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To: patron_anejo_por_favor who wrote (278818)	9/26/2010 7:00:19 PM
From: joseffy	Respond to of 306849

Investors, Brace Yourselves for Tax Hikes By William Ehart 09/26/10 thestreet.com; As if battered investors needed more abuse, they are in for a rude awakening at the end of the year. That's when the Bush tax cuts, enacted in 2001 and 2003, are scheduled to expire. While many in Congress favor extending some or all of the cuts, President Obama has come out prior to this fall's congressional election strongly against the Bush tax breaks. However, a number of key Democrats including former presidential candidate Sen. John Kerry (D, Mass.) are working to extend the cuts that pertain to the middle class. But without action by Congress and the assent of the president, those investor-friendly tax breaks simply will vanish in the night as the ball drops on Times Square. Action before the election is seen as highly unlikely, even though Obama and party leaders wanted to make an election issue out of the matter. Republicans are expected to gain seats in Congress in the election and such a result might change the equation. While the tax change mainly will hurt the "wealthy" -- high earners with incomes above $200,000 -- any investor large or small will take a serious hair cut on next year's tax bill. The most dramatic change will be in the taxation of dividends. Who doesn't love big, stable dividend-paying companies in these uncertain times? Well, you may have to adjust your portfolio as the tax on dividends will rise from the current Bush-era maximum capital gains rate of 15% to a Clinton-era maximum income-tax rate of 39.6%. While Obama had proposed a 20% tax on dividends as an alternative, that now appears unlikely given budget rules enacted by Congress. Speaking of capital gains, that attractive 15% maximum rate will rise to 20%, so if you have big gains, you may want to sell your high-dividend stocks this year and buy different stocks with less tax impact. The story is the same for income tax rates. The Bush brackets of 10%, 15%, 25%, 28%, 33% and 35% will revert back to a schedule of 15%, 28%, 31%, 36% and 39.6%. The so-called marriage penalty and the phase-outs for itemized deductions and personal exemptions for wealthy taxpayers will also return. If it's not one thing it's another for shell-shocked investors.

To: patron_anejo_por_favor who wrote (278818)	9/26/2010 10:00:46 PM
From: joseffy	Respond to of 306849

US Treasury stumbles selling Citi shares By Francesco Guerrera September 26 2010 ft.com The US government is in danger of missing its deadline of divesting all of its Citigroup shares by the year-end after a fall in stock market trading volumes prompted authorities to slow down sales in July and August. The lull could prompt the US Treasury, which has a stake of about 17 per cent in Citi, to consider a share offering instead of selling the stock in small quantities in the market, according to bankers and analysts. The sales of Citigroup stock have slowed way down in July and August?...?The US Treasury will not finish its share sale by?...?the end of the year,” said Linus Wilson, a professor of finance at the University of Louisiana. “The only option for the Treasury if it wants to exit Citigroup before the year-end seems to be to conduct a large secondary offering of the stake.” The government only seeks to sell shares equivalent to a small percentage of the overall trading volume in Citi to avoid depressing the price. By the end of August, less than half of the government’s 7.7bn shares in Citi had been sold, with the average number of shares sold per day falling sharply, the latest official data show. The Treasury has until Thursday to complete the sale of 1.5bn shares before entering a “blackout period” ahead of Citi’s third-quarter results. Missing the December deadline would not have a great financial impact on the Treasury, which has already made a profit of more than $2bn on the Citi investment. But the delay would be emblematic of the difficulties faced by the authorities as they extricate themselves from the aid doled out during the crisis. Two years after Washington injected billions of dollars into banks, insurers and carmakers through the troubled asset relief programme, Citi and the insurer AIG remain the two largest groups yet to repay taxpayers. The government’s continued involvement complicates Citi’s efforts to convince investors its troubled past is behind it. Citi declined to comment. The Treasury, which has said the Citi sale would depend on market conditions, declined to comment. Morgan Stanley, which is selling the shares on behalf of the government, did not respond to a request for comment. Citi shares have risen nearly 18 per cent this year but volumes have fallen in line with the market during the summer. By the end of August, Treasury has sold 3.5bn of the 7.7bn shares it received last year when it converted $25bn-worth of preferred shares, netting a profit of more than $2.6bn, according to Prof Wilson. The shares were part of a $45bn in rescue aid received by Citi during the crisis. The sale of the latest tranche began on July 23 when Treasury said it had authorized Morgan Stanley to sell 1.5bn shares in the market. By the end of August, though, the authorities had sold just 900m. The average number of shares sold in the period was about 33.5m compared with a peak of 66m a day in April and May.