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Holly asked in Politics & GovernmentElections · 1 decade ago

Will Obamas tax plan crash the stock market?

The current dividend tax is at 15%. Obama's plan is to increase that to 39%.

If you have any money invested in stock market, IRA, mutual funds, college funds, life insurance, retirement accounts, or anything that pays or reinvests dividends, you will now

be paying nearly 40% of the money earned on taxes. Won't higher tax rates on dividends and capital gains crash the stock market?

He is promising free college. Can't I just take my 401K and pay for my kids college myself?

Please help! I'm trying to understand the Obama plan. I just can't see where it is helping to cut the deficit or helping the tax payers at all!


Please read the facts before posting an answer. Or can Obama followers read?

Update 2:

$4000 is about $1000 per year tax credit. That is way less than 39% of my 401k. Not a benefit at all!!!!!

16 Answers

  • 1 decade ago
    Best Answer


  • 1 decade ago

    I don’t know where Matthew F is getting his information, but it’s incorrect. Wall Street is NOT endorsing Obama. He is getting some campaign contributions from the Street, but that’s just hedging. Every special interest group, from banks to unions, hedges their bets by contributing to the candidate they don’t want to win so they’ll at least have access if he wins the election.

    I have seen several predictions of what an Obama win in November would do to the economy and the stock market. All of them are very negative.

    I have seen a couple of estimates that Obama’s plans, if he tries to implement them, would increase our deficit to over $1 trillion in year one. That seems reasonable because his spending will start quickly, but his higher taxes will take time to kick in. Let’s face the fact that his agenda calls for big increases in spending; that may be the reason he hasn’t indicated what his plans will cost.

    Raising taxes on dividends and capital gains will send the stock into a tailspin. Many people have their retirement savings, including their IRAs and 401Ks, invested in the market. They are counting on dividends and capital gains, including gains on the sale of their primary homes, to help fund their retirements. Social Security is in serious trouble, as evidenced by comments from the SS Administration that benefits may need to be reduced for future retirees. They don’t need to put that “may need to be reduced” bit in there because benefits WILL need to be cut. As the baby boomers start to retire in large numbers, and that’s imminent, the number of SS beneficiaries will increase by more than 30 million people. That would increase benefit payments by close to $500 BILLION a year, and that number will rise as the ratio of contributors to recipients falls.

    When payments to beneficiaries exceed receipts from working people, there will be no place to turn to fund the shortfall. As it is now, FICA taxes exceed benefits paid. The “surplus” goes into the general fund and is spent. That makes the deficit look smaller than it really is. There is no Social Security “trust fund” to draw from. So if increased taxes cannot cover the shortfall, the only other way to cover it is to borrow. But who’s going to buy the Treasury bills and notes to fund that shortfall? Nobody! Not China and not private investors. You wouldn’t buy corporate bonds if the proceeds were being used to fund on-going losses. And you won’t keep buying Treasury securities to fund on-going budget deficits, either. And the “rich” won’t be buying them, either, because they won’t be rich any more.

    When current and future retirees finally see that their Social Security benefits are going to be cut and the taxes on their investment income are going to be increased, the **** is going to hit the fan. That’s what is known as a double whammy. If your employer cuts your salary and requires you to pay for your work space, you wouldn’t like it. You probably couldn’t afford it. And there are no other jobs available because the economy is headed down and employers are laying people off, not hiring new people. And welfare won’t help. There are a LOT more people on Social Security than there are on welfare. Does anyone think that those who receive or are due to receive Social Security benefits are going to sit back and tolerate a huge increase in welfare spending when the retirement benefits they think they paid for are being reduced.

    Don’t look for the “rich” to bail us all out. There aren’t enough “rich” people to pick up the tab for the shortfall we’re looking at. If we CONFISCATED all the earnings of everyone making more than $100,000 a year, it might get us through year one of the coming crisis, but that would be a one-time event. People, whether they are rich or poor, are not going to keep working if all their income is taxed away from them.

    Frankly, I don’t know why anyone would want to be president in the years to come. The problems he or she will face cannot be solved by taxing the “rich” or finding someone to blame. But finding someone to blame is the only thing our elected “representatives” are really good at. After all, how else can they keep us from finding out that THEY are the ones who should be blamed?

  • 1 decade ago

    Yes, and I believe the recent down turn in the market is a sell off in anticipation of Obama getting elected. Money taken out now is safe, and will be put back in after the election if McCain wins, which I hope he does.

  • 1 decade ago

    we now have to pay of the huge deficit that always seems to be left by the republicans. we cannot continue to allow the deficit to get larger and larger because then we will be paying large amounts to interest when it should be spent on the american people.

    it is like your personal finances, you want to spend the least you can on interest because the only benefit from it is being able to borrow the money.

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  • Anonymous
    1 decade ago

    No. Obama's plan is to increase from 15 to 18 or 20% nowhere near the 39% you're talking about.

    He's not promising free college, he's promising a $4000 credit towards college in exchange for community service.

  • Anonymous
    1 decade ago

    Obama will raise the taxes.

    In this time of crisis, this is not what we need.

    We need less government spending and lower taxes and thats what a fiscal repuclican is all about.

    McCain will do just that!

    We have many Senior Citizens living off their hard earned money that they have worked for. By increasing taxes, these senior citizens will loose their money that they have invested.

    Obama will make people withdrawal their money from investments and the stock market which means the economy will get worse.

  • Anonymous
    1 decade ago

    Clinton's tax plan led to the biggest bull run in market history. Why should it be any different for Obama?

    We are already in a "correction" because of Bushonomics. We need to change course. We need to balance the budget. We do that by taking in mroe revenue. From whom? Not the poor!

  • 1 decade ago

    Those with means will withdraw their investments and move to foreign exchanges or offshore accounts with more favorable rates.

    With less investment in American companies there will be detrimental effects.

  • Anonymous
    1 decade ago

    Don't worry about Obama crashing the stock market...even if he were to be elected, the market will crash long before he

    has anyting to do with it. People can just take so much and it is already about to reach its limit!

  • Anonymous
    1 decade ago

    Yes, and bring us 20-25% interest and inflation rates like Carter did.

    Source(s): Matthew F- is lying! EVERY economist says that Obamas plan would be a disaster for the economy!
  • Anonymous
    1 decade ago

    Obama is already backing off on raising taxes. I think everything he says is campaign rhetoric, so who knows.


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