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What the Average American Should Know About the Capital Gains Tax

The federal government can how to increase the income of the debate of the most controversial one problem may differ nearly 8%, it encourages more than companies scramble to issue in the New Year special dividend payment to shareholders. It is called the capital gains tax, and it's like the stock investment assets sales price, the cost difference between the tax paid. Long-term capital gains rate most investment assets is generally 15% now. Compensation high income people, through the capital gains, such as holding stocks, is one of the richest man preference method, because it is less than ordinary income, this is the highest legal rate 35%. But the United States President barack Obama has proposed the increase of capital gains rate is 23.8%. Have immunity, such as family to sell. The highest rate of dividend, payment, some company distributed to shareholders, can be increased from 15% to 43.4%. Rick Schottenfeld compensation, Schottenfeld group chairman of the board and CEO, headquartered in New York city, is a mixture of short and long term capital gains, it depends on his investment is how to "success," he said. A registered republicans, Schottenfeld always is about improving capital gains tax voice, although in fact, doing so will reduce their income. Schottenfeld is a member of the patriotic millionaires, a group of more than 200 americans revenues of more than $10000 a year who is petition congress, to increase revenue for the rich to help plug budget deficit, this has reached 1 trillion us dollars, the past four years. "This entire process, resulting in larger deficit, reduce taxes, create jobs, so we can't afford something, we need," he said. "Obviously need to cut costs, this is a arithmetic problem, need to be in the middle of the meet. We have overshoot capital gains. Although many senior staff or negotiate their wages often have get compensation decision stockholding, medium or lower income people usually do not. "They really don't give such an opportunity, will your income," he said. "How many teachers have a lot of long-term capital gains use?" To keep the capital gains tax low argument is, it will be a compromise if general income tax rate for high income family increased by 39.6%, 35%, President Obama has been put forward. A certain threshold, $250000, married couples and $200000 for others, the family will pay an additional 0.9% of the tax on their income support new medical regulation, many mainstream economists believe that tax capital at a lower rate than ordinary income, in order to create an incentive to preserve or reinvestment, city - brookings tax policy center research assistant, Joseph rosenberg said: "high capital gains tax try to save your current income and consumption sorting, so reduce the capital is in the economic and investment," he said. The department of the Treasury in its 2013 fiscal year budget report, increase the capital gains rate is 20%, will bring more than ten years of about $3.6 billion in revenue. Ordinary income tax dividend, will bring a larger piece of pie: $20 billion more than ten years. If all scheduled and tax held as scheduled, in 2013, in 2013 they will produce an income of $53.6 billion. Net increase of $5 trillion for more than ten years, the tax policy center points out, "not a single policy is enough to own, but as a whole part of the form a complete set, it is important," Rosenberg said. "But perhaps more important is who is the degree of influence, we care about is not only the income, but the distribution of tax. Tax capital gains and dividend "overwhelming" influence the change of the top of the income distribution. In particular, if Mr Bush's tax cuts from 2003 high earners capital gains and dividend due, so only 1% of the tax payers will be affected, the highest income one 5, according to the center. Kelly the employees retraining board (erb) tax lawyer, said, many medium income tax payers often carry financial assets outside of their homes, mutual funds or retirement account, such as 401 (k) plan. These vehicles often deferred taxes financial account holder take money retirement age. At this point, they are usually as ordinary income tax, for personal hold stock this year, the employees retraining board (erb) said, most people don't have to sell their admiration holdings of shares of the expected capital gains and dividend rate increase. "I don't think you should not change their behavior," she said. "I think you should see your behavior time."




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