Capital Gains Tax

[MRT144]

This is one tax I wouldnt mind seeing abolished or made very very small.

The reason being that it hurts people that invest their money as a means of growing the value of it and then turning around and using that grown value to buy a house or something.

Example

I save $400 a month and invest it in something that returns 5.5% per year (400(1+.055/12)^(5*12). After 5 years the value is $27,552.33. If I deducted 15% capital gains from that I'd wind up with $23,419.48

Now if i put this into a mattress that saved the same amount of money i'd wind up with $24,000.

For a long term approach this wouldnt matter because in the 6th year, despite capital gains tax i'd still have made more money.

Now I'm not saying that a capital gains doesn't have its place but for someone who makes 24k a year and wants to save money to buy a house or condo this seems like a reason to not invest my money unless it can earn over 5.5% per year.

Also i realize that I am in the 15% tax bracket (and really I have a long term capital gains tax of 5%) but if i were to make $30,651 a year i'd be paying 15% long term capital gains.

[Zkribbler]

The U.S. already has the largest national debt in this history of humanity. So, what would you do to lessen the impact of your tax cuts on the debt? Or would you finance it by borrowing more money that our children and grandchilden would have to repay?

[Arrian]

I wouldn't mind this if it was part of a comprehensive overhaul of the tax system.

CG probably shouldn't apply to everyone. We want poor people to save money. We want rich people to spend it.

-Arrian

[MRT144]

1. make capital gains over a certain dollar amount taxable and don't tie it to income level.
2. set up housing downpayment investment plans that are tax exempt like the 529 College Plan, and are taxed at the normal capital gains tax rate if withdrawn and used for anything other than housing.


I already support cutting the debt by eliminating several programs and departments of government and not reducing income taxes.

[Ramo]

Rich people make their money off investments, everyone else makes their money off wages. Eliminating capital gains basically eliminates taxes on the rich.

Already, capital gains rates are substantially lower than higher income tax brackets. Warren Buffet once pointed out that his tax rate is something like half that of his secretary's.

I save $400 a month and invest it in something that returns 5.5% per year (400(1+.055/12)^(5*12). After 5 years the value is $27,552.33. If I deducted 15% capital gains from that I'd wind up with $23,419.48

Now if i put this into a mattress that saved the same amount of money i'd wind up with $24,000.

I'm pretty sure only the gains are taxed. So you should end up with a little over $27,000 in the first scenario.

[MRT144]

Originally posted by Ramo
Rich people make their money off investments, everyone else make their money off wages. Eliminating capital gains basically eliminates taxes on the rich. Already, capital gains rates are substantially lower than higher income tax brackets. Warren Buffet once pointed out that his tax rate is something like half that of his secretary's.



I'm pretty sure only the gains are taxed. So you should end up with a little over $27,000 in the first scenario.

hahahaha, you're right.





jesus.

[Patroklos]

Now I'm not saying that a capital gains doesn't have its place but for someone who makes 24k a year and wants to save money to buy a house or condo

It ain't happening, sorry.

[MRT144]

Originally posted by Patroklos


It ain't happening, sorry.

I'll make it happen.

I make 24k a year, and could save 400 a month when I pay off my credit cards and get my tax return (feb 08).

I just think there needs to be greater opportunity for poor people to save money, invest money and get into home ownership.

[Patroklos]

I just think there needs to be greater opportunity for poor people to save money, invest money and get into home ownership.

Ummmm... what do you not understand about "poor"

[MRT144]

your definition obviously.

is one considered poor by income level? i think im poor based on making a lot less than median income.

but im not so poor compared to other people like those i work with who spend way more than me.

[Bugs ****ing Bunny]

I would back a limited form of this abolition, providing it was limited to capital gains within earmarked pension saving schemes, up to a maximum ceiling. It would give a greater universal incentive to save for old age.

[Lorizael]

You make 24k a year and save $400/month? Man, I wish I could save that much.

[MRT144]

Originally posted by Lorizael
You make 24k a year and save $400/month? Man, I wish I could save that much.

i'll be able to once I pay off some of my credit card debts and get my tax return

1005 per paycheck (i contribute 130 to 401(k) but i'll be scaling that back to 60 per paycheck) I get about 672 net after taxes 401(k). I also get 150 from my mom every month.


monthly income:1494

rent: 575
groceries: 415
cell: 49
entertainment:25 (netflix, theater)
utilities: 60 (gas is usually 40, light usually 20)
debt/savings: 350
RX: 20 (concerta)

with an extra 70 dollars per paycheck

monthly income: 1634
debt/savings: 470 per month until tax return

[Victor Galis]

Maybe they should just exempt like the first $10,000 each year. That would probably be enough to save relatively small investors from it.

[Bugs ****ing Bunny]

Originally posted by MRT144
I also get 150 from my mom every month.

Cut the umbilical, man.