How are we going to pay for all this shit?

[bambino]

Originally Posted by 1blackman1

You’ve no clue what you’re talking about.

You obviously don’t.

[Texas Contrarian]

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Originally Posted by Tiny

We can't start with the most progressive tax system in the developed world, where 45% of households pay no income tax and a couple making $200,000 a year pays at a rate of 18%. And then, just by increasing rates on people who make over $400,000 per year and on corporations, reduce the deficit, and also pay for $1.1 trillion in infrastructure spending, $5.7 trillion in COVID relief, and $3.5 trillion for a Democratic Party wish list. Apparently you partly recognize that, as you say you favor reducing spending.

So what do you do? Jack up taxes on everyone? I don't think that's necessarily the solution. When you filter out the tiny countries and petrostates, the countries with the highest per capita GDP are Hong Kong, Ireland, Singapore, Switzerland and the United States. Those also happen to be the five countries in the developed world, again filtering out tiny countries and petrostates, with the lowest taxation and government spending as a % of GDP. Smaller government and lower taxes, and a larger private sector with more money to invest, equate with economic growth.

More efficient government, closer to the people, is what I'd favor. And yes, cut out loopholes in the tax system. What does the federal government do for you anyway? It does diddly squat for me, except pay too much to maintain a large military for my defense from mostly imaginary enemies, and distribute money to the states. Money that would be better raised at the state and local level, closest to the people and locally elected politicians who oversee the spending that actually benefits my neighbors and me.

Your belief that tax cuts caused the recessions is wrong. The 2020 recession was caused by COVID. The 2008/2009 recession was caused by inadequate regulation of the mortgage and other financial markets. The 2000/2001 and 1990/1991 recessions were mild and had nothing to do with tax policy. You can chalk them up in part to the dot com bubble, the 9/11 attack, and the oil price shock as a result of the Iraqi invasion of Kuwait.

Finally you place far too much weight on tax increases as the reason we balanced our budget in the late 1990's. We actually cut the capital gains tax during that period. Here's an admittedly somewhat slanted explanation written in 1998, that mentions cyclical strength in the economy and lower military expenditures and fiscal discipline imposed by Republican Congressmen as reasons.

https://www.cato.org/commentary/no-b...balance-budget

.

Fully agree on all points.

Although Steve Moore, the author of that Cato piece, has a penchant for getting a little carried away with enthusiasm and exaggeration at times, I believe he gets it pretty much right here.

Regarding spending, it seems highly unlikely that anyone will ever cut anything.

Remember back about 10 years ago when the new Republican majority opened up debate about cutting domestic spending (but not a single penny from entitlements) by about one percent? The New York Times, along with most of the rest of the media, immediately erupted with nonstop commentary about how we were about to enter DEFCON 1. It was really something else!

Those who advocate big increases in the capital gains tax rate might do well to take a glance at this chart:

https://taxfoundation.org/federal-ca...storical-data/

The tax was sharply raised during the Nixon years and then cut to 28% in 1978. Notice what happened to revenues for the following 8-year period? Then check out what happened in the late 1990s, after the rate was cut again (to 20%).

If this isn't a real eye-opener for those who seek to push the capital gains tax rate to record highs, I have a great deal of trouble imagining what would be!

.

[Tiny]

Originally Posted by CaptainMidnight

.

.

Fully agree on all points.

Although Steve Moore, the author of that Cato piece, has a penchant for getting a little carried away with enthusiasm and exaggeration at times, I believe he gets it pretty much right here.

Regarding spending, it seems highly unlikely that anyone will ever cut anything.

Remember back about 10 years ago when the new Republican majority opened up debate about cutting domestic spending (but not a single penny from entitlements) by about one percent? The New York Times, along with most of the rest of the media, immediately erupted with nonstop commentary about how we were about to enter DEFCON 1. It was really something else!

Those who advocate big increases in the capital gains tax rate might do well to take a glance at this chart:

https://taxfoundation.org/federal-ca...storical-data/

The tax was sharply raised during the Nixon years and then cut to 28% in 1978. Notice what happened to revenues for the following 8-year period? Then check out what happened in the late 1990s, after the rate was cut again (to 20%).

If this isn't a real eye-opener for those who seek to push the capital gains tax rate to record highs, I have a great deal of trouble imagining what would be!

.

The Tax Foundation has done some good work on capital gains taxes. This is worth a look,

https://taxfoundation.org/biden-capi...tax-rate-oecd/

Under Biden's plan, the U.S. would have the highest marginal tax rate on capital gains AND the highest combined rate on corporate income + dividends in the OECD, 48.4% and 65.1% respectively. It's insane! What's the point in taking the risk to invest when government's take is that high? Would you buy a store somewhere if you knew the local mafia were going to take 65% of your profits from operating the business before you could put them in your pocket, and another 48% when you went to sell it?

It's interesting to compare the 48.4% to the average historical rates in your link -- there's a huge difference.

[Strokey_McDingDong]

You don't have to pay for shit. You can LITERALLY take it from your asshole.

[Texas Contrarian]

.

I thought the internecine war in the Republican Party was bad enough, what with the pro-Trump and never-Trump factions attacking each other in far more energetic fashion than either displays when they actually go to battle against progressive economic policies -- but they have nothing on Democrats!

Just look at how the Congressional Progressive Caucus is threatening to drum up efforts to tank the "infrastructure bill" if they can't simultaneously shove through the multitrillion-dollar epic spending blowout.

Now comes word that progressives' opponents are flooding the zone with ads targeted at the districts of the more "moderate" House members that could be on shaky ground in any event, promising to end their congressional careers forthwith if they vote for this hideous monstrosity. Since House Democrats have only a few votes to spare, getting this obese turkey over the finish line might turn out to be quite a challenge.

The news on the tax front may also be a bit less bad than expected.

It's obviously not good that Dems want to push the corporate tax rate to the high end of the OECD range, and it's certainly possible that the planned increase will impede growth, but at least they seem to have given up on raising the capital gains rate to 43.4%. Recently they seem to have settled on a 28.8% rate, which probably won't raise much (if any) additional revenue, but at least will not be too destructive.

Best of all may be the realization that the Wyden mark-to-market asset seizure plan is a stone dead letter. No one I know thought it was very likely to be pushed through anyway, but it's a relief that even Schumer doesn't want to see any discussion of it, as he snapped to a questioner while walking down a Capitol hall a couple of months ago. All in all, about the happiest face supporters of these big spenders can put on anticipated revenues from planned tax hikes is that they might raise something like 0.7% or 0.8% of GDP annually, while we figure to be running fiscal deficits close to 10% of GDP from here to eternity (or until something busts).

As has been mentioned many times by several people in this forum, this collection of clowns isn't serious about anything other than shoving as much cash into constituents' pockets as possible in a (hopefully forlorn) effort to hang on to as many House and Senate seats as possible in a year that might not be looking very good for the party of our esteemed Slumberer-inChief.

.

[Tiny]

What came out of the House Ways and Means Committee was a 25% rate on long term capital gains, plus a 3% surtax on all classes of income realized by higher income taxpayers. Add that to the existing 3.8% net investment income tax, and you get to a total long term capital gains rate of 31.8%.

Wyden's still pushing his mark to market capital gains tax, but apparently now only for billionaires. That's from press reports. I believe Biden is now backing him up on this. The White House today came out with a piece by two economists that says America's 400 wealthiest families pay an average income tax rate of 8.2%:

https://www.whitehouse.gov/cea/blog/...est-americans/

How did they possibly come up with this, given that the lowest top federal rate on any class of income is 23.8%, on long term capital gains and qualified dividends? Which is a lot higher than 8.2%? Well, by including unrealized capital gains in income. And how would that happen in the real world? A mark-to-market capital gains tax, of course.

So I think that Wyden and Biden are in the same corner on this.

I agree the amounts the Democrats will end up raising will probably be a low percentage of GDP. Supposedly promises have been made to moderate Democratic members of the House that the SALT cap will be removed or greatly increased. This will mostly benefit higher income taxpayers in Blue states. And will offset a lot of the revenues from higher rates.

The only given is that these bozos will complicate the tax system even more, making life more difficult for many of us. And as you say they'll do their best to put cash into their constituents' and contributors' pockets.

I hope this war between the moderates and progressives blows up so they don't pass anything.

[Tiny]

Originally Posted by CaptainMidnight

.Now comes word that progressives' opponents are flooding the zone with ads targeted at the districts of the more "moderate" House members that could be on shaky ground in any event, promising to end their congressional careers forthwith if they vote for this hideous monstrosity.

I didn't know that. I hope the ads will do some good.

[HedonistForever]

Originally Posted by Tiny

What came out of the House Ways and Means Committee was a 25% rate on long term capital gains, plus a 3% surtax on all classes of income realized by higher income taxpayers. Add that to the existing 3.8% net investment income tax, and you get to a total long term capital gains rate of 31.8%.

Wyden's still pushing his mark to market capital gains tax, but apparently now only for billionaires. That's from press reports. I believe Biden is now backing him up on this. The White House today came out with a piece by two economists that says America's 400 wealthiest families pay an average income tax rate of 8.2%:

https://www.whitehouse.gov/cea/blog/...est-americans/

How did they possibly come up with this, given that the lowest top federal rate on any class of income is 23.8%, on long term capital gains and qualified dividends? Which is a lot higher than 8.2%? Well, by including unrealized capital gains in income. And how would that happen in the real world? A mark-to-market capital gains tax, of course.

So I think that Wyden and Biden are in the same corner on this.

I agree the amounts the Democrats will end up raising will probably be a low percentage of GDP. Supposedly promises have been made to moderate Democratic members of the House that the SALT cap will be removed or greatly increased. This will mostly benefit higher income taxpayers in Blue states. And will offset a lot of the revenues from higher rates.

The only given is that these bozos will complicate the tax system even more, making life more difficult for many of us. And as you say they'll do their best to put cash into their constituents' and contributors' pockets.

I hope this war between the moderates and progressives blows up so they don't pass anything.

My hope too and if the Republicans had any brains at all or at least enough to figure out how to thwart the Democrats, no Republican, House or Senate, would vote for anything till after mid terms. Make it very clear, including spending details on what kind of an infrastructure bill Republicans would support, my guess would be between 500 to 1 billion on nothing but old school infrastructure and another detailed bill on how to "re-arrange" spending all that Covid money that hasn't been spent yet.


Vote no on everything with a detailed and I mean detailed spending bill that 100% of Republicans could get behind for 2022.

[HedonistForever]

Moderates threatening Progressives, Progressives threatening Moderates!!! Damn I love the smell of Naplam in the morning.


Eat up Democrats, remember, you are at the buffet and it's all you can eat.

[eccieuser9500]

Democrats Face Tough Choices as They Look to Shrink Safety Net Bill




https://www.nytimes.com/2021/09/23/u...-net-bill.html

But they offered no details about what programs would be included or what the total cost would eventually be, and left crucial disagreements unresolved about which tax increases would be included, and how large they would be.


Senator Bernie Sanders, the Vermont independent and chairman of the Budget Committee, took to the Senate floor to double down on that price tag and issue a reminder that he originally wanted nearly twice that much spending.

Democratic leaders tried on Thursday to quell some of the confusion by talking up their “framework agreement,” which appeared to be largely a list of tax proposals that have been made public by both the House Ways and Means Committee and the Senate Finance Committee.

Aides, speaking on the condition of anonymity, said the committees already saw eye to eye on a top income tax rate of 39.6 percent, a crackdown on tax-preferred conservation easements, and closing a loophole that can shield huge investment gains from taxation within an individual retirement account.

[Strokey_McDingDong]

I'll pay for it.

[goodman0422]

Did you count the promise to pay off $1.5 trillion (estimated) in student loan debts?
Uncle Sugar also want to pat everyone's rent as well.

[rexdutchman]

Tax and spend , Tax the rich ( oh But the Rich millionaire / Billionaire will just move out of the country to the Maldeves)
The large companies will move again so Hmm more great America killing ideas for puddens pop

[Texas Contrarian]

.

Originally Posted by Tiny

What came out of the House Ways and Means Committee was a 25% rate on long term capital gains, plus a 3% surtax on all classes of income realized by higher income taxpayers. Add that to the existing 3.8% net investment income tax, and you get to a total long term capital gains rate of 31.8%.

Yep! That indeed appears to be the case. I mistakenly failed to realize earlier that the 3% surtax is intended to apply to investment income as well. Pretty sure that 31.8% is several percentage points higher than most people's opinions on the issue of the revenue-maximizing rate. (But what do these clowns care? All of this is about ideology and scoring progressive political points; not about economic growth or fiscal discipline.)

Originally Posted by Tiny

Wyden's still pushing his mark to market capital gains tax, but apparently now only for billionaires. That's from press reports. I believe Biden is now backing him up on this.

He does indeed seem to still be pressing this issue, but I'm not sure such ideas are likely to get past a couple of dozen house Dems who get big donations from very wealthy hedge fund and private equity players, let alone Senators like Manchin and Sinema. (I hope not, anyway!)

A couple of left-wing economists came out with a piece a few months ago in which they advocated for taking the mark-to-market plan to a radical extreme. (I think it may have been Saez and Zucman; as when such proposals are debated, they're the first two suspects you might want to round up when looking for the culprits.)

They particularly mentioned about a half-dozen of the wealthiest tech billionaires, whose net worth may be almost entirely comprised of stock with a near-zero basis. The idea is that their preferred plan would allow Treasury, on a date certain, to consider all of the accumulated gains to be "deemed realized" (that's the term they used), and then capital gains tax would be presumably owed on almost 100% of their stock's market value on that date.

Further, their proposal would allow payment of the massive unrealized gain taxes to be spread out into annual installments over ten years, presumably so as to limit the degree of radical disruption. (Isn't that nice of them?)

Among other negatives, here's a big problem:

What do you think all the forced selling, even if conducted over a multi-year period, would do do to market capitalization? (I don't think it takes a lot of imagination to figure out that the damage would not exactly be classifiable as minimal, to say the least.)

Millions of non-affluent Americans own tech stocks and other mega-cap stocks in 401(k) and other accounts that would get shellacked.

This sort of thing is why -- as was mentioned earlier in this thread -- that G.H.W.B. said, way back around 1990, that when progressives start prattling about how "rich people" need to pay their "fair share," it's a good idea for middle-class folks to hang onto their wallets!

But do these people think through any of this? (Of course not! What the hell was I thinking?)

.

[Tiny]

Originally Posted by CaptainMidnight

.Yep! That indeed appears to be the case. I mistakenly failed to realize earlier that the 3% surtax is intended to apply to investment income as well. Pretty sure that 31.8% is several percentage points higher than most people's opinions on the issue of the revenue-maximizing rate. (But what do these clowns care? All of this is about ideology and scoring progressive political points; not about economic growth or fiscal discipline.)

Do you know whether the 28% rate, more or less, that's supposed to maximize revenues includes state income taxes? I'd guess it probably does, in which case some states are already above it.

Originally Posted by CaptainMidnight

.
He does indeed seem to still be pressing this issue, but I'm not sure such ideas are likely to get past a couple of dozen house Dems who get big donations from very wealthy hedge fund and private equity players, let alone Senators like Manchin and Sinema. (I hope not, anyway!)

Good point. The House Ways and Means Committee can't even come up with a proposal that does away with preferential taxation of carried interest.

There's a very interesting piece in the New York Times on Krysten Sinema that came out a couple of hours ago. It's about a Carbon Tax, but if you read between the lines, she apparently doesn't want to increase income taxes period. According to the article she'd even leave the corporate rate at 21% and the top individual rate at 37% (40.8% with NIIT). It's here,

https://www.nytimes.com/2021/09/24/u...democrats.html

I know this because I've got an irritable bowel right now, and every time I head to the john, I look up "Democrats Tax" in Google News.

Originally Posted by CaptainMidnight

A couple of left-wing economists came out with a piece a few months ago in which they advocated for taking the mark-to-market plan to a radical extreme. (I think it may have been Saez and Zucman; as when such proposals are debated, they're the first two suspects you might want to round up when looking for the culprits.)

They particularly mentioned about a half-dozen of the wealthiest tech billionaires, whose net worth may be almost entirely comprised of stock with a near-zero basis. The idea is that their preferred plan would allow Treasury, on a date certain, to consider all of the accumulated gains to be "deemed realized" (that's the term they used), and then capital gains tax would be presumably owed on almost 100% of their stock's market value on that date.

Further, their proposal would allow payment of the massive unrealized gain taxes to be spread out into annual installments over ten years, presumably so as to limit the degree of radical disruption. (Isn't that nice of them?)

Among other negatives, here's a big problem:

What do you think all the forced selling, even if conducted over a multi-year period, would do do to market capitalization? (I don't think it takes a lot of imagination to figure out that the damage would not exactly be classifiable as minimal, to say the least.)

Millions of non-affluent Americans own tech stocks and other mega-cap stocks in 401(k) and other accounts that would get shellacked.

This sort of thing is why -- as was mentioned earlier in this thread -- that G.H.W.B. said, way back around 1990, that when progressives start prattling about how "rich people" need to pay their "fair share," it's a good idea for middle-class folks to hang onto their wallets!

But do these people think through any of this? (Of course not! What the hell was I thinking?)

.

How would that work with Elon Musk? While I've been tempted to short Tesla from time to time (thankfully I never did), he does appear to be creating something special. Could he have done it if the CaptainMidnight scenario came to past? He's dumping shares to pay taxes, which affects the valuation of the shares, which makes it more difficult to raise money for the business. OK, this isn't a great analogy, because Tesla is so liquid, but there are undoubtedly mere centimillionaires and one digit billionaires with private businesses who would be screwed in this scenario. Not to mention the employees and consumers and shareholders who benefit from their businesses.

This sounds a lot like the so called exit tax, which people pay when they renounce U.S. citizenship. Tie this to what the Dutchman wrote above, about wealthy Americans relocating to places like the Maldives. If you're going to get hit with this "deemed realized" tax, why not just pay the exit tax instead and move to Monaco or wherever? Then, depending perhaps on what % of the company you own, you'd be free of capital gains taxes going forward.

Originally Posted by rexdutchman

Tax and spend , Tax the rich ( oh But the Rich millionaire / Billionaire will just move out of the country to the Maldeves)
The large companies will move again so Hmm more great America killing ideas for puddens pop