Speaking Out for Louisiana Citizens

Speaking Out for Louisiana Citizens

BIDEN - CAPITAL GAINS TAX

It appears very ill-logical for President Biden’s capital gain tax to increase to 43.4%. It sounds good but actually it will cost the government revenue. The bureaucrats claim this preferential tax rate for long-term capital gains is unjustified. Especially for gains on assets held for less than a year are taxed the individual rate. They claim that a preferential rate, which is expected to vacate, is unfair. The current top rate is 23.8% which includes a 3.8% ObamaCare surcharge.

Under the current tax rules all gains and investments are fully taxed, but all losses are not fully deductible. Losses can offset gains in any given year, but losses that exceed gains can only be offset by personal income up to $3,000. It has been said by many U.S. presidents that “The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital from static to more dynamic situations.” If we raise this tax, we will actually destroy what we have and wind up with less money. We need people to make long term investments that are subject to capital gains. Generally these investments are very risky. As rates rise American tend to hold on to their assets longer, reducing realizations. The CBO has found that for each 1% increase in the capital gains rate, there is a 1.2% reduction in realizations. We need people to keep these investments as such and enjoy the benefits of the capital gains tax and leave this legislation alone.

 

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