Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Obama supports raising the tax rate on Capital Gains and Dividends from 15% to 28%. When questioned about this (I believe it was on Meet The Press), he responded that it was the right thing to do. This was in spite of the fact that the moderator pointed out that tax revenues went up when the tax rate was decreased and went down when the tax rate was increased. To this he responded that it didn't matter because it was a "fairness issue". Possibly the reported fact in WSJ that the Obamas own very few investments in the Stock market explains this skewed logic. The young Obama backers probably will not find this significant but I would bet that older voters who depend on investments to supplement their Social Security income will not appreciate a 13% increase in taxes.
He will and has begun to come down from the 28% mark. He wants to target a point where revenues still increase. You are correct that seniors with a high percentage of income from investments would be hurt. People forget that you don't have to be wealthy to pay capital gains you just need to be invested.
I do some financial advice for retired folks, and my current advice to them is that if Obama wins the election they should move their mutual fund investments over to Index Funds, significantly reducing their current year tax liability.
This will also significantly reduce current Government tax revenue, but that's life.
Every person who has a 401-K will have a higher tax liability under Obama's plan.
Retirees will be hit hard. People who sell real and intangible property will pay a higher percentage of their gains in taxes.
That's not the way to stimulate the economy!
It is the way to deepen the recession.
Please read the attached explaination of capital gains taxes and 401/403 plans. They are different then mutual funds in how they are taxed and are not impacted by capital gains as many think. However attached is a description so readers can understand and be informed. PolitiFact | McCain stretches on who gets hit
Obama supports raising the tax rate on Capital Gains and Dividends from 15% to 28%. When questioned about this (I believe it was on Meet The Press), he responded that it was the right thing to do. This was in spite of the fact that the moderator pointed out that tax revenues went up when the tax rate was decreased and went down when the tax rate was increased. To this he responded that it didn't matter because it was a "fairness issue". Possibly the reported fact in WSJ that the Obamas own very few investments in the Stock market explains this skewed logic. The young Obama backers probably will not find this significant but I would bet that older voters who depend on investments to supplement their Social Security income will not appreciate a 13% increase in taxes.
To help the discussion along please find attached a detailed analysis of the topic. It is up to the reader to digest, interpret and form their own opinion.
To help the discussion along please find attached a detailed analysis of the topic. It is up to the reader to digest, interpret and form their own opinion.
I'm very familiar with both issues, the 401K and who benefits most.
However, many low income retirees depend upon dividend and cap gain income, they have monthly amounts transferred to their checking accounts. They will be substantially impacted by the proposed change.
If Obama wanted to constructively address the issue, he could change the rate to something like 65% of your incremental tax bracket, negating much of the severe advantage cited in the article.
I'm very familiar with both issues, the 401K and who benefits most.
However, many low income retirees depend upon dividend and cap gain income, they have monthly amounts transferred to their checking accounts. They will be substantially impacted by the proposed change.
If Obama wanted to constructively address the issue, he could change the rate to something like 65% of your incremental tax bracket, negating much of the severe advantage cited in the article.
Agreed I just wanted it clear that tax sheltered accounts were different.
I predict that the capital gains tax rate will not exceed 25% under Obama. It may even be 20%. Even under Bill Clinton for most of the 90s, the cap gains rate was 28%, and only later in his term did this drop to 20%. And everyone knows that the 1990s had a booming economy. So a cap gains tax rate between 20 to 28% is in line with what we had in the 1990s.
Please read the attached explaination of capital gains taxes and 401/403 plans. They are different then mutual funds in how they are taxed and are not impacted by capital gains as many think. However attached is a description so readers can understand and be informed. PolitiFact | McCain stretches on who gets hit
I am very well aware that Capital Gains taxes are not paid on 401K and IRA (not including Roth IRA) until distributions are taken. HOWEVER, and this is a big however, when the senior reaches 70.5 they are required to start taking distributions. For those seniors who dutifully scrimped and saved to put away money in IRAs and 401K since they were instituted, they face a significant tax hit. So much for trying to do the right thing and not be dependent on SSI. My understanding is that earnings from the date the money was put into the retirement account will be taxed at the higher rate in effect when the distribution is taken. And by the way I have worked as a volunteer tax preparer for several years.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
