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Write legislators now

- Alan Lavine and Gail Liberman



It's more important than ever to keep an eye on our federal legislature. A lot of proposed legislation aims to help mutual fund investors.

Here are some pending issues that it could pay to support by writing your legislators:

  • Legislation banning mandatory arbitration clauses. The Arbitration Fairness Act of 2007, S. 1782 and H.R. 3010 would ban these clauses, now routine in financial services, including brokerage contracts. With these one-sided clauses, you may be waiving your right to a court hearing. Or, you could be agreeing to arbitration arrangements that may be costly and/or not necessarily in your best interest.

  • Legislation that would let you defer taxation on all or some reinvested mutual fund capital gains. Currently, you get annual taxable capital gains distributions, or profits from the sale of securities, from your mutual fund at the end of the year. You pay tax on short-term capital gains on securities held less than one year, based on your income tax bracket. Long-term capital gains are taxed at 15 percent. Any deferral of capital gains would be a shot in the arm to investors that could mean thousands of dollars in the value of your investments over time. Although you'd have to pay the capital gains tax when shares are sold, you could control the amount you sell based on your tax situation.

  • Legislation that would give tax incentives for investing in individual annuities. S. 1010 and H.R. 2205 both would let retirees receive up to $20,000 annually tax-free from individual annuities. We need all the financial help they can get--particularly when it comes to maximizing retirement income!Stay in contact with all your elected officials on these issues. Keep tabs on federal legislative efforts at www.thomas.gov. Contact information for federal congressional officials can be found at a href="http://www.house.gov">www.house.gov and a href="http://www.senate.gov">www.senate.gov.

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    Spouses Gail Liberman and Alan Lavine are syndicated columnists. You can purchase Alan Lavine & Gail Liberman's latest book Quick Steps to Financial Stability (QUE Publishing 2006) online at www.moneycouple.com or at your local bookstore. E-mail them at MWliblav@aol.com.


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