Predicted Capital Gain Tax Increase and Its Impact

For the past couple of years the financial sector has been going through a rough time them and their business owners. The long list of people that are affected by in terms of limited credit wonder if there is a good long term plan in mind ready to be put in place.

When it comes down to reasons for getting a merger and acquisition they are many. One of the main reasons for this is that it improves economic indicators, the heavy balance sheets of strategic buyers and also funds raised from private equity group are very important in getting the full confidence of both the public and private sectors. And also for some potential sellers it is wise to think about the risk of valuation which will occur in the coming year. The act which was signed in 2001 was the economic growth and tax relief reconciliation act; this was crated by president bush and was created to reduce capital gains.

The rules of this act were that the new rate for capital gains and qualified dividends would be 15% as the two lowest categories. The original date for this tax plan to expire was 2008, but it was then extended by the bush administration for another two years which will be the end of 2010. And when this low tax rate ends it will be back at the rate of 2003 which was 20%. The increase in the rate of capital gains are at 33.33% higher, this could lead to more people making sale before a certain prescribed time which would be better for them.