At least, that would be the Democrat and media definition.

“Surprise: investors shifting resources to avoid tax hikes next year”

It’s amazing to me that so many on the right don’t understand that this is exactly what Obama wants to happen.

Look, the Repubs are simply going to let the Bush tax cuts expire. Then, new tax legislation will be passed to offset the increase to middle income earners. Republicans will go along with it because “lowering taxes for some is better than not lowering them at all”. So taxes are going up for the those making $200K. Period.

So when the economy – very predictably – falls back into recession because of the decreases in investment and spending by upper income earners, what is it that Obama and the Dems are planning to do to deflect blame off of themselves for the mess? After all, they’re not going to be able to attack Republicans directly on the issue of the tax increase because the Dems will have gotten everything that they wanted – i.e., higher taxes on the “wealthy”, with no increase to the middle class.

So what then?

They’re going to directly attack “the rich”…then they will indirectly attack Republicans as the “defenders of the rich”. We saw them floating the first trial balloon of this strategy during the election when they were attacking Romney’s offshore accounts.

When the economy tanks, the “argument” Obama will use to deflect blame will be that the reason for the collapse has nothing to do with the tax increase that these “greedy rich people can easily afford to pay”. The reason will be that they are avoiding paying their fair share – and thus, hurting the economy – by “hiding their money” in overseas accounts…or using “loopholes” to hold onto their ill-gotten gains. So what will be necessary will be more taxes and to close down the avenues that “the rich” use to avoid paying their “fair share”. But to do that, guess what?…”We’ve got to get rid of those darned Republicans who stand in the way of us getting these greedy fat cats to pay their fair share!” If they’re successful and retake the House, they will completely choke off investment in this country because that will then set them up for pursuing what their real agenda is – not wealth redistribution, but wealth confiscation.

Remember: for the Left, poverty is OK…it’s wealth that is unacceptable.

Mark my words: if you thought the Dems were involved in class warfare in 2012, just wait until 2014.

People and Companies are not stupid. The tax bite may be unavoidable but, where they can, they will try to minimize its effects as far as they legally can.

So in real life, people react to stimuli and adjust accordingly (where they can). Static assumptions presume that they don’t.

Merry Cliffness indeed.

The sad little king of a sad little hill.

Bishop on December 11, 2012 at 9:31 AM

Formerly known in a galaxy now far far away as the shining city upon a hill.

That or I’ll wait until I retire and take $20K-$40K profits per year and live off that (and pay under 20% on that as my only income).

Why pay 40% now when you can pay 20% later?

gekkobear on December 11, 2012 at 11:24 AM
Makes sense; however, I’m not at all optimistic that the rates will be what you think they’ll be when we pull our retirement money out and it becomes taxable. My presumption is that either a) the rate will be *much* higher, or b) those tax-deferred retirement funds will be nationalized before then, replaced with a new/improved IOU/single-payer/government pension plan – that will likely be bankrupt as well.

I’m half tempted to liquidate at least some of my tax-deferred retirement funds now, take the hit, and… well, just a complete rethink of it all.

Midas on December 11, 2012 at 11:39 AM

Don’t forget, on top of the income taxes you’ll also be paying higher Capital Gains taxes on what your retirement money earns between now and then unless it is all pension.

The math is coming and hell is coming with it.

Bishop on December 11, 2012 at 9:31 AM

“Get ready Little Lady. Hell is coming to breakfast,” Chief Lone Watie

gekkobear on December 11, 2012 at 11:24 AM

I agree with your strategy, with one exception. You are making the assumption that the rule of law holds. It does not. If you have the capability, I would suggest that a part of your assets go black. Convert it to cash, and then covertly into some other store of value held outside the jurisdiction of the US government. A bolt hole with a supply of “start over” money for you and yours may be the best investment you can make. You may not be rich if you have to run, but you will be in better shape than most trying to start over.

Subotai Bahadur

And he’s rich. And Democrat. So he must be right.

Any moron knows that raising taxes always reduces revenue. Lowering taxes always produces more revenue because of the expanding economy that follows. Those carney clowns in Washington all know that an expanding economy is the only way to significantly increase revenues, but here we are on some stupid crusade for “fairness” that won’t achieve squat. Whats worse is they seem to be intentionally keeping the economy down with all the ridiculous continued uncertainty.

My only conclusion is that the powers at be are intentionally keeping the economy down for some dark reason.

Jeebus, call me anything but not a lib!

ctmom on December 11, 2012 at 11:46 AM

I sincerely, humbly, and unreservedly apologize for insulting you in such a senseless and egregious manner. I don’t expect you to forgive me, but perhaps someday, when the pain has faded with time, your descendants will.

Midas on December 11, 2012 at 11:33 AM

No problem. I blame twitter and trying to say everything in 140 characters or less.
;-)
Jeebus, call me anything but not a lib!

After all, it is they that love to tax vices like soda, cigarettes, gas, carbon, ammo, etc. to get us to change our behaviour.

People like to keep their money and will do whatever it takes. Just look how hard the Federal government is trying to get their slice of our pie!

One of my very high net worth, liberal clients famouly signed a “Please tax me more” letter to the president a few years ago. I see he is now selling off a number of his companies before year end – likely to avoid the increase cap gains tax.

LilyBart on December 11, 2012 at 11:27 AM

ROFL

That or I’ll wait until I retire and take $20K-$40K profits per year and live off that (and pay under 20% on that as my only income).

Why pay 40% now when you can pay 20% later?

gekkobear on December 11, 2012 at 11:24 AM

Makes sense; however, I’m not at all optimistic that the rates will be what you think they’ll be when we pull our retirement money out and it becomes taxable. My presumption is that either a) the rate will be *much* higher, or b) those tax-deferred retirement funds will be nationalized before then, replaced with a new/improved IOU/single-payer/government pension plan – that will likely be bankrupt as well.

I’m half tempted to liquidate at least some of my tax-deferred retirement funds now, take the hit, and… well, just a complete rethink of it all.

Again, my apologies.

I took every penny of my LTCG (Long Term Capital Gains) showing a profit to reset my basis upward at a 15% tax rate for the profit… and I’m moving my investments to places where I’m ok leaving them for 15-20 years if need be when those rates get jacked.

I’m now under the impression that I won’t want to be taking any more LTCG income while I’m employed to avoid paying a 30%+ rate on that income; and it’ll be years maybe decades before someone realizes the market is in lockdown and could provide a lot more revenue if they’d put things back.

That or I’ll wait until I retire and take $20K-$40K profits per year and live off that (and pay under 20% on that as my only income).

Why pay 40% now when you can pay 20% later? I don’t need the money to live on, that’s why I have a job… if you’re going to penalize moving money drastically, I’ll quit moving money.

What did you think I’d do?

Jabberwock on December 11, 2012 at 11:01 AM

Thx.