Posted on 11/13/2012 7:54:41 PM PST by ilovesarah2012
For many of the wealthy, 2012 is becoming a good year to sell.
They're worried about the "fiscal cliff," which is when tax cuts expire and spending cuts are set to go into effect at the end of the year.
Fearing an increase in capital gains and dividend taxes, many of the rich are unloading stocks, businesses and homes before the end of the year.
Wealth advisors say that with capital-gains taxes potentially going to 25 percent from 15 percent, and other possible increases in the dividend tax, estate tax and other taxes, many clients are selling now to save millions in taxes.
Under almost any scenario, it makes sense to take the gains this year, said Gregory Curtis, chairman and managing director of Greycourt & Co. Clients arent selling willy nilly. But if they can and they have a huge gain, theyre selling now.
If the Bush-era tax cuts expire, taxes on capital gains would revert back to its previous rate of 20 percent from its current 15 percent. Another 5 percent may be added from health-care levies and changes in itemized deductions, bringing the rate to 25 percent for many high earners.
(Excerpt) Read more at cnbc.com ...
Taxes haven’t gone up yet and they’re already pushing to raise them.
Think about that. :)
No, wealthy are dumping assets before the capital gains tax rate goes from the current 15% up to the pre-Bush tax cut rate of 25%.
For example ... The increase in tax rates on dividends isn't likely to result in huge increases in taxes paid by "the wealthy." It will simply cause publicly-traded companies to re-assess whether they even pay dividends at all -- and how much they pay. A company like ABC, Inc. that is profitable and has lots of cash on hand may simply opt to buy back its own stock -- thereby driving up the value of the remaining shares that are held by shareholders. Those shareholders can then sell their stock later at a higher price and pay any capital gains tax on that sale. Even at the higher capital gains tax rates they won't pay any more in taxes than they would have under the "Bush" tax rates on the dividend they would have been paid before.
Probably no dividends, and possibly never again any capital gains. If we never have another Republican president, capitalism will be gone in the US.
We can change the country’s name to North Mexico.
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