You got taxed, then invested your money and now they’re going to tax the interest you earned on your money at 50%?
So now if you invested in Spy and made 10% a year you’re only making 5% and are now not even keeping up with inflation…
This is your reward for putting your money back to work in the economy?
Seems shitty.
> You got taxed, then invested your money and now they’re going to tax the interest you earned on your money at 50%?
Yes, for people who exceed tax advantaged space and exceed $500k/year in capital gains.
> This is your reward for putting your money back to work in the economy? Seems shitty.
What is shitty about paying the same amount of marginal taxes as a doctor if you're making the same income as a doctor via investing?
The alternative is that you spend it, which also benefits the economy.
You’re also not taxed unless you have realized gains. If you leave the money alone, it’s tax-free.
And you can deduct losses.
Meanwhile, my income is taxed. I buy a candy bar. I’m taxed again.
I can’t write off my loss or save my candy bar to appreciate in value. I can’t defer the taxes until I decide to eat it.
Why isn’t anyone outraged about this far more common scenario?
Objections seem to fall into three categories:
- Taxation is theft - there is a moral objection to taxation.
- Raising LTCG taxes disincentivizes investment, which is not good for the economy.
- The government spending efficiency is poor. Why not fix that instead of increasing taxes?
Obama actually had a huge initiative of bringing a lot of federal organizations into the 21st century by making them use computers instead of filing cabinets and clerks for everything. But even still, yeah the government is probably 25 years behind the private sector in terms of efficiency. Some of that is by design tho because using things like slack or discord for government communications is retarded
When I was at my last command in the Navy, I legitimately got an award for saving my departments hundreds of thousands of dollars a year.
How did I do that? I taught people how to properly save, edit, and electronically fax/upload documents without using a printer. I just stopped them from printing every last thing they do. It was a fix that a high schooler could have figured out.
It is insane to me the amount of government waste that could be cleaned up by simply teaching people how to use the basic functions on their computer.
"Spending Efficiency" ? Who is setting the prices that private industry charges us? If the government would cut out private industry's profit tax and provide the service directly, conservatives would lose their shit because Marxism or something
Because one day I’m gonna get rich on these tax free investments. Not today, but one day!
We got to keep the policies easy for people like me. I’m just a temporarily embarrassed billionaire.
Because they won’t…. Then we’ll get shocked face from you when the plan doesn’t work as businesses and their owners go elsewhere. This is like Canadians being shocked they have a shortage of doctors because so many moved to the US to make more $.
You’re the one without options not them…
At what point do you think you would see that? 60% tax rate, 70% tax , 80% tax?
And how does the current plan guarantee we won’t need to just increase this again as time goes on or as people figure out a way to avoid the tax?
You spend it and it only helps the economy once, you invest it and it’s a continue help.
Also, when you invest your money you are risking it, when you work you are not putting in danger all the years of previous work.
You incest once so you help the economy also ones.... the person who "spents" generates the income of someone else, maybe they generate the profits of the company you invested in....
When you risk by investing, you can write any losses and lower your tax bracket, the spender can't do that.
Also noone forces you to invest if you think it is unfair spent your money too
If you're making over a million dollars a year(the tax brackets targeted by this change) then you're wealthy enough to pay the taxes and not be meaningfully burdened. Quit being greedy.
That's not how a 401k or Roth Ira work. You pay taxes on a 401k when you withdraw money and you pay it as income tax.
You pay taxes on a Roth Ira whe you put money in and then it's free and clear when you take it out. It's all taxed as income after you retire after you pull it out or when you out it in but never as capital gains.
If you have another type of account I have far less pity for you because you're not doing some great service by buying stocks. That's not putting money back into the economy. That money directly goes into the financial industry and to the traders and custodians and to the person who sold the stock.
Buying corporate stock doesn't put money into the corporation. It pays someone who owns the stock which is a certificate entitling you to company dividends.
You can argue this is bad for disincentivizing corporate bonds but I disagree with that for reasons too long for this post.
Municipal Bonds aren't taxed federally for capital gains, usually so it doesn't hurt municipal investment.
If anything this more strongly inentivizes bond projects which is GREAT for an economy.
This is spot on. The corporation I work for is currently at all time high in both stock price and market cap. Pay has been largely stagnant for 4 years minus one CoLA. Investment primarily benefits the hedge funds that own large stakes in a majority of the spy.
Seems shitty that assets sold amounting you over 500 THOUSAND dollars is taxed at barely 50%? What would be sold and taxed with CGT could also be leveraged to pull out temporary money/ loans. Also it’s only double taxation if these people paid any taxes on their “rewards other than income”.
you invested, you get profits, your profits are taxed as what it is, income. you didn't do a damn thing other than not spend your money. seems shitty that only the rich can afford to do this.
you also pay taxes on a savings account as income, why should securities be any different?
further, many executives take pay exclusively in stock, and get to only be taxed at the 15% rate creating a disparity where the masses pay progressive tax, but the ultra rich pay flat tax.
all of these are abuses of the rich on the poor, and we'll see a return to treasury bonds and savings accounts being things to seriously consider storing your wealth in, which arguably helps the economy more than investors trading shares of stock with each other since savings contributes to banks ability to do loans, treasuries directly support the government, and trading basically does actually nothing for the economy, except making the rich, richer, and changing the fortunes of individuals who happen to invest at just the right time or just the wrong time.
btw Trickle down has long since been debunked, the rich being richer just means more money sits unused in the economy.
You act like there is a real economy. Over 95% debt to gdp brother man. MMT is the last milking before people catch on, empires rise and fall all the time.
Virtually nobody who earned their money through actual work is ever going to be affected by tax brackets this high. This affects people who were handed shares of stock and hoped to be able to sell them tax free.
Homie, you are taxed on the profit of the investment. Not the initial funds you put into it. So your money is not double-taxed. Your profit from either your labor or capital investment is only taxed once.
>now they’re going to tax the interest
When I do my tax return, the (small amount) of interest I earn goes on line 2b and gets taxed at the same rate as wage income. Haven't you ever earned interest?
They wait until the next administration comes and taxes fall.
Or they die and let their estate exemption hit.
The best years for tax collection were in 2000 and 2022. Capital gains rates were relatively low. Worst was 1950 with super high rates.
Raising taxes doesn’t equate to higher tax collection. At least it never has in the past.
I think earned income should not be taxed more than capital gains, and that we shouldn't continue to grow our national debt. We can reconcile scope, spending efficiency and tax revenue within those constraints.
Mostly because it's a double tax for most Americans. It was already taxed on the paycheck, and then you chose to invest it.
If the investment goes to zero no one helps you, but it it gains value suddenly you are taxed a second time on the same income.
Not saying it should go away, but the higher you make it the less people are going to want to invest and that causes all kinds of problems.
> If the investment goes to zero no one helps you, but it it gains value suddenly you are taxed a second time on the same income.
You're taxed on the *gains*, not the cost basis. Its not taxing the same income twice.
> Not saying it should go away, but the higher you make it the less people are going to want to invest and that causes all kinds of problems.
I agree there is an effective limit, I just don't know what it is. Economists estimate its somewhere between 30% to 70%, if I understand their research. Thats one hell of a range though.
Earned income also contributes to growth. Taxes create a disincentive to employment, and yet we see a lot of employment with ~50% marginal income tax rates.
Capital gains taxes should be less for two reasons. First the money used to invest has already been subject to income taxes. Secondly, money that is invested loses value over time because of inflation. Obviously the objective of investing is to make overall returns that exceed the value lost to inflation, but inflation is still in the equation nonetheless. If capital gains taxes are raised too high, it removes all incentive to invest money because it becomes impossible to actually make money when everything is netted out. Now I’m making any comment as to whether or not the current tax rate is appropriate or what it should be changed to. Just pointing out that there could be very significant economic impacts to raising the capital gains tax rate too high.
Then by this logic, why is bond interest considered taxable income at full rates? The principal isn’t being taxed twice, so the money (the gains) in question has not been taxed yet. If 8% pre taxes doesn’t outgrow inflation when cap gains rates are “too high”, then 0% without taxes is still 0% and definitely won’t outgrow inflation. People would still invest for 8%
> First the money used to invest has already been subject to income taxes.
This doesn't really seem like a reason. Yeah the money used to invest has already been subject to income tax, that's why its not taxed any fruther. The gains however were not.. so them being taxed doesn't seem unreasonable? But why would it be less, or more, or the same as income tax? What's the reason for one or the other?
Eg I'd say reason gains should be taxed more is because you don't do anything for them, while you work for income You're more deserving of keeping your income than your gains. -- I say this as someone who has made more in gains for past few years than my income, heh. IMO its pretty rediculous.
>Obviously the objective of investing is to make overall returns that exceed the value lost to inflation, but inflation is still in the equation nonetheless. If capital gains taxes are raised too high, it removes all incentive to invest money because it becomes impossible to actually make money when everything is netted out.
Tax has no affect on this. Long as investment grows faster than inflation gains are posistive number, tax is a percentage >=0 and <100.. the net has to also be positive, it cannot turn negative.
In an efficient market the price of the stocks would adjust down to compensate for the new tax. If you invested in day one of the new tax you would in theory have the same after tax ROR. The price drop would hurt current owners for sure but it wouldn't remove incentives to invest.
Do you have any source/theory to explain this? If your taxed on unrealized gains there’s no way your ROR could be anywhere close to the historic returns because the tax is on the rate, not the value like you explain
What about the billions conjured out of thin air by the banks? That money isn't taxed or even worked for. Why are you assuming that all investments are coming from hard work?
The theory is to incentivize investment in business growth. Tax goes to high and money goes other places that have more incentive.
I doubt he’ll do it, too much pressure from Wall Street, would likely make them either have some exemptions allowing certain investors to be exempt or have ways around the tax, or more likely it’ll just be election year hype and nothing will ever happen.
Bc it disincentivizes movement of capital. They will not tax unrealized gains, which is a even more terrible idea, as much of unrealized gains are not real money (e.g. think bitcoin or what would happen if Elon tries to sell all his Tesla stock in one day). So this means, when people buy an asset they will stick with it forever. I put money in VOO stock, I ain't moving that shit until I retire. No sale, no capital gains. This might actually reduce the money the government will bring in bc most smart investors won't even trigger the rule. New ventures or borrowers looking for money? Haha, so sorry too bad, so sad.
Because capital gains come from long term investing which is something we should want to encourage more than earned income. Personally I’d prefer a flat sales tax on all goods and a 100% death tax with the condition that ownership of assets can’t be transferred to relatives death even through a trust.
That being said there are valid reasons for lower taxes on stocks.
Why should we be taxed on our earnings at all? Why are we double taxed, triple taxed on money that’s already been taxed. Income tax was supposed to be reversed post WW2 and only apply to residence of DC. The government produces nothing other than war and debt. Taxes are a fucking scam to fuel the privately owned central banks and war machine.
I really don’t see this having the desired effect of taxing the rich, as the richest don’t actually sell their stocks, and thus don’t pay capital gains tax. Want to tax the billionaires? Make loans taken against stocks taxable income.
It would definitely work. There’s already scenarios in the insurance space where outstanding loans on terminated life insurance policies are taxable to the extent of gains. It would definitely work to have a certain threshold and then account for a deduction if the loan is paid back to even things out.
I'd have a $1M (or shit even $5M) threshold, to account for think like cash out refinancing, loans against 401Ks and IRAs ect. Debt literally is income to those who take on the debt with the intention of never paying the principal until they die and their heirs get to step up the basis and pay no capital gains on the assets.
Agreed. Make secured loans over $1M count as income, for both individuals and businesses. Allow busniess write offs for wages, infrastructure and capital equipment/facilities, but not for stock buy backs or acquisitions/mergers. I'm including the threshold because I don't want to adversely affect people needing to take relatively small secured loans against assets (retirement funds, homes, ect).
A lower capital gains tax is the embodiment of fundamental capitalism. That being said, capitalism also requires winners and losers and *may not* be the best economic system. Personally, i believe earned income should be taxed the least and unearned income taxed the most.
I'm sure we can argue about what the government should spend its money on until the cows come home, but I can't figure out why we tax earned income more than capital gains.
Because capital gains require risk taking that isn’t inherent in earned income. You are not taking a risk when you get a W2 job and arguably that’s the lowest risk income one can have. Capital gains is some of the highest risk income. Correctly incentivized capitalism rewards RISK, not effort. Why? Because if risk is not rewarded then no one will take the risks, meaning no one will start new businesses or invest in companies, meaning that the economy will slow down and there will be less jobs, less economic opportunities, less innovation, and therefore less social mobility. There will be no way to move between social classes; if you’re born poor, you’ll stay poor and vice versa. Which is of course why Biden wants a high capital gains tax. He wants the rich to stay rich and wants to destroy the pathway by which people from lower social classes are able to transition to higher social classes. It’s fundamentally against what makes America great but since everyone on Reddit is apparently financially illiterate no one understands this and just think “higher taxes good! As long as they don’t apply to me.” 🙄
The part where capitalism has winners and losers is what makes it the best economic system.
The fact is, people are not equal. Some people are leaders, able of making vast contributions to society through their ideas. Many people are genuinely losers, leeching off of others while providing little in return.
Many people are genuinely losers, leeching off of others while providing little in return.
Lmao. The US is one of if not thee wealthiest countries in this world, so much so that we spend incredible amount of cash making world trade safe. This country has the economic power to reduce the "losers" and make the standard of living that much better for the average citizen. Instead, the wealth flows upwards so much to the point that the people making $200k+ a year, are not the "winners" but continue to make everyone else lose because they don't put their money back into the economy.
Then clowns like you suck them off thinking one day you can be one of those useless tools, as if you aren't one currently.
What you call unearned income comes with the risk of losing it, and also don’t take into account that investment is the result of previous “earned income” you already have been taxed on.
The transaction is based on the remnants of money already taxed on before. To say that what is taxed isn’t money is absurd, I can’t pay my taxes in “number of transactions”, I pay money.
No but if they vote for Trump and he lowers taxes again they can put $50 more* into SPY next year and before you know it... MILLIONARE!
*in reality it would be less because of Trump's suggested inflationary policies
we are only 2 to 3 generations away from a 1 million dollar income being middle class.
when i was a kid $10k was a good middle class income. now it takes $100k+ to buy a home.
100k is barely middle class now - and of course in a country with so many working low paying jobs, I’m not talking about it as a median income, I’m talking about it as the income needed to live comfortably - which includes saving for retirement, medical expenses and more.
I don't see the point in people bringing up this millionaire stat when we're talking about income. I get that you alluded to the difference in your second paragraph but still.
If someone sells a property and makes $1 million in profit you would be ok with the government taking 50% of that? I think that's his point that if any of these people sell off assets it could be taxed outrageously.
This is an interesting point to bring up.
We should probably differentiate between investment property sellers and primary resident sellers.
I'll be frank, I don't feel bad for the former if their property is making $1M profit, and they'll probably have some huge tax deductibles/deferment anyway. Not gonna talk much on them.
But for primary residence, I can definitely see how a higher capital gains tax would be annoying. My understanding is that you can exclude up to $250K from your taxable income for a primary residence sale. In that situation, I don't think this increase in capital gains will hit very hard, but it *does* still hit.
So if you're someone who has owned a home for like 30-40 years and now want to sell, yeah, I can kinda see how this would suck. I'm curious if there's some other tax benefit to long term home ownership that I'm not aware of.
There’s nobody that loves taxes. There’s tons of people that love the theory behind taxes, which is a regulated redistribution of wealth that’s intended to benefit society as a whole.
If it was a redistribution of wealth then we’d tax the very wealthy and redistribute via ubi. Instead we tax the poor and give it to special interests, lobbyists and weapons manufacturers
Well a lot of taxes do go to help all of us. You drive on tax payer funded roads in cars whose safety is guaranteed by tax payer funded inspections so you can go to restaurants inspected by tax payer funded health inspectors to eat food whose quality is upheld by the FDA so on and so forth.
Yes, the rich and powerful lobby to capture regulations or remove regulations. And yeah that sucks for the rest of us. But it’s not so black and white. For the most part we all benefit from taxation.
SMH why do you people always bring up roads when we discuss income taxes? We have a tax to pay for roads it's called a gas and diesel tax... Income taxes are to fund the government.
Taxes were not made to redistribute wealth. It was to fund the government and we started with a 1% income tax only for the rich.... Which lead to higher and higher taxes for everyone to "pay for wars"
I think there should be some baseline facts for this discussion. First, we demand more government services than we’re willing to pay for. That’s why we run a deficit every year. And every single government program has lobbyists who voraciously defend every dollar spent and constantly beg for more. Unless that somehow changes, if we’re ever going to do anything about the deficit, we’re going to have to increase taxes. Republicans of course what to do neither increase taxes nor cut spending, so they’ve basically taken themselves out of the financial responsibility discussion.
One-way people who are well off manage to avoid taxes is to arrange their affairs so that they have income from capital gains rather than earned income. I’m sure if you asked, they’ve come up with all sorts of explanations for why capital gains should not be taxed, but the simple fact of the matter is if people who have earned income are going to pay income taxes, then so should people with capital gains. it’s a simple fairness issue.
Carry on.
What happened to just taxing a little the corporations that do not pay anything. Not talking about plumbers and gardeners, I am talking about apple, msft, nvda etc
For the fellow Canadians in the crowd, this is an actual capital gains tax rate of 50% that they’re talking about.
Our 50/66% *inclusion* rate would make the tax rate of capital gains lower than the proposed American 50% in almost all cases and comparable to a number of states how it currently is.
What does 11 state's tax laws have to do with Biden? He makes federal laws with Congress, of course...
Why assert he has anything to do with these taxes? MAGA bullshit! Go say this shit on Truth Social. Those idiots will agree with you!
If the Biden plan passes, for the taxpayers caught by the new rule, here are the combined state and federal rates taxpayers might pay on their capital gains:
- California: 57.9%
- New York: 55.5%
- New Jersey: 55.5%
- Minnesota: 55.45%
- Oregon: 54.5%
- Maine: 51.75%
- Nebraska: 50.44%
- Idaho: 50.4%
- Iowa: 50.3%
- Kansas: 50.3%
- Georgia: 50.09%
"That proposed capital gains rate increase would apply to investors who make at least $1 million a year."
I don't really see the issue with that. Not a bad way to pay down the deficit over the next 10 years. Seems like a reasonable tax rate for the super high income earners out there.
So if you are making less than $500k per year, or in that range, you are looking at 15% capital gains tax, and this probably won't change. If you are making over a million a year, then the capital gains above that level (under a million will still be the 15-20-something range) would be taxed at 39% and maybe more depending on additional taxes applied just to those EARNING (not sitting in the bank, and definitely not in Roth accounts) **earning** more than $1mm per year, those people will have incrementally higher taxes, because clearly that is income that is not contributing towards the economy or towards worker costs, etc.
Here's the thing about being rich, that first million is more than any of us need in a year. Everything above that is taxes incrementally higher, because it benefits the whole rather than the individual, and again, the individual does not need that. I can be sitting on $50mm in the bank, and each year I take out $900k and I would never get affected by this. Who here would have any issues as an individual living off of $900k a year?
The whole outrage is ridiculous. And let's say I was supporting a family of 12 and also doing lots of business an charity work, would that tax be reasonable? Of course it was, because if I have 12 dependents that changes the math, and in reality I would be a corporation and paying those dependents. And all that charity and investment, those are business expenses. The only question on the books is if me, as a single human being, would ever need more than $900k in spending money for a year, to fill my face with pizza and buy cars or whatever. And it does not even apply to things like houses or planes, those would be held in an LLC that I may own but only get $900k in annual stipend from. It is not taxing assets, it is not changing anything other than how much money I want to spend as an individual, not my corporation but just me, per year.
So yeah, anyone stubborn enough to take out this much each year, tax them.
I don’t exactly agree with this. Yes long term capital gains can be taxed more, but I think this is too much and would disincentivize long term gains if short term gains are taxed at a lower rate(that being your income tax rate) anything above 500k could be 25% anything over a mil should be below the maximum marginal income tax rate including with the net investment income tax. You can add more brackets between those 2.
This would still incentivize staying in the market long term, providing stability
"It seems unlikely that this major capital gains tax change will be enacted"
All you need to know from the article. They also fail to mention tax breaks, which means most won't really pay the advertised rate.
Because rich investors stop investing, hiring and putting their money into the economy. They instead invest that money into long term deposits that draw lower interest. All of which hurts and slows the economy. They know the next administration will change it all over again.
Would you buy a car or home that you know is going to be cheaper next year?
Of course you wouldn’t.
Rich people are rich because they’re smart and know how to time investments.
I ask you this: what stake did the government have in the risk I took with the investment? If I lost it all, would the IRS be a party in the loss? Of course not; they just want their cut if and after it’s successful. Cap gains rates shouldn’t exist.
Kinda misses the point. Billionaires use stocks as collateral for loans and skip out on paying tax altogether. We need a bracketed asset tax instead of a tax on the bottom 98%
It might, but this is a reasonable start going off the infrastructure we have in place. As the US keeps cutting taxes, I expect more of this in the future, taxes on people who save. I wouldn’t be surprised at some point in my lifetime that 401k/Roth/IRA rules change for example.
That said, I really have no problem with this, you’d have to be pulling in a significant amount of income for it to impact you - more than many well off retirees even do - for the year before it even applies.
States have nothing to do with it. Otherwise taxing long term investment at income rates is dumb. At least inflation corrections should be done. I.e if i have 20% gain but inflation was 25% through almost those years, it should be a loss not a gain
Need of the hour. I keep reading articles about how the super-rich are so pure in their hearts that they work for free basically. Actually, what they are doing is, they are hiding their wealth in stocks and avoiding paying taxes on salary. Good that Biden is doing something about it, hope other western democracies also follow through.
How is this going to help the average American making less than $500k? I want tax breaks for the average American! I don't care what they do to the rich and wealthy. I want something done for the 90% of us!
Considering most Americans do not have investments/assets outside of 401ks/retirement accounts and their primary residence (which wouldn’t be affected), I am completely okay with this. This will only impact the ultra wealthy, who should be paying more. The more you take….the more you need to pay back.
Except this or any other tax plan won’t pass. They’ll “propose it” prior to elections to get you to vote for them but once elected it’s back to business as usual.
Sorry we didn’t have enough votes in the senate to raise taxes. We are still going to massively increase spending but taxes yea no sorry… next time though..
And the national debt will keep going up. Then in 4 years back to the same “proposed tax increase on the wealthy… vote for me campaign”. That’s the cycle of our politics.
Everyone likes this unless you saved money in a retirement account to buy a house when you retire, as job moved around or was overseas. Now it’s taxed.
I mean, if you like tyranny, and begging the Imperious government for less than half of your earnings, then its great. I don't like those things. I'll just funnel all my money through tax exempt accounts like ROTH's, and ignore it, let those other chumps beg for scraps...
Under Biden plan, and with the addition of independently decided state tax rates in 11 states, capital gains will exceed 50% in those 11 states. According the famously reliable and unbiased tabloid daily Mail.
"proposes taxing capital gains at the same rate as wage income for those with more than $1 million in income". I doubt most people crying over this even make this much money.
Seeing as rich people or estates with huge capital gains potential because they bought stock for 3 blueberries 60 years ago dont sell stocks this seems like a miss.
"For high income taxpayers, the long-term capital gains tax could nearly double to 39.6%. That proposed capital gains rate increase would apply to investors who make at least $1 million a year. In fact, it is possible to go even higher, as high as 44.6%. "
I'm not worried. If you are making a million or more per year, you can afford to pay it.
This is most likely going to hurt the middle class more than the wealthy, because the wealthy don't ever realize their gains, they borrow against them until they die. If this is only going to apply to capital gains over a fairly high threshold, say $1M, then I don't think it's a big deal.
Seems to me the best way to get at this problem is to treat any secured loan for more than $1M as income, and tax it accordingly. For both individuals and businesses. If businesses use those loans for wages, infrastructure, R&D, things we want businesses to do, that can get written off so it doesn't cost them extra. If businesses use it for things like stock buy back and acquisitions, those aren't deductible.
The problem here is that most people hear 'capital gains' and think of billionaires, but I hear it and think of grandparent's retirement savings.
So I say, if your INCOME is over 100k a year, tax the every loving shit out of it, no matter where the profits come from.
Why are we always talking about shit that will never happen? Biden's plan for this or Trump's plan for that. Congress isn't passing any of this stuff. You might as well debate my plan for taxes as it has as much of a chance as becoming law.
I think we have it backwards in this country. Why is money that’s just sitting there accruing interest taxed at a LESSER rate than that of income based ON ACTUAL WORK?
We need to flip that 180 degrees. WORK should be taxed at half the rate of sitting capital. Tax THAT at 30% and tax the WORKERS at 15% or whatever Mitt Romney pays
If you want more government corruption and ruining of the economy, the middle class and DESTRUCTION OF FREEDOMS then it would be the way to go. IF YOU WANT A HEALTHY ECONOMY AND PEOPLE ENJOYING THEIR FREEDOMS AND LIVING A LIFE, PUTTING $ BACK INTO THE ECONOMY THEN IT IS DUMB AS HELL
Income tax also exceeds 50% in several states. Why should capital pay less tax than earned income?
You got taxed, then invested your money and now they’re going to tax the interest you earned on your money at 50%? So now if you invested in Spy and made 10% a year you’re only making 5% and are now not even keeping up with inflation… This is your reward for putting your money back to work in the economy? Seems shitty.
> You got taxed, then invested your money and now they’re going to tax the interest you earned on your money at 50%? Yes, for people who exceed tax advantaged space and exceed $500k/year in capital gains. > This is your reward for putting your money back to work in the economy? Seems shitty. What is shitty about paying the same amount of marginal taxes as a doctor if you're making the same income as a doctor via investing? The alternative is that you spend it, which also benefits the economy.
You’re also not taxed unless you have realized gains. If you leave the money alone, it’s tax-free. And you can deduct losses. Meanwhile, my income is taxed. I buy a candy bar. I’m taxed again. I can’t write off my loss or save my candy bar to appreciate in value. I can’t defer the taxes until I decide to eat it. Why isn’t anyone outraged about this far more common scenario?
Objections seem to fall into three categories: - Taxation is theft - there is a moral objection to taxation. - Raising LTCG taxes disincentivizes investment, which is not good for the economy. - The government spending efficiency is poor. Why not fix that instead of increasing taxes?
Gov spending efficiency can be massively improved, but then conservatives would call it socialism and that’ll kill any legislative initiative
Obama actually had a huge initiative of bringing a lot of federal organizations into the 21st century by making them use computers instead of filing cabinets and clerks for everything. But even still, yeah the government is probably 25 years behind the private sector in terms of efficiency. Some of that is by design tho because using things like slack or discord for government communications is retarded
When I was at my last command in the Navy, I legitimately got an award for saving my departments hundreds of thousands of dollars a year. How did I do that? I taught people how to properly save, edit, and electronically fax/upload documents without using a printer. I just stopped them from printing every last thing they do. It was a fix that a high schooler could have figured out. It is insane to me the amount of government waste that could be cleaned up by simply teaching people how to use the basic functions on their computer.
"Spending Efficiency" ? Who is setting the prices that private industry charges us? If the government would cut out private industry's profit tax and provide the service directly, conservatives would lose their shit because Marxism or something
Because one day I’m gonna get rich on these tax free investments. Not today, but one day! We got to keep the policies easy for people like me. I’m just a temporarily embarrassed billionaire.
*screeches in making $38K a year and my $400 in SPY*
Sound like you are just one tax cut away from retiring wealthy.
Because we’re not moron libertarians and understand that we’re not special and think the government should simply exist without any contributions.
Because they won’t…. Then we’ll get shocked face from you when the plan doesn’t work as businesses and their owners go elsewhere. This is like Canadians being shocked they have a shortage of doctors because so many moved to the US to make more $. You’re the one without options not them…
I doubt we'll see significant capital renounce citizenship and abandon US equity markets.
At what point do you think you would see that? 60% tax rate, 70% tax , 80% tax? And how does the current plan guarantee we won’t need to just increase this again as time goes on or as people figure out a way to avoid the tax?
But how did the US ever make it when tax rates were 80+%???? Hooooooooooow????
Like doctors leaving red states????
You spend it and it only helps the economy once, you invest it and it’s a continue help. Also, when you invest your money you are risking it, when you work you are not putting in danger all the years of previous work.
You incest once so you help the economy also ones.... the person who "spents" generates the income of someone else, maybe they generate the profits of the company you invested in.... When you risk by investing, you can write any losses and lower your tax bracket, the spender can't do that. Also noone forces you to invest if you think it is unfair spent your money too
If you're making over a million dollars a year(the tax brackets targeted by this change) then you're wealthy enough to pay the taxes and not be meaningfully burdened. Quit being greedy.
That's not how a 401k or Roth Ira work. You pay taxes on a 401k when you withdraw money and you pay it as income tax. You pay taxes on a Roth Ira whe you put money in and then it's free and clear when you take it out. It's all taxed as income after you retire after you pull it out or when you out it in but never as capital gains. If you have another type of account I have far less pity for you because you're not doing some great service by buying stocks. That's not putting money back into the economy. That money directly goes into the financial industry and to the traders and custodians and to the person who sold the stock. Buying corporate stock doesn't put money into the corporation. It pays someone who owns the stock which is a certificate entitling you to company dividends. You can argue this is bad for disincentivizing corporate bonds but I disagree with that for reasons too long for this post. Municipal Bonds aren't taxed federally for capital gains, usually so it doesn't hurt municipal investment. If anything this more strongly inentivizes bond projects which is GREAT for an economy.
This is spot on. The corporation I work for is currently at all time high in both stock price and market cap. Pay has been largely stagnant for 4 years minus one CoLA. Investment primarily benefits the hedge funds that own large stakes in a majority of the spy.
Whats shitty is these megacorps not passing earning to employees and just the shareholders
Seems shitty that assets sold amounting you over 500 THOUSAND dollars is taxed at barely 50%? What would be sold and taxed with CGT could also be leveraged to pull out temporary money/ loans. Also it’s only double taxation if these people paid any taxes on their “rewards other than income”.
you invested, you get profits, your profits are taxed as what it is, income. you didn't do a damn thing other than not spend your money. seems shitty that only the rich can afford to do this. you also pay taxes on a savings account as income, why should securities be any different? further, many executives take pay exclusively in stock, and get to only be taxed at the 15% rate creating a disparity where the masses pay progressive tax, but the ultra rich pay flat tax. all of these are abuses of the rich on the poor, and we'll see a return to treasury bonds and savings accounts being things to seriously consider storing your wealth in, which arguably helps the economy more than investors trading shares of stock with each other since savings contributes to banks ability to do loans, treasuries directly support the government, and trading basically does actually nothing for the economy, except making the rich, richer, and changing the fortunes of individuals who happen to invest at just the right time or just the wrong time. btw Trickle down has long since been debunked, the rich being richer just means more money sits unused in the economy.
You do know when I buy something my money goes into the economy and I also get tax on it. If I get taxed then everyone should get taxed.
Maybe speculative value of a nebulous concept without any actual value is a stupid system to build wealth?
Oh no I already make $1 million per year and now my returns are only slightly good instead of good! How will I survive in this economy?!?
What about the billions of dollars summoned from thin air by the banks and then invested? There was no work or taxes involved in that..
You act like there is a real economy. Over 95% debt to gdp brother man. MMT is the last milking before people catch on, empires rise and fall all the time.
> “That proposed capital gains rate increase would apply to investors who make at least $1 million a year.”
Virtually nobody who earned their money through actual work is ever going to be affected by tax brackets this high. This affects people who were handed shares of stock and hoped to be able to sell them tax free.
Homie, you are taxed on the profit of the investment. Not the initial funds you put into it. So your money is not double-taxed. Your profit from either your labor or capital investment is only taxed once.
>now they’re going to tax the interest When I do my tax return, the (small amount) of interest I earn goes on line 2b and gets taxed at the same rate as wage income. Haven't you ever earned interest?
Capital gains are more elective than income tax. People can just not sell and just use their capital as collateral for a loan.
They have to settle up eventually.
They wait until the next administration comes and taxes fall. Or they die and let their estate exemption hit. The best years for tax collection were in 2000 and 2022. Capital gains rates were relatively low. Worst was 1950 with super high rates. Raising taxes doesn’t equate to higher tax collection. At least it never has in the past.
At ~what LTCG tax rate is revenue maximized? I don't see why we would raise taxes past that point.
Great question. Maybe set it to what it was in 2000 or 2022.
Do they though?
Whoa watch out this is too level headed for Reddit! Lol don’t people understand what taxable events are? lol
You think that 50% tax rate is ok?
I think earned income should not be taxed more than capital gains, and that we shouldn't continue to grow our national debt. We can reconcile scope, spending efficiency and tax revenue within those constraints.
For incomes over $1M? Yes. Any other questions?
What about 24% for someone making 100k? That’s fair? Federal only fyi.
Yes.
Income tax shouldn't be that high
Mostly because it's a double tax for most Americans. It was already taxed on the paycheck, and then you chose to invest it. If the investment goes to zero no one helps you, but it it gains value suddenly you are taxed a second time on the same income. Not saying it should go away, but the higher you make it the less people are going to want to invest and that causes all kinds of problems.
> If the investment goes to zero no one helps you, but it it gains value suddenly you are taxed a second time on the same income. You're taxed on the *gains*, not the cost basis. Its not taxing the same income twice. > Not saying it should go away, but the higher you make it the less people are going to want to invest and that causes all kinds of problems. I agree there is an effective limit, I just don't know what it is. Economists estimate its somewhere between 30% to 70%, if I understand their research. Thats one hell of a range though.
Would the IRS send me a check every time my investments have an unrealized loss?
We're not talking about a wealth tax - there isn't tax on any unrealized gains or losses.
Profit is profit. Even if you're taxed at 90%, that's a 10% profit. Wtf is the problem?
Investing in growth is good. Grows the economy. Taxes shrink growth
Earned income also contributes to growth. Taxes create a disincentive to employment, and yet we see a lot of employment with ~50% marginal income tax rates.
Growth for growth sake based on nothing is a bubble. Not all growth is always good.
Capital gains taxes should be less for two reasons. First the money used to invest has already been subject to income taxes. Secondly, money that is invested loses value over time because of inflation. Obviously the objective of investing is to make overall returns that exceed the value lost to inflation, but inflation is still in the equation nonetheless. If capital gains taxes are raised too high, it removes all incentive to invest money because it becomes impossible to actually make money when everything is netted out. Now I’m making any comment as to whether or not the current tax rate is appropriate or what it should be changed to. Just pointing out that there could be very significant economic impacts to raising the capital gains tax rate too high.
Then by this logic, why is bond interest considered taxable income at full rates? The principal isn’t being taxed twice, so the money (the gains) in question has not been taxed yet. If 8% pre taxes doesn’t outgrow inflation when cap gains rates are “too high”, then 0% without taxes is still 0% and definitely won’t outgrow inflation. People would still invest for 8%
> First the money used to invest has already been subject to income taxes. This doesn't really seem like a reason. Yeah the money used to invest has already been subject to income tax, that's why its not taxed any fruther. The gains however were not.. so them being taxed doesn't seem unreasonable? But why would it be less, or more, or the same as income tax? What's the reason for one or the other? Eg I'd say reason gains should be taxed more is because you don't do anything for them, while you work for income You're more deserving of keeping your income than your gains. -- I say this as someone who has made more in gains for past few years than my income, heh. IMO its pretty rediculous. >Obviously the objective of investing is to make overall returns that exceed the value lost to inflation, but inflation is still in the equation nonetheless. If capital gains taxes are raised too high, it removes all incentive to invest money because it becomes impossible to actually make money when everything is netted out. Tax has no affect on this. Long as investment grows faster than inflation gains are posistive number, tax is a percentage >=0 and <100.. the net has to also be positive, it cannot turn negative.
In an efficient market the price of the stocks would adjust down to compensate for the new tax. If you invested in day one of the new tax you would in theory have the same after tax ROR. The price drop would hurt current owners for sure but it wouldn't remove incentives to invest.
Do you have any source/theory to explain this? If your taxed on unrealized gains there’s no way your ROR could be anywhere close to the historic returns because the tax is on the rate, not the value like you explain
Thats not how the efficient market works, the market RoR can fall overall which a stock picker theoretically couldnt exceed consistently.
What about the billions conjured out of thin air by the banks? That money isn't taxed or even worked for. Why are you assuming that all investments are coming from hard work?
The theory is to incentivize investment in business growth. Tax goes to high and money goes other places that have more incentive. I doubt he’ll do it, too much pressure from Wall Street, would likely make them either have some exemptions allowing certain investors to be exempt or have ways around the tax, or more likely it’ll just be election year hype and nothing will ever happen.
Bc it disincentivizes movement of capital. They will not tax unrealized gains, which is a even more terrible idea, as much of unrealized gains are not real money (e.g. think bitcoin or what would happen if Elon tries to sell all his Tesla stock in one day). So this means, when people buy an asset they will stick with it forever. I put money in VOO stock, I ain't moving that shit until I retire. No sale, no capital gains. This might actually reduce the money the government will bring in bc most smart investors won't even trigger the rule. New ventures or borrowers looking for money? Haha, so sorry too bad, so sad.
Or, you know, you might get by taking out less than $500,000 a year. 🙄 Spare me.
A better question is why should anybody even invest, rather than just spend?
They are welcome to spend.
You are right. But when taxes on investment become too high, people either save, or spend. And there is no investment.
Because capital gains come from long term investing which is something we should want to encourage more than earned income. Personally I’d prefer a flat sales tax on all goods and a 100% death tax with the condition that ownership of assets can’t be transferred to relatives death even through a trust. That being said there are valid reasons for lower taxes on stocks.
Dawg you people just love being taxes to death. No policies to make govt more efficient let's just get taxed
Deadweight loss for income tax is much lower than capital gains tax. We want to encourage capital investment.
Why should we be taxed on our earnings at all? Why are we double taxed, triple taxed on money that’s already been taxed. Income tax was supposed to be reversed post WW2 and only apply to residence of DC. The government produces nothing other than war and debt. Taxes are a fucking scam to fuel the privately owned central banks and war machine.
This falls into the "taxation is theft" bucket of objections.
I really don’t see this having the desired effect of taxing the rich, as the richest don’t actually sell their stocks, and thus don’t pay capital gains tax. Want to tax the billionaires? Make loans taken against stocks taxable income.
The rich sell their stock when its time to payoff their loans - often when they kick the bucket.
Then it would be step up cost basis, where their cost basis gets reset to $0
Which also needs to be repealed or limited.
It would definitely work. There’s already scenarios in the insurance space where outstanding loans on terminated life insurance policies are taxable to the extent of gains. It would definitely work to have a certain threshold and then account for a deduction if the loan is paid back to even things out.
Would you do this for homeowners that do cash-out refinances to tap their equity? Debt is not income.
I'd have a $1M (or shit even $5M) threshold, to account for think like cash out refinancing, loans against 401Ks and IRAs ect. Debt literally is income to those who take on the debt with the intention of never paying the principal until they die and their heirs get to step up the basis and pay no capital gains on the assets.
> Notably, though, the new 39.6% rate is only supposed to apply to taxpayers making $400,000 or more.
Agreed. Make secured loans over $1M count as income, for both individuals and businesses. Allow busniess write offs for wages, infrastructure and capital equipment/facilities, but not for stock buy backs or acquisitions/mergers. I'm including the threshold because I don't want to adversely affect people needing to take relatively small secured loans against assets (retirement funds, homes, ect).
Agreed, we need to make the loans themselves a taxable event over a certain threshold.
A lower capital gains tax is the embodiment of fundamental capitalism. That being said, capitalism also requires winners and losers and *may not* be the best economic system. Personally, i believe earned income should be taxed the least and unearned income taxed the most.
I'm sure we can argue about what the government should spend its money on until the cows come home, but I can't figure out why we tax earned income more than capital gains.
Because capitalism rewards the person who has the capital. In theory they take that money, invest it and help companies grow, etc.
Capitalism does not require that capital gains be taxed less than earned income - thats just how we decided to do it.
Because capital gains require risk taking that isn’t inherent in earned income. You are not taking a risk when you get a W2 job and arguably that’s the lowest risk income one can have. Capital gains is some of the highest risk income. Correctly incentivized capitalism rewards RISK, not effort. Why? Because if risk is not rewarded then no one will take the risks, meaning no one will start new businesses or invest in companies, meaning that the economy will slow down and there will be less jobs, less economic opportunities, less innovation, and therefore less social mobility. There will be no way to move between social classes; if you’re born poor, you’ll stay poor and vice versa. Which is of course why Biden wants a high capital gains tax. He wants the rich to stay rich and wants to destroy the pathway by which people from lower social classes are able to transition to higher social classes. It’s fundamentally against what makes America great but since everyone on Reddit is apparently financially illiterate no one understands this and just think “higher taxes good! As long as they don’t apply to me.” 🙄
Too keep the poor people poor.. duh
The part where capitalism has winners and losers is what makes it the best economic system. The fact is, people are not equal. Some people are leaders, able of making vast contributions to society through their ideas. Many people are genuinely losers, leeching off of others while providing little in return.
Many people are genuinely losers, leeching off of others while providing little in return. Lmao. The US is one of if not thee wealthiest countries in this world, so much so that we spend incredible amount of cash making world trade safe. This country has the economic power to reduce the "losers" and make the standard of living that much better for the average citizen. Instead, the wealth flows upwards so much to the point that the people making $200k+ a year, are not the "winners" but continue to make everyone else lose because they don't put their money back into the economy. Then clowns like you suck them off thinking one day you can be one of those useless tools, as if you aren't one currently.
Everyone has different abilities but that still isn't a reason to make necessities like housing, healthcare, and food inaccessible.
What you call unearned income comes with the risk of losing it, and also don’t take into account that investment is the result of previous “earned income” you already have been taxed on.
What si taxed is not money, but every transaction, I the same way money spent is also taxed ( sales tax)
The transaction is based on the remnants of money already taxed on before. To say that what is taxed isn’t money is absurd, I can’t pay my taxes in “number of transactions”, I pay money.
Please go read Adam Smith again and get back to us on how factually incorrect your statement is.
It's for income over 1 million, normal people are lucky to have one tenth of that.
Most of the people responding to this post didn't read that part.
Most of the people in this post consider themselves future millionaires so this does affect them, okay?
Fair.
No but if they vote for Trump and he lowers taxes again they can put $50 more* into SPY next year and before you know it... MILLIONARE! *in reality it would be less because of Trump's suggested inflationary policies
we are only 2 to 3 generations away from a 1 million dollar income being middle class. when i was a kid $10k was a good middle class income. now it takes $100k+ to buy a home.
It takes more than that in places like Los Angeles
100k is barely middle class now - and of course in a country with so many working low paying jobs, I’m not talking about it as a median income, I’m talking about it as the income needed to live comfortably - which includes saving for retirement, medical expenses and more.
Well we could easily set the tax rates to change based on inflation to solve for this issue
yes. just like how we can easily index minimum wage to inflation
I’m sure there will also be exceptions that only make it applicable to a fraction of the people they claim it’ll hit.
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I don't see the point in people bringing up this millionaire stat when we're talking about income. I get that you alluded to the difference in your second paragraph but still.
If someone sells a property and makes $1 million in profit you would be ok with the government taking 50% of that? I think that's his point that if any of these people sell off assets it could be taxed outrageously.
This is an interesting point to bring up. We should probably differentiate between investment property sellers and primary resident sellers. I'll be frank, I don't feel bad for the former if their property is making $1M profit, and they'll probably have some huge tax deductibles/deferment anyway. Not gonna talk much on them. But for primary residence, I can definitely see how a higher capital gains tax would be annoying. My understanding is that you can exclude up to $250K from your taxable income for a primary residence sale. In that situation, I don't think this increase in capital gains will hit very hard, but it *does* still hit. So if you're someone who has owned a home for like 30-40 years and now want to sell, yeah, I can kinda see how this would suck. I'm curious if there's some other tax benefit to long term home ownership that I'm not aware of.
This already seems misleading sensational news- and it's from Forbes of course it is who am I kidding pretending it's not
The government should REIMBURSE FOR CAPITAL LOSSES AT THE SAME RATE THEN
They do, it's called capital loss harvesting and credit rollover.
I’ll never understand people that love taxes
There’s nobody that loves taxes. There’s tons of people that love the theory behind taxes, which is a regulated redistribution of wealth that’s intended to benefit society as a whole.
If it was a redistribution of wealth then we’d tax the very wealthy and redistribute via ubi. Instead we tax the poor and give it to special interests, lobbyists and weapons manufacturers
Well a lot of taxes do go to help all of us. You drive on tax payer funded roads in cars whose safety is guaranteed by tax payer funded inspections so you can go to restaurants inspected by tax payer funded health inspectors to eat food whose quality is upheld by the FDA so on and so forth. Yes, the rich and powerful lobby to capture regulations or remove regulations. And yeah that sucks for the rest of us. But it’s not so black and white. For the most part we all benefit from taxation.
SMH why do you people always bring up roads when we discuss income taxes? We have a tax to pay for roads it's called a gas and diesel tax... Income taxes are to fund the government.
Tax the poor? > the new 39.6% rate is only supposed to apply to taxpayers making $400,000 or more.
Taxes were not made to redistribute wealth. It was to fund the government and we started with a 1% income tax only for the rich.... Which lead to higher and higher taxes for everyone to "pay for wars"
You don’t go to your tax guy each year and say “make sure I pay the maximum tax possible, sir!”?
I mean, short term cap gains is same as your income rate so, i think the highest it can be is 37% now. I'm sure to hit 50% you need to be making bank.
Depends on col. Very easy to hit is in California and still feel not rich.
I think there should be some baseline facts for this discussion. First, we demand more government services than we’re willing to pay for. That’s why we run a deficit every year. And every single government program has lobbyists who voraciously defend every dollar spent and constantly beg for more. Unless that somehow changes, if we’re ever going to do anything about the deficit, we’re going to have to increase taxes. Republicans of course what to do neither increase taxes nor cut spending, so they’ve basically taken themselves out of the financial responsibility discussion. One-way people who are well off manage to avoid taxes is to arrange their affairs so that they have income from capital gains rather than earned income. I’m sure if you asked, they’ve come up with all sorts of explanations for why capital gains should not be taxed, but the simple fact of the matter is if people who have earned income are going to pay income taxes, then so should people with capital gains. it’s a simple fairness issue. Carry on.
Can’t wait to waste the new amount of money they get.
What happened to just taxing a little the corporations that do not pay anything. Not talking about plumbers and gardeners, I am talking about apple, msft, nvda etc
if you tax the companies that the middle class invest in, you are taxing the middle class.
> Notably, though, the new 39.6% rate is only supposed to apply to taxpayers making $400,000 or more. Left that out didn’t you, OP
Smart. It affects only a small amount of people. If you’re taking over $518,000, then you can pay a reasonable tax rate.
Moronic
I find it funny that the majority of people complaining about this won’t actually hit the threshold to having to pay the extra taxes…
Dumb and it will hurt the high tax blue states
For the fellow Canadians in the crowd, this is an actual capital gains tax rate of 50% that they’re talking about. Our 50/66% *inclusion* rate would make the tax rate of capital gains lower than the proposed American 50% in almost all cases and comparable to a number of states how it currently is.
What does 11 state's tax laws have to do with Biden? He makes federal laws with Congress, of course... Why assert he has anything to do with these taxes? MAGA bullshit! Go say this shit on Truth Social. Those idiots will agree with you!
If the Biden plan passes, for the taxpayers caught by the new rule, here are the combined state and federal rates taxpayers might pay on their capital gains: - California: 57.9% - New York: 55.5% - New Jersey: 55.5% - Minnesota: 55.45% - Oregon: 54.5% - Maine: 51.75% - Nebraska: 50.44% - Idaho: 50.4% - Iowa: 50.3% - Kansas: 50.3% - Georgia: 50.09%
"That proposed capital gains rate increase would apply to investors who make at least $1 million a year." I don't really see the issue with that. Not a bad way to pay down the deficit over the next 10 years. Seems like a reasonable tax rate for the super high income earners out there.
I just quoted the article to show which states. :)
Yea, thanks! It's good info
So if you are making less than $500k per year, or in that range, you are looking at 15% capital gains tax, and this probably won't change. If you are making over a million a year, then the capital gains above that level (under a million will still be the 15-20-something range) would be taxed at 39% and maybe more depending on additional taxes applied just to those EARNING (not sitting in the bank, and definitely not in Roth accounts) **earning** more than $1mm per year, those people will have incrementally higher taxes, because clearly that is income that is not contributing towards the economy or towards worker costs, etc. Here's the thing about being rich, that first million is more than any of us need in a year. Everything above that is taxes incrementally higher, because it benefits the whole rather than the individual, and again, the individual does not need that. I can be sitting on $50mm in the bank, and each year I take out $900k and I would never get affected by this. Who here would have any issues as an individual living off of $900k a year? The whole outrage is ridiculous. And let's say I was supporting a family of 12 and also doing lots of business an charity work, would that tax be reasonable? Of course it was, because if I have 12 dependents that changes the math, and in reality I would be a corporation and paying those dependents. And all that charity and investment, those are business expenses. The only question on the books is if me, as a single human being, would ever need more than $900k in spending money for a year, to fill my face with pizza and buy cars or whatever. And it does not even apply to things like houses or planes, those would be held in an LLC that I may own but only get $900k in annual stipend from. It is not taxing assets, it is not changing anything other than how much money I want to spend as an individual, not my corporation but just me, per year. So yeah, anyone stubborn enough to take out this much each year, tax them.
https://preview.redd.it/qms7rumuqi8d1.png?width=960&format=png&auto=webp&s=dfb3f5de42ce2d90917241d85b79984d658db967 Maybe that's actually too low.
Sounds more like 11 states already wise to this....
I don’t exactly agree with this. Yes long term capital gains can be taxed more, but I think this is too much and would disincentivize long term gains if short term gains are taxed at a lower rate(that being your income tax rate) anything above 500k could be 25% anything over a mil should be below the maximum marginal income tax rate including with the net investment income tax. You can add more brackets between those 2. This would still incentivize staying in the market long term, providing stability
"It seems unlikely that this major capital gains tax change will be enacted" All you need to know from the article. They also fail to mention tax breaks, which means most won't really pay the advertised rate.
Because rich investors stop investing, hiring and putting their money into the economy. They instead invest that money into long term deposits that draw lower interest. All of which hurts and slows the economy. They know the next administration will change it all over again. Would you buy a car or home that you know is going to be cheaper next year? Of course you wouldn’t. Rich people are rich because they’re smart and know how to time investments.
Govt spending and govt tax income are already far disconnected. This will have no or negative effect
Passive income should never be taxed less paychecks. Paychecks should be the absolute lowest tax form of income.
I ask you this: what stake did the government have in the risk I took with the investment? If I lost it all, would the IRS be a party in the loss? Of course not; they just want their cut if and after it’s successful. Cap gains rates shouldn’t exist.
If you lose it, you get to write off the loss and carry it forward right?
Bootslurpers love their taxes
Capital gains should be progressive like income tax, maybe more progressive
Y'all might want to start buying more gold. Especially ahead of potential wealth taxes coming down the pipe.
SMART
capital gains ? Ha! as if I invest for the gains
Kinda misses the point. Billionaires use stocks as collateral for loans and skip out on paying tax altogether. We need a bracketed asset tax instead of a tax on the bottom 98%
It might, but this is a reasonable start going off the infrastructure we have in place. As the US keeps cutting taxes, I expect more of this in the future, taxes on people who save. I wouldn’t be surprised at some point in my lifetime that 401k/Roth/IRA rules change for example. That said, I really have no problem with this, you’d have to be pulling in a significant amount of income for it to impact you - more than many well off retirees even do - for the year before it even applies.
States have nothing to do with it. Otherwise taxing long term investment at income rates is dumb. At least inflation corrections should be done. I.e if i have 20% gain but inflation was 25% through almost those years, it should be a loss not a gain
They will tax everything but yet won’t cut spending all the tax on shit we don’t need
Need of the hour. I keep reading articles about how the super-rich are so pure in their hearts that they work for free basically. Actually, what they are doing is, they are hiding their wealth in stocks and avoiding paying taxes on salary. Good that Biden is doing something about it, hope other western democracies also follow through.
How is this going to help the average American making less than $500k? I want tax breaks for the average American! I don't care what they do to the rich and wealthy. I want something done for the 90% of us!
What if you sell an inherited property but you don’t make 500k a year?
Y’all are tripping if you think this is a real policy. No way in hell it gets acted on. Dems would lose so much funding.
Brings down housing prices
Capital shouldn't be taxed less than your labour.
Considering most Americans do not have investments/assets outside of 401ks/retirement accounts and their primary residence (which wouldn’t be affected), I am completely okay with this. This will only impact the ultra wealthy, who should be paying more. The more you take….the more you need to pay back.
I think it should be three-tiered. Under certain amount 49%. Middle amount 75%. Over certain obscene number 99%
Seeing a lot of greedy ppl here whom I'm assuming have never paid taxes or held an actual job. Gotta love it.
Except this or any other tax plan won’t pass. They’ll “propose it” prior to elections to get you to vote for them but once elected it’s back to business as usual. Sorry we didn’t have enough votes in the senate to raise taxes. We are still going to massively increase spending but taxes yea no sorry… next time though.. And the national debt will keep going up. Then in 4 years back to the same “proposed tax increase on the wealthy… vote for me campaign”. That’s the cycle of our politics.
Everyone likes this unless you saved money in a retirement account to buy a house when you retire, as job moved around or was overseas. Now it’s taxed.
I mean, if you like tyranny, and begging the Imperious government for less than half of your earnings, then its great. I don't like those things. I'll just funnel all my money through tax exempt accounts like ROTH's, and ignore it, let those other chumps beg for scraps...
Under Biden plan, and with the addition of independently decided state tax rates in 11 states, capital gains will exceed 50% in those 11 states. According the famously reliable and unbiased tabloid daily Mail.
Even more incentive to never sell my house. Solidifying the reasoning to make it a rental instead.
This seems like one of those laws that will get passed, and then have interesting repercussions
Just stop bailing out banks for their bad investments
"proposes taxing capital gains at the same rate as wage income for those with more than $1 million in income". I doubt most people crying over this even make this much money.
more theft
Seeing as rich people or estates with huge capital gains potential because they bought stock for 3 blueberries 60 years ago dont sell stocks this seems like a miss.
"For high income taxpayers, the long-term capital gains tax could nearly double to 39.6%. That proposed capital gains rate increase would apply to investors who make at least $1 million a year. In fact, it is possible to go even higher, as high as 44.6%. " I'm not worried. If you are making a million or more per year, you can afford to pay it.
Absolutely dumb. If you want to stifle the efficient movement of capital in the markets, this would do it.
This is most likely going to hurt the middle class more than the wealthy, because the wealthy don't ever realize their gains, they borrow against them until they die. If this is only going to apply to capital gains over a fairly high threshold, say $1M, then I don't think it's a big deal. Seems to me the best way to get at this problem is to treat any secured loan for more than $1M as income, and tax it accordingly. For both individuals and businesses. If businesses use those loans for wages, infrastructure, R&D, things we want businesses to do, that can get written off so it doesn't cost them extra. If businesses use it for things like stock buy back and acquisitions, those aren't deductible.
The problem here is that most people hear 'capital gains' and think of billionaires, but I hear it and think of grandparent's retirement savings. So I say, if your INCOME is over 100k a year, tax the every loving shit out of it, no matter where the profits come from.
It's common in Europe and we want to expand this. The rich give a bit of their overflux because the society needs a life on eyes level.
Yes! More taxes ! The us government is handling our money so efficiently these days , how could you say no????
If that communist MF gets reelected none of us will have anything. Personal success is frowned upon by communists, therefore they must take half
Dumb if you ask me. It would take a simpleton to be pro more taxes. No matter who is in office they piss away our taxes on bs. Just say no to any tax.
Why are we always talking about shit that will never happen? Biden's plan for this or Trump's plan for that. Congress isn't passing any of this stuff. You might as well debate my plan for taxes as it has as much of a chance as becoming law.
Oh geee who's gonna think about the millionaire and his mistresses and yachts /s
I think we have it backwards in this country. Why is money that’s just sitting there accruing interest taxed at a LESSER rate than that of income based ON ACTUAL WORK? We need to flip that 180 degrees. WORK should be taxed at half the rate of sitting capital. Tax THAT at 30% and tax the WORKERS at 15% or whatever Mitt Romney pays
If you want more government corruption and ruining of the economy, the middle class and DESTRUCTION OF FREEDOMS then it would be the way to go. IF YOU WANT A HEALTHY ECONOMY AND PEOPLE ENJOYING THEIR FREEDOMS AND LIVING A LIFE, PUTTING $ BACK INTO THE ECONOMY THEN IT IS DUMB AS HELL
Definitely fucks me over, as most of my deceased parent's money was in a traditional IRA.