Capital Gains Tax Rates Headed Higher After Election

capital gains tax rateOur oft reviled President Bush helped pass significant tax reduction bills in both 2001 and in The 2003 bill lowered the maximum tax rate on long period from 20percentage to 15percentage.

The maximum tax rate on corporate dividends was lowered even further from a maximum tax rate of 386 to 15percent. Then, maximum tax rate on all income was lowered from 386 to 35. Oftentimes capital asset investors seem comfortable with the idea that the existing tax rates on dividends, capital gains and earned income will stick around until at least the end of 2010 their scheduled expiration date. The odds of that occurring are, at best, 50″ for now.

Tax policy can be structured to achieve one or more of these three goals.

capital gains tax rateDemocratic candidates for president have not disavowed the trial balloons by Democratic members of Congress to hike tax rates.

capital gains tax rate

Investors can expect higher tax rates post 2008 should a Democrat become president.


None of the Democratic candidates for president has articulated a private sector ‘progrowth’ tax policy. Anyways, instead, their orientation appears to be toward wealth redistribution via higher tax rates. This is the case. During the recent debate between Democratic politicians, Obama indicated that he wanted to almost double the maximum tax rate on capital gains from 15 to 28. Known clinton has stated that her maximum tax rate on capital gains must be 20percent. That said, both of these candidates have indicated a willingness to raise taxes on dividends and on income of other categories. Now regarding the aforementioned fact… The existing tax rates are history ‘post 2008’ must a Democrat win control of the White House in this fall’s election. Now pay attention please. That message is clear from Democrats on the House Ways and Means Committee who have already released a plan to hike personal tax rates.

On the other side is McCain, who has recently stated his support for extending the present ‘tax rate’ structure past McCain voted no on both the 2001 and 2003 tax rate reduction bills. Realistically, the likelihood of the 15 dividend tax rate and capitalgains tax rate remaining past 2008 is perhaps less than 50″ for now. For instance, the Danger When Bill Clinton signed his big tax increase bill in 1993, the economy had been expanding for over two years, and did power through the negative economic impact of the hikes. In 2009, the United States should cause a net decrease in tax revenue at the very time when business needs to be stimulated! You should take this seriously. All candidates must take this into account when considering a tax increase.

Any increase in tax rate means more total dollars in the hands of government and less in the hands of the private sector. That said, this will mean increased challenges to holding onto your hard won wealth. So here is a question. What is your best strategy in this market? For Real Estate investors, Section 1031 of the IRS tax code is the last bastions of legal tax reduction. Besides, the value of doing a 1031 exchange becomes more valuable to the investor, as the capital gains tax rate increases. Tax deferral under section 1031 can mean tax avoidance over time. On top of that, think of the tax deferred under a Section 1031 exchange as an interest free loan from the government just what really is needed in these unsettled times!

Embedded in Section 1031 are creative tax planning opportunities.

The capital gain tax calculator found at, will allow you to estimate the possible impact of the increased taxes on a real estate investment and the value of using the Section 1031 exchange. To work with a Qualified Intermediary who is bonded and insured. You can create a winning strategy, regardless of who wins the 2008 Presidential Election! Steve Hickox, Attorney and President of. Let me tell you something. Real Estate Investors across the United States since 1994.

We invite you to call ‘1 888 899 1031’ for a free consultation. We enjoy helping our clients build their wealth! Nevertheless, steven Hickox, Attorney/President.

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