US Tax issue 2012

Currently US tax rate on dividend and capital gain is 15% for an US individual.   This concessionary rate will expire on 31 Dec 2012.  The US tax rate on dividend and capital gain will then revert back to being taxed as ordinary income. 

This means that the high income earners will be taxed at 35% in 2013.   So the most logical thing to do for those investors holding large embedded capital gain is to liquidate in their stock holdings to capitalise on the concessionary 15% tax rate.  Otherwise they face the possibility of a higher taxation next year