As we near the end of 2012, the fiscal cliff is becoming bigger and bigger news. If nothing’s done, taxes will go up for everyone and we’ll have another fine example of politicians being politicians. Remember, this was something completely man-made. They did this in the debt ceiling debate because they figured that something this drastic would never actually happen. It would be severe enough to spur politicians to agreement and it appears, as the days pass, that they underestimated their ability to recognize great pain.
Unfortunately for everyone else, there really isn’t much that we can do about it. When you combine the uncertainty of a deal getting done and the certainty of tax rates going up, I’ve been mostly on the sidelines in terms of changing anything specific. I have sold stock holdings I’ve had for several years but the logic behind them has been mostly housekeeping, not taxes. A few of those holdings I sold because I wanted to capture those gains (and harvest as many losses as I can) since taxes on long term capital gains will almost certainly go up, deal or not.
Other than that, I haven’t done much of anything else. Have you done anything because of the fiscal cliff?
(Photo: aidanmorgan )