Skip to comments.Wealthy Dump Assets Amid Worries About Going Over 'Cliff'
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 arent selling willy nilly. But if they can and they have a huge gain, theyre 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 ...
And so it begins.
If they’re selling, who is buying?
They own our debt, might as well buy our assets too.
Not sure I completely buy that, yes there are some, but also the DOW hasnt 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.
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.
Just the beginning
A tax increase of from 15% to 40%. That overseas money is never coming back.
This was the reason why George Lucas sold the Star Wars universe to Disney a few weeks ago.
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...
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).
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.
Not only, NOT coming back, MORE is pouring out.
If I had money, I would be.
This wont make news until the Dow really dives. Otherwise no one will notice/.
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.
The underground or “informal” economy will thrive. Smuggling money out like an Argentine. Know any mules or good techniques?
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.
We went over the cliff on Nov 7.
Taxes haven’t gone up yet and they’re already pushing to raise them.
Think about that. :)
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%.
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.
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.