RE:RE:RE:Buy more?Mountainpose1 wrote: The main problem in my opinion is that the capital gain is a "Ballon Payment" meaining all the tax hits in the year of the sale. The gains may have taken 15 years to accrue. I believe you should be allowed to spread the gains over a number of years but not less than 5 years if the holding was 5 years or more. Why the tax all in the same year?
The increased tax rate will also force corporations the adjust their pricing for IPO's to a lower price/multiple to compensate for the increased taxes.
There is also the behavioral problem of being unwilling to sell an overpriced security to avoid the taxes.
Lots of other problems as well...
So the problem is paying the tax in one lump sum??? There is a fix but I don't think ANYBODY would like it: a wealth tax every year on valuation...think of the nightmare accounting involved in that!!!!
Your suggestion of spreading the gain over five years would be quite onerous as well. Would you even HAVE the money to pay the tax due in a couple of years if you had a big "life event" that cleaned you out in the meantime??? There's another problem. As things are you pay the tax when you have the cash in hand...there's nothing wrong with that except for the "sticker shock" of writing a big cheque....but keep in mind the large pile you have sitting in the bank!
If it took fifteen years to realize the gain divide the tax bill by fifteen if that is going to make you feel better (????) I dunno! But back to my question....let's forget about inclusionn rates and progressive tax backets....if there was one single tax levied to capital gains, regardless of other income, what would be a reasonbable/fair/acceptable percentage??? It's a rhetorical question I suppose... but I'm curious.
Pick a number!