RE:RE:Oil stock will remain depressed untill June 25?Moemoney42 wrote: I agree and have commented on that previously.. saw a money manager on BNN yesterday that took a call about this exact topic..
The fellow (can't remember his name) didn't think there was a lot of trading related to the cap gain increase.. LOL.. ya right..!
He didn't think the "retail" investor would be affected... duh..!! Its the fund managers buddy..!! they're the ones who have the ability to unload 10's of thousands of shares each day by going short.. make money on the short.. capture the 50% tax rate.. then once they've ran it down, and have re-established their cost base, go long..!
My thought is this guy was probably doing it as well.. just didn't want to admit it... :-/
First off, it's not "the 50% tax rate"...it's the 50% inclusion rate. Second, a fund manager is not an individual, who still gets the 50% inclusion rate for the first 250k capital gain. Your "fund manager" sounds like a business and therefore the new 66% inclusion rate would apply to the whole capital gain.
If you're an individual and your stock trading produces an annual gain higher than 250k...CONGRATULATIONS!!! Forget about the "one percent" you're in the 0.00001% category!
"Yeah right" indeed.
Even after the inclusion rate hike to 66% for amounts over 250k for individuals....capital gains taxes in this country will still be lower than taxes on employment income.
A worker making 117,733 a year will pay 19,833 in federal tax.....that's 17.7% of his income
If he has a 340k capital gain, even AFTER June 25....he'll pay an extra 53,607 of fed. tax.(Total 73,444)
That extra 53,607 of taxes is 15.8% of his 340k capital gain.
If he records the gain BEFORE June 25 he'll pay 48,855 in extra tax...that's 14.4% of the 340k gain.
A 1.4% increase after June 25 is STILL a lower tax rate on capital gains than on employment income.