Capital Gains Tax

There's an e-mail going around warning that anyone who sells their home after 2012 "will pay a 3.8% sales tax on it" to help fund President Obama's healthcare reform law. "Oh, you weren't aware this was in the Obamacare bill?" says the e-mail, which is being forwarded by many people but the origins of which remain a mystery. "Guess what, you aren't alone. There are more than a few members of Congress that aren't aware of it either. " The e-mail was called to my attention by Chino resident Ken Burton, who wanted to know whether it was legit.

Is it too much to ask that the best-financed statewide political campaign in the country — maybe in U.S. history — get things right about a central tenet of its electoral platform? The question arises from GOP gubernatorial candidate Meg Whitman's new glossy campaign brochure, titled "Creating Jobs for a New California." In it she proposes killing the state tax on capital gains. "California is one of a few states in the country that taxes capital gains at a higher rate than traditional income," the booklet states.

Britain's new coalition government on Tuesday unveiled the country's most painful budget in a generation, outlining a program of deep spending cuts and tax hikes in line with the mood of public austerity sweeping across Europe. George Osborne, chancellor of the exchequer — Britain's equivalent of Treasury secretary — said drastic measures affecting everyone were unavoidable to mollify jittery investors and tackle the nation's biggest national deficit since World War II. The emergency budget calls for rises in sales and capital gains taxes and reductions in welfare benefits to help erase the government deficit within six years.

A major feature of Republican Meg Whitman's plan to create jobs as governor is to eliminate the state tax on capital gains. Not merely tax investment profits at a lower rate than wages, as the federal government does, but scuttle the state tax completely. Most people don't need to worry about paying taxes on capital gains. They're not so fortunate. But a relatively few wealthy Californians pump substantial sums into the state treasury, which would leak even more red ink if those payments ceased.

Meg Whitman's Republican rival calls her a liberal. He's not even close. Political writers often describe her as moderate. That misses the mark too. Supporting abortion rights -- even state funding of abortions for the poor -- doesn't automatically make her a moderate. Not when she's prepared to whack benefits for welfare moms -- slash almost any program -- to avoid raising taxes. She opposes same-sex marriage but supports recognizing those unions allowed before Proposition 8 passed.

Re "An absolute menace," Opinion, March 13 Does the Club for Growth actually think that labeling moderate Republican senators "comrade of the month" means anything at all to the majority of American voters? I doubt that most people make the connection between comrade and communist. How many American voters even know who Karl Marx was? Next will the Club for Growth be calling Sen. Arlen Specter (R-Pa.) a Wobbly? Isn't it time somebody told former Rep. Pat Toomey (R-Pa.) and the Club for Growth that Red-baiting went out with Joe McCarthy?

SHOULD MANAGERS OF takeover firms be encouraged by the tax code to receive a share of the profits from a restructured company's eventual sale? The question might bore even accountants, but billions of dollars of profits and potential tax revenues are at stake. That's why the Senate Finance Committee is considering classifying the managers' payday as ordinary income, subject to tax rates as high as 35%, instead of as long-term capital gains, which are taxed at 15%.

Zhang Mei sat inside a packed, smoke-filled stock trading hall here today, still pained by a plunge in share prices the day before that cost her almost a tenth of her retirement funds. "I don't understand why it dropped so much," said the retired department store employee, recounting how she raced to the computers here Tuesday in a fruitless bid to sell before the market closed. "It was already too late. There were too many people waiting for computers." Shanghai's benchmark index tumbled 8.

The FBI is investigating Rep. Gary Miller (R-Diamond Bar) for a series of land transactions in which he avoided paying capital gains taxes after saying he had been forced to sell under eminent domain in Monrovia and Fontana. The federal investigation was initiated after The Times reported in August that officials in both cities denied that they had acquired Miller's property using eminent domain, which enables governments to buy land for certain purposes even if owners do not want to sell.

A little-noticed provision in the recently passed tax act has given songwriters something to croon about. Starting next year, songwriters will be able to claim capital gains treatment when they sell a catalog of their work. This is a stark departure from current law, under which such sales are taxed at ordinary income tax rates that can be as much as 20 percentage points higher.