Taxman Cometh Up Short

Only about half of U.S. states met their forecasts for withheld taxes in February after taxpayers made last-minute financial moves in 2012 for fear of having to pay higher federal tax rates in 2013 that befuddled politicians. Tax revenues rose about 5.7% during the last quarter as people took profits and companies moved forward bonuses all to avoid the higher Obama tax rate milking the so called rich in 2013. Politicians are just dumb. They constantly think whatever trend in motion stays in motion and fail to comprehend their shenanigans cause changes in behavior.

Part of the rise in the Dow is re-entering positions that were liquidated in the last quarter of 2012. If you had profits, you took them, and jump back in after January 1st. This is simply the way capital moves. For years, the difference in tax rates on dividends in French stock led to the sale of French shares for 24 hours when dividends would be paid and the stock went to Britain for an overnight stay.

The growth in futures in the late 1970s was aided by the tax straddles. You sold December gold and bought Feb gold taking a loss in the current year pushing income into the next year. That lasted until the IRS figured out what people were doing.

The only way to get steady revenue is to stop fooling around with the tax rates. No matter what study you do, people like Obama will still just raise taxes no matter what the proof it will only drive capital out, cause it to hoard, and reduce investment lowering economic growth.