Skip to main content

View Diary: The oft-repeated lie about the capital gains tx preference (74 comments)

Comment Preferences

  •  no they won't, and no they shouldn't. (0+ / 0-)
    pensions and 401ks that stay in dividend stocks will be hurt.  but they shouldn't stay in those stocks, and should transfer out.
    since taxes on those pension funds are deferred, until those funds are actually taken out, and are all taxed at ordinary rates anyway, it makes exactly zero difference to those funds what the rate on dividends, gains and interest income is, the deferral applies to the fund's earnings as well. anyone following your advice will lose money. better to have those dividends now (time value of money), so it can be used to invest in other things, than later, when it's lost both the value of the increased actual investments, and the value of the deferred taxes. as well, equities paying consistent dividends tend to increase in value over time, so you have both the current revenue stream (dividends), and the profit from the long-term increase in value (gain).

    a basic rule of financial thumb: it is always better to have the money in hand now, then to wait for it years down the road.

    again, basic finance 101.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site