USA 2024 Elections Thread

[grarpamp]

Democrats insist on pissing off Americans...
"Absolutely anything goes to increase the size scope
and power of the Overbearing Tyrannical State, fuck it,
tax them to hell" Democrat Biden says.


Capital Gains Tax Can Exceed 100 Percent Under Biden Proposal: Economist

https://www.theepochtimes.com/bidens-proposed-cap-gains-tax-would-exceed-100-percent_5122877.html

President Joe Biden’s proposed capital gains tax increase could result
in an effective tax rate of over 100 percent after adjusting for
inflation, according to estimates by economist Arthur Laffer, a former
adviser to Ronald Reagan. The increase would more than double the tax
investors pay on investments held longer than one year.

The proposal, outlined as part of Biden’s $6.8 trillion budget plan
for 2024, seeks to increase the capital gains tax rate for individuals
earning more than $1 million a year, to 39.6 percent, up from the
current rate of 20 percent. In addition, it would increase the
Affordable Care Act surcharge to 5.0 percent, bringing the total tax
rate for high-income investors to 44.6 percent.

This would imply that investors could face an effective tax rate of 86
percent on after-inflation profits from holding an investment,
assuming inflation returns to the Fed’s 2 percent goal, according to
economist Stephen Moore, author of the Committee to Unleash Prosperity
newsletters.

If the inflation rate remains at current levels, the real capital
gains tax could reach above 110 percent, Moore explained in a note,
referring to a chart prepared by Laffer.
Epoch Times Photo Source: Center to Unleash Prosperity/Laffer Associates

“What’s the right and fair tax to levy on investments?” Moore asked.
“Should the government take it all and then some?”

To illustrate how an investor might pay more money than he or she has
earned, he offered another way of looking at it.

“If you buy a stock for $100 a share and then it rises to $120 per
share five years later, but the accumulated inflation rate over that
period was, say, 24 percent, then you lost money owning the stock
after adjusting for inflation,” he wrote. “You would still owe Uncle
Sam a 40 percent tax on the phantom ‘gain’ of $20 per share. This is
sheer idiocy.”

Since the nominal rate of return on some assets is lower than the rate
of inflation, Biden’s capital gains tax “can reach infinity,”
according to Laffer’s estimate.

In addition, Biden’s plan would eliminate a tax provision known as
“step-up in basis,” which allows heirs to avoid paying capital gains
taxes on assets that have appreciated during the previous owner’s
life.

Some market participants argue that eliminating this law may prove problematic.

“There could be great difficulty in estimating what the original cost
was,” said macro analyst Peter Grandich. “Taxing the party passed onto
could cause serious issues with illiquid assets inherited.”

Grandich added that excessive capital gains taxes will discourage
investment, by reducing returns, which are “the incentive to invest
long term.”

The Biden administration has defended the proposal as a way to fund
critical investments in education, childcare, and other social
programs. However, it remains to be seen whether the proposal will
gain enough support in Congress to become law.

Regardless of its fate, the proposal has sparked a fierce debate about
the appropriate level of taxation on investment income and its impact
on the economy.