Your donation today gets you two things to keep you going – your daily news fix and your new favorite mug.
No fiscal cliff solution could mean increase in capital gains
Share Now on:
There’s cryptic news this morning from the White House: Officials are developing an alternative to the fiscal cliff package of steep tax hikes and spending cuts. Negotiations with Congressional leaders begin today.
Without a negotiated solution, capital gains taxes — our tax on investment income — will increase by two-thirds in 2013. No matter what happens, capital gains taxes will go up by 25 percent as part of paying for health care reform.
It’s been reported that George Lucas decided to sell his Lucasfilm to Disney a few weeks ago in order to lock in his capital gains.
“You’re seeing a lot of that kind of behavior,” says Chris Low, chief economist with FTN Financial. But, he continues, “There’s probably two reasons not to do it. First off, if you’re investing like most of us do in a retirement account, then chances are, it’s tax-protected anyway, and so none of this applies. If you’re investing outside of a tax-protected account, most stock advisers recommend not making decisions based on tax changes. One reason for that is, once we get to the end of the year, there’s no reason to sell anymore. There’ll be a pile of cash on the sidelines, and it probably comes back into the market pretty quickly.”
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.
New mug alert!
Support Marketplace & get our new mug as
a thank-you gift.