The Evil Rich Began Acting Rationally
So, about that big sell off on Wall Street after the election…
It turns out there were a lot of selfish, rich capitalist pigs who decided to take their chips off the table rather than gamble on dodging the proverbial soaking that the American electorate voted to commence.
President Obama ran on a promise to raise taxes on annual incomes more than $250,000. And people who understand wealth, asset management, and investment protection see the writing on the wall:
Fearing an increase in capital gains and dividend taxes, many of the rich are unloading stocks, businesses and homes before the end of the year.
Wealth advisors say that with capital-gains taxes potentially going to 25 percent from 15 percent, and other possible increases in the dividend tax, estate tax and other taxes, many clients are selling now to save millions in taxes.
Democrats are now saying they’ll be okay with allowing all of the Bush-era tax cuts expire, and then go back and try for new replacement cuts.
Higher income households can expect to see an additional 5% tax hike on their healthcare benefits and changes in itemized deductions. So, someone living off investments would see their federal tax burden hit about 25% of their annual income. This, obviously, does not count any non-investment income, state income taxes, and property taxes.
Also, the expiration of the Bush tax cuts would mean taxes on dividends would triple (from 15% to 43%).
Bottom line: It’s just not going to be as profitable to take risks as it was. The payoffs will be curtailed, so the more-riskier investments will be abandoned.
The federal government will also stake a majority claim on all estates worth more $1 million. So, a family farm with assets valued at one million dollars would have to pay $550,000 in death taxes.
Talk about creating generational poverty.
Experts are also expecting small business owners to sell off their companies before the New Year, in order to get the maximum return on their investments. In a down economy, I’m sure this will mean some great deals for big business looking to consolidate holdings and eliminate small competitors.
Talk about benefiting the big corporations.
There are also reports that businesses (like the parent company of Olive Garden and Longhorn restaurants) are moving employees to part-time status to avoid paying for health benefits. Other companies are shedding employees in order to stay under the 50-employee cap after which businesses must offer benefits. Still other companies are considering abolishing benefits altogether, instead paying the federal fine (which costs less than the benefits).
This was, of course, predictable and entirely predicted. But when people put faith in a government to give them everything at no cost, there is little room for logic.
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