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This is why it should be the goal of the U.S. government to eliminate billionaires as a class, and make sure they can never return. Close the door on the stinking rich because; “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” - Louis D. Brandeis. The stinking rich corrupt everything. I don’t want to take away any billionaire’s humanity; I just want the government to take away most of their wealth.
Just tax their wealth and be done with it.
The eternal horseshoe…one end the GOP-voters…the other end the Oligarchs
Bigotry makes it go for the former
Greed makes it go for the latter
The article says the Wash period is 60 days. Everything I’ve read and experienced says it’s 30 days.
The maximum capital gains loss deduction on stock market investments is $3000/year. The article says that’s related to work wages and such. First time I’ve heard that. How exactly are they getting around the $3000?
Selling and then repurchasing a stock establishes a new, and lower, tax basis that results in higher taxes in the future when the new stock is sold than if the tax loss harvesting hadn’t occurred. If the new and old stocks perform identically, the only thing that changes is the timing of the tax payment. The article doesn’t appear to consider the impact of this strategy on future tax payments.
And the former are convinced (or self-deluded into believing) that it’s about the economy (they took our jobs!) or freedumb or whatever.
I work in the defense industry, where citizenship and the ability to hold a security clearance are the norm. Yet many of my coworkers are somehow convinced that a wall is needed to prevent those awful Mexicans from swimming across the Rio Grande and supplanting them.
I’ll wager a $1 that I paid a higher effective tax rate than Ballmer at my middle-management job.
The article states that 30 days before and 30 days after equal a 60 day period that’s being discussed.
You are correct about that $3k per year offset against regular income, but the way this trick really benefits you the most is when you offset cap gains against cap losses to no limit. Say you are selling Stock A for a big-time gain; then you also sell Stock B (and then buyback quickly as discussed here) to generate a big (virtual) loss at the same basic level to get to net zero gain and so net zero tax on the original capital gain of Stock A. Easy Peasy.
The tax should be 10% of the sale price with no exception. A whole category of fraud would be eliminated at once.
Some of the wealthy go through a lot of time and expense to avoid taxes. Wouldn’t it be easier to pay the taxes and skip the time and expenses of lawyers, accountants, more lawyer and more accountants?
Reminds me of a certain statement:
People feel like the system is rigged against them. And here’s the painful part: they’re right.
'- Elizabeth Warren
I came to say exactly this. In the short term it can reduce taxes. But it is a gamble. For example if in the future capital gains rates go up the future payments will be higher. Then again if lowered then they would be lower. Of course not paying taxes for a while allows for potential more gains from holding on to the money.
What I am trying to say is it’s not at all obvious as it seems, although it probably has some advantage smaller than it appears.
The only potential exception to this is if someone plays this game and eventually passes on the investments on a “stepped up” basis, which could save a lot of taxes. But requires two loopholes to be used.
The way some wealthy people got there was by pinching every penny and looking for every loophole on the way up. It gets to be a habit, even after they’re very well off financially. For others, it’s just never enough money. They need to see their wealth constantly growing and taxes are a brake on that process.
And then of course, for some it’s the idea that the government doesn’t deserve the money. Either because it’s being badly used or the money is going towards helping the wrong people.
OT. Another UFO was shot down over Lake Huron today
And of course, using a stepped basis usually involves the owner of the stock dying.
Some may not consider that a downside.
Just as an ordinary, law-abiding person looks at the behavior of Trump and his associates in late 2020 and says, “That’s obviously sedition and criminal conspiracy,” an ordinary, law-abiding person looks at this scheme and says, “That’s obviously cheating.”
What ordinary people need to be saying, as @rlsluiter notes above, is that it should be the policy of the US government to eliminate billionaires. That’s one weird trick that will eliminate in a stroke all their various ways of cheating and gaming and corrupting our system.
This was one of the many reasons I supported “Shiv” Warren in the primaries.
I’ve been an individual investor for 40 years. Good years and bad years. Was only expecting a reasonable gain – my portfolio would be my retirement, as I was not in long-term pension employment positions. I did great in my 401Ks and in my IRA. But now, at the age of 70, and retired, I am having to be careful about yearly withdrawals. I am solidly middle-class. Mr. Hatmama and I own our (one) home, two vehicles, no debt. But we haven’t taken a vacation in several years. Pandemic, and our own health issues. We spend our retirement time volunteering, and taking care of our modest home and gardens. And our neighbors, family and friends. And, this weekend I did our taxes. We actually pay our taxes, at the rate that is completely middle class – 22%.
It is time that we demand that these ultra-wealthy people pay their fair taxes, and that those who protect them in Congress and in the Presidency change the laws to reflect fairness and equity.
To brag that only stupid people pay their taxes is a shame, a shandah.
JMHO.
So am I the only one here not really watching The Big Game? It’s on the tv but I just can’t get into it. No matter how much I’ve tried I just can’t get too interested in football. Maybe it’s because you can’t really see the player’s face and eyes, and there are too many interruptions in the action. Plus all the hype and pomp. It’s just too much for me.