what would motivate someone to invest more of their money if taxes are raised and they would need to make more gains to actually make more profit after taxes? 1% return isn't really that exciting. john edwards wants to raise capital gains taxes from 15% to 28%. thats almost double. more ways to reach into our pockets.
2007-07-27 05:23:19 · 13 answers · asked by Anonymous in Politics & Government ➔ Politics
Economics 101: Savings + Taxes = Income + Government. Taxes go up; savings go down. You can bet if we get Socialized medicine (veiled under Universal Healthcare) our taxes will go up and our savings will go down because the government will take more of your money.
2007-07-27 05:35:42 · answer #1 · answered by Anonymous · 1⤊ 2⤋
You always invest for the future. The thing is if everyone is taxed more then everyone has less money which will keep inflation in check. Basically If you gave everyone a million dollars, a million dollars isn't worth very much. Everyone needs to do this since the government will be unable to support everyone. This will become painfully evident in the next 20 to 30 years.
If you're keeping a lot of money in your savings account, consider opening an ING or other higher yield-paying account so for money just sitting there you earn around 4.5%. All short term investments, like interest from savings accounts, gets taxed at your nominal rate as income.
Capital gains is paid when you've owned an investment like stocks or bonds for over a year. Even at 28%, that might be lower than some people's tax bracket.
Here's some ways to get around paying capital gains taxes: If you invest in a ROTH IRA you use post-tax money and will never pay taxes on its gain. You can also put pre-tax money into a normal IRA or 401k and then pay only taxes when you pull it out at retirement age. At that time it's taxed as income based on how much you pull out. If possible, always use these avenues, which were set up to encourage investing so people would be able to support themselves later in life.
Hope that helps. Here's a link to the IRS with some simple tips.
http://www.irs.gov/retirement/participant/article/0,,id=133069,00.html
2007-07-27 05:37:56 · answer #2 · answered by James 3 · 1⤊ 0⤋
The Dollar has been subject to inflation prettymuch continuously since the end of the great depression. If you don't invest or spend your money, it loses value. Even if the alternative is paying a relatively high tax on investment proceeds it's still generally better to invest than not.
However, there are many ways to avoid taxes. For instance, you can avoid capital gains taxes by simply holding your investments over a longer period, and trading rather than selling them if you want to change your market exposure.
2007-07-27 05:36:21 · answer #3 · answered by B.Kevorkian 7 · 2⤊ 0⤋
As a decrease tax guy, even I could admit that capital helpful factors is bigoted in specific circumstances. If taxes is your rationalization for making an investment then the investment became no longer good to start with. in spite of the undeniable fact that, we could desire to verify a thank you to adjust earnings for long term investment. We additionally could desire to do the comparable to your consumer-friendly mark downs. Inflation makes many obvious revenue honestly loses. At under a million% interest your mark downs account is a suitable occasion.
2016-10-12 22:22:55 · answer #4 · answered by ? 4 · 0⤊ 0⤋
I agree that his raise in taxes is a bit extreme, and probably far too high than anyone should be considering, but a more modest raise on them shouldn't be something that will devestate the economy...say a raise from 15% to 18 or 19%.
But if you aren't smart enough to avoid some of those taxes anyway, you probably shouldn't be gambling on the stock market.
2007-07-27 05:36:29 · answer #5 · answered by avail_skillz 7 · 0⤊ 0⤋
Simple solution then.
Don't invest.
Why should someone who works 40 hours a week have to pay more in taxes, as a percentage, than someone who is getting their money through investing?
It's all income.
2007-07-27 05:37:42 · answer #6 · answered by Dogjudge 4 · 1⤊ 0⤋
like during the Clinton years when the economy was great, people were investing And saving.
and the rest of the world liked and trusted us ?
the truth is that people do invest with a Democrat serving as President - Bill Clinton is proof of that.
2007-07-27 05:35:12 · answer #7 · answered by Anonymous · 3⤊ 1⤋
I really don't believe Edwards or anyone else can ever get that passed, for the very reason you stated.
2007-07-27 05:45:04 · answer #8 · answered by Anonymous · 0⤊ 0⤋
The majority of Americans are not affected by capital gains taxes and the people that are affected by these taxes use more of the commons then people that are not.
2007-07-27 05:29:01 · answer #9 · answered by Anonymous · 1⤊ 4⤋
Correct. The incentive to invest would be greatly diminished. This, of course, would have an adverse effect on economic growth.
2007-07-27 05:26:52 · answer #10 · answered by Brian 7 · 2⤊ 3⤋