FINANCIAL TIMES: …The debate on investment income highlights the difficulty in finding common ground in the talks – with less than a month to go before the US economy is otherwise walloped by a $600bn mix of annual spending cuts and tax hikes that could tip it back into recession…
The part of the negotiations relating to capital gains and dividends, which are currently taxed at 15 per cent, are being watched closely on Wall Street, where anxiety is growing about the possibility of a tax hike…
A compromise between the two sides on investment income could conceivably lead to a modest hike in capital gains and dividend taxes. But if no deal is reached at all, the impact could be much greater, with tax rates on capital gains rising to 23.8 per cent and those on dividends increasing to 43.4 per cent… (more)
EDITOR: People making big money know how convert earnings from being taxed at the top 35% top income tax braaket to capital gains at the 15% tax level. That is how billionaires end up paying a smaller percentage of thei earnings in taxes than do their secretaries.
