Federal Taxes -- Specifically What Impacts You!

[chinaco]

I think the key word in the above sentence is work. For retired folks without pensions, the lower tax rates on dividends and capital gains can be very significant. For example, a middle-class couple filing a joint return with taxable income of 65K which is all dividends and long-term capital gains have zero Federal tax liability in 2008.

My entire point is that most people do not have assets that generate $ that produce LT cap gains... Most people that acquired their securities through working have their assets in tax deferred accounts.

It appears that most people have an income tax burden not a LT cap gains burden. When the current LT cap gains law sunsets... most middle class Americans will not notice.

 

[FIRE'd@51]

My entire point is that most people do not have assets that generate $ that produce LT cap gains... Most people that acquired their securities through working have their assets in tax deferred accounts.

It appears that most people have an income tax burden not a LT cap gains burden. When the current LT cap gains law sunsets... most middle class Americans will not notice.

And my point is this is an early-retirement forum. Most people who retire early without a pension have a fairly significant taxable portfolio. Otherwise they wouldn't be able to retire early.

 

[chinaco]

And my point is this is an early-retirement forum. Most people who retire early without a pension have a fairly significant taxable portfolio. Otherwise they wouldn't be able to retire early.

I don't think everyone here is retired or if they are retired... retired Early... or perhaps they have pensions and SS + 401k/IRAs.


Did you look at the poll?

 

[FIRE'd@51]

Did you look at the poll?

Yes, and IMO, the questions in the poll were very poorly stated and too ambiguous to draw any valid conclusions.

 

[chinaco]

Yes, and IMO, the questions in the poll were very poorly stated and too ambiguous to draw any valid conclusions.

Perhaps. It is not a scientific study. But I think it provides some insight.

I have some taxable accounts... about 40% of our wealth. But DW and I are not typical middle class Americans. Our earnings are higher than the norm.... even after DW ERd

I think more Americans would benefit from income tax reductions than LT Cap gains reductions.

Given a choice, lower income tax or lower LT cap gains, I would choose a lower income tax.


Of course, LT cap gains should be a bit reflective of the risk investors take.


It all comes down to how the tax pie is sliced. And I think we are in for some reslicing over the next few years.

 

[M Paquette]

And my point is this is an early-retirement forum. Most people who retire early without a pension have a fairly significant taxable portfolio. Otherwise they wouldn't be able to retire early.

To be taxed on capital gains, you've got to have gains.

Alas, after this year, I don't think any changes in capital gains taxes for the next decade will have any effect on me. I'm going to be carrying forward booked losses for long, long time.

I doubt any changes will be made toward removing the ability to carry forward losses. That would have a chilling effect on starting new businesses as well as existing businesses that have a cyclic nature.