Trump says he is 'seriously' considering a capital gains tax cut

It's pretty clear that you don't know what capital gains taxes are- and cutting them will not cause people to divest themselves of stocks, but to buy more. Lowering capital gains encourages investments which means improving the odds for new businesses- who hire people. Jobs.

Just a note about differences in IRA's that some may not understand. Conventional market investment gains are taxed the same at any age, whenever a stock is sold. IRA's are different.
IRA's have limits on the contribution per year- usually $6K. Nobody can dumping huge amounts of money into them, but the average man can build a pretty good retirement with one if he starts early and manages it wisely. However, taking money out is also regulated; there is an annual limit, and a penalty for early withdrawal.

On regular IRA's the contribution is not subject to tax at the time, but all the retirement withdrawals are- both contribution and gains.
On Roth IRA's the contributions are taxed money when made, but there is no tax at all on the withdrawals in retirement.

 

Long term rates are based on your income. The only uniform part of the equation is that everybody gets taxed at the same 25% rate on the recapture portion of long term gains on depreciated assetts . After that, the tax rates are 0%, 15% or 20% based on your income

 

No, the stepped-up cost basis on death is never taxed, even when it is realized. If Gramps bought some MSFT for $1K and it was worth $1M when you inherited it, and you sell it for $1M, that $999K gain has NEVER BEEN TAXED, is not taxed when you realize it, and never will be taxed. It is unearned and untaxed wealth that the rich are legally entitled to take far more of from society than anyone else.

No kind of loan is reportable as income, nor are loan proceeds ever taxed as income unless the loan is forgiven.

 

Technically it could be taxed as part of the estate tax as you may not have to pay taxes on it, but the estate may have to.

 

This is your thread, yet you make an accusation and don't substantiate it. Have you no self esteem?

 

I do like the idea of lower taxes in general. But capital gains is only taxed when people remove their investments from the market. This might encourage people to pull out their investments in addition to other putting in investments. A better idea is to boost consumer spending by boosting unemployment benefits. Or help businesses survive by giving them money.

 

Unemployment benefits that are too high create slugs who won't go back to work at a job that pays less. The $600 Federal kicker had that effect. Long term capital gains tax cuts make small businesses more liquid, refreshing ownership and potentially promoting growth.

 

We have an 8.4% unemployment rate. That means we have a very high number of people who are looking for a job and can't find one. We don't have a problem with unfilled jobs right now. So higher unemployment benefits is ok for now.

 

Only about 1 in 500 estates pays any estate tax, and the average rate paid is not only less than half the notional 40% rate, it's less than all but the lowest rate on earned income: under 17%.

 

Are you an ass?

 

Are you going to counter my insightful post with your own data to prove me wrong, or do you plan to validate my post by refusing to make your case?

BTW. Looks like your bikini is slipping off your nose.

 

At this point, much of the unemployment has been self-inflicted by Blue State Governors and Democrat Mayors in coordinated attacks to throw the election. We should not be subsidizing their selfish destruction of lives and livelihoods.

 

Your definition of insightful needs work. There no need for data, you were cherry picking one thing that resulted in a growing economy. I could do the same Bush Jr reduced them even further leading to the great recession. Would I be right? No, many other factors were involved. Are you right? No, many factors grew that economy.
Your insults need work as well, they make you look, well, like an ass.

 

You would be wrong. Bush cut tax rates gradually -- twice to pull us out of the Clinton dotcom debacle. The first in 2001 was too slow. The second in 2003 launched a steady recovery. That recovery stuttered slightly as 5 year ARMS began to reset in 2005 and word of mortgage defaults hit the news. Early in 2007, Pelosi tried to pass a job killing increase in the minimum wage. She backed off under threat of veto. Later in the year, she held Katrina victims and veterans hostage for that job killing IED and the trickle of defaults turned into an implosion.

At the bottom of the great recession was this:

*CUOMO ANNOUNCES ACTION TO PROVIDE $2.4 TRILLION IN MORTGAGES FOR
AFFORDABLE HOUSING FOR 28.1 MILLION FAMILIES*
WASHINGTON - Housing and Urban Development Secretary Andrew Cuomo today
announced a policy to require the nation's two largest housing finance
companies to buy $2.4 trillion in mortgages over the next 10 years to
provide affordable housing for about 28.1 million low- and
moderate-income families.
https://archives.hud.gov/news/1999/pr99-131.html

Not only did Cuomo cause the hand out of mortgages like hot cakes, but by using the GSE's, Fannie and Freddie, to do the deed, he applied a AAA rating to toxic paper, mortgage backed securities that contained his mortgages. The GSEs set the qualification bar as low as needed to put poor people into houses ,,, and mortgage companies and banks followed.

Yes it was Andy, the same moron who wasn't held to account and, as Governor of NY, killed thousands of elderly people in nursing homes.

 

It should be self-evident that the benefit is pretty much directly proportional to the amount of wealth owned. As the poorest half of the US population has derisory average net worth, and the wealthiest 1% own more than half of all wealth other than principal residences -- on which capital gains taxes are typically not paid anyway -- the effect of the proposed capital gains tax cut will be to disproportionately benefit the wealthiest.

The plan is brazen and transparent. By holding interest rates near zero, the Fed's Trump-appointed governors have blown the biggest asset bubble in history -- the Everything Bubble: stocks, bonds and real estate. Now, in an unprecedented move, the Fed has been issuing trillions of new dollars to pay the super-duper uber-rich peak bubble prices for their grossly overvalued corporate stocks and junk bonds, asset classes the Fed has never bought before: up to now, when the Fed has wanted to stimulate the economy by increasing the money supply, it has bought government debt instruments, reducing the effective interest rate the government has to pay on them.

So, not content with throwing trillions at rich, greedy, privileged parasites in return for nothing, Trump now wants to reduce even further the already derisory taxes they will pay on those unearned gains. The uneducated whites who are Trump's only significant demographic support bloc aren't intelligent enough to understand that as a result, the rich will own even more of their rights to liberty. Rich, greedy, privileged parasites support Trump, but they have only 1% of the votes, so they have to buy the votes of the gullible with campaign donations and control of the Faux News narrative.

 

There are problems with that conspiracy theory. First, other developed nations also did lockdowns. They tend to be more left wing just like blue state governors. Liberals just tend to honestly favor lockdowns more. Second, these governors and representatives in their state houses have their own elections to think about. If hurting the economy by locking down hurts Trump, then it will hurt them too. And they care about themselves the most, they are politicians.

I do believe that they over-did it with these lockdowns like other developed nations. But there is a case to be made that these lockdowns save hundreds of thousands of lives. These states can open up safely once cases are down and can avoid this drawn out period of months of people not going out because they are afraid of the virus. Also, even without official lockdowns, even if we have a lot of covid cases, people aren't going out like they did before, so the economic damage is unavoidable. We have also seen that the economic damage to the US is about comparable to the rest of the developed world who did stronger lockdowns and saw much fewer die. We have also seen that if states aren't careful, covid cases increase exponentially and that eventually reaches a point when hospitals become overwhelmed.

 

More than likely they will only have a temporary tax relief as they won't have the votes to make it permanent. This means more people are going to want to sell now while the tax rates are low, not buy more. You pay tax when you sell so you sell when tax rates are temporarily low. In the long term I might agree but still probably not because people who have the money to invest will do so to get the higher return and lower taxes from that growth compared to the tax one pays for hard labor and or operating a business.

 

Federal gains tax rates now are 15% long term (12 months +) and 30% short term (less than 12 months, and I expect you know that. You also know these have been stable for a long time- although some states have changed, so where you live alters the picture.
Trump has stated he was considering lowering gains taxes, but the amounts and conditions weren't stated.
I do consider the impact of these two tax levels with stocks. It means investing when you expect a short-term hold must produce a higher return than a long-term hold, thus for the most part, I tend to do less short term unless the opportunity looks very good.

If federal rates changed, I suspect it would be on both short and long-term, and if the change was uniform it probably wouldn't change my investment strategy at all.
I am a supporter of the idea that high taxation is an economy killer. Government should run on a percentage of national income- and it shouldn't fluctuate except in time of special emergency. Same as your personal or business financial management. When rates continue to increase, they disturb everybody's business balance, and if they push it far enough, as California is doing and NY is following, the tax base evaporates.
If you make enough intrusions and burdens on business and industry or anything, you stifle growth, and eventually- nothing will happen in that toxic environment.

An old staple in economics is that 10% of something is always more than 100% of nothing. Politicians don't seem to understand that, nor do they understand their use of money needs to be a stable share of the economy.