Investors can deduct $3,000 in capital losses against ordinary income, a benefit that cushions the sting of a failed investment. It’s a tax break frozen in time, stuck at the same nominal dollar amount since 1977.
President Barack Obama campaigned in 2008 on tax cuts for most Americans and tax increases for the fortunate few. He has delivered on the breaks and, for the most part, been unable to follow through on attempts to raise taxes.
Congress will return from its spring recess next week to debate just how large a tax burden Americans can and should shoulder, an issue at the core of the discussion about reducing the U.S. budget deficit.
President Barack Obama and Republican opponent Mitt Romney want to move the top capital gains tax rate in opposite directions, with a single number emphasizing their divisions on economic and fiscal policy.
President Barack Obama describes them as “millionaires and billionaires” who can afford to pay higher taxes. Republicans call them “job creators” who need to keep their money so they can hire more workers.
An expansion in the reach of the alternative minimum tax is the element of the U.S. fiscal cliff with the largest immediate effect on taxpayers and the most bipartisan appetite for a solution, creating the possibility that lawmakers could use it to propel Congress toward a deal.