What's Up On Wall Street - Peggy Collins, Bloomberg

Good morning and welcome to the financial exchange is a story in today's Wall Street Journal about nursing homes across the country this is -- wonder to nursing homes. Nursing homes across the country. Overbilling. Medicare to the tune of billions of dollars and cover that story during this hour. Got a lot to chat about the market is open and there's actually some trading going on today June because it's not. The veterans day holiday which we experience yesterday and I'm start to think that they should just close the markets. On that day yeah I don't hate it if it's. Somewhat disrespect to our veterans -- not -- it that's it and in and nobody trades any. Dial up three points NASDAQ down nine not a whole lot of movement gone pretty uneventful this morning S&P flat -- -- flat and -- just amounts of money aren't we're joined now by piggy Collins eased down at Bloomberg News in New York Peggy good morning welcome to show. Current travel. -- I think a lot of investors. Our. Yeah are selling assets not just stocks but they're selling assets would there be real estate companies are stocks. On the. I'm motivated and and particularly on the wealthier investor side of things because they're looking at. Proposals by the Obama administration -- Raised the rate on capital gains from 15% now to as much as 23 point 8%. Starting in January next year but there are a number of people -- me who worried or looking at their portfolios and pain on that a rebalancing he gained an ally can -- -- -- -- apps currently. I'm going to he felt appreciated Athens accessibility. Or because business is that I was thinking of -- anyway and I'm gonna lock and now. C.'s senior with a New York co op and Condo market the Hamptons properties. I remember reading the stories all summer long about how. You know people were selling these 25 million dollar homes because they wanted to pay the 15% tax as opposed to the 23. Yet -- every that he you know hearing about -- private equity fund to maybe trying to close deals on real estate before the end of the year to peaking now. As well I think he's dead people who haven't gotten into real estate enterprise it. Companies feel failing businesses who were thinking of telling the business in the next two years and explain elaborate a little -- up and -- -- before the end of the year. So what does this do to future years any it would happen I suspect. If you have a big the government of get a big boost in revenue because they're gonna. They're selling things are gonna pay their 15% tax in my guesses tax receipts are gonna increase dramatically in the first quarter. Of 2013. But then I would suspect it'll slow way down again in 2013. In the last nine months. It could -- you know depends on how would be economy does -- know what people are waiting for. Thankfully a real and -- yelled battery boot media economy coming in at some point and -- the market really -- takeoff of housing market as it looks like it's stabilizing now start to peacock. You could hear people have short memories he could even start that I feel like there's. Good deal he had even if raped her are tired so I'm not -- exactly what happened but we do we do it speeded even you know we thought the Dow dropped about three or point the day after the election. We do anticipate more people -- gains. Point the end of the year but it's important to note to on the personal side that a number -- -- that I Pataki have talked about you know if you like the position that your aim for example it on the stock side of things he could rocking your -- now and read by it. So we could see people kind of blocking their gains and -- still go back into the market. It end and that leads to the next question which has to do -- dividends. It do you think that congress will increase the tax rates on dividends and more or less than they will on capital gains. For the dividend the question is if you want that advises are looking at closely and -- after the -- because right now it as it. But tax cuts expire by the end of the year. Big dividend rate is scheduled to go from. 15% now to as much as the 39 point 6% being reset to ordinary income rates instead of the preferential capital gain three. But you also have the Medicare attack coming into play in January that it ties to the healthcare bill is not tight fiscal -- But that is coming at people court upheld that bill in June and that is coming for wealthy investors those who -- -- More than 200000 dollars a year or couples who make more than 250000 dollars a year to put it together and you've got to rate of about 43. Point 4%. From 15%. As high expected dividend rate could go for the wealthiest investors. The bad has it something that people are definitely looking ideally we'd see a lot of people turn to dividend paying opportunity guilt -- to allow as a way to get income. But we meet these people start to hit those assets income tax deferred accounts -- like an IRA. Going forward if they're great because I can as high as 43 point 4%. That's pretty scary stuff -- Well you know -- we -- we have -- a lot of people proposed keeping nearly pandemic did dividend in line with capital gains. So potentially you know there's proposals out there for it can rise to 23 point 8%. As opposed to 43 point four try to keep them in -- capital gains but we don't know what and I. And it happened in the compromises that content. Well well they -- -- goes to 43% then you couple tax state tax rates in their pay here your look unit in excess of 50% in some parts of the country. Yes and you know Lipton I mean come not from the network that's hard to control right in your beating off in the ending come it's not something that you can easily kind of control how it's -- Atlanta of course you decide the -- and put your state give me an attack deferred account like at retirement savings account. There's not a whole lot to do on the demand side but we could beat people's perspective shy away from dividend paying -- -- the rate is -- and much. All right well Peggy thank you very much for your time appreciate your research. Bad piggy Collins she's a Bloomberg reporter joining us today on the financial exchange got a busy hour for you today we're going to be talking about. Raises anybody will your folks are gonna get a raise junior going to be of the call your mom after the show and tell him -- on January 1 again -- And in what capacity Social Security. And I want to know I I I take some research I've been doing all morning long and and I started yesterday afternoon haven't been able to find it. Normally you find out what the Medicare part B premium to increase is going to be like a week and a half ago before the election. I still don't know and -- have you seen this anywhere this. -- -- -- Her Medicare you know her era there. I -- last week and she's now not a time like it's like twenty bucks a month there's some -- like four dollars and something. It may be significant but she did she call -- -- not thinking over the weekend and says it was a Medicare part B via -- going up OK let's. Let's put that out -- audience if you know how much Medicare part B is going up on January 1 2013 -- let me know. Because I don't know if that's that's pretty bad researches it and. I hatcheries -- all my mother has. It getter on the phone gave up next June -- while she's working she has seal you know -- she's all he failed retirement on she she had an F in retirement. I'll find out I'll find out 68680s. Or text number my email address is Barry Armstrong at WRK dot.