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Biden plans retroactive hike in capital-gains taxes, so it may be already too late for investors to avoid it: report
Market Watch ^ | 05/28/2021 | Victor Reklaitis

Posted on 05/28/2021 8:16:10 PM PDT by SeekAndFind

President Joe Biden’s proposed budget for the upcoming fiscal year assumes that a hike in the capital-gains tax rate took effect in late April, meaning that it already would be too late for high-income investors to realize gains at lower tax rates, according to a Wall Street Journal report out Thursday citing people familiar with the proposal.

Biden plans to increase the top tax rate on capital gains to 43.4% from 23.8% for households with income over $1 million, though Congress must OK any hikes and retroactive effective dates, the report added.

Some analysts predicted any rise in capital-gains taxes will not end up being retroactive.

“Given that Biden’s capital-gains tax proposals face headwinds already, we think it is unlikely that Congress will make them retroactive as well. That would be adding insult to injury,” said James Lucier, managing director at Capital Alpha Partners, in a note.

Separately, a New York Times report said Biden plans to propose a $6 trillion budget on Friday that would take the U.S. to its highest sustained levels of federal spending since World War II.

Documents obtained by the Times show that Biden’s first budget request as president calls for total spending to rise to $8.2 trillion by 2031 as he aims to upgrade the nation’s infrastructure and substantially expand the social safety net, that newspaper’s report added.

(Excerpt) Read more at marketwatch.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: biden; bidenomics; capitalgains; expostfacto; expostfactolaw; searchandfind; taxes; taxhikes; unconstitutional; xiden
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To: SeekAndFind

Any investor who did not see this coming has not been paying attention.

Obama and Clinton both signed retroactive tax increases.


41 posted on 05/29/2021 3:12:42 AM PDT by zeestephen
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To: Governor Dinwiddie

Top tax rate under FDR in 1944 was 94%.


42 posted on 05/29/2021 3:58:10 AM PDT by EEGator
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To: lightman; SeekAndFind

SCOTUS has held that the prohibition against ex post facto laws contained in the Constitution applies only to criminal laws.


43 posted on 05/29/2021 4:36:30 AM PDT by KevinB (''... and to the Banana Republic for which it stands ...")
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To: lightman

They did it before


44 posted on 05/29/2021 5:21:03 AM PDT by for-q-clinton (Cancel Culture IS fascism...Let's start calling it that!)
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To: irishjuggler

Bingo! We have a Winner!

Exactly what happens every day.


45 posted on 05/29/2021 5:29:15 AM PDT by Texas Fossil ((Texas is not where you were born, but a Free State of Heart, Mind & Attitude!))
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To: BiglyCommentary
Was that a very narrow technical decision?

Not really, [United States v. Carlton (92-1941), 512 U.S. 26 (1994)]

"Provided that the retroactive application of a statute is supported by a legitimate legislative purpose furthered by rational means, judgments about the wisdom of such legislation remain within the exclusive province of the legislative and executive branches . . . ."
46 posted on 05/29/2021 7:11:53 AM PDT by Dr. Sivana (Where do comic book heroes and villains get their doctorates?)
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To: proxy_user

Yea, until the president’s Fed ally shows up and says they need to roll out a new currency called the American Dollar to be used extensively throughout N/S Amerika.


47 posted on 05/29/2021 8:03:17 AM PDT by Jumper
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To: Az Joe

Seems there could be a lot of implications in this tax, especially making it retroactive. Never have understood how someone like the government could just come in & make a tax retroactive. Supposing a private citizen wanted to make their increase in wages retroactive? Guess you know how that would go over...about like an employer trying to make a pay cut retroactive. Maybe “retroactive” should be something that is no longer employed as I don’t see how it can be made fair for those concerned.


48 posted on 05/29/2021 10:11:49 AM PDT by oldtech
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To: Dr. Sivana

Actually is was a somewhat narrow and technical decision. The part you quoted is missing a qualifier. A retroactive tax does not fail the due process clause if it is fixing earlier legislation. That wouod apply in a totally new tax not related to fixing a loophole. So I think BitMe’s new one would fail due process.

We conclude that the 1987 amendment’s retroactive application meets the requirements of due process. First, Congress’ purpose in enacting the amendment was neither illegitimate nor arbitrary. Congress acted to correct what it reasonably viewed as a mistake in the original 1986 provision that would have created a significant and unanticipated revenue loss. There is no plausible contention that Congress acted with an improper motive, as by targeting estate representatives such as Carlton after deliberately inducing them to engage in ESOP transactions. Congress, of course, might have chosen to make up the unanticipated revenue loss through general prospective taxation, but that choice would have burdened equally “innocent” taxpayers. Instead, it decided to prevent the loss by denying the deduction to those who had made purely tax motivated stock transfers. We cannot say that its decision was unreasonable.

*******************

Second, Congress acted promptly and established only a modest period of retroactivity.


49 posted on 05/29/2021 12:00:04 PM PDT by BiglyCommentary
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To: BiglyCommentary

Link with decision.

https://www.law.cornell.edu/supct/html/92-1941.ZO.html


50 posted on 05/29/2021 12:01:27 PM PDT by BiglyCommentary
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To: BiglyCommentary
First, Congress’ purpose in enacting the amendment was neither illegitimate nor arbitrary.

It is easy to define any act passed as not being arbitrary as an excuse to muster up the votes will always be present. Almost by virtue of the fact that 220+ voted for it could be used as grounds for it not being arbitrary.
51 posted on 05/29/2021 2:45:37 PM PDT by Dr. Sivana (Where do comic book heroes and villains get their doctorates?)
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To: Dr. Sivana

The court decides arbitrary or not. How many votes the legislation gets doesn’t matter to them.


52 posted on 05/29/2021 6:54:54 PM PDT by BiglyCommentary
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To: BiglyCommentary
The court decides arbitrary or not. How many votes the legislation gets doesn’t matter to them.

It does matter, indirectly. The case could be made that if an elected body makes such decisions, that rational men do not make arbitrary decisions en masse. The criteria for "arbitrary" remains undefined. In effect, the Court has been put in a position to arbitrarily decide whether the legislature was arbitrary.
53 posted on 05/29/2021 7:21:36 PM PDT by Dr. Sivana (Where do comic book heroes and villains get their doctorates?)
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To: Dr. Sivana
In effect, the Court has been put in a position to arbitrarily decide whether the legislature was arbitrary.

That is simply not the case. There are many, many precedents and conditions that the court uses to decide whether legislation was arbitrary or not. This is not some unknown/untested area as you are trying to make it out as. Read the decision for insight ion how they decide.

54 posted on 05/30/2021 3:22:02 AM PDT by BiglyCommentary
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To: BiglyCommentary
Congress, of course, might have chosen to make up the unanticipated revenue loss through general prospective taxation, but that choice would have burdened equally "innocent" taxpayers.

Innocent taxpayers in this case would be those who sold capital assets in good faith based on the capital gains taxes rates at the time of sale. They denied the due process claim in that case because the sales were considered sham sales made entirely to take advantage of an unintended loophole in the law that Congress did not intend to be there.

Second, Congress acted promptly and established only a modest period of retroactivity. This Court noted in United States v. Darusmont, 449 U. S., at 296, that Congress "almost without exception" has given general revenue statutes effective dates prior to the dates of actual enactment. This "customary congressional practice" generally has been "confined to short and limited periods required by the practicalities of producing national legislation." Id., at 296-297. In Welch v. Henry, 305 U.S. 134 (1938), the Court upheld a Wisconsin income tax adopted in 1935 on dividends received in 1933. The Court stated that the "recent transactions" to which a tax law may be retroactively applied "must be taken to include the receipt of income during the year of the legislative session preceding that of its enactment."

55 posted on 05/30/2021 3:48:28 AM PDT by BiglyCommentary
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