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Capital losses not all deductible
- very unfair double standard
Many people are in for a very expensive lesson on how unfair the tax system
is in this country when they prepare their 2000 tax returns.
The reason for the huge windfall in tax revenues by the Federal and state
governments in the past year was due to all of the capital gains people had
reported on their 1999 1040s. Unless the stock market does a big reversal
in the next 30 days, 2000 1040s will yield much less money for the government
On a related side note, all of the projected budget surplus figures that
everyone in Washington is planning on spending are based on the underlying
assumption that the stock market will increase in value by more than 20% each
and every year from now until the end of time. This is why I, and anyone
with even a basic understanding of finance, haven't taken any of the budget talk
seriously at all.
It has been a long standing very unfair double standard in regard to the
taxation of capital gains. When you have a net profit, there is no dollar
limit to how much is subject to tax on that year's return. However, it's
not the same when there is a net loss. In that case, only $3,000 per year
is deductible against other income. [This is $3,000 per tax return -
another example of married people being ripped off by the tax system.] The
additional loss is carried over to the next tax year, where is can be used to
offset future capital gains or deducted at $3,000 per year until it's used
up. With some people losing hundreds of thousands of dollars, odds are
they won't live long enough to deduct all of them.
I have never understood the justification for this double standard and have
always considered it one of the top changes to be made by our rulers in D.C. if
they want to make the tax code resemble anything close to being
fair.
It has long been my belief that rather than just complain in an abstract
manner about the problems with the tax system (of which there is no shortage),
it is been more important to try to solve them. I am writing this before
it has been decided who our next President will be; so I'll cover both
possibilities.
If the media get their wish and the robot called AlGore is allowed to cheat
his way into the White House, you can kiss any chance of repairing this inequity
goodbye. Don't even bother asking for it. He is on record as being
firmly against anything that would reduce the taxes paid by the evil rich
capitalists and loves laws that screw over law abiding people.
If the Constitution is allowed to prevail, and George W. Bush can stand the
stench left over from the Clinton gang, it would be a good idea to see how
serious he is about fixing the tax system. Pepper him and your other
elected officials to allow capital losses to be fully
deductible.
Updated: Friday, December 01, 2000 10:21 PM
Ozarks Time by KMK
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