Many investors are carefully watching the current presidential race and wondering if they should begin selling their stocks as a reaction to political poll reports. Capital gains have been discussed frequently during this campaign and each candidate has clearly stated his position on this subject. Investors are watching carefully and wondering whether or not they should sell their stocks in order to safeguard their profits.

If Senator Barack Obama is elected, he has vowed to increase the capital gains tax from the current rate of 15% to approximately a 20% rate for taxpayers earning more than $200,000 individually, or $250,000 filing jointly. Although this does not seem like a huge increase, if you have a large profit from the stock market this year, this increase could amount to a substantial amount of money that would be owed to the government from your profits.

Senator McCain, on the other hand, has stated numerous times that he would allow the capital gains tax to remain at the current rate of 15%. He does not believe that it is necessary to increase this tax and would support holding the line at 15%.

If Senator McCain becomes our next president, the large investors in the stock market can breathe easily. If, however, Senator Obama is our next president, the investors must decide if it is in their best interest to sell their stocks at a profit while the 15% rate is still in effect. This is a decision which will have to be made soon. It is important to understand that history has repeatedly shown us that a new president generally addresses his tax agendas in his first year in office.

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