Economy Biden plans to fix Capital Gains Tax

jefferz said:
We've already thrown hundreds of millions of dollars at ISP's to improve broadband infrastructure, but they keep the money and don't improve shit. This goes all the way back to the Telecommunications act of 1996.
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I don't mean keep doing the failed thing we do, I mean actually deliver it. If the ISPs won't, then maybe we need to consider municipal broadband or other alternatives to deliver broadband to rural areas.
 
The Narrator said:
You're right the markets will be fine but the overall strategies of investors are going to change.

As I said before, I'd selloff a major portion of my stock, reinvest and switch to long term holdings. I'm already seeing a few different strategies to avoid the tax.

The overall rate of selling is going to go down which leads to less revenue from capital gains tax.

https://www.wsj.com/articles/the-dumbest-tax-increase-11619384611

"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."

There's a couple articles that are similar on tone out there. I think I saw one video estimating like $100B loss in federal revenue over 5 years. Don't quote me on those numbers but I'll try to find it again.
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"There are good economic and fairness reasons for the preferential rate. First, under current tax rules, all gains from investments are fully taxed, but all losses are not fully deductible. Losses can offset gains in any given year, but losses that exceed gains can only be offset against personal income up to $3,000. The preferential rate compensates for this asymmetry."

This ignores the fact loses can be carried forward to future years. Misleading at best.

"Second, gains in asset values aren’t adjusted for inflation, so investors who hold assets for an extended period pay taxes on increases that are partly illusory. "

True, gains should consider the affects of inflation. However I don't think it warrants forty odd years of inflation as a discount.


"
Third, a capital-gains tax is a second tax on corporate income. A neutral revenue code would tax all income only once. But the U.S. also taxes business profits when " there is more but hidden behind a pay wall.

This is not true for many different gains and even some corporations pay next to nothing. Tesla for example paid about 2% thus year,
 
HeffDoesWant said:
Which is why I asked a multitude of questions before.

So should a bonus I get paid be taxed lower because it is not guaranteed?
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No, because there is no risk involved. You didn't put up any upfront capital to maybe get a bonus but maybe not get one and loss the capital you put up.
 
KeepingItReal said:
No, because there is no risk involved. You didn't put up any upfront capital to maybe get a bonus but maybe not get one and loss the capital you put up.
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So would it be fair to say its more about capital risk than the variability of incomes?

If so, that is more in line with the standard thinking, I totally disagree with it as I feel it's more important to encourage people to work, while passive income is always desirable.
Further work is primarily within that economy, investment however is global.
 
HeffDoesWant said:
So would it be fair to say its more about capital risk than the variability of incomes?

If so, that is more in line with the standard thinking, I totally disagree with it as I feel it's more important to encourage people to work, while passive income is always desirable.
Further work is primarily within that economy, investment however is global.
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Well then, you would have to change the banking industry, not the tax rates. As long as you can buy an asset for $200,000 and five years later have that same asset cost $500,000, people will naturally try to get rich from buying assets at a low price and selling them at a high price. The only way to stop people from trying to get rich from seeling assets is to keep asset prices stable. Then people will be forced to get rich through work, ingenuity, and the creation of new labor saving, money saving and life saving technologies.
 
KeepingItReal said:
Well then, you would have to change the banking industry, not the tax rates. As long as you can buy an asset for $200,000 and five years later have that same asset cost $500,000, people will naturally try to get rich from buying assets at a low price and selling them at a high price. The only way to stop people from trying to get rich from seeling assets is to keep asset prices stable. Then people will be forced to get rich through work, ingenuity, and the creation of new labor saving, money saving and life saving technologies.
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I have zero objections to people investing in things in the hope of earning a return on their money. My job literally depends on it.

I object to the idea they need a tax break to want to do it.
 
HeffDoesWant said:
I have zero objections to people investing in things in the hope of earning a return on their money. My job literally depends on it.

I object to the idea they need a tax break to want to do it.
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That's wonderful for you, except it goes against your purported reasoning that people should have more incentives to work and less to just profit from not working.

It's not a tax break to keep taxes exactly where they are, it would be a tax break if taxes are taken to a lower rate.
 
For what purpose? Just leave people alone. Everyone knows they're not going to do shit to the really rich, the people that buy them off. The Covid restrictions just redistributed a ton of wealth for the lower classes to the upper ones. This isn't going to do shit to change that. If anything, its going to fuck over the normal people trying to make money. Just leave it alone.
 
KeepingItReal said:
That's wonderful for you, except it goes against your purported reasoning that people should have more incentives to work and less to just profit from not working.

It's not a tax break to keep taxes exactly where they are, it would be a tax break if taxes are taken to a lower rate.
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Are you suggesting it's not a tax break because it's pre-existing???
 
The XL said:
For what purpose? Just leave people alone. Everyone knows they're not going to do shit to the really rich, the people that buy them off. The Covid restrictions just redistributed a ton of wealth for the lower classes to the upper ones. This isn't going to do shit to change that. If anything, its going to fuck over the normal people trying to make money. Just leave it alone.
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So you came to air your complaints about a problem and about the program to fix said problem?
 
ShadowRun said:
No one .. If laws are not being broken
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If a hierarchy becomes too unequal there becomes little movement in either direction which allows for incompetence to grow at the top and ability fester at the bottom.

It is a fundamental natural law that is being broken.
 
Phlog said:
If a hierarchy becomes too unequal there becomes little movement in either direction which allows for incompetence to grow at the top and ability fester at the bottom.

It is a fundamental natural law that is being broken.
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No the rich will get richer sure.. but the USA poor is not poor on the world stage...
 
ShadowRun said:
No the rich will get richer sure.. but the USA poor is not poor on the world stage...
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Sure, well enjoy your inevitable revolution in your system you propose.

Poverty is relative and wasted potential will find a way to change the system if it is not allowed to be part of it.
 
KeepingItReal said:
Stop bullshitting.
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I think I've pretty consistently answered every question asked in this thread with a response which details the overwhelmingly positive effects of this proposal.

It is pretty simple stuff but hey maybe you just don’t want to see it.
 
HeffDoesWant said:
Biden plans to effectively end the hugely expensive and illogical tax concessions given to the wealthy to encourage them into wanting more passive income.

This is the missing link in tax reform which I hope gives other leaders the balls to do the same.


"President Joe Biden will propose almost doubling the capital gains tax rate for wealthy individuals to 39.6 per cent to help pay for a raft of social spending that addresses long-standing inequality, according to people familiar with the proposal."

It's hard to believe its been the orthodoxy that we need bigger tax concessions to encourage passive income than we do to encourage worked income.

I expect a world of negative Biden press to be forthcoming. Poor farm families and mum and pop property investors being wheeled out as victims despite their high net worth status.
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Let's punish the successful. Good idea.
 
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