Posted on 04/27/2021 8:26:54 AM PDT by SeekAndFind
What would happen if Biden got the tax hikes he seeks? A big set of questions and answers follows.
As I noted on April 23, under Biden's proposal Net Capital Gains Tax Would Approach a Whopping 60%.
I'll complain when I'm the one being taxed.
Mish, tell me if it impacts someone with $60K in annual income and $12K in short-term capital gains. If it doesn't, go screw yourself!
Great if the plan is passed! Party time for the Top .3% is over!
Why should investment be advantaged over labor?
The first two comments above remind me of (fill in your own blanks: They came for the ______ and I did not speak up. Then they came for the _____ and I did not speak up. Then they came for me and _____.
Q: Put a 60% tax on capital investments and what happens to investment?
A: Investment in new businesses will plunge.
Q: Put huge taxes at the state level and what do people do?
A: They move.
Q: What happens to neighborhoods, even states, when the wealthy flee?
A: Think Illinois
It is not the poor who invest in new businesses. And at a 60% tax rate it will not be the wealthy either!
Bonus Question: Who said this?
"The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital from static to more dynamic situations, the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth of the economy."
If you guessed Ronald Reagan, try again. In fact, if you did not know the answer, I doubt it would be one of your top 5 guesses.
Bonus Answer: "Public Papers of the Presidents of the United States, John F. Kennedy, 1963".
The WSJ addresses that question in The Dumbest Tax Increase.
As former Federal Reserve Governor Larry Lindsey explains nearby, a 43.4% federal rate will cost the government money.
The Congressional Budget Office says the revenue-maximizing rate for capital gains is about 28%. Other economists say it’s lower, and many think the ideal rate is zero. No one outside the fever swamps thinks it is more than 40%, much less the 55% or more that would apply in high-tax states if the Biden proposal becomes law.
As rates rise, Americans tend to hold on to their assets longer, reducing realizations. CBO has found that for each 1% increase in the capital-gains rate, there is a 1.2% reduction in realizations. Raise the tax as much as Mr. Biden wants, and realizations will fall significantly. The higher rate will cost the government revenue.
The WSJ quotes Lindsey "punishment for its own sake."
This is what happens when you turn your economic policy over to Bernie Sanders and Elizabeth Warren. Envy is in the political saddle, and Joe Biden is going along for the ride.
One of my economically literate readers accurately noted the envy angle. Others noted capital flight.
Another commented that Biden added trillions in debt in just a few months commenting "Even 100% capital gains tax won't pay for all this."
As discussed above it would not pay for anything but would negatively impact investment and therefor jobs.
In addition to the above, a hike of that proportion could and in my estimation likely would spook the markets.
It certainly would make future investments in the US stock markets less attractive than foreign markets.
And if the proposed legislation did pass, it would be a clear indication that the looney wing of the Democratic party lead by Elizabeth Warren was in full command.
To fund their crazy ideas, tax hikes would not stop with the wealthy. Either that or inflation would soar, perhaps both.
The fearless fool who said, "I'll complain when I'm the one being taxed," would then complain about tax hikes on him, how his neighborhood went to hell, or how the stock market decline hurt his investments.
I am totally in favor of tax reform and will post some ideas on what's needed in a bit, but Biden's proposals are hugely foolish from many standpoints.
I was against Trump's cuts because of the way they were structured.
They did not benefit the middle class, they did increase the deficits, etc.
I am against these absurd proposals on their own demerits. I will write up an outline for a good tax plan later.
Meanwhile, Biden's proposals are hugely foolish from many standpoints.
Shouldn’t have carried water for the Rats. Sucks to be them.
Instead of selling their shares and paying ~60% tax, the rich will borrow off them at the rate (less than 1%) the banks pay people like me on their savings.
What stupid M*F* would put their name on this with 2022 just over the horizon? The population is far more woke to conservatism than scumbag leftist BS. This bill is a career ender.
“Shouldn’t have carried water for the Rats. Sucks to be them.”
Yep, I’m done too carrying the water for the wealthy. Those clowns got us the nightmare we’re now living through, they can STEW in it for all I care.
If we ever get a chance to be a free people again, the Constitution needs amending in the taxation area. This amendment should; set a national sale tax rate of say 7.5% , repeal the 16th amendment (income tax), eliminate the ability of congress to write tax law except in national emergency, require 3/4 of the states to approve the declaration of national emergency, sunset any national emergency declaration after two years, phase out all government transfer payments, outlaw property taxes of any type. Everybody pays, no one skates. Remember it is not the constitution that is bad, it is the people.
Call it what it is, the Envy Tax.
Ten Years After:
Tax the rich, feed the poor
‘Til there are no rich no more
Another gift from the democrat party chaos.
This is so important. It defies explanation as to how and why the American people ever accepted perpetual taxation of real estate. What on earth were we thinking. I find it disturbing that people actually think they have private property rights or that they actually own real estate, they don’t.
RE: What stupid M*F* would put their name on this with 2022 just over the horizon?
Very simply- as long as the corrupt voting system that cheated Trump out of victory in November 2020 is in place, and I don’t see any evidence that it has changed, the Democrats will push their leftist agenda WITH IMPUNITY knowing that the system will re-elect them regardless.
This has nothing to do with money to the government. This is about preventing the accumulation of wealth. It’s about old money making new money impossible. This is Communism and the people behind it are pure evil.
Yep, I’m done too carrying the water for the wealthy. Those clowns got us the nightmare we’re now living through, they can STEW in it for all I care.
For rears I wondered why the very wealthy are dims.
It has finally dawned on me that i have had it backwards.
Those wealthy dims did not start out conservatives whose wealth made them dims.
They are dims who became wealthy because of the insider information available to and accepted by dims.
And the rinos are no better.
You are so correct. I tell people the same thing and they scoff at it. Wait till they get behind, then they will find out who owns their property.
“Yep, I’m done too carrying the water for the wealthy. Those clowns got us the nightmare we’re now living through, they can STEW in it for all I care.”
Your are very ignorant on this subject and should study the effects of this kind of tax increase. Everyone will be negatively affected, and the negative effects will hurt those paying this tax LESS than the rest of us.
Tax hikes always pound the Middle Class, the rich can always find ways to get around them.
Everything it does is hurt Americans. That is the plan.
Right, most Americans are woefully ignorant of financial knock-on effects. The “we’re only taxing the rich, it won’t affect you” is a favorite dodge by Democrats and socialists.
Right, most Americans are woefully ignorant of financial knock-on effects. The “we’re only taxing the rich, it won’t affect you” is a favorite dodge by Democrats and socialists.
Why should investment be advantaged over labor?
because in wealth creation, investment has to precede labor
they dont want to take water out of the middle class end of the pool.
they only want to take water out of the rich end of the pool.
either way the water level goes down.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.