Fixing 'Fiscal Cliff' Will Mean 'High, Higher' Taxes: Gross

CNBC ^ | 11/7/2012 | Jeff Cox

[gotribe]

...Consequently, Gross said, higher dividend taxes would make those companies less attractive and thus take the stock market down 5 to 10 percent.

That's "the ultimate danger here for the stock market," he said. "Dividends are sheltered in 401(k)s, they're sheltered in pension funds. At the margins investors pay dividend tax rates. To the extent that you raise them from 15 to, say, 25 (percent), that implies in terms of equaling after tax rates another 5 to 10 percent down in terms of stock prices. We've been very spoiled for the last 10 years."

[gotribe]

1932 all over again, they never learn.

[Gaffer]

What all this really is, the to-be-coming revelations about this calamity or that calamity, Benghazi et al, is the same thing as Obama getting up from the bed of his latest “one-night stand” and saying “By the way, you need to get yourself checked out - I gots the Herpes.”

[Doogle]

...back when they started 401k’s I remember asking people, “think about it, the government and the banks getting together to do you a favor?”.....the the secondary question,
What’s the tax rate going to be when you need to be drawing on it?

[Doogle]

...of course back then, would you have ever thought a big eared lying muslim Marxist would be leading the country?

[napscoordinator]

Well if they don’t do anything before 31 December, we all will have higher taxes regardless. Those damn Democrats are seriously in charge right now. All Reid has to do is block whatever the House sends over until 31 December and we are all screwed. Ugh!!!!

[Truth29]

"1932 all over again, they never learn."

Maybe they do - equal distribution of the misery, vast increase in dependency, rising support for a government that feeds you, etc. Sounds like an Obama plan.

[Alberta's Child]

I'm not so sure that I agree with Gross here. Higher dividend taxes may simply cause the stock market to revert back to its pre-2001 days when blue chip stocks that pay steady dividends lose their appeal in favor of growth stocks that pay no dividends but offer opportunities for capital appreciation.

In fact, I would even suggest that some economic growth in this country has been limited over the last 10 years simply because the tax code doesn't provide the same incentives like this that used to be in place.

These major corporations are not stupid. Change the tax code on them, and they'll simply change the way they do business to reflect the changes to their bottom line.

[formosa]

Watch out my fellow Americans you are about to mugged to support fools who have not learned to so much as to cook a meal. Stay safe and be prepared. They will literally end in chaos when it all runs out.

[gotribe]

In the long-run, I agree with you. Increase divvy taxes and they will stop pouring so much money into divvies and do more buybacks. In the end, they’ll privatize and pay the lower corporate taxes that are coming. Good for them.

However, over the next couple of months, I don’t intend to sit around and watch my retirement money get a 10% haircut.

[Alberta's Child]

If I were totally convinced that the stock market is going to get a "10% haircut," I'd sell all of my stock holdings in my 401(k) and sit on the cash until the market declines by 10%, then start buying back the exact same investment instruments afterward.

Personally, I think any anticipated "fiscal cliff" scenario is simply going to incentivize companies to pay a lot of dividends out of their cash holdings between now and the end of the year.

[Alberta's Child]

I would also add that the U.S. is not going to get out of its fiscal mess unless future hikes are more regressive than the current tax environment. In other words, people who pay little or no taxes today are going to be expected to pay something in the future (hence the appeal of a VAT).

How ironic is it that the election of Barack Obama may very well drive the decline of the "47%" -- simply because a lot of those people are going to soon join their "53%" counterparts as taxpaying citizens.

[LibLieSlayer]

It is going to happen so get ready for it. We are ALL paying more... wait until the illegals and those that foul their own beds find out that their little paycheck just got smaller. Bring on the pain... the sooner the better... I am sorry for the Military but as for the pain... to cure cancer they almost kill you with chemicals and radiation... but they kill the cancer and you barely survive to recover... that is what is coming... ready yourselves accordingly. Me... I'm John Galt.

LLS

[LibLieSlayer]

Bret on fox last night was interviewing communist patty murray and she said that any tax deal would have to cover everyone... that all Americans will have to share in the tax burden... to be fair and to meet with marx’s approval... they must cover every working American. They are coming after everyone... wait until the obamaphone creatures find out that they owe obammy... or dey gets da slammy.

LLS

[Wildbill22]

I am very seriously considering cashing in my 401K. Pay the high tax on early withdrawal, pay off all total debt and perhaps buy some silver or gamble it on commodities futures. Otherwise it will get raided to pay for Social Security, or taxed extremely high anyway.

And anything but to let these mooching bastards get it. At least I will have SOME benefit from it.

Too extreme?

[BlatherNaut]

How ironic is it that the election of Barack Obama may very well drive the decline of the "47%" -- simply because a lot of those people are going to soon join their "53%" counterparts as taxpaying citizens.

Schadenfreude :-)

[CincyRichieRich]

I don’t see where Boehner has anything to lose; he should play the game of chicken, get Fox and any other cameras which will cover him and start educating like Rush says our side needs to do:

* constitution
* what the fiscal cliff means
* taxes
* how each impacts YOU and the reality of not doing anything

Otherwise, he and congress WILL be blamed and yes, the country has proven they are stupid and gullible.

[ctdonath2]

Federal revenue never exceeds 20% of GDP.
Never.
We’re at 19%.
Raising taxes won’t work.

[EricT.]

Wait... is this JOHN Boehner you’re talking about?!?

*eyeroll*

[Chgogal]

There are longterm capital gains tax increases as well.