ASSOCIATION
Tax Hikes Coming
Tax hikes may be coming soon on the investment industry.
Starting Jan. 1, 2011, all tax rates and rules return to pre-Bush 2001
and 2003 Act law. That will be a huge amount of tax hikes and rule changes
to digest. President Obama and other Democrats want to make Bush tax cuts
permanent on all but the two-highest tax brackets, plus widen the third
highest bracket too. That’s great for all income under $200,000
single and $250,000 married.
The Bush tax cuts are front and center on political battle-lines for the upcoming midterm elections. But that is just the starting point. The deficit commission reports in December 2010 and many Democrats and some economists are calling for higher taxes to help balance the out-of-control deficit, which has moved up the ladder to the being the biggest problem we face.
President Obama, Congressiona Democrats and populist forces are calling
for tax increases on the following groups related to many traders and
investment managers:
-Upper-income, by letting the Bush tax rates expire on the upper two brackets
only;
-Investment income, with possible lapsing of the lower qualifying-dividends
tax rate on the upper-two brackets too – losing the revised 20 percent
rate and returning to the 36 and 39.6 percent ordinary tax rates;
-Investment income, with the new 3.8% Medicare tax effective in 2013 per
the health care reform bill;
-Investment managers with the proposed but so far blocked repeal of carried-interest
tax breaks;
-Professionals and small-businesses using the S-corp. structure, with
the continued – but blocked each time – proposed repeal of
self-employment (SE) tax breaks – this hurts investment management
businesses collecting fees;
-Futures dealers with President Obama’s 2011 budget proposal to
repeal lower 60/40 tax rates on dealers only;
-Big banks with the President’s proposed $90 billion bank “responsibility
fee” (or tax related to TARP, even though most already repaid TARP
with dividends).
Robert Green has written many blogs on the tax changes.
Click here to see the Tax Changes section of our blog.
Robert has several Forbes
blog versions of these blog articles too.
Robert Green covered Tax Changes often on his podcasts.
Click
here to find 2010 and 2009 podcast archives.
Robert writes about tax changes in Green's
2010 Trader Tax Guide too.
