their money (giving me a raise, perhaps? ). Each subsequent iteration would be less than the one preceding it, because of saving and taxes taking it out of circulation.

Eventually, this would help recover the economy. As for the government, tax revenues could, in theory, actually increase despite lower taxes (think a smaller slice of a much bigger pie). The budget defecit isn't a terrible thing, as long as taxes are raised during a boom, creating a surplus to make up for the defecit. Otherwise, the economy will 'overheat', the economy will return to normal anyway, but with higher inflation, and an unpaid national debt.

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Hee hee I like Wall $treet Week with Fortunethey were just talking about how insane wall street analysts wereand still areendorsing companies that had their lawyers on the steps, doing the walk of shame, to declare bankruptcy. Then they were talking about how the S+P was still over inflated by a factor of four..then the same analysts are like buy 99% of everything and sell 1%....good bless em for trying.

But in the words of Newt Gingrich ÔÇ£DonÔÇÖt try to reform the current system. It is hopeless. It is impossible.ÔÇØ God bless you newt for telling it like it is.

Here Jag this is from a real leader:

"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country....Corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed". Abraham Lincoln

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quote:

honest lawyer

Law as a profession has been perhaps fatally wounded by the legions of corporate lawyers that have destroyed our justice system. Law as a profession is a noble endeavor when we remember who it was meant to serve.

quote:

J.W.B.

?

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Steve Schacher

What's different is that you're forgetting the up-front investment. Dividends are not manna from heaven, they are return on investment.

Not really forgetting no. I know it's not free money. Free money IE a lottery is taxed even worse than anything else right? But anyway I think we are looking at this fundamentally differently. The bad thing is I'm trying to use the govt's own definition of income. Look at how precisely they define income. By the govt's own tax book at best it's unearned income.

If I borrow money from a bank that money is not really income because I will pay it back. But I pay it back with interest. That interest eventually becomes profit to the bank and is taxed right?

In investment that process is reversed. You become the "bank" by loaning money to the company (investing). When you get dividends that money is profit to you from your investment. In other words income.

If it walks like a duck, swims like a duck, and quacks like a duck it's a duck. It is income. That's part one of my point.

Part two is the argument over whether it should be taxed or not. I feel it should. AT least at some level. Even a nominal "feel good" level to avoid the jealously and huge debate that has arisen over this issue. They could have substatially raised the limit where dividends begin to be taxed. That way the medium investor could have gotten a break but the super uber rich who really do live off the income of dividends would still pay taxes like they were receiving a paycheck. They could have done what I said and given the break to the corporation. Maybe a couple of other things but they didn't and it caused a furor. Perhaps it was improperly presented to the media and/or public or perhaps the Democrats got in a really good counter argument but the perception is there that it is a tax break only for the rich. That's part three of the argument by the way. The perception of said tax break.

I doubt I will change your mind but perhaps you will see my point. That's the other thing about the Yahoo boards. I am detatched enough to see when either side has a good point. I am against going into Iraq like cowboys but Bush did have a good point when he asked where all that other stuff went. (Anthrax and VX gas and stuff.)

I can do that with this argument. You Steve are probably (hopefully) right when you say that it takes tons of well performing stock paying dividends to actually get any appreciable revenue from it. So this tax break probably won't be a drop in the bucket in the grand scheme of things.

Then again maybe so. I'm not interested enough to go seeing if those numbers are around anywhere. But the perception is there.

quote:

Steve Schacher

The draw on your income to pay the monthly car payment is not an expense to you, it is a transfer of wealth into your asset , the car

Tell that to my checkbook. I have a for more simplistic view. If it goes out it's an expense regardless.

quote:

Steve Schacher

That (money) should not be taxed again when the shareholder receives it because the shareholder already put up money up front to buy into the company.

That's the wrong argument to use. That money should definitely be taxed again because it's a profit to you. Why should unearned income be tax free when my earned income is taxed? You aren't doing anything noble with that money. That's probably how this got started. "Look at all those noble investors propping up the country's infrastructure by investing. Let's give them a tax break for being so noble and selfless." It's not noble or selfless. You are making a profit.

quote:

Fermin

There's a HUGE difference.

You haven't convinced me yet. This is getting long so I'm not gonna use quote blocks on Fermin's points.

1. Then I shouldn't pay any other taxes because my money is already taxed when I get it. Bad argument in my opinion. We have a rather cicular economy and money get taxed as it circulates throughout.

2. & 3. should have been one point. Bank analogy again. You are the bank. You are risking a default on the loan but that is no reason to negate taxes on profits.

4. Of course he had to pay taxes on the dividends. That was counted as income at the time. Losing value goes back into Steve's explanation of dividends versus capital gains.

quote:

Steve Schacher

Snip Steve's very good explanation of Dirty CEO tricks to inflate stock value

I said some if this in another thread. You gave a lot better explanation of the mechanics of it. I just knew it had happened and it Started with Reagan's deregulation Trickle Down.

Lotharr has some good points about Enron and their ilk. A bit too panicky for me but some good points.

quote:

Urza

As for the government, tax revenues could, in theory, actually increase despite lower taxes (think a smaller slice of a much bigger pie).

Thought that had already been proven if the economy is bubbling along.

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The bad thing is I'm trying to use the govt's own definition of income. Look at how precisely they define income. By the govt's own tax book at best it's unearned income.

We'll see shortly.

quote:

If I borrow money from a bank that money is not really income because I will pay it back. But I pay it back with interest. That interest eventually becomes profit to the bank and is taxed right?

Correct.

Let's look at this transaction from the borrower's point of view. The loan from the bank is a liability to you. Your net worth is negative until the loan is repaid. Income has not been affected. Your loan repayment contains two parts: principle and interest. The principle portion of your payment goes towards reducing your liability, the interest portion is an expense to you. Study amortization if you want to pull more of your hair out (90% of your payment goes towards interest in the early days). Depending on the type of loan (home loans), you can deduct the interest expense from your income tax.

quote:

In investment that process is reversed. You become the "bank" by loaning money to the company (investing). When you get dividends that money is profit to you from your investment. In other words income.

If it walks like a duck, swims like a duck, and quacks like a duck it's a duck. It is income. That's part one of my point.

This is where your argument breaks down.

Your investment is not a loan to the company. You, as an owner, are buying an asset, that is, shares of stock in a company. You are transferring one asset for another, cash for shares of stock. Again, income is not affected. This transaction does not result in a liability for anyone. You may have an expense in the broker fees paid for the purchase, but that is it.

Dividends paid by the company to the owners is not loan repayment, it is distribution of income to the owners. You may be making a mistake in lumping owners with wage earners. You only see income in terms of wage earners. Many wage earners are also owners, and the financial transactions have to be kept separate.

The stock owner owns part of a company that has its income taxed. The after-tax distribution of the profits to the owners is dividend that has already been taxed from the perspective of the owner. The fact that an owner is also a wage earner or not is immaterial to the fact that the owner had their income taxed prior to distribution of the profits. Any othe wages earned by the owner will also be taxed as income, but the dividend the owner received was taxed as income to the company of which the owner is a part.

quote:

Part two is the argument over whether it should be taxed or not. I feel it should. AT least at some level. Even a nominal "feel good" level to avoid the jealously and huge debate that has arisen over this issue.

That is the makings of class warfare. Rather than punish the successes of some because of what others don't have, it should be an incentive for others to reach for more.

quote:

That way the medium investor could have gotten a break but the super uber rich who really do live off the income of dividends would still pay taxes like they were receiving a paycheck.

Remember, they are not living off of the income of dividends, they are living off of the income of the company of which they are an owner. The income of the company was taxed.

As much as it makes you feel good, it is not a paycheck.

quote:

Tell that to my checkbook. I have a for more simplistic view. If it goes out it's an expense regardless.

You need to take some basic courses in accounting and finance. Try setting up your accounts and managing your money in a program like Quicken to better appreciate how money is accounted for.

That's the wrong argument to use. That money should definitely be taxed again because it's a profit to you. Why should unearned income be tax free when my earned income is taxed?

The money is not unearned income. The company (of which you are an owner) did plenty to earn that income.

quote:

You aren't doing anything noble with that money. That's probably how this got started. "Look at all those noble investors propping up the country's infrastructure by investing. Let's give them a tax break for being so noble and selfless." It's not noble or selfless. You are making a profit.

I'm not directing this comment to you, but this is where the tax arguments become shrill. This is where opponents claim to know how to better spend your money than you, and try to take it away from you because you aren't using it properly.

quote:

Snip Steve's very good explanation of Dirty CEO tricks to inflate stock value

Actually, I didn't explain the dirty tricks. I explained how changes in the corporate tax structure caused corporations to move away from dividend incentive to stock price growth incentive.

Let me explain the "dirty tricks" that went on at Enron for you to see how abusing the financial definitions led to problems (I'm going to be very simplistic):

Enron was in the business of brokering energy -- buy it here and sell it there. They weren't actually producing energy, just trading it. It was a very speculative business and they made a lot of money (income) off of California's energy crisis (legally, the problem was in the way that California set up their market). However, Enron had a lot of losses (expense greater than income). Enron would borrow money from banks (liabilities) in order to stay in business. So far, so good. Then Enron did something illegal and got their accountants (Arthur Andersen) to certify it.

The banks that held the loans to Enron would book the loan as an Asset (a future cash flow from Enron). The interest on the loan would be future income). They'd do all the proper net present value calculations to get today's value of tomorrow's cash flow, and that would be their balance sheet.

Enron figured that they could buy the bank that held their loans. They tried to hide the loans (liabilities to Enron) by booking the bank (now a wholly-owned subsidiary) as an asset (the suppposed loan payments that Enron would have made that was an asset to the bank) instead of keeping their liability separate. They mis-valued the bank, and instead of recording their debts, they doubled their value, swapping their loan liability for the asset of the bank. This ignored the fact that the asset of the bank was propped up by the future loan repayments from Enron.

Confused yet?

Enron played this game with hundreds of shell companies. They wildly exaggerated their value, when in fact the were deeply in debt.

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quote:


Originally posted by Steve Schacher:

quote:

snippage

We'll see shortly.

quote:


If I borrow money from a bank that money is not really income because I will pay it back. But I pay it back with interest. That interest eventually becomes profit to the bank and is taxed right?

Correct.

Let's look at this transaction from the borrower's point of view. The loan from the bank is a liability to you. Your net worth is negative until the loan is repaid. Income has not been affected. Your loan repayment contains two parts: principle and interest. The principle portion of your payment goes towards reducing your liability, the interest portion is an expense to you. Study amortization if you want to pull more of your hair out (90% of your payment goes towards interest in the early days). Depending on the type of loan (home loans), you can deduct the interest expense from your income tax.

quote:


In investment that process is reversed. You become the "bank" by loaning money to the company (investing). When you get dividends that money is profit to you from your investment. In other words income.

If it walks like a duck, swims like a duck, and quacks like a duck it's a duck. It is income. That's part one of my point.


This is where your argument breaks down.

Your investment is not a loan to the company. You, as an owner, are buying an asset, that is, shares of stock in a company. You are transferring one asset for another, cash for shares of stock. Again, income is not affected. This transaction does not result in a liability for anyone. You may have an expense in the broker fees paid for the purchase, but that is it.

Dividends paid by the company to the owners is not loan repayment, it is distribution of income to the owners. You may be making a mistake in lumping owners with wage earners. You only see income in terms of wage earners. Many wage earners are also owners, and the financial transactions have to be kept separate.

The stock owner owns part of a company that has its income taxed. The after-tax distribution of the profits to the owners is dividend that has already been taxed from the perspective of the owner. The fact that an owner is also a wage earner or not is immaterial to the fact that the owner had their income taxed prior to distribution of the profits. Any othe wages earned by the owner will also be taxed as income, but the dividend the owner received was taxed as income to the company of which the owner is a part.

quote:


Part two is the argument over whether it should be taxed or not. I feel it should. AT least at some level. Even a nominal "feel good" level to avoid the jealously and huge debate that has arisen over this issue.

That is the makings of class warfare. Rather than punish the successes of some because of what others don't have, it should be an incentive for others to reach for more.

quote:


That way the medium investor could have gotten a break but the super uber rich who really do live off the income of dividends would still pay taxes like they were receiving a paycheck.

Remember, they are not living off of the income of dividends, they are living off of the income of the company of which they are an owner. The income of the company was taxed.

As much as it makes you feel good, it is not a paycheck.

quote:


Tell that to my checkbook. I have a for more simplistic view. If it goes out it's an expense regardless.

You need to take some basic courses in accounting and finance. Try setting up your accounts and managing your money in a program like Quicken to better appreciate how money is accounted for.

That's the wrong argument to use. That money should definitely be taxed again because it's a profit to you. Why should unearned income be tax free when my earned income is taxed?


The money is not unearned income. The company (of which you are an owner) did plenty to earn that income.

quote:


You aren't doing anything noble with that money. That's probably how this got started. "Look at all those noble investors propping up the country's infrastructure by investing. Let's give them a tax break for being so noble and selfless." It's not noble or selfless. You are making a profit.

I'm not directing this comment to you, but this is where the tax arguments become shrill. This is where opponents claim to know how to better spend your money than you, and try to take it away from you because you aren't using it properly.

quote:


Snip Steve's very good explanation of Dirty CEO tricks to inflate stock value

Actually, I didn't explain the dirty tricks. I explained how changes in the corporate tax structure caused corporations to move away from dividend incentive to stock price growth incentive.

Let me explain the "dirty tricks" that went on at Enron for you to see how abusing the financial definitions led to problems (I'm going to be very simplistic):

Enron was in the business of brokering energy -- buy it here and sell it there. They weren't actually producing energy, just trading it. It was a very speculative business and they made a lot of money (income) off of California's energy crisis (legally, the problem was in the way that California set up their market). However, Enron had a lot of losses (expense greater than income). Enron would borrow money from banks (liabilities) in order to stay in business. So far, so good. Then Enron did something illegal and got their accountants (Arthur Andersen) to certify it.

The banks that held the loans to Enron would book the loan as an Asset (a future cash flow from Enron). The interest on the loan would be future income). They'd do all the proper net present value calculations to get today's value of tomorrow's cash flow, and that would be their balance sheet.

Enron figured that they could buy the bank that held their loans. They tried to hide the loans (liabilities to Enron) by booking the bank (now a wholly-owned subsidiary) as an asset (the suppposed loan payments that Enron would have made that was an asset to the bank) instead of keeping their liability separate. They mis-valued the bank, and instead of recording their debts, they doubled their value, swapping their loan liability for the asset of the bank. This ignored the fact that the asset of the bank was propped up by the future loan repayments from Enron.

Confused yet?

Enron played this game with hundreds of shell companies. They wildly exaggerated their value, when in fact the were deeply in debt.


And since the Enron execs knew they weren't going to get anymore moola from the scam, they raided their employees 401k accounts. which were probably held in the same bank. I say string the bastages up from a very tall Oak tree. No cushy Federal spa. for them boys.

That should send a bold message to the other fat cats who think they can play the system to make a free buck.

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And since the Enron execs knew they weren't going to get anymore moola from the scam, they raided their employees 401k accounts.

This is where Democrat hypocrisy began.

Enron only had about 19,000 employees, and far less were affected by the 401(k) loss, yet Jesse Jackson organized a protest over the Enron employees and bused his rent-a-mob down to Houston.

How often do we hear of General Motors closing down a plant and laying off thousands of workers, and yet there are no protests by Jackson over that?

Enron was also a political attempt by Democrats to bring down the Bush administration, but as they delved deeper into the scandal, they found Clinton's fingerprints all over it and quickly stopped the investigation and all congressional hearings for fear of what would come out.

Now, take a company like Adelphia in Pennsylvania. That company was truly looted by the executives right from the start. It wasn't a bad management practice that got out of hand, it was a CEO's personal bank account right from the start.

Then there's Global Crossing, MCI Worldcom, and a few others that had improper accounting, all certified by Arthur Andersen.

Then there are some who call for all corporate taxes to be eliminated. Why? Because corporations are only concepts, not real living breathing things. Corporations are groups of people. There are some who say that the shareholders should pay all the taxes and the corporations should not be taxed at all.

[ 02-02-2003, 04:12 PM: Message edited by: Steve Schacher ]

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How often do we hear of General Motors closing down a plant and laying off thousands of workers,

Gah, this happened here recently, they closed the camaro/firebird plant, and although the gov. and the employees tried over and over to propose a solution (up to the govt. financing plant conversion costs), they even tried to propose a new car model, nothing. years of struggle and the plant is closed, thousands of jobs lost.

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No Ep5 that's progress. Remember these corporate axioms "Haste makes profit, employees are assets, profit is life, and toxic sludge is good for you."

quote:

I say string the bastages up from a very tall Oak tree

That would be too good for them. They should have to work fourteen hour days, in a toxic environment, for $1 a day, to produce goods that will be sold for massively inflated prices for the remainder of their natural life (a sentence handed down all across the planet). And when they die, (wipes off a tear) at the ripe age of thirty something we can toss their body in an unmarked grave and get their kids to work post haste....ahhhhh....I smell profit!

quote:

Corporations are groups of people

Stock holders and execs (with labor having no significant input)...and in no way deserving of Bill of Rights protections. None. Why?

quote:

Because corporations are only concepts, not real living breathing things

Yup.

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quote:


Originally posted by Epsilon 5:

quote:

How often do we hear of General Motors closing down a plant and laying off thousands of workers,

Gah, this happened here recently, they closed the camaro/firebird plant, and although the gov. and the employees tried over and over to propose a solution (up to the govt. financing plant conversion costs), they even tried to propose a new car model, nothing. years of struggle and the plant is closed, thousands of jobs lost.


This little tidbit should burn your biscuits,

GM is coming out with two new models next year. I hope they build them there.

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Farmer Brown had just finished butchering a herd of hogs.

after loading the last Hoghead onto his wagon, he called his son.

"take these into town and sell them to Luther at the general store."

When the boy arrived at the store, all of the boys were sitting around the cracker barrel playing checkers. When the boy asked Luther to buy the Hog heads, Luther decided to have some fun with the kid. " I don't know son, Are them Republican Hog heads or Democratic Hog heads? he quizzed. "I don't know fer sure." replied the boy

"Ma Daddy is a Democrat, so I suppose they're Democratic Hog Heads.

Luther just winked at all the good'ol boys in the store and told the boy " Go back and tell Yore daddy that I only buy Republican Hog heads" The boy departed and returned a few hours later.

Luther scowled at the boy when he returned. Now I told you I only wanted Republican Hog heads. The boy just grinned and said, "They are Luther." Luther said, "no they ain't. They look the same as what they did when ya' came the first time!"

the boy tells Luther, "Look closer, Daddy took the brains out!"

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That I did. Some preconceptions modified. Some old elementary school info corrected. Not a bad discussion all in all.

Classes I may wind up taking. Been thinking about it for years. Just now getting to the point where I can.

Using Quicken at home is a definite no. "Been there done that" and I found that it was just double entry and a transposition is just as wrong on the computer as it is in the register and more trouble than it's worth.

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Im in a little country to one side of the world, out of sight out of mind.

No importance we are.

Since I can never be sure I am right, because I am basing my arguments on things I read and I saw on t.v news programs, anyone can write or say anything so Unless I see it for myself I have to choose which one sounds most coherent logically. And I am not the most logical minded thinking person.

So instead of putting forth blindly wrong accusations, I ask questions, it is said that God has said to man, question all things.

I begin, prior to the Iraqi war, The same U.S supplied Saddam with weapons. The same U.S also funded Bin Laden as it suited them.

Then there is the gulf war. The Allies, *not only U.S) bomb Iraq. invade the country. Bush senior cries for the Iraqi people to rise up and oust Saddam. Kuwait is liberated, the oil is free to flow again, the U.S decides it's time to pull out, the allies as usual follow like sheep behind mary.

Bush still calls for the people to rise up, can't remember the name of the city, Kurdistan? The Kurds decide to do just that. Rebellion against Saddam, no support from Bush, he has his oil he doesn't care.

Large piles of refugees people driven from the rebelling city by the Republican Guard...

why after calling and appealing to the people of Iraq to rebel, did Bush not help them. Didn't expect they would? Didn't really want out Saddam.

Why the war now? Weapons of mass destruction? is this all the smart people can come up with to fool gullible people? But why bother to come up with something better, they seem to be going for it.

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Coalitions have been forming, disbanding, and reforming all throughout history.

One could make the argument that all the modern era's troubles actually stem from the sibling rivalry between England and France. Consider history:

France and England were the dominant empires in the Western world. They had the navies.

In the Americas, France and England were fighting their colonial wars here. The French-Indian wars of the early 1700's were the French hiring mercenary Indians to attack British colonies.

The American Revolution against England: America won largely because of France's navy. France was willing to help because it despised England.

After the American Revolution, England and France were again at war. American neutral shipping to Europe antagonized England, which was blockading France, and was a tool for France, which was blockading England. English resentment eventually led to the War of 1812 in America.

Napoleon Bonaparte led the French Army on attacks across Europe and northern Africa in the late 1790's, ending in Egypt. He was ultimately defeated at Waterloo (Belgium) by Wellington of England in 1815.

The Opium Wars of the mid-1800's, between England and China (1840's), and then England/France and China (1850's) led to long-lasting anti-Western sentiment in Indo-China .

The French Foreign Legion was created for French colonialism of Western Africa during the mid-1800's, especially in Morocco and Algeria.

The Boxer Rebellion in China in 1898 was an attempt to oust Western influence in China. After the Opium Wars, the Chinese were forced to grant commercial concessions to England and France, and then Germany and Russia. Feeling weakend by European encroachment, the Chinese rebelled, but failed, and put themselves deeply in debt to the West, becoming in effect, a subject nation.

The Boer War in Southern Africa in 1898 was an attempt to oust British colonialism in Africa. England had been working its way south into Africa when gold was discovered. This resulted in a great influx of British into South Africa. The Boers (Dutch) had already settled those areas and reject British attempts to control the commercialization of the area. They fought back and won sovereignty, leaving much bitternes with the English.

During all of this, America was a small, but growing, country. We were still focused on Manifest Destiny, the march westward toward the Pacific. We were not a super-power.

The 1900's saw World War I and World War II, both mostly European conflicts, and both ended by American might. World War II saw the emergence of the United States as a super-power.

With this chronology in mind, one can argue that America is paying for the sins of England and France (and the ill-will they left behind) from the 1700's forward.

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quote:

Originally posted by Steve Schacher:

English resentment eventually led to the War of 1812 in America.

The War of 1812 didn't actually come about because of English resentment of the US. It came about because of US resentment of England. Because America was still trading with both the English and the French, the English decided to begin capturing US merchant ships, confiscating them and their cargo so their supplies could not be used to support the French.

In addition they also began impressing US merchant sailors into the Royal Navy, giving the "reason" that those merchant sailors were "former English citizens", no matter that the US had been an independent nation for almost thirty years by that point. This angered the American government, and along with other reasons caused the US to eventually declare war against England in 1812.

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