How are we going to pay for all this shit?

[oeb11]

Originally Posted by 1blackman1

oeb11
This message is hidden because oeb11 is on your ignore list.

In case you forgot. I truly couldn’t care less what you type.

I am not on ignore - the curiosity is unquenchable in DPSTs.

[pfunkdenver]

Originally Posted by oeb11

I am not on ignore - the curiosity is unquenchable in DPSTs.

Uhhh...yes...you are! LOL!

[rexdutchman]

[texassapper]

Back to the OP question... We aren't. We're meant to default and thus usher in a brave new world of socialism where we will all own nothing and be happy. if we know what's good for us.

[Tiny]

Here's the Senate budget resolution, passed today through a 50-49 partisan vote:

https://www.democrats.senate.gov/imo...c/HEN21B52.pdf

It calls for the federal deficit to go from 1.3 trillion in 2022 to 1.8 trillion in 2031. That's 6% of the current GDP in 2022, and 8% in 2031. Despite being 92 pages in length, it's very sketchy on details, with nothing about changes in the tax regime beyond devoting lots more resources to the IRS.

Manchin and Sinema have said they believe the $3.5 trillion additional spending that's being proposed is excessive. Hopefully they'll stick to that when it comes time for the next vote in the Senate.

[HedonistForever]

Unfortunately, I predict things will not get better, till they get much worse at which time I WILL tell you "told you so".

[Tiny]

Originally Posted by HedonistForever

Unfortunately, I predict things will not get better, till they get much worse at which time I WILL tell you "told you so".

I hope you're wrong. I fear you may be right.

[1blackman1]

Originally Posted by Tiny

Here's the Senate budget resolution, passed today through a 50-49 partisan vote:

https://www.democrats.senate.gov/imo...c/HEN21B52.pdf

It calls for the federal deficit to go from 1.3 trillion in 2022 to 1.8 trillion in 2031. That's 6% of the current GDP in 2022, and 8% in 2031. Despite being 92 pages in length, it's very sketchy on details, with nothing about changes in the tax regime beyond devoting lots more resources to the IRS.

Manchin and Sinema have said they believe the $3.5 trillion additional spending that's being proposed is excessive. Hopefully they'll stick to that when it comes time for the next vote in the Senate.

3.5 won’t pass. I’m thinking somewhere along the 2T mark will get passed from the senate to the house. The question will be will the house blow it all up or just eat the smaller amount. They have to consider that they’ll likely only get one shot and will need to pass this before year end to use the budget rules. And they gotta have people seeing the results of the money in real life to make it palatable.

[Tiny]

Originally Posted by 1blackman1

3.5 won’t pass. I’m thinking somewhere along the 2T mark will get passed from the senate to the house. The question will be will the house blow it all up or just eat the smaller amount. They have to consider that they’ll likely only get one shot and will need to pass this before year end to use the budget rules. And they gotta have people seeing the results of the money in real life to make it palatable.

That would be my guess, $2 trillion too, still a huge amount of money. It depends on whether the moderate Democrats succumb to peer pressure.

It will be interesting to see how this will play out in the House. As you know, the Progressives are saying they won't pass the infrastructure bill unless the Senate passes the reconciliation bill first, and Pelosi is backing them up. Democratic moderates on the other hand, some of whom might prefer to pass the infrastructure bill but not the reconciliation bill, aren't all happy with $3.5 trillion. And then you've got a group of Democratic representatives who want to lower tax rates on upper income tax payers by removing or increasing caps on deductibility of state income taxes. They say they won't vote for the bill unless they get that. There's the potential for a knock down, drag out fight among the Democrats.

[1blackman1]

I don't there will be ny real fight. the progressives can only muck up the work, but they don't have any real power. eventually they will cave to a lower number. Now changes to the tax code, particularly the corp tax rate and state income tax deduction actually makes sense in the long run. the republicans knew that would never make it once the dems got power, they just needed it as a pay for in their bill to get it through the CBO analysis.

[Tiny]

Originally Posted by 1blackman1

I don't there will be ny real fight. the progressives can only muck up the work, but they don't have any real power. eventually they will cave to a lower number. Now changes to the tax code, particularly the corp tax rate and state income tax deduction actually makes sense in the long run. the republicans knew that would never make it once the dems got power, they just needed it as a pay for in their bill to get it through the CBO analysis.

What do you think will happen with capital gains taxes? Biden's proposals would result in the U.S. having the highest capital gains tax in the developed world,

https://www.cnbc.com/2021/06/21/bide...-in-world.html

I've read, in unbiased sources, that the CBO historically has considered 28% to be rate at which government revenues are maximized from the capital gains tax. Raise it higher and enough people hang onto assets instead of selling, so that tax revenues actually fall. Which is not a good thing IMHO, as it hinders efficient allocation of capital.

Manchin has thrown out 28% as being a reasonable level for the capital gains tax. That's probably before the 3.8% net investment income tax and state income taxes. Warner and Tester believe Biden's proposed rate is too high too.

I'd think that Congress would have enough sense not pass a tax increase that would actually reduce government revenues. The kicker though is that Biden has also proposed to eliminate stepped up cost basis when taxpayers die. Instead, when someone dies, his estate would have to pay a capital gains tax on his property. This probably would result in Biden's capital gains tax changes raising some nominal amount of additional revenues. People won't be as motivated to hang onto assets until they die, to avoid the capital gains tax, if they have to pay it after they're dead, so to speak.

However, would it be fair? In addition to the capital gains tax, larger estates would also have to pay an estate tax of 40%. If you had very little cost basis in a business or investments, because you bought them many years ago, your estate would potentially be looking at having to fork over 80% to the government. This definitely won't fly with Tester, the Democratic Montana Senator and farmer, who would be exactly in this position personally when he passes away. But he and other farm state members may try to get an exemption for farms and ranches, instead of voting against the bill.

We're in for an interesting few months.

[1blackman1]

they may find a way to increase it as well, but I am not sure what a good level will be. 28% sounds fair enough. but I can say I am not familiar enough with that to know.

no one pays 80% or even anything close so you should stop spouting those crazy numbers Norquist keeps putting out.

[Tiny]

Originally Posted by 1blackman1

they may find a way to increase it as well, but I am not sure what a good level will be. 28% sounds fair enough. but I can say I am not familiar enough with that to know.

no one pays 80% or even anything close so you should stop spouting those crazy numbers Norquist keeps putting out.

That's not from Norquist, it's from Biden's Green Book. The combination of the elimination of the Trump tax cuts on upper income taxpayers and taxing capital gains as ordinary income boosts the capital gains tax rate to 43.4%.

The estate tax is 40% and it's not on the capital gain, but rather on the value of the estate.

Add them together and assume the taxpayer has a low cost basis, maybe because he started a business or bought a farm or stock 30 years ago, and you can get to 80%.

One caveat, I don't know if they'd deduct the capital gains tax before calculating the estate tax, in which case the government would "only" be taking around 65% of the value of the estate.

[1blackman1]

Ok. I’m not familiar enough to know how that works. We have a CPA and since I don’t come from money, there’s no inherited wealth or “death tax” I have to be concerned about. Now my daughter may have some issues but I am confident I’ll have an answer for that by the time my death is an issue (at least a trust of some sort to structure taxes).

[Tiny]

Originally Posted by 1blackman1

Ok. I’m not familiar enough to know how that works. We have a CPA and since I don’t come from money, there’s no inherited wealth or “death tax” I have to be concerned about. Now my daughter may have some issues but I am confident I’ll have an answer for that by the time my death is an issue (at least a trust of some sort to structure taxes).

Right now there's a lifetime exemption from estate and gift tax of $11.7 million. Biden campaigned on lowering it to $3.5 million but hasn't followed through. You've got a lot of wealthy Senators out there who probably don't want to see the exemption cut. But yes, if you find that your exemption isn't high enough, there are potentially ways out of paying the tax. Unfortunately that's the way the politicians work -- raise the headline rates sky high (40% for the estate tax), but then put in loopholes so those who can afford high priced attorneys and accountants can get out of paying the tax. It's not an efficient way to tax people.

The proposed capital gains tax on estates though would kick in at a much lower level, $1 million I think. And would be 43.4% of the value of the estate at death less your cost basis in the assets.