NewMexiKen is trying (somewhat at least) to learn more about this economy thing, but I still confess to a lot of ignorance.
Even so, I have a question.
- Housing prices are down and most experts expect them to drop some more
- Stocks are way down across the board, Monday’s boom notwithstanding
- Businesses are facing a serious downturn — fewer Christmas hires an indication in one story I saw
A major part of McCain’s economic recovery plan is to reduce the tax on long-term capital gains to 7.5 percent from 15 percent for 2009 and 2010.
Where exactly are these capital gains going to be coming from in 2009 and 2010?
buy and hold investors that have been around a while (granny and grandpa come to mind), corporate employees who have sat on stock awards for a long time, IPO winners, vacation home owners who chose wisely, collectors of art and other precious objects. there out there!
So the wealthy.
BTW, there is no capital gains tax on the first $250,000 profit from the sale of your residence, $500,000 for a couple. So your run-of-the-mill granny and grandpa are unaffected by McCain’s plan, at least as far as home ownership (the primary capital gain for most Americans).
ah, that’s just it with capital gains: gotta have post-tax money to invest. most folks invest with pre-tax dollars in IRAs and 401k. now if you really wanted to give folks a break, make investment gains in IRAs and 401ks subject to capital gains, rather than ordinary income. if they gave a 2 yr window to do that, i’d unwind my 401k faster than fast.
btw, the 1/2 million except; i thought that was available only for the primary residence and is not available on a vacation home. am i wrong?