Fern
Elite Member
- Sep 30, 2003
- 26,907
- 174
- 106
Haven't been able to find any specifics on Obama's proposed tax increases. But I'm doubtful he'll get any through the House.
As a conservative I could support some, and go along with a few others if we get spending cuts in return.
As regards corporate tax rate increases, I can't see it. IIRC, Japan just cut their corp rates leaving us as the highest taxed country in the world. IMO, that's not a spot you want to be in.
I'd LOVE to see the carried interest provision repealed so fund managers' income was properly taxed at regular rates and subject to FICA.
Since about 50% of people pay no taxes, I'd like to see another 'minimum tax'. say 5% of adjusted gross income. And no more refundable tax credits, they're just welfare type payments disquised as tax cuts.
I see an awful lot of confusion about stock options here. If you're given stock as compensation it is taxed as regular wages. Stock options that get preferential treatment are really no different than any other stock investment. The execs must buy the stock at FMV at the date of grant. If the stock doesn't go up, the options are worthless.
Capital gains. Long term cap gains rate must be lower than regular income. If not, given there is inflation, capital assets would be an awful investment. Real estate and stock values would fall. But there's no equity/fairness in giving the same 15% tax rate to someone who held for only a year vs someone who held for 10-15 yrs. Even as it stands now, those holding LT assets for 10-15 yrs usually pay tax on inflation and have no real inflation adjusted gain. The accurate solution is adjusting for inflation, but Congress (unlike other nations) seems to find that too complicated. But a reasonable approach would be to index the rate for the number of yrs the asset was held. You would, in effect, be raising the tax rate and generating some federal revenue.
I never saw a valid reason for lowering the tax on (ordinary) dividends to 15%. It did however, make stocks a better investment thus driving up the stock market. To reverse it would surely have a negative on the stock market. In any case, I think the best solution (although politically undoable) would be to eliminate corporate income tax and attribute dividends (whether or not actual paid out) to individuals and let them pay tax at regular rates. This would prevent the hoarding of dividends and essentially converting them to LTCG upon the sale of stock. We already do this with certain investment companies/funds.
I could accept a few % increase for individuals in the highest bracket, say above $250k. I think it reduces demand but would accept it as a trade off for getting some spending cuts.
But, AFAIK, we have no tax professionals in Congress so we'll likely end up with garbage proposals.
Fern
As a conservative I could support some, and go along with a few others if we get spending cuts in return.
As regards corporate tax rate increases, I can't see it. IIRC, Japan just cut their corp rates leaving us as the highest taxed country in the world. IMO, that's not a spot you want to be in.
I'd LOVE to see the carried interest provision repealed so fund managers' income was properly taxed at regular rates and subject to FICA.
Since about 50% of people pay no taxes, I'd like to see another 'minimum tax'. say 5% of adjusted gross income. And no more refundable tax credits, they're just welfare type payments disquised as tax cuts.
I see an awful lot of confusion about stock options here. If you're given stock as compensation it is taxed as regular wages. Stock options that get preferential treatment are really no different than any other stock investment. The execs must buy the stock at FMV at the date of grant. If the stock doesn't go up, the options are worthless.
Capital gains. Long term cap gains rate must be lower than regular income. If not, given there is inflation, capital assets would be an awful investment. Real estate and stock values would fall. But there's no equity/fairness in giving the same 15% tax rate to someone who held for only a year vs someone who held for 10-15 yrs. Even as it stands now, those holding LT assets for 10-15 yrs usually pay tax on inflation and have no real inflation adjusted gain. The accurate solution is adjusting for inflation, but Congress (unlike other nations) seems to find that too complicated. But a reasonable approach would be to index the rate for the number of yrs the asset was held. You would, in effect, be raising the tax rate and generating some federal revenue.
I never saw a valid reason for lowering the tax on (ordinary) dividends to 15%. It did however, make stocks a better investment thus driving up the stock market. To reverse it would surely have a negative on the stock market. In any case, I think the best solution (although politically undoable) would be to eliminate corporate income tax and attribute dividends (whether or not actual paid out) to individuals and let them pay tax at regular rates. This would prevent the hoarding of dividends and essentially converting them to LTCG upon the sale of stock. We already do this with certain investment companies/funds.
I could accept a few % increase for individuals in the highest bracket, say above $250k. I think it reduces demand but would accept it as a trade off for getting some spending cuts.
But, AFAIK, we have no tax professionals in Congress so we'll likely end up with garbage proposals.
Fern
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