Now that things look to be settled on the Democratic side of things, how do the two candidates look at the current capital gain tax rates? Both candidates seem to be focused on “change” at the moment; does that extend to the capital gain tax rate?
The presumptive nominee on the Republican side, Senator John McCain, expresses the intent to leave the rate at its current level of 15%, which was reduced from 20% in the Income Tax Act of 2003.
The as-of-last-night-presumptive nominee of the Democrats, Senator Barack Obama said early in the campaign that he would move to raise capital gain taxes to at least 20% and not more than 28%. At one point during the debate in Philadelphia, Obama said, “…I would look at raising the capital gain tax for purposes of fairness.”
In the past decades, raising the capital gain tax rate has resulted in decreased revenues. By the same token, when the capital gain rate decreased, revenues increased. Even though Obama’s intentions, if enacted, would in all likelihood result in more taxpayers who were interested in performing tax-deferred exchanges, I cannot support an increase in the tax rates for capital gains. If you have an opinion, please let me know in the comments section.
Regardless of whether the capital gain tax rate is reduced, increased, or left the same, Section 1031 tax-deferred like-kind exchanges will continue to help taxpayers avoid paying those taxes today. It is very common for people to have questions about 1031 exchanges. Please feel free to ask us any questions that you might have about the process.
Ken Tharp
Providing Qualified Intermediary services for Section 1031 tax deferred exchanges all over the United States. Headquartered in Iowa, our services are available in Missouri, Kansas, Nebraska, Colorado, North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, and all other states.
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Copyright © 2008 By Ken Tharp, All Rights Reserved. * The Presidential Election and the Potential for Change in Capital Gain Rates *
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