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Politics : Formerly About Advanced Micro Devices

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To: Alighieri who wrote (624712)	8/16/2011 8:47:51 PM
From: Tenchusatsu	1 Recommendation Read Replies (2) of 1577343

Al, > I would pay an a 25/30% tax on 10%/15% cap gains than bag 3% tax free on munis... The ROI on munis and other bonds (tax-free or otherwise) is almost guaranteed. The ROI on stocks and equities is not. Proper diversification states that you should have some funds in both, but the allocation between the two will change depending on your tolerance for risk. So what happens when the risk stays the same, but the returns are lower? The prudent thing to do would be to allocate less of your portfolio toward that area. And that's what will happen if, say, you raise taxes on long-term cap gains to ordinary income levels. Of course, I don't believe for a moment that such a tax hike will mean the end of America as we know it. But these actions have consequences, often unintended. And for people who think these moves will only affect the "rich," they're going to be in for a rude awakening, especially when their 401(k) plans take a hit. Tenchusatsu. P.S. - I disagree with the notion that the S&P downgrade is just a short-term effect. Personally I see it as the first significant vote of no confidence in public policy. And I believe that we are in a policy bubble.

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