Rich selling off assets to avoid higher taxes

bobwg · Nov 13, 2012

The rich are selling off assets and moving to cash. Homes, stocks, even businesses are being sold to avoid the increase in taxes like the death tax increase, capital gains, etc. The last time a big tax increase was expected on the rich back in the 1980s the rich sold off the the year before and the year the tax was increased tax revenue dropped 50%

Humble2drive · Nov 13, 2012

bobwg said:
The rich are selling off assets and moving to cash. Homes, stocks, even businesses are being sold to avoid the increase in taxes like the death tax increase, capital gains, etc. The last time a big tax increase was expected on the rich back in the 1980s the rich sold off the the year before and the year the tax was increased tax revenue dropped 50%

If you still have the link that would be an interesting story to read?

I found this:

In 1986, for example, the capital gains tax rate was 20 percent but was schedule to go up to 28 percent in 1987 as part of President Ronald Reagan’s tax overhaul. In 1986, capital gains collections soared to $52 billion – twice the amount as 1985. But the following year, when the higher rate kicked in, capital gains fell by 50 percent.

Wealthy Dump Assets Before the 'Fiscal Cliff' - U.S. Business News - CNBC

This explains that it was the capital gains taxes that fell. Not total tax revenue.

bobwg · Nov 13, 2012

Humble2drive said:
If you still have the link that would be an interesting story to read?

I found this:

This explains that it was the capital gains taxes that fell. Not total tax revenue.

Yes you are correct it was only the tax revenue on the hated rich that dropped. You can expect the same this time with higher tax revenue from the rich this year as they sell off the assets and pay the lower tax this year and then not much action next year as the rich sit on the side lines with cash and thus the govt gets lower revenue.

Monty · Nov 13, 2012

One thing about them rich folks, they intended to stay that way! And bully for them.

Now if the poor didnt make the same plans, (to stay where they are), things might be different.

Humble2drive · Nov 13, 2012

bobwg said:
Yes you are correct it was only the tax revenue on the hated rich that dropped. You can expect the same this time with higher tax revenue from the rich this year as they sell off the assets and pay the lower tax this year and then not much action next year as the rich sit on the side lines with cash and thus the govt gets lower revenue.

I don't know about you but an increase in the capital gains tax will effect me and I am not rich. The death tax as well. I moved $ out of stocks months ago and made plans for the death tax.
To me, the death tax is unconscionable but around midnight on November 6th it was clear that dealing with it vs whining about it will be the prudent thing to do till 2016.
The truly wealthy are doing the best thing for themselves and there will be a ripple effect and could reflect positively for the Republican party in the next election if they would end their preoccupation with unpopular social issues and focus on the big issues of the Economy, National Defense and Foreign policy.

Just wanted to make clear that we were talking about 50% of capital gains revenues vs total tax revenue. That's all.