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View Diary: Preventing the Next Financial Mess: An Idea (6 comments)

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  •  Understood... (0+ / 0-)

    I see your point about the capital gains rate not being progressive... Maybe some compromise could be reached.

    If I got some "5 year stock" today bought at $10, and in 5 years time, the stock is at $5, I shouldn't have to pay an income tax at that point on the original amount that was spent to buy the $10 stock. If that were the case, I'd be forced sell everything to cover the tax. If the stock was at $0 after 5 years, I'd really be screwed.

    I was trying to avoid a situation where the recipient was forced to sell stock at the "point of vesting" (for lack of a better term) to pay a tax.

    There would probably have to be some formula to make it work. I'm sure it could be done - I'll have to think about that some more. It'd have to be straightforward to have legs.

    Another and better option might be to make the capital gains tax progressive. But, I don't know how practical it is to count on that happening.

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