Any number of things could happen between now and year-end 2012 but for now this is how the law reads.
One of these days I'll get around to posting on cap-gains rates and capital deepening.
From Lew Rockwell:
Two More Things 2012 Will Bring
Long-term rates on capital gains rise to 20% (for higher tax brackets) at the end of 2012. Plus an added 3.8% Medicare tax tacks on to capital gains! The existing rate is 15%, so that's a 59% increase in the capital gains tax rate (from 15 to 23.8). This will cause (at least) two things to happen.
One, people will realize capital gains in 2012 to avoid the higher rate in 2013. This effect will probably depress the stock market starting maybe around August and going to the end of the year. Second, the cost of capital goes up significantly. This causes business to cut back on projects (investment). Growth and productivity slow. The economy slows down. This happens gradually, but it's a long-term powerful effect. Just what we need, right? Another recessionary jolt. Remember, we are still in the recession that began in 2008. The banks are still in bad shape with overstated assets. Europe is the current stress point....MORE