How are we going to pay for all this shit?

[Texas Contrarian]

Originally Posted by adav8s28

The deficit has decreased under Biden & Harris.

Say what?? (You're kidding, right?)

Please take a look at my post from March 21st and see if you can tell me with a straight face that Joey and Kamala have "reduced the deficit!"

https://eccie.net/showpost.php?p=106...postcount=1665

Originally Posted by adav8s28

...The main reasons for inflation were two things: Supply chain problems caused by Trump mishandling the Pandemic and Putin invading the Ukraine.

Really? Most people I know seem to think the primary driver of the big 18-month burst of high inflation was the tsunami of government spending, which was well in excess of what may reasonably have been considered appropriate for getting us through the aftermath of the covid crisis. Remember, not long after the year 2021 dawned, businesses were re-opening, the economy was getting back on track, and people were returning to work by the millions. We didn't need to have nearly $2.5 trillion of excess savings poured into household bank accounts. Even economist Larry Summers, a partisan Democrat, said that the "American Rescue Plan" was the most irresponsible fiscal act in decades, and would create a nasty inflation spike. And as if that weren't more than enough, the big spenders piled on hundreds of billions more in unpaid-for and unnecessary spending in short order.

Originally Posted by adav8s28

Trumps tax cut for the 1% caused the Federal Budget deficit to go up.

Are you somehow unaware that only a small portion of the 2017 tax cut went to "the 1%?" (The bulk of the tax cut dollars reduced the burden on taxpayers in the lower income brackets, not the "wealthy." Didn't we already go over that in this thread?)

And now we are still stuck in a surreal place where Joey promises that no one earning less than $400K annually will see a tax increase.

(Which is tantamount to saying that he isn't even going to bother to make the slightest pretense of credibly claiming that we're going to attempt to pay for all the shit that was crammed through during the first couple of months of his shockingly irresponsible administration, let alone any of the new stuff comprising the progressives' wish list encompassed within his new $7.3 trillion budget fantasy.)

[eccieuser9500]

God damn Tiny, incredible thread. I don't get shit (sort of), but it's fun to read. Like another language that I can read but I don't know what the fuck I just read.

[Tiny]

Originally Posted by eccieuser9500

God damn Tiny, incredible thread. I don't get shit (sort of), but it's fun to read. Like another language that I can read but I don't know what the fuck I just read.

I'm just happy it helps you cope with your insomnia!

Originally Posted by Texas Contrarian

Say what?? (You're kidding, right?)

Please take a look at my post from March 21st and see if you can tell me with a straight face that Joey and Kamala have "reduced the deficit!"

https://eccie.net/showpost.php?p=106...postcount=1665



Really? Most people I know seem to think the primary driver of the big 18-month burst of high inflation was the tsunami of government spending, which was well in excess of what may reasonably have been considered appropriate for getting us through the aftermath of the covid crisis. Remember, not long after the year 2021 dawned, businesses were re-opening, the economy was getting back on track, and people were returning to work by the millions. We didn't need to have nearly $2.5 trillion of excess savings poured into household bank accounts. Even economist Larry Summers, a partisan Democrat, said that the "American Rescue Plan" was the most irresponsible fiscal act in decades, and would create a nasty inflation spike. And as if that weren't more than enough, the big spenders piled on hundreds of billions more in unpaid-for and unnecessary spending in short order.



Are you somehow unaware that only a small portion of the 2017 tax cut went to "the 1%?" (The bulk of the tax cut dollars reduced the burden on taxpayers in the lower income brackets, not the "wealthy." Didn't we already go over that in this thread?)

And now we are still stuck in a surreal place where Joey promises that no one earning less than $400K annually will see a tax increase.

(Which is tantamount to saying that he isn't even going to bother to make the slightest pretense of credibly claiming that we're going to attempt to pay for all the shit that was crammed through during the first couple of months of his shockingly irresponsible administration, let alone any of the new stuff comprising the progressives' wish list encompassed within his new $7.3 trillion budget fantasy.)

I just cautioned a new board member that arguing with you about economics is a fool's game. That's no aspersion on Adav8s28 -- The time or two I've argued with you I was the fool!

[eccieuser9500]

Originally Posted by Tiny

I'm just happy it helps you cope with your insomnia!

Thank you.

I just cautioned a new board member that arguing with you about economics is a fool's game. That's no aspersion on Adav8s28 -- The time or two I've argued with you I was the fool!

I've held my distance.

I've posted before: I know better than that! Money and all the intricacies are not my thing. It's all fun in the end.

The ethics, though . . . . Not fun. Nor funny.

Just glad to be in the conversation. Be it tangentially.

[royamcr]

That 1% was the initial rollout which stays the same throughout the life of the tax bill. However incrementally taxes on middle class go up during the lifetime of the bill.

Originally Posted by Texas Contrarian

Say what?? (You're kidding, right?)

Please take a look at my post from March 21st and see if you can tell me with a straight face that Joey and Kamala have "reduced the deficit!"

https://eccie.net/showpost.php?p=106...postcount=1665



Really? Most people I know seem to think the primary driver of the big 18-month burst of high inflation was the tsunami of government spending, which was well in excess of what may reasonably have been considered appropriate for getting us through the aftermath of the covid crisis. Remember, not long after the year 2021 dawned, businesses were re-opening, the economy was getting back on track, and people were returning to work by the millions. We didn't need to have nearly $2.5 trillion of excess savings poured into household bank accounts. Even economist Larry Summers, a partisan Democrat, said that the "American Rescue Plan" was the most irresponsible fiscal act in decades, and would create a nasty inflation spike. And as if that weren't more than enough, the big spenders piled on hundreds of billions more in unpaid-for and unnecessary spending in short order.



Are you somehow unaware that only a small portion of the 2017 tax cut went to "the 1%?" (The bulk of the tax cut dollars reduced the burden on taxpayers in the lower income brackets, not the "wealthy." Didn't we already go over that in this thread?)

And now we are still stuck in a surreal place where Joey promises that no one earning less than $400K annually will see a tax increase.

(Which is tantamount to saying that he isn't even going to bother to make the slightest pretense of credibly claiming that we're going to attempt to pay for all the shit that was crammed through during the first couple of months of his shockingly irresponsible administration, let alone any of the new stuff comprising the progressives' wish list encompassed within his new $7.3 trillion budget fantasy.)

[Tiny]

Originally Posted by royamcr

That 1% was the initial rollout which stays the same throughout the life of the tax bill. However incrementally taxes on middle class go up during the lifetime of the bill.

Not likely, unless you're talking about bracket creep. Probably Congress and the President will extend the tax cuts for all except the top 1% to 5%, and allow the cuts for higher-income Americans to expire. That's what's happened in the past anyway.

[Texas Contrarian]

Originally Posted by royamcr

That 1% was the initial rollout which stays the same throughout the life of the tax bill. However incrementally taxes on middle class go up during the lifetime of the bill.

Originally Posted by Tiny

Not likely, unless you're talking about bracket creep. Probably Congress and the President will extend the tax cuts for all except the top 1% to 5%, and allow the cuts for higher-income Americans to expire. That's what's happened in the past anyway.

Yes, indeed.

Here's a summary rundown of what will happen if no one does anything:

https://finance.yahoo.com/news/trump...160750197.html

But I'd bet dollars to dimes that there will be a big push to let the tax cuts for the top bracket expire, while sustaining those for all the lower income brackets. (Which means, of course, that the change won't raise a whole lot of revenue, since most of the tax cut dollars went to lower-income households, not to the "rich" as is so commonly claimed.)

Of course, if Democrats allow the tax cuts for any brackets below the top one (37%) to expire, they'll be blasted by Republicans from now to kingdom come for shoving a tax increase down the throats of middle-class Americans. (In other words, it ain't gonna happen!)

[westwardho]

And he's back! Welcome back!

[Why_Yes_I_Do]

Originally Posted by Texas Contrarian

Yes, indeed.

Here's a summary rundown of what will happen if no one does anything:..

Appears they got's their eyes on even more fun prizes. Chalk it up to: Play stupid games, Win stupid prizes much?!?

Biden's 44.6 Percent Capital Gains Tax Proposal a 100-Year High

By Jim Thomas | Wednesday, 24 April 2024

President Joe Biden's proposal to increase the top capital gains tax rate could be the highest such tax rate in over a century.

In his 2025 budget proposal, Biden outlined plans to elevate the top marginal rate on long-term capital gains and qualified dividends to 44.6%. This rate, if enacted, would surpass any seen in over a century, according to Americans for Tax Reform (ATR).

Moreover, the combined federal-state rate could exceed 50% in several states when factoring in state capital gains taxes. For instance, California residents would potentially face a 59% rate, while those in New Jersey, Oregon, Minnesota, and New York could confront rates ranging from 53.4% to 55.3%, according to ATR.

Critics of the proposal argue that capital gains taxes, particularly when not indexed to inflation, impose a form of double taxation and disproportionately affect certain demographics. Small business owners, for example, may find themselves grappling with inflated tax liabilities on gains that are partly attributable to inflation rather than real profit.

Furthermore, comparisons with other nations highlight the potential ramifications of such a steep increase. China, for instance, maintains a capital gains tax rate of 20%, significantly lower than Biden's proposed rate. The prospect of imposing higher taxes than a major economic competitor raises concerns about the impact on investment and economic competitiveness.

The history of the capital gains tax underscores the magnitude of Biden's proposal. Initially introduced in 1922 at a rate of 12.5%, the tax has evolved over the decades but has never approached the proposed levels.

Additionally, Biden's plan includes measures to address tax implications upon inheritance, potentially adding further complexity to the tax code. The proposal to eliminate a stepped-up basis upon the transfer of assets upon death could result in a mandatory capital gains tax event, affecting families' financial planning and estate management.

"When someone dies, and the asset transfers to an heir, that transfer itself will be a taxable event, and the estate is required to pay taxes on the gains as if they sold the asset," said Howard Gleckman, senior fellow in the Urban-Brookings Tax Policy Center, CNBC reported.

The budget proposal, which calls for approximately $5 trillion in tax increases over the next decade, has drawn mixed reactions from lawmakers and experts alike. While some argue that such measures are necessary to fund various social programs and infrastructure projects, others express concerns about the potential adverse effects on economic growth and investment...

Ya get that? Estate planning is for dummies now. Leastwise, according to dummys, or should I say dimmies?

I suppose I should add: with falling commercial real estate values, especially in some deep blue cities, the local yokels are going to have to jack up property taxes to fill the void of living in the manner in which they are accustomed to, though not even including the increasing demand to mollycoddle mass immigration of the not legal variety. As such, those state and city tax rates will have to spiral upwards, which in turn will increase the velocity of the death spiral.

[Why_Yes_I_Do]

Originally Posted by Texas Contrarian

Yes, indeed.

Here's a summary rundown of what will happen if no one does anything:..

Here's the thing about that: even if they do nothing, nothing is doing something, but it ain't what they said it would do. Remember "transitory" inflation - from 2+ years ago?!? Well... it has not transitioned out - like they said it would. Oh, about those lofty prognostications - faggit about it.

Spoiler Alert: T-r-a-n-s-i-t-o-r-y Inflation is miraculously morphing into a phrase we haven't heard since the 1970's -- STAGFLATION! Go ahead, tell me you are surprised.

GDP Growth Misses Estimate by 64 Percent, Recession Fears Real
By Lee Barney | Thursday, 25 April 2024

The latest GDP numbers released Thursday sent shock waves among economist and traders with the data indicating the economy is seriously slowing.

The Commerce Department reported Thursday that U.S. gross domestic product in the first quarter rose just an anemic 1.6%, while analysts had predicted GDP of 2.4% for the first quarter — a miss of 64% from the estimate.

The GDP contraction suggests a recession could be in the offing. A recession is defined as two consecutive quarters of growth below 2%.

Meanwhile, inflation is still higher than expected.

Personal consumption expenditure inflation for the first three months came in at 3.4%, and core PCE, excluding food and fuel, was 3.7% — far above the Fed's 2% target.

"This report was the worst of both worlds: Economic growth is slowing and inflationary pressures are persisting," Chris Zaccarelli, chief investment officer of Independent Advisor Alliance, told Bloomberg.

"The Fed wants to see inflation start coming down in a persistent manner, but the market wants to see economic growth and corporate profits increasing," Zaccarelli said.

"We know inflation can be a self-fulfilling prophecy, in which expectations for a higher prices can lead to higher inflation," economist Lauren Henderson of Stifel, Nicolaus & Co., told Morningstar. Even if Fed policymakers are worried they are losing control of inflation, Henderson added, "they wouldn't voice it because they would do everything they can to ensure market participants that inflation will be in control with the appropriate policy."

Shortly after the bell Thursday, the Dow Jones Industrial Average was down by 660 points and the Nasdaq had declined by 1.96%, though stocks clawed back those declines to close with the Dow shedding the most, 0.96%, for the day.

Wall Street had been crowing about the consistent decline in inflation in the second half of last year and the potential for a "soft landing," whereby the U.S. economy could avoid a recession and mass layoffs.

Economists are now not only beginning to worry about a recession, but a worse scenario: stagflation.

Stagflation is the worst of all possible outcomes, economists say, because it is far harder to address — and may require the Fed to increase interest rates at a time when growth is weakening.

In a recession, the Fed can cut rates to help the economy rise over time.

Surprising to many is the economy has been extremely sluggished despite President Joe Biden's stimulus efforts — amounting to over $10 trillion since he took office...

About those Fed interest rate cuts coming any day now...
You know... the thing... FAGGIT about it. Come on man

[Tiny]

Originally Posted by Why_Yes_I_Do

Biden's 44.6 Percent Capital Gains Tax Proposal a 100-Year High

That's brilliant Biden. A 44.6% federal capital gains tax should result in lower revenues from the tax than would be realized with the current 23.8% federal rate. I don't believe making gifts and bequests subject to capital gains tax is going to change that. Again, the CBO has considered the revenue maximizing rate to be around 28%.

The end result will be lower after tax profits for higher income taxpayers and less money collected by the Treasury.

I guess Biden subscribes to Barrack Obama's belief that it's great if you make everyone worse off, just as long as you make everyone more equal. That philosophy did not serve countries like the USSR well.

Here's a link to the Administration's proposals:

https://home.treasury.gov/system/fil...ons-FY2025.pdf

[eyecu2]

Corporate earnings are still coming in pretty good. -stock market seems to be vacillating between the weeks with highs and profit taking. I'm certainly not into any increases on capital gains, but see that there likely should be an increase slightly..maybe a percentage point or two once you get over gain amounts in excess of 1mm and other points. Seems like the consumer pricing still seems to be up and down, and it's month to month. Could be some of the tax return moneys entering into the revenues of consumers. I think we need to stop some of the frivolous spending and filling up some of the tax write-offs that expire

[Tiny]

Originally Posted by eyecu2

Corporate earnings are still coming in pretty good. -stock market seems to be vacillating between the weeks with highs and profit taking. I'm certainly not into any increases on capital gains, but see that there likely should be an increase slightly..maybe a percentage point or two once you get over gain amounts in excess of 1mm and other points. Seems like the consumer pricing still seems to be up and down, and it's month to month. Could be some of the tax return moneys entering into the revenues of consumers. I think we need to stop some of the frivolous spending and filling up some of the tax write-offs that expire

Biden's proposal actually is to eliminate preferential tax treatment on long term capital gains for upper income taxpayers. So they'd pay at the ordinary income rate. Then as you say there would be the additional 1.2% increase in the Net Investment Income Tax on top of the existing 3.8% rate. And the maximum tax rate on ordinary income goes from 37% to 39.6%. Add it up, 39.6% + 5%, and you get WYID's 44.6% total. Right now the maximum federal rate is 23.8%, so that's almost a 2X increase. And very unfair considering long term gains aren't indexed to inflation.

I absolutely agree that we need to stop the frivolous spending. And qualifiedly agree we need to stop some of the tax write-offs. But not all of them. The rules right now make it impossible to deduct some legitimate business expenses. I wouldn't want to see that become worse. And we sure don't want to go back to a 35% federal corporate tax rate, like we had in 2017.

[Texas Contrarian]

Raising the capital gains tax rate to 40+% (or even beyond 28%, which is the highest it's been in about 45 years) is such an obviously bad idea that it should strike most as surprising that there's even any debate over the issue.

The history is very clear on this. Just look at the post-Watergate years of the 1970s, when Democrats won back the presidency and also strengthened their hand in congress. Then they pushed the capital gains tax rate to very near the 40% mark. Not surprisingly, revenue from the tax declined as investors were disincentivized to sell appreciated assets.

Then, in legislation passed in 1978, the rate was lowered to 28%, and guess what. Revenues over the next few years substantially increased! (I know, I know. What a surprise! Turns out that people actually respond to incentives.)

Shouldn't Joey remember all this? (OK, never mind. I almost forgot that he was somnambulating his way through his first decade in the Senate, while focusing most of his efforts on how to maximize campaign contributions by shilling for Delaware-based bank holding companies that were the nation's largest credit card issuers.)

And if that's not bad enough, today's fiscal blowout fetishists want to tax unrealized capital gains, which is an idea that's caught on big-time in "progressive intellectual" circles.

Aside from the obvious fact that it would disincentivize risk-taking and capital formation that drives entrepreneurship, it would hurt middle-class savers and investors who participate in the publicly-traded markets -- and to whom private equity investing is, for the most part, unavailing.

That's because assets owned within private equity entities are not so easy to continually value, and therefore are not big, juicy targets for Treasury agents to sack during bull market years like the past year, when markets rocketed upward and are richly valued.

If taxation of unrealized gains becomes reality, the ensuing result will be that trillions of dollars of assets will be chased from the publicly-traded markets into private equity ventures. For instance, a big portion of investment in the most promising new tech and AI-related ventures will be the province of the affluent; not aspiring savers and investors in smaller brokerage accounts and vehicles such as 401(k)s. (Things like "the next Nvidia," etc.)

Is this really the vision sought by so-called "champions of the middle class?" (I think not. Note that a very large portion of S&P 500 market cap is comprised of maturing or grown-up tech-related ventures.)

I have occasionally referred to a concept called "deadweight loss."

https://en.wikipedia.org/wiki/Deadweight_loss

https://www.investopedia.com/terms/d...f-taxation.asp

Any tax that yields revenue insufficient to finance benefits that outweigh damage to prospects for growth, or generates economy-impeding headwinds to capital formation and consequent economic dynamism, axiomatically produces deadweight loss.

(As the proposed Biden tax "reform" obviously does.)

[Michael8219]

Yep. Those that don’t study history are dumbed, I mean doomed to repeat it.

And as I found out the hard way, short term capital gains are taxed as ordinary income.

One very very smart guy told me you can’t raise taxes by more than 2 % or you kill the golden goose.

Also, the Fed has to reduce interest rates soon, which when coupled with erasure of student debt and “free” government handouts along with out of control spending, IRA, etc will increase inflation even more:

“At current rates, the U.S. national debt is growing by a remarkable $1 trillion about every 100 days, equal to roughly $3.6 trillion per year. As the national debt has ballooned, debt payments even exceeded Medicaid outlays in 2023—one of the government's largest expenditures.“