Interesting CNN comment regarding the 'Buffet Rule'.
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10-04-2012, 01:37 PM
Interesting CNN comment regarding the 'Buffet Rule'.
http://money.cnn.com/2012/04/10/news/eco...?hpt=hp_t3
By ThinkCareful

If you've invested money over the years knowing that you'll have to pay 15% tax when you sell it, you could make the argument that they shouldn't be allowed to change that tax on any money you've already invested, since you're changing the rules on them. But they won't, so here's what will happen:
Say you have 100,000 invested over the years. (a plumber who throws $400 at it a month is going to have about that after 18 years) Say you invested it all in Apple. They've tripled in the last couple years. Now you have 300k. So, you've increased 200k. if you want to take it all out now, you'll have to pay 15% of that increase. Of that "Capital gain". That's $30,000 in tax. That's nothing to sneeze at! The Buffet Rule makes the capital gains tax go to 29.97% That means you'd have to pay $60,000 to cash out. So what are you going to do?
Well, if that law passes, it'll have a start date. Say they pass it today, and say, "Ok, it kicks in next month" Then, you'd be smart to cash out NOW, and pay the 15% and put that money elsewhere that is not subject to capital gains, like certain kinds of IRAs, etc. If you wait until next month when it kicks in, you'll pay an extra 30,000. Your'e not dumb, you pull out now.
Well, you're not the only one. When many investors all "Sell" at once, the stock market drops. When hordes do, the stock market crashes like in 1929. Remember "All we have to fear is fear itself?" That meant "The economy isn't that bad, but if we get scared and sell our stock and take our money out of the bank, then we'll CAUSE it to collapse." No one listened to him and they did, and it did.
Obama could collapse our stock market with the buffet rule.
"Oh, but it's only for millionaires"? you say? Well, they'll determine how that's figured, and that could change. They just have to get their foot in the door. When they sold us the income tax it was 'Oh, it's just 1% and 7 if you're rich. NOW, it's 10 if you're poor and 40 if you're rich. This isn't the same as saying the cost of bread went up, this is a PERCENTAGE. There are only 100 percent to work with. You can't just keep raising it, or people stop working. (look up the Laffer curve to see how that works.)

“Whenever you find yourself on the side of the majority, it's time to pause and reflect.”

-Mark Twain
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10-04-2012, 09:58 PM
RE: Interesting CNN comment regarding the 'Buffet Rule'.
The number of people who fall under the Buffett Rule is quite small, only 60k. Also the CRS did a report. The Buffett rule shouldn't affect businesses nor investments and savings
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11-04-2012, 08:53 AM
RE: Interesting CNN comment regarding the 'Buffet Rule'.
(10-04-2012 09:58 PM)Indian Wrote:  The number of people who fall under the Buffett Rule is quite small, only 60k. Also the CRS did a report. The Buffett rule shouldn't affect businesses nor investments and savings
I'm pretty sure it affects single earners of 200K or more and families with 250K or more.

So what are they really trying to do? Raise revenue? Or punish the wealthy? Even an extra million (unlikely) from 60K people will only net an extra 60B. So raising 60B/year for say 10 years doesn't even cover our deficits for one year.

“Whenever you find yourself on the side of the majority, it's time to pause and reflect.”

-Mark Twain
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