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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: TimbaBear who wrote (53685)	2/13/2006 12:08:11 PM
From: GraceZ	Read Replies (1) \| Respond to of 110194

Capital gains have been a feature in tax collection for many many years. The flavor may have changed from mostly cap gains in financial assets to a larger percentage of cap gains in RE in the last five years, but tax receipts always include cap gains. What we did have in say, 2000 and 2001 was a large portion of those gains offset by losses in financial assets. RE gains are far easier to avoid paying taxes on than those on financial assets. Most of the people I know speculating on things like buying up pre-construction and flipping have done tax free roll overs and have continued to postpone the inevitable tax consequences. My anecdotes about smaller businesses are strongly supported by the large increases in profit seen by their customers, who are mostly public corporations and whose financials are public. It is also supported by the strong GDP growth in Q3, which is where this conversation got started. I implied that the tax receipts supported the strong GDP numbers. Additionally, nothing you have provided so far has refuted the contention that the national phenomenon of house flipping is perhaps responsible for a significant part of the difference between the amount collected and listed under "Individual Taxes" and those collected under "Employment Taxes". You haven't shown that your thesis that the increase in tax collected comes from "flipping" is correct. The strong GDP numbers from Q3 support my thesis that it comes from productive activity. Selling an asset for more than you paid for it does not add a dime to the GDP. I have run across the phenomenon of the extra week in a quarter making numbers appear better than they should. It is one of the pitfalls one learns to be aware of. Tax periods contain exactly the same number of days every single year except for an extra day on leap year in Q1. What does change is the date that the tax is due. If it falls on a weekend or Holiday you have until the next business day to get your return in, so that if Jan 15 falls on a Saturday, you have until January 17 to file and pay, but the taxes due always cover the same number of days Q over Q (except for leap year). I thought you'd know this, this is why I thought maybe you were referring to people dicking around with the withholding and paying it late. It's not like this hasn't happened in the past but the penalties are so steep and justice so swift, almost no one does this.