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Wealthy Dump Assets Amid Worries About Going Over 'Cliff'
cnbc.com ^ | November 12, 2012 | Robert Frank

Posted on 11/13/2012 7:54:41 PM PST by ilovesarah2012

For many of the wealthy, 2012 is becoming a good year to sell.

They're worried about the "fiscal cliff," which is when tax cuts expire and spending cuts are set to go into effect at the end of the year.

Fearing an increase in capital gains and dividend taxes, many of the rich are unloading stocks, businesses and homes before the end of the year.

Wealth advisors say that with capital-gains taxes potentially going to 25 percent from 15 percent, and other possible increases in the dividend tax, estate tax and other taxes, many clients are selling now to save millions in taxes.

“Under almost any scenario, it makes sense to take the gains this year,” said Gregory Curtis, chairman and managing director of Greycourt & Co. “Clients aren’t selling willy nilly. But if they can and they have a huge gain, they’re selling now.”

If the Bush-era tax cuts expire, taxes on capital gains would revert back to its previous rate of 20 percent from its current 15 percent. Another 5 percent may be added from health-care levies and changes in itemized deductions, bringing the rate to 25 percent for many high earners.

(Excerpt) Read more at cnbc.com ...


TOPICS: Business/Economy
KEYWORDS: economy; fiscalcliff; jobs; layoffs; obama; uscrisis

1 posted on 11/13/2012 7:54:51 PM PST by ilovesarah2012
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To: ilovesarah2012

And so it begins.


2 posted on 11/13/2012 7:56:22 PM PST by MadMax, the Grinning Reaper
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To: ilovesarah2012

If they’re selling, who is buying?


3 posted on 11/13/2012 8:05:43 PM PST by umgud (No Rats, No Rino's)
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To: umgud

The Chinese?


4 posted on 11/13/2012 8:09:19 PM PST by ilovesarah2012
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To: ilovesarah2012

They own our debt, might as well buy our assets too.


5 posted on 11/13/2012 8:11:14 PM PST by umgud (No Rats, No Rino's)
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To: ilovesarah2012
many of the rich are unloading stocks, businesses and homes before the end of the year

Not sure I completely buy that, yes there are some, but also the DOW hasn’t completely dropped significantly yet, and a DOW 9000 is all I ever expected. Will more aggressive selling happen before Dec 31 is the big mystery.

6 posted on 11/13/2012 8:12:35 PM PST by Son House (Romney Plan: Cap Spending At 20 Percent Of GDP.)
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To: ilovesarah2012

I’m by no means wealthy but I went to cash shortly before the election based on technicals.

As a protest to wealth confiscation, we all should do two things: go to cash or metals and reduce spending. We need to shrink the enconomy in excess of taxation. This is our only power. Deflation is our weapon. Make them make an offer to us for a change.


7 posted on 11/13/2012 8:13:56 PM PST by cicero2k
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To: cicero2k

Just the beginning


8 posted on 11/13/2012 8:15:50 PM PST by scooby321 (AMS)
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To: ilovesarah2012
Fearing an increase in capital gains and dividend taxes, many of the rich are unloading stocks

A tax increase of from 15% to 40%. That overseas money is never coming back.

9 posted on 11/13/2012 8:17:01 PM PST by Mike Darancette (I don't understand why the Boomers are so passive.)
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To: ilovesarah2012

This was the reason why George Lucas sold the Star Wars universe to Disney a few weeks ago.


10 posted on 11/13/2012 8:18:56 PM PST by Vince Ferrer
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To: cicero2k

Do it like Indians (in India); after you’re paid, buy what you need and buy gold with the rest. It is the only way for them to protect their earnings against the inflation of the rupee. This doesn’t work if you pay any noticeable “fees” for the exchanges...


11 posted on 11/13/2012 8:26:29 PM PST by kearnyirish2 (Affirmative action is economic war against white males (and therefore white families).)
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To: ilovesarah2012

Obama’s gov’t will rake in some money this year from the sales, but will be hurtin’ fer certain in 2013 when the rate hikes on capital gains kick-in, (provided the Marxist gets his way on the tax rate increases).


12 posted on 11/13/2012 8:29:43 PM PST by onyx (FREE REPUBLIC IS HERE TO STAY! DONATE MONTHLY! IF YOU WANT ON SARAH PALIN''S PING LIST, LET ME KNOW)
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To: cicero2k

Going to cash may not work if your cash is still in a bank that will be investing. I’d say for long-term to beat inflation some necessity stocks will be good performers, a rebalanced portfolio is what I am looking at. But you’ve got it right, we should minimize many taxes paid so there’s limited funding for spending.


13 posted on 11/13/2012 8:30:50 PM PST by Son House (Romney Plan: Cap Spending At 20 Percent Of GDP.)
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To: Mike Darancette
A tax increase of from 15% to 40%. That overseas money is never coming back

Not only, NOT coming back, MORE is pouring out.

14 posted on 11/13/2012 8:32:21 PM PST by onyx (FREE REPUBLIC IS HERE TO STAY! DONATE MONTHLY! IF YOU WANT ON SARAH PALIN''S PING LIST, LET ME KNOW)
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To: umgud

If I had money, I would be.


15 posted on 11/13/2012 8:37:04 PM PST by OneWingedShark (Q: Why am I here? A: To do Justly, to love mercy, and to walk humbly with my God.)
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To: ilovesarah2012

This wont make news until the Dow really dives. Otherwise no one will notice/.


16 posted on 11/13/2012 8:37:51 PM PST by sickoflibs (How long before cry-Bohner caves to O again? They took the House for what?)
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To: ilovesarah2012

I bet we will be seeing an increase in the number of American citizens giving up their citizenship and leaving the country for greener pastures.


17 posted on 11/13/2012 8:38:58 PM PST by Jack Hydrazine (It's the end of the world as we know it and I feel fine!)
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To: ilovesarah2012

The underground or “informal” economy will thrive. Smuggling money out like an Argentine. Know any mules or good techniques?


18 posted on 11/13/2012 8:41:22 PM PST by grumpygresh (Democrats delenda est; zero sera dans l'enfer bientot)
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To: cicero2k

Going to cash isn’t any better. Worse, probably, for whereas they can tax “unearned” income they have a monopoly over the issuance of legal tender. Whether they know it or not, that’ll be how they pay their bills; it’ll have to be. There aren’t enough rich people, and the rich aren’t rich enough. There isn’t enough money anywhere in the country. Heck, you could confiscate 100% of money made by all, citizen or whatever, in a year and still not pay off the debt. As for borrowing, no one will invest in the US government just because it is the US government forever.

No, inflation is the only way. That won’t ultimately work, either, but in the meantime what else is there? Which is why we should run like Achilles away from cash.


19 posted on 11/13/2012 8:44:56 PM PST by Tublecane
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To: ilovesarah2012

We went over the cliff on Nov 7.


20 posted on 11/13/2012 8:56:17 PM PST by ModelBreaker
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To: ilovesarah2012

Taxes haven’t gone up yet and they’re already pushing to raise them.

Think about that. :)


21 posted on 11/14/2012 1:11:02 AM PST by Tzimisce (Will there be anything to fight for in 2016?)
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To: ilovesarah2012
Wealthy Dump Assets Amid Worries About Going Over 'Cliff'

No, wealthy are dumping assets before the capital gains tax rate goes from the current 15% up to the pre-Bush tax cut rate of 25%.

22 posted on 11/14/2012 3:23:24 AM PST by Yo-Yo (Is the /sarc tag really necessary?)
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To: Son House
I don't think anyone who "dumps assets" because of these pending tax increases is being very smart about it, which might explain why the U.S. stock market hasn't collapsed even though it's clearly hit a rough patch.

For example ... The increase in tax rates on dividends isn't likely to result in huge increases in taxes paid by "the wealthy." It will simply cause publicly-traded companies to re-assess whether they even pay dividends at all -- and how much they pay. A company like ABC, Inc. that is profitable and has lots of cash on hand may simply opt to buy back its own stock -- thereby driving up the value of the remaining shares that are held by shareholders. Those shareholders can then sell their stock later at a higher price and pay any capital gains tax on that sale. Even at the higher capital gains tax rates they won't pay any more in taxes than they would have under the "Bush" tax rates on the dividend they would have been paid before.

23 posted on 11/14/2012 3:31:16 AM PST by Alberta's Child ("I am the master of my fate ... I am the captain of my soul.")
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To: Alberta's Child

Probably no dividends, and possibly never again any capital gains. If we never have another Republican president, capitalism will be gone in the US.

We can change the country’s name to North Mexico.


24 posted on 11/14/2012 11:26:15 PM PST by tdscpa
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