Post by supposn1 on Oct 5, 2014 17:37:48 GMT -6
Capital gains tax and tax averaging methods for reducing taxable incomes.
Profits due to the sale of anything owned by the seller for at least the full year prior to the sales transaction are granted Capital gains tax and tax averaging methods for reducing taxable incomes. extraordinary and unjustified tax reductions for their long term capital gain incomes.
I do not argue that incomes of those who continuously reinvest into and strive to nurture their enterprises are MORE worthy but they are CERTAINLY NOT LESS economically worthy than those who choose to “take the money and run”.
The lesser tax rates granted to commercial capital gains reduce federal revenues and increases our budget’s deficits.
(It's politically unfeasible to eliminate this consideration for taxpayers' selling their primary residence).
The IRS tax option of income averaging was once available to all taxpayers that experienced ANY financial boon.
Income averaging enabled a taxpayer to divide their taxable income over three year duration and pay taxes based upon those updated annual taxable incomes. Income averaging mitigated the higher tax due to progressive income tax rates. I believe it’s still an option available only to agriculture, ranching or fishing enterprises. It’s an advantage to those with erratic annual taxable incomes.
I think it then required the taxpayer’s net income for the last tax year be 20% greater than that of the previous tax year and some specific foreign incomes were not averaged out.
Except for those exclusions, the government made no other determination as to what source of income should be favored. The income averaging form did fully consider regulations or tax rate differences that may have changed during the years of incomes being averaged.
Unlike the tax reduction for long term capital gains, income averaging equally treated lottery winners, speculators, investors and home sellers. Government did not determine winners and losers.
I advocate that income averaging should be fully reinstated and replace the favorable treatment of long term capital gains. I would not be adverse to it being extended to average out 5 rather than the 3 years.
Respectfully, Supposn