Stock Market Investors » Stock Tax Issues » The Simplified US Tax Code Proposals

The Simplified US Tax Code Proposals

The Simplified Income Tax Plan has made some changes in the tax code that have an influence on the investment decisions of investors.

The new implementations were aimed at simplifying some parts of the tax code. However, no changes have been made on the total tax revenue. Encouraged by President George Bush, the changes in the tax code eliminated some of the complicated twists of the previous tax code.

Before the new changes are implemented the confirmation of the US Treasury is required. A team of professionals was formed that made a lot of suggestions that the US Treasury is about to consider.

Some of the suggestions made by the panel include the elimination of the ATM (alternative minimum tax). Another suggestion made concerned deductions on home mortgage interest and the reduction of tax brackets.

Investors can be directly affected by the proposed changes in the way dividend income and capital gains are charged by Uncle Sam.

As for dividends it was suggested that those that are acquired from domestic holdings should be freed from taxes.

On the other hand, the panel suggested that 25% of the capital gains should be liable to either a tax rate representing the top of the rate for which the investor is liable or a marginal tax rate. 75% of the capital gains under the new changes are freed from taxes.

Another proposal of the team of professional is connected with the interest, dividends and capital gains. The panel suggested a tax rate of 15%.

Both of the proposals made differ from the current rules of the tax code. If accepted by the US Treasury, either of these suggestions will affect the investment decisions that investors make.

On the other hand, the suggestions made by the panel for the changes in the tax code may find their opposition. Good arguments for these introductions should be presented so that the Congress approves them.

The panel should also meet the pressure on the part of the many lobby groups, which will guard the interests of their members.

Finally, the recommendations of the panel should not be taken as already agreed rules. Further discussions will be made, which if successful will lead to the reconsideration of many of the investment decisions by investors.

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