Wanna get paranoid? Check out this post I made to UB only ONE week ago:
Message 17884129
<<For example, leave the market alone but give everyone a 50% tax credit for any loss in value of their stock.>>
Wanna know the ultimate "quick fix" for post-bubble economic malaise? Simply allow all capital losses on stock to be taken against current income (not limited to $3000, like it is presently). Make it retroactive to tax year 2000...VOILA! Instant cure!<G>
(Hope no Kongressional Klowns are reading this...it would be toooooo funny if someone actually proposes this!<NFG>)
Now check out this article from yesterdays MarketWatch:
www2.marketwatch.com
Pressure builds for investor tax cuts
By Deborah Adamson, CBS.MarketWatch.com
Last Update: 12:03 AM ET Aug. 22, 2002
LOS ANGELES (CBS.MW) - Support is growing for investor tax relief amid the lumbering bear market, but the federal government's rising red ink is snuffing out those hopes, experts say.
President Bush heard from advocates of investor tax cuts during his economic summit last week. They back raising the ceiling for tax-deductible capital losses to $20,000 a year and cutting dividend and capital gains taxes.
But with U.S. budget deficits rising - July's alone hit $29.2 billion -- passage of another tax relief plan could be difficult politically.
"It's not likely to happen," said Martin Nissenbaum, national director of personal income-tax planning at Ernst & Young. "These tax proposals won't go anywhere unless they're part of a bigger bill."
Grover Norquist, president of Americans for Tax Reform, is more optimistic about the prospects. He noted that 60 percent of voters are stockholders - important in an election year. Overall, about half of all U.S. households own stock, according to the Investment Company Institute.
"Politicians who say don't help those rich people has half the country saying 'What?'" Norquist said. "They're out of date."
Here's a list of proposals being considered that would keep more of investors gains in their pockets.
Raising cap loss ceiling
Americans have lost a pretty penny in the stock market. In 2000, the average reported short-tem loss was $34,310 - up 131 percent from 1996 - and the number of taxpayers reporting such losses rose 129 percent, said Rep. Ernest Istook, (R-OK), citing IRS data.
Last month, Istook introduced a bill to increase the capital loss allowed in tax deductions to $20,000 a year from $3,000 -- plus index the amount for inflation. He noted that the $3,000 ceiling has not been increased in more than 25 years.
An investor generates a capital loss when he or she sells an asset at less than the purchase price. For example, you bought 200 shares of XYZ Co. at $25 a share. Your cost is $5,000. The stock market dives and you sell the stock at $6 a share, or $1,200. You lost $3,800.
According to current tax law, you can only deduct $3,000 of your $3,800 loss in the first year (assuming you don't have a gain to offset the loss). You have to wait until next year to deduct the $800.
How are you taxed when you've made a gain on your stock? Let's say that instead of selling at $6, you sold at $45. Your capital gain is $4,000. You're taxed the full $4,000 in the year you sold the stock.
"It's more of an equitable issue," Nissenbaum said. "They tax people on gains and don't allow them to take losses at a reasonable level."
However, Charles Gabriel, senior Washington analyst for Prudential Securities, said $20,000 is too high and won't pass political muster. It might help investors during the bear market, but if left on the books, the $20,000 limit would help mainly "fat cats" who don't need it. Instead, he supports doubling the cap loss target to $6,000.
GOOD GAWD! ARE SOME KONGRESSIONAL (and Presidential) KLOWNS TURNING TO THE CFZ FOR POLICY ADVICE! Holy $hit, if that's the case, I'm going clown long gold bullion futures and moving to New Zealand for good!<G> |
