Bush Tax Cuts Expiring - Selling for lower Capital Gains before End of Year

[Greg]

1.) With the Bush Tax Cuts expiring at the end of 2012 and everyone's tax rates going up (and I believe capital gains going from 15% to 25%), is it worthwhile to sell capital gains in stocks/bonds to claim the 15% status before the end of the year and then repurchase them again after the new year starts?

2.) Do you think others are thinking of this (all over the US) and the stock market will fall by a bit. I realize this could be considered part of the Stock portion of the PP or of a VP play, but humor me.

[Pointedstick]

100% chance that they get renewed for another 3-12 months, with this process continuing essentially indefinitely.

[Greg]

100% chance that they get renewed for another 3-12 months, with this process continuing essentially indefinitely.

Ideally that's what I would like but I'm not sure if we'll have to increase income tax eventually to offset the aging demographics for medicare/medicaid/etc. Unless we just want to inflate our way out of the debt. That could work too.

My libertarian-leaning beliefs though want as low/eliminating the income tax but not sure if that will happen anytime soon and that we'll still have mandatory obligations to pay for until then (see medicare, etc. above).

[Pointedstick]

We don't need to raise taxes to afford these welfare obligations because the treasury can spend infinitely without first needing to have any money in its account at the fed. Printing money to afford these welfare obligations would only be inflationary if the new money is printed in excess of the demand for money at the time of its introduction into the private sector. If our lawmakers were at all intelligent, we'd print zillions right now--in an environment of deflationary pressures--and keep that money around for when it needs to be thrown away subsidizing the last few years of wealthy old people errr I mean given back to all the hardworking loyal American who've earned it all their lives.

In any event, the Republicans in congress are going to kill any tax increases for the foreseeable future. That's the least of my worries.

[Reub]

We don't need to raise taxes to afford these welfare obligations because the treasury can spend infinitely without first needing to have any money in its account at the fed. Printing money to afford these welfare obligations would only be inflationary if the new money is printed in excess of the demand for money at the time of its introduction into the private sector. If our lawmakers were at all intelligent, we'd print zillions right now--in an environment of deflationary pressures--and keep that money around for when it needs to be thrown away subsidizing the last few years of wealthy old people errr I mean given back to all the hardworking loyal American who've earned it all their lives.

In any event, the Republicans in congress are going to kill any tax increases for the foreseeable future. That's the least of my worries.

Sounds like what Warren Mosler has been saying all along.