Why is the Stock Market Crashing After Obama's Relection? (margin, small business, invest)
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Part of the reason is the fiscal cliff meaning taxes will go up on the investment. This year investors are paying 15% on capital gains but if we go over the fiscal cliff (higher taxation) then investors will pay 39% on the profits. There will be much more fallout that will hurt the middle class too. People were warned about all the potential fallout but voted Obama in anyway because they don't think it will hurt them but it will. Companies also have to pay more money for Obamacare and this will cut into the companies profit margins. .
Basically people are bailing out while they can. Think of it this way, if you invest $100.00 and can sell the stock at $200 and pay 15% taxes on the $100 profit this year but if you wait until next year you will have to pay $39% on the profit what would you do?
If you noticed, the day before election the stock market went higher and that is because many people thought Romney was going to get elected.
Either way, never give the government the mandate (give permission) to increase taxes on any group because it will inadvertently hurt you.
That would really hurt me in investing if I have to pay 39% tax on profits. Don't people with less than $250,000 / year income pay less capital gains tax?
That would really hurt me in investing if I have to pay 39% tax on profits. Don't people with less than $250,000 / year income pay less capital gains tax?
The current law is the Bush tax cuts will expire "for everyone" on January 1st and everyone will pay higher taxes if some sort of agreement that makes both the democrats and republicans happy is not made. For the middle class there are a few deductions you will lose too and you will have to increase taxes paid out of your paychecks or at the end of the year you are in for a depressing surprise.
Democrats said this summer (playing chicken) that they are willing to let the tax cuts expire on everyone if they don't get their way. The republican house voted on the Bush tax cuts extending them for everyone (not raising taxes on anyone) but the Congress (Harry Reid) would not vote on them and they pushed the Bush tax cut issue down the road past election. To this day we still wait for Congress.
Obama said he would veto any the extension of the Bush tax cuts if it included $250K or above. If Obama does veto the Bush tax cut extension essentially he is raising taxes on everyone.
Here we are months later and we voted mostly the same people into office. Democrats want to blame it on the republicans but the republicans already did their job and voted to not raise taxes on anyone. Republicans understand that increasing taxes on people $250 and higher will hurt small business, in other words employers will cut jobs and instead of broadening the tax payer base they will decrease the tax payer base. They also want Obama to stop spending so much money.
My point is, if you are joyous about Obama getting re-elected I wouldn't feel all comfy because higher taxes will hurt you in one way or another.
I don't like Republicans because all they want is tax cuts for the rich and to weaken Social Security and Medicare. They are harsh on the Middle class and poor, so I voted all democrat on my ballot.
The main reason is the fiscal cliff, we went past the deadline last time and this time we cannot do that. It's the same majorities so it's the same deadlock.
Jesse, the rich are able to take advantage of legal deductions that most people can't. Romney said he wanted to lower the tax rate for everyone but take away tax deductions that only the rich are able to take advantage of. A lower marginal tax rate would have been very good for middle class.
Romney believed that by doing this businesses would start hiring again. When companies hire these people come off unemployment and off welfare and into jobs. Because more people are working more people are paying taxes instead of taking money out of the system they would be paying into the system. At the same time because more people are working and people get to keep more of their money they would spend it.
The main reason is the fiscal cliff, we went past the deadline last time and this time we cannot do that. It's the same majorities so it's the same deadlock.
Yes we went past the deadline in 2010 but Obama extended the Bush tax cuts because he said we were in a bad economy but we are still in a bad economy but Obama said he will veto the Bush tax cuts if they include the extension of the Bush tax cuts for higher income people. The bottom line is if you raise taxes on the small businesses they will cut cost elsewhere and it may be your job. The republicans know this and don't' want to do it because it will kick us back into another recession.
Now as it sits, "everyone" will pay higher taxes.
If you would have voted for Romney this would not be an issue, your tax rates would have been eventually reduced and you would have more money to spend effectively jump starting the economy and a wider tax paying base with less people on the dole (expenses).
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