Bush's Capital-Gains Tax Cut May Bypass Millions of His Backers

[swag]

http://www.bloomberg.com/apps/news?pid=20601070&sid=akCEVB.XL.DI&refer=home

July 24 (Bloomberg) -- When Jeff Trinca liquidated part of his stock portfolio to satisfy a divorce decree in early 2005, he calculated he would owe 15 percent tax on his capital gain. A year later, he got a nasty surprise: a much higher bill from the Internal Revenue Service.

If anyone should have known what to expect, it's Trinca: He's a Washington tax lobbyist. Still, he lives in one of some 2 million U.S. households that were denied the lower rate on capital gains last year because of a little-noticed quirk in the alternative minimum tax, originally created almost four decades ago to make sure a much smaller number of affluent Americans were paying their fair share.

Instead of paying the 15 percent rate established by President George W. Bush's 2003 tax cut, Trinca, 45, and other taxpayers with incomes between $150,000 and $400,000 are required to pay rates of up to 22 percent on their investment income. If left unchecked, the AMT anomaly may deprive millions more six- figure earners -- 60 percent of whom voted for Bush in 2004, when he won 51 percent of the vote nationwide -- of the low rate.

Affected taxpayers have a right to be angry, given the emphasis placed on the lower rates by Bush and congressional Republicans, says Nina Olson, the national taxpayer advocate at the IRS.

. . . more

[SoCalDem]

1. No biggie.. he's not running for any office

and his minions will just claim they didn't understand the legislation they voted for..and everyone will hug and kiss, bless some embryos, shoot each other in the face, read a few sermons from the Book of Coulter and all will be well in RepubloWorld

[gratuitous]

2. So when Trinca makes a grand off his stock selloff

He has to pay $220 in taxes instead of $150? He didn't do anything to "earn" that $1,000 capital gain, just held the stock. But instead of feathering his already ample annual income with $850, he only gets to keep $780? I'm supposed to sympathize with Mr. Trinca? I'm supposed to feel bad about that?

Okay, here's my sympathy Mr. Trinca: Boo fucking hoo.

[JuniorPlankton]

3. That's not the point

It's not about the fairness of the tax cut. It's about * lying and misleading his voters.
What a bunch of morons; how can you believe *???? In 2000 or especially in 2004!

(By the way, if Mr. Trinca lost $1,000 on his investment, you and I would subsidize $220 of that loss and not $150 :))

[gratuitous]

4. Well, the IRS says that Trinca has a "right" to be angry

I don't quite see it, myself. And why would Trinca want to sell his stock if he's going to take a $1,000 bath on the investment? If he's forced to do sell stock at a loss because he's trading in Wife 1.0 for an upgrade to his Mistress 1.0 program to Wife 2.0, then he's probably not "angry" about it for the very reason you mention.

In any event, the idea that one of these overrich near-moguls is going to change their political leanings just because they got screwed out of $70 on a $1,000 profit seems far-fetched.

[JuniorPlankton]

5. You'd be surprised

I work in investments and I am surrounded by people salivating at the thought of a tax cut. It's not that they don't have enough money, it is the very idea that they can get more by electing Republicans. Unfortunately, you are right, they will not change their political views based on this. Here comes the very argument that drives me nuts: "Yes, * and his cronies lied to us and screwed us over. But the Democrats would be a lot worse." :grr:

Anyway, on of the reasons people decide to sell their stocks and take "$1,000 bath on the investment", is because they are afraid of taking a $2,000 or $3,000 bath :) It is real.

[gratuitous]

9. Oh, no way!

See, if your stocks have lost $1,000 in value, why it's positively un-American to sell them under the presumption that they're going to tank even further! If you think stocks are going to go down, you're in league with the terrorists, and you want to hurt America. No, it's your patriotic duty to hold onto a loser stock until it turns around, at which point it's your patriotic duty to bitch about having to pay a tax on your profit.

I'd probably make a lousy investment counselor. :)

[w4rma]

6. Easy fix. Raise the capital gains tax to be equal to the tax on labor. nt

[fordnut]

7. good to hear

If someone makes a proffit then don`t reinvest it they should pay taxes on it.I`m thinking more in the neighborhood of 60 percent,all they have to do is invest it and not pay anything.

[MallRat]

8. That's not all... if the GOP makes the estate tax cut permanent...

...then a lot of people who THINK they're going to benefit are going to find themselves actually paying more in estate taxes.

Allan Sloan in Newsweek did an analysis on this. I can't remember the details, but the bottom line is that estates with a net worth between $2-7 million (what he affectionately called the "little rich") would be thoroughly screwed over.

In other words, the GOP isn't even supporting the interests of the top 1% anymore. They've moved on to the top 0.01%.

-MR

[pitohui]

10. hahahahahahaha

why should someone making $150K to $400K a year get a cut on capital gains, jeez louise

most people it takes around 8 years of work to earn $400K!