Hillary Clinton proposes sharp increase in short-term capital gains taxes

[DemocratSinceBirth]

Presidential contender Hillary Clinton will announce a proposal Friday afternoon to raise capital gains taxes for assets that are held for less than six years by top-bracket payers as a way to try and encourage long-term investing, and grow the economy.
Clinton's plan specifically seeks to double the period of time for the 39.6 percent top capital gains rate (from up to a year to up to two years), and then institute a sliding rate scale until assets are held for more than six years.


http://www.cnbc.com/2015/07/24/hillary-clinton-proposes-sharp-increase-in-short-term-capital-gains-taxes.html

[JaneyVee]

1. KNR!

[mmonk]

2. Yes!

I wasn't sure she would see the light. Kudos.

[DemocratSinceBirth]

3. I never understood why passive income is treated differently than earned income.

eom

[mmonk]

4. I think most likely lobbying by the traders and also the ideology that taxing capital

promoted by talking heads is a drain on the economy (which we know is ridiculous).

[DemocratSinceBirth]

5. I should have been more careful or specific...

I meant investment income...


Social Security, SSDI, and pensions are technically passive income...I can see treating them and taxing them differently and in many instances at a lower rate.

[mmonk]

7. I agree.

I also think doing this helps stabilize pension funds.

[mmonk]

6. I'm glad 3 of our candidates are aligned on this issue.

It makes my day.

[DanTex]

10. I agree. It should be the same rate.

The theory I've heard is that lowering capital gains taxes encourages investment.

[DemocratSinceBirth]

12. The theory is your losses are capped but your gains aren't.

For instance it's easy to lose 3k in the market which is where I believe market losses are capped.

I was wiped out in the Great Recession... I lost my home, car, business, and investments...

I had hundreds of stocks of Lucent that I bought at $20.00 or so and rode all the way up to $80.00 or so and down to $1.00.

[DanTex]

14. I do think that capital losses should be carried forward so that if your investments go

back up you shouldn't have to pay capital gains tax on "getting back to even". But I think that overall, cap gains and income should be taxed at the same rate.

[Chan790]

24. I feel compelled to point out what is obvious to bankers and investment advisors...

you haven't gained or lost anything in the market until you sell.

If I bought ZYX at $50, rode it all the way up to $300, down to $1 and sell it at $50...I've not made or lost a dime and there is no tax-impacting gain or loss.

Edit: The problem is a lot of people freak-out when their stock bottoms out and sell. Then when it starts to rise...they want to buy back in. So...they lose money twice.

[DemocratSinceBirth]

25. That's a bit of a theoretical distinction.

Some investments never return

[taught_me_patience]

20. The argument is that it is "double taxed"

Dividend income that you receive from the corporation is from post tax profit, therefore, theoretically it has already been taxed at the 39% corporate tax rate. Then you receive the dividend and it is taxed as income.

Corporations pay tax on investment income as if it were ordinary income.

[rock]

8. Hillary is slow and cautious

Many criticize her for this. Not me. Good going Hill!

[DemocratSinceBirth]

9. Many well meaning policies have iatrogenic effects

[rock]

15. And in this case?

P.S. I did not know the word iatrogenic and I had trouble finding an understandable definition for it. After several references came to the conclusion that it is a (usually undesired) side effect from a treatment, or analogically a policy. But what causes don't have possible side effects? Would it be better if Hillary were quick and reckless?

[DemocratSinceBirth]

16. No. My point is prudence is sometimes warranted as the road to Hell is paved with good intentions.

eom

[rock]

23. Gotcha!

Thanks. I am well acquainted with the road to Hell's pavement!

[oasis]

22. Hillary does it her way.(eom)

[ibegurpard]

11. Good policy

I do not believe she will go to the mat for this.

[seveneyes]

13. As long as it doesn't hit the middle and lower incomes

Millionaires can afford it.

[cascadiance]

17. I think a transaction tax would be better to hit the wealthy that buy/sell stocks quickly...

... that I think this tax increase proposal is intended to penalize. A transaction tax is far more focused on stopping speculative manipulation and buying by wealthy insiders, etc. or at least making them pay for it a lot more. That kind of activity is not really done by lower or middle class Americans at all, and they for the most part won't even notice a very small transaction tax if they are buying and selling stocks rarely, and using the market to INVEST in stocks and not just to play casino games with these stocks.

The problems with raising short term taxes on stock sales is that often times it hits the middle and lower classes more for the small amounts of stock ownership they might have, as many are forced to sell stocks sooner than they'd like when faced with things like Alternative Minimum taxes if they have that hanging over them on a stock purchase that they can't pay for with other assets they might have, or perhaps they have other big expense from medical issues, etc. that force them to sell stocks or other short term owned assets sooner than they'd like. A wealthy person can sell other assets and then more optimally sell those stocks with alternative minimum tax liability and not get short changed on timing of these sales as a lower class person would.

As a person who paid alternative minimum tax and tax on unemployment benefits the same year back during the dotcom era, I was one of those in the trenches that went through these kind of things.

[mmonk]

19. In my estimation, both are needed.

Especially since before Reaganomics and fake trade deals which were more about moving jobs over seas, corporations once carried 32% of the tax burden compared to today's 6%.

[marble falls]

18. About time. Bernie really is starting to worry her.

[Cha]

21. Mahalo DSB

[Scootaloo]

26. I welcome her slow, cautious, hesitant steps into progressivism!