How important is the IRS capital gains tax? - By: Mark Jensen

The new government has considered doubling the tax rates on capital gains, when in fact there have been proposals to reducing or even eliminating such taxes. Many economists are of a view that reducing IRS capital gains tax will encourage private investment, and boost the country’s economy in recovery and growth. However, appearing lax to the taxes of the richest strata of the country, who are the ones invariably involved in capital gains, is an image the government wants to banish.

Our difficult economic times indicate that every idea to assist in the recovery of the economy should be seriously tested and applied, because ultimately everyone will benefit from such measures, not just the rich but also the poor. And then again, even though it is the wealthy who own more capital gains, it is the middle class which is at the center of securities ownership in this country. More than 100 million Americans hold securities, almost half of all the households in our country. These owners pledge more than half of their household assets in stocks earning a median income of $65,000. Of course, they are not considered rich in the context of today’s economy, and the government needs to acknowledge their efforts. While it can be argued that most of these owners have securities within then IRA tax deferred and 401K accounts, more than 75% of these people have outside schemes as well. If the reduction of IRS capital gains tax allows securities to move up in price, owners benefit from an increase in amounts earned from them as well.

It is ironic however, that where the government is shying away from the reduction of IRS capital gains tax, the solution to a probably quick way of boosting the country’s economy lies. By eliminating or reducing these taxes the economic downturn will not only be stemmed, but also reversed, boosting a new wave of investments. Major new investment may cause capital appreciation, which is the a sure way of injecting life into a slumping economy.

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It is essential to get qualified advice when dealing with income tax questions and related matters. Research on the Internet is a wonderful approach for keeping your hourly lawyer bills low, but always check your findings with a licensed attorney or accountant before making any financial or business decisions. If you need more information about filing extension tips or other tax topics, visit us today at http://www.irs-help-tax.com.

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