A lot of the reasons why people have been investing in the stock market lately is that in 2003, the capital gains tax, originally set at 35% was lowered to 15%. Some have credited this tax cut with saving the economy and causing the post 9-11 recession to be a lot less of an impact on our economy than it could have been. Unfortunately, the tax is scheduled to revert to 35% in 2008.
Dividend income and estate taxes are also scheduled to revert to their pre-2003 levels in the next few years. "What? A few years?" Yes, I know there is still some time, but even with only a few years away, the effect that a tax rise is imminent will have negative effects on the market, most likely causing a number of investors to sell their stocks to take advantage of a lower tax rate.
Read this article at Tech Central Station for more information.
1 comment:
Hopefully legislators will intervene and keep some of these things going...
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