Bush's last tax cut just took effect at the beginning of this year. It doesn't apply to me, as I own no stock, and don't have the deductions to get under the earned income limit. If either of you know someone who has stock, this would be a good year to sell. The article didn't say, but I'd assume this only applies to long-term capital gains. Otherwise this would be a great time to dabble in some daytrading.
Side note: What percentage of people in this tax bracket do you suppose own stock? What percent do you suppose have a savings account? I'd guess more have a savings account, as should every American. So why does long-term capital gains get taxed at 0% whereas interest gets taxed at the normal rate? This to me, is a joke. Just like the reduced tax rate on dividends. Tax cuts for the top 10%!
Side side note: Why is bank interest taxed, anyway? The government should be promoting savings, rather than penalizing it. At the very most, interest should be taxed at the same rate as dividends, 15 percent. With the tax "rebate" and reduced interest rates, the government is telling us to take our money out of the bank and 'invest' it in $600 LCD TVs. Good for Wal-Mart, bad for Americans.
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See the following link. Apparently about 1/4 of Americans save after their expenses. There is something seriously wrong with that.
http://money.cnn.com/2006/01/24/pf/worst_savers/index.htm
That doesn't surprise me. Most people don't even use their 401k effectively. A lot of people never change where their money is going, leaving it in the default option. It doesn't sound like many people are maxing out the company match. That's leaving free money on the table.
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