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

Whatever gave you that idea? In the case of the investor that earned their money through their labors yes but when they sell their investment they are only taxed on the increase in their investment AKA the gains their capital made. The hyper-rich live off the capital gains which are already taxed lower than other incomes and since they buy their investments with money from other investments that money is never taxed at the normal rate. Worse still would be if the Republicans do away with the estate tax even many capital gains taxes could go away as well.
Currently if you inherit stock it is valued at the time of death of the deceased and you pay inheritance tax on that if it's large enough. Here's a scenario for you.
Your daddy bought 1000 shares in a startup company called Microsoft for $100. Today it would be worth over $3 million dollars. Assuming that you get over the huge deductible that's what you'd pay inheritance tax on. The capital gain on the difference between the $100 and $3 million is never taxed.
If the inheritance tax is eliminated then you could get the $3 million free and clear and it's capital gains only begin after you receive the stocks based on the value the day you received them.

 

You are incorrect. People retiring pay the higher income taxes on the Ira and 401K. Only the super rich can benefit from the lower cap gains tax.


https://www.investopedia.com/articl... in your,the same rate as regular income.  

 

huh? Everyone pays cap gains if they have it...not just the rich....and everyone that has a IRA or 401K benefits from those....people can have both, and most do.

 

He's seriously considering anything if he thinks it will help him win the election. As for the effect on the country......he couldn't care less.

 

The problem with blinding envy is that it's so all consuming that you lose track of the facts. The top earners are top earners for one or two years tops. While most of their income in those years is capital gains, it's not stock. It's selling a business they built up over decades. It come from a life long choice not to live high, but to reinvest most of their earnings back in their business and take it out in one or two years upon their retirement.

The IRS posts data on those people. It may be stand alone or on their SOI pages. Fact is, because they are lumping most of a life's earnings into one or two years as far as the IRS is concerned, they may end up paying an equivalent or higher rate overall. I don't fault policy makers for the apparent tax rate break given to these people, who BTW, funded half the SS and Medicare of employees along with other benefits along the way.

 

Trump says he is 'seriously' considering a capital gains tax cut
If only he would seriously consider a spending cut.

 

. . . capital gains also refers to gains made from the sale of stock. In fact, that's what it primarily refers to.

 

Yes it's possible to say your investment and reinvest it....but the orginal money had to be earned at some point via ordinary income...

"hyper-rich" - is that different then "super-rich"? how much wealth is that ? People can retire early and that's great if they live on tehir investments...what's the problem?

It woud depend a great deal on how those shares were passed...ie via case, or the stocks themselves....the $100 was already taxed....it was taxed when my dad earned it.
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If he passed me simply shares, then yes I'd get a step up to the current fair market value and pay cap gains on whatever it was when I sold it....if dad hadn't died it woldn't have been taxed either, unless he sold it.....not sure why it simply be willed to my name means it should be.....it will be when i sell it though

 

I said the working stiff paid income taxes on the investment amount but they only pay capital gains on the increase in value. They buy $10,000 in stock with money they paid income tax on and sell the stock for $15,000 they only pay capital gains on the $5000 increase. They are not being double taxed. The 0.1%er, since you don't like hyper-rich, buys his stock with money earned from selling other stock, he is never charged the normal income tax rates.

Under current law the estate tax on that $3 million in stocks is $0, the capital gains tax on the $3 million is $0, only when the inheritance passes $11,580,000 does the estate tax kick in and only of the amount over that. You would only pay capital gains when you sell on the difference between $3 million and the selling price, ie if you sell the stocks for $3.1 million you pay capital gains on $100K. If your dad had to work for a salary to earn $3 million then all of that money would be taxed but if it's appreciation of an investment then it is not.

If the estate tax law is eliminated then increases in values may never be taxed at all. I could will my child $1 billion in investments and as long as they don't touch the principal it could grow to $10 billion, that they will to their children, on and on and never pay any taxes on that growth. In the meantime they can use it for collateral to make other investments or just live off the dividends or rent on properties.

The founding fathers actually discussed the dangers of this happening and they feared a return to the feudal system of Ol' England where the government would be unduly influenced by financial dynasties. They were right.

 

1) that's true and true for everyone.....rich, poor and working class whoever. I am not a 1 percenter, but when I sold my house, I purchased another with the return, thus not paying cap gains.....
2) well yeah there is no cap gains, because it wasn't sold...it was transferred...when it's sold there will be cap gains....that's true for anyone, rich, poor, who inherits stocks.
l3) you don't pay cap gains until you realize the value...ie sell it...so in your hypo with your children and grandchild and 10 billion...well who cares? They are benefiting from it, they aren't selling it. Seems rather stupid not to sell some to live on

Cap Gains doesn't just include stocks....it also includes real estate and businesses....if a small business owner opens their lemonade stand for $1000.00 and 10 years later sells it to Coca Cola for $100,000 he pays cap gains on that. if it's not reinvested. The reason we tax this different is we want to encourage investment, we want people to open businesses, and buy homes etc

 

Capital gains tax rates allows billionaires to pay a lower tax rate than the middle class.

And Trump wants to lower capital gains tax rates????

**** him!!!!

 

A reduction in capital gains means an increase in the profit for investors. Meaning they have more money to invest which means businesses have more money with which to expand and create jobs.

 

Except the 99% had to work and pay income tax on their investment, not so the 0.%ers

Incorrect. The stock is valued at the time of inheritance. If you sell it the day you get it you pay 0 capital gains. The $3 million in appreciation only gets taxed at all if your inheritance exceeds $11.5 million.

It would be stupid to sell it, much better to borrow and use it as collateral and live off the income generated by your borrowed funds.

 

1) of course they did...money doesn't just grow on trees....
2) say otherwise....you pay gains one what is earned when it realized...that's true for all income levels
3) Living off loans is smart? How are you ever gonna pay it back? and if you never sell it...what's the issue? There is no realization...nothing to tax....

also the loan would be considered ordinary income and you'd pay taxes on that rate

 

what about the people who inherit massive gifts and invest that money?

they paid ZERO taxes on the gift. Now Trump wants them to pay even less on their capital gains!!!

 

Great idea. The government gets away with taking too much already. I support all tax cuts, but they need to be combined with deep spending cuts.

 

But the bequester paid a lot. Why the Cooke estate had to sell the Washington Redskins.

Hold on. I just remember that name has bad connotations for some. How about the Deep State Redskins???

 

The heirs pay the taxes.

https://www.baltimoresun.com/news/bs-xpm-1997-04-08-1997098023-story.html

 

Estate taxes are paid on the transfer. The taxes come out of the estate.

 

Yes, that money was earned. Just not by the rich, greedy, privileged parasites who got it...

So you admit that all asset value gains before death become tax-free. It was not taxed as earnings, it was not taxed as a capital gain, and in fact, it will never be taxed at all. Working people are taxed for earning income, while the super-duper uber-rich are not taxed on income they get without lifting a productive finger. That is what the system is designed to achieve. That is why it is evil.

 

87% f all stocks traded0n our markets are owned by the top 1% of income earners. Dirty Donalds philosophy, make the rich richer and pay next to no taxes JUST LIKE ME!!!!

 

Short term capital gains is taxed as ordinary income, so I presume you are referring to Long Term Capital Gains. In addition, of the $35.5T in US stock capitalization, $11T are in 401(K)'s and $6.2T are in IRA's. 401(K)'s and traditional IRA's grow tax free and distribute at the ordinary income rate. Avid investors don't let their investments sit idle and thus are often not advantaged with Long Term Capital Gains tax rates. With all due respect, I think you overestimate the tax rate advantage enjoyed by wealthy individuals in distributions of their stock investments.

On the other hand, I believe that investors in Sub-chapter S Corporations can choose how much profit (actually expense) goes to pay themselves a salary and how much is reinvested in their business and employees. FICA is a disincentive for an owner to take a big salary out of the business. That's why Democrats find it so easy to mislead people who never owned a business how unfair the tax code is.

 

Biden is responsible for the tax laws that allowed Trump to reinvest in his business and people rather than paying himself a salary. The flip side is that Trump donated his Presidential salary to the government quarterly and wrote an annual check to the government for any business profit that could be considered an emolument. In addition, Trump's kids are working for no compensation.

"Dirty Donald" is not nearly as adept at being dirty as Obama, who walked away with a tidy sum earned on the taxpayers' backs. He didn't build his fortune. We did.

 

Not necessarily. Holdings in your 401K are taxed at your ordinary tax rate when they are disbursed. Capital gains do not apply to them.

I think even though there are some middle class investors that will earn capital gains any reduction in the capital gain tax really impacts higher income earners and the wealthy a lot more. Capital gains are already taxed at a lower rate than ordinary income. If you wanted to help out middle class or seniors you would be better off to eliminate the taxes on interest income or at least on interest income up to the inflation rate. Bank savings, bonds, t-bills, government bonds, 401K, IRA are the primary holdings of the middle class and seniors and do not pay capital gains tax.