Congress held a meeting
recently to discuss the capital gains taxes and how they might be
reformed. This is one of the great
American debates and has major impacts, specifically on the wealthy, and can
take a lot of time to debate and determine what the best route is.
Currently capital gains are
taxed at a maximum of 15 percent, compared to the top rate of 35 percent on
ordinary income. Some Senate members argue that the reforming the tax system
must include a review of the rates on capital gains to find a level that sparks
broad based growth, creates jobs and strengthens the economy.
Many feel that the reform
process needs to consider the capital gains rate in conjunction with those on
individual wage income, corporate income and dividends.
Many American often scream out
about how little the wealthy pay in taxes and it is typically a direct response
to the capital gains tax. Capital gains
tax rates are typically lower than wages thus middle class Americans tend to pay
more in taxes.
I’m a firm believer that our
entire code needs to be rewritten to cause a major shift in our economic
future. Both sides of the aisle need to
come together and find a solution. Part
of the solution maybe adding more side to the aisle and make it less about Red
or Blue, less about Donkey or Elephant, and more about the country and its
The main problem with revamping
the tax code is that we still need to balance a budget. It doesn’t do us any good to raise or lower
taxes if we don’t know how we are going to spend the money. However, the
size of the Code makes it difficult to comprehend an opportunity to
simplify it or create a massive overhaul of the system.
Pertaining to capital gains,
everyone is in favor of a change, unless it affects them. Who is going to support capital gains changes
that cause someone to pay more taxes?
Many people question when the money should be taxed. Should it be taxed when earned or realized?
What are your thoughts? Do you like the capital gains tax rate as is
or does it need to change? How would you
Feel free to stop in a Liberty
Tax office and start a discussion about this blog!
Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.