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  • Capital gains tax hike

    https://www.bloomberg.com/news/artic...-4-for-wealthy

    Yea...

  • #2
    This would only apply if you sold your investments while your income is over $1mil, correct?

    I’ll have to remember to keep my income under 1 mil in retirement.

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    • #3
      Anything focused on rates is pointless. Need to address deductions and get people playing closer to their marginal rates. Making the rates sky high doesn't do much for anything and will just incentivize more playing of the game and disproportionately affect people on the lower end of the spectrum you're addressing. Should just set a rate and then no deductions, extremely simple. Any tax calculation that a 10 yr old can't figure out is too complex. That would be meaningful tax reform.

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      • #4
        Originally posted by Panscan View Post
        Anything focused on rates is pointless. Need to address deductions and get people playing closer to their marginal rates. Making the rates sky high doesn't do much for anything and will just incentivize more playing of the game and disproportionately affect people on the lower end of the spectrum you're addressing. Should just set a rate and then no deductions, extremely simple. Any tax calculation that a 10 yr old can't figure out is too complex. That would be meaningful tax reform.
        As long as we’re in this fairyland where Congress will simplify the tax code, can Tinkerbell make my hair less gray?
        I sometimes have trouble reading private messages on the forum. I can also be contacted at [email protected]

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        • #5
          I guess this could create some volatility if some very wealthy people tried to sell their investments to collect their capital gains taxes now, prior to any tax increase?

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          • #6
            Where are they going to put their money in for yield in the current environment, bonds? LOL.

            There may be some short-term vol, sure, but I would guess IF this ever gets passed (and that is a big IF), high-growth stocks would be hit the most... investors would demand a higher risk-reward ratio & earnings yield for speculating.

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            • #7
              Originally posted by xraygoggles View Post
              Where are they going to put their money in for yield in the current environment, bonds? LOL.

              There may be some short-term vol, sure, but I would guess IF this ever gets passed (and that is a big IF), high-growth stocks would be hit the most... investors would demand a higher risk-reward ratio & earnings yield for speculating.
              high growth no revenue stock with long tailed FCF would get hurt. Dividend yielding stocks and REITs become more attractive.

              Eitherway, not sure what the heck is POTUS thinking. Seems dumb. And I don't see this passing. At all.

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              • #8
                I certainly hope it does not pass. Every time I feel like I understand my taxes the laws change.

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                • #9
                  stock market dropped "in response to" this report. hey I'm all for it since it doesn't seem to impact me as I am certain I'll never make $1m in a single year ever in my lifetime

                  but yes, this needs to go through the sausage making process called Congress so who knows what'll look like. Passing the SECURE Act frankly I think will impact far more people on this forum than a LTCG rate hike conditioned on "income," and I'm still not happy about SECURE

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                  • #10
                    I’m all for taxing the living crap out of left handed people. After all, I’m right handed!!
                    I sometimes have trouble reading private messages on the forum. I can also be contacted at [email protected]

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                    • #11
                      Some people who don't expect it may find themselves with very high incomes for a year or several while doing Roth conversions.

                      Whether the wealthy will sell before this hits depends on their beliefs about how long it will last. Tax rates go up and down depending on who is in power.

                      The response also depends on whether stepped up basis survives. An alternative to selling now may be holding an appreciated asset till death.

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                      • #12
                        Originally posted by afan View Post

                        Whether the wealthy will sell before this hits depends on their beliefs about how long it will last. Tax rates go up and down depending on who is in power.
                        They would just make it effective for this tax year and they’d avoid a scenario like that altogether.

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                        • #13
                          Seems like a non-issue for the vast majority of physicians. How many would be selling stock and incurring LTCG in years when their income is also over $1 million?

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                          • #14
                            Originally posted by JBME View Post
                            stock market dropped "in response to" this report. hey I'm all for it since it doesn't seem to impact me as I am certain I'll never make $1m in a single year ever in my lifetime

                            but yes, this needs to go through the sausage making process called Congress so who knows what'll look like. Passing the SECURE Act frankly I think will impact far more people on this forum than a LTCG rate hike conditioned on "income," and I'm still not happy about SECURE
                            i have seen so much breathless stuff about how the market dropped in response to this.

                            yeah it dropped back to like 34k or about 1% off its record.

                            i mean it's basically Black Friday.

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                            • #15
                              I don't think this will pass as it will hurt political donors whom are all very wealthy. This will also hurt the politicians themselves as a lot of them are very rich. Democratic party actually favors the rich and the poor. The middle class will get crushed.

                              I think this is like a PR article to boost Biden's image among the poor. Wasn't there news a few months back that Biden will cancel student loans? But that didn't happen.

                              If this goes through, this would be major and will eventually affect all of us. If they never index the $1 million income to inflation, when we retire we'll be paying that tax.

                              Anyways, worrying about it isn't going to do anything.

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