Re: Gibson raided
I'm not a tax expert, but there are at least two rates on capital gains, depending on how long the security is held... For short term capital gains, (less than one year) we pay ordinary income tax rates, for long term holdings more than one year there are lower rates depending on what bracket you are in.
Starting in 2013 medicare tax is increasing to 3.8% (was 2.9%) and will be charged on investment income too, formerly it was just applied to regular income but was increased in the recent healthcare legislation (on $200k+ earners).
There's a $250k exemption (per taxpayer) for primary residences, If it wasn't her primary residence it might be worth living there long enough to establish it as one.
I've heard rumors of work on a plan to eliminate the corporate taxes on off shore profits, and reduce some loopholes to get nominal rates lower while being revenue neutral, but nobody is optimistic that congress would consider such in this climate. I suspect the president would love to free up the $1T on corporate balance sheets (held offshore), to create domestic investment and jobs before next year's little election.
I mentioned GE already and while the example is factual its not some mysterious loophole, but some $32B of losses they took in their finance division. It seems fair enough for business to apply real loses from one dividion against profits in another and to carry it over into future years... For individuals there's an Alternate minimum Tax to keep deductions from completely wiping out high income tax liabilities. Perhaps something like that for corporations could make sense, while it's hard to get blood from a stone, or a corporation that isn't making a profit. I suspect GE will be paying more taxes as these losses roll off.
It's the loopholes we don't know about that bother me. They are just about to pass a new improved patent law, and one drug company finagled a special loophole to retroactively forgive a mistake they made (they missed a patent filing date by one day on some big dollar drug application).
There is a lot of social engineering in the tax code, including a $250k exemption for selling homes. Attacking the poor people for not paying enough taxes is pretty much the other side of the same coin as criticizing the wealthy for not paying enough. This class warfare is distracting us from the man behind the curtain, borrowing and spending our money.
I wish the government would just spend (and have spent) less... So we wouldn't be in a position where we pretty much have to increase taxes, and cut spending too. All these very expensive short term band aids on the economy don't fix the fundamental issues. Here we are a couple years after the last big short term patch job, and we're surprised that that the root issues haven't changed? I'm shocked! Another short term stimulus, will be yet another short term postponement of reality, but all this borrowing for the "health" of the economy, reminds of ancient medicine that used to bleed patients with leeches. I guess we didn't bleed the patient enough with the last stimulus program.. Doctor, bring us more leeches...
JR
