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October 11, 2008

Comments

haha - yes, americans are outraged at all the capital gains taxes they'll be paying this year

Capital losses are deductible against ordinary income, but only up to $3000 a year. Any excess is carried over into the next year.

So, how's about increasing that $3000 number. I'm sure it would benefit *lots* of people this year.

JC

My wife and I were deliberating having to take a home equity loan to help cover our massive capital gains burden this year. Thank God for patriots like Senator McCain.

Did you know that he was once a POW and didn't have a home or a kitchen table?

Seriously, how out of touch can one man be?

Not that I don't appreciate a good bit of "spot the loony." But I suppose it is possible that there are people out there who had invested 10 or 15 years ago and would get out of investments which had risen significantly, but are now tanking, if it were not for a worry about some tax liability.

Not to concern troll or anything, I was just thinking about this.

In general, I think capital gains tax cuts merely serve as tax shelters for the truly wealthy, who don't work, they invest. If you make 10 million a year as a salary, your tax liability is - what, 40%? But if you have $100 million in net worth, and make your money off investing that $100 million, making a 10% profit, you are taxed at, what, 20%?

Only to the uber wealthy does this make sense.

Nick, I don't know any more about economics than the next guy, but it seems to me that our markets don't lack for people willing to sell of their assets right now, and increasing the incentives for more people to join them might have a downside.

What WT said.

okay - ignore my comment in favor of what WT said. In my defense, I was momentarily distracted by the Red Sox putting a relief pitcher in that I think is old enough to be McCain's son.

Capital losses are deductible against ordinary income, but only up to $3000 a year. Any excess is carried over into the next year.

So, how's about increasing that $3000 number. I'm sure it would benefit *lots* of people this year.

Or, much better if you're looking to appeal to the middle class and especially those hitting retirement, how about keeping the number at $3,000 and changing it from a deduction to a refundable tax credit.

Floyd Norris in the NY Times:

http://norris.blogs.nytimes.com/2008/10/12/got-any-capital-gains-left/#comments

Got Any Capital Gains Left?

"But such a move would do little for the people who need help the most...

There is a case for temporary tax cuts now to stimulate the economy, but it is tempered by the soaring deficits being brought on by the recession and the costs of the bailout. If taxes are to be cut, this not the place to do it."

I think that the story must be confused, in the same way that they seemed to imply that their mortgage was actually not a real loss at the taxpayers expense at first.

The only way this makes sense is if they're suggesting some of the failing businesses get a tax break, in order to privately fund their own bailout, a proposal the GOP made in the house, I believe. But that ship has sailed.

It could also be their response to Pelosi and many of us who are recommending a stimulus plan, including Roubini. Instead, they're going to offer tax cuts as their stimulus package in response.

However, given their recent record, we need more information to actually understand what they're talking about.

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