How are we going to pay for all this shit?

[rexdutchman]

But But wait ,,,,Tax's not going up ,,, But wait costs of goods not going up Hmm You think we being lied to Just maybe ( Oh never mind Critical thinking again )

[Texas Contrarian]

.

Originally Posted by NoirMan

Sure our tax rates were the highest in world except no one paid that high of a tax rate. I’ve owned several businesses and still own a couple. We’ve always paid significantly less that what the rate says on paper because we have one of the most gameable tax codes there is.

Yes, indeed. Our corporate tax code is ridiculously gameable, and that cuts to the heart of why it shackles the economy with so much deadweight loss.

In many cases, larger and more politically connected firms are often able to game the system in such fashion as to advantage themselves relative to their smaller competitors. One libertarian economist thus described the US corporate tax code as a "crony capitalist shuffle." (I have trouble disagreeing with that assessment.)

My view is that the economy (meaning everyone, including workers) would be better off if the rates were kept very low and the code greatly simplified, with far fewer deductions and exclusions.

In any event, everyone is worse off if the U.S. corporate tax system encourages inversions of the type that we saw during the middle of the last decade, or any other maneuvering that involves shifting of capital, booked profits, or operations to other jurisdictions. At the very least, we need to be fully competitive with everyone else in the OECD.

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[Texas Contrarian]

.

Amid all the disingenuous rhetoric abut how the "rich" are going to pay full freight for whatever multitrillion dollar package gets shoved through, a few finance blogs have been abuzz with discussions as to just what is the incidence of the corporate tax. Although the corporation that's nominally the "taxpayer" obviously writes the check, how is the real burden apportioned? Progressives and many left-leaning journalists would have you believe that "rich people" pay the tax.

Although true to at least a fairly significant extent, that's far from the whole picture. Even left-leaning economists do not argue that none of the burden falls on customers and workers. The only question is how much. That depends on a number of things, such as the relative elasticities of supply and demand for labor, the firm's products at the point of final sale, various cost inputs, and the mobility of capital. The portions would obviously also vary by industry and over time.

It also should be remembered that to the extent capital bears a portion of the burden by way of reduced profits and share prices, a large percentage of US equities are owned by non-affluent Americans through 401(k) and other investment vehicles. The vast majority of such beneficial owners earn well under $400K annually.

Here is a concise piece on the issue by the Tax Foundation:

https://taxfoundation.org/who-bears-...corporate-tax/

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[eccieuser9500]

Critics still opposed after Democrats ease IRS bank reporting to $10K


https://komonews.com/amp/news/nation...porting-to-10k

The U.S. Chamber of Commerce, which opposes the Biden social spending package in its entirety, said the proposal to give the IRS more information about Americans’ banking activities was "one of countless provisions in the bill that make it unacceptable to the business community. Raising the threshold to $10,000 doesn’t change that."

Democrats have worked to counter the narrative, arguing the proposal had been grossly misrepresented.

"Despite what its opponents say, what President Biden and Democrats have proposed is focused on rooting out tax cheating at the top," said Chair of the Senate Finance Committee, Ron Wyden, D-Ore.

Supporters of the plan insist that it will help close the estimated $600 billion annual tax gap, or the difference between what taxpayers owe and what the government collects. The wealthiest individuals, whose income streams are typically more opaque than working-class Americans, account for the largest portion of unpaid taxes in the country.

[Tiny]

It looks like the Progressives and Biden are trying to pull a fast one on Manchin and Sinema.

Excerpts from

The $2 Trillion Is Phony Too
Biden is bowing to the left again by keeping new entitlements and disguising their cost.

Democrats say they’re working hard to pare back their $3.5 trillion tax and spending bill to $2 trillion to please House and Senate dissenters, but don’t believe it. What they’re really doing is working hard to pack $4 trillion in new programs into a $2 trillion disguise that sounds less radical than it is.

That’s the message from news reports that the White House on Tuesday offered Congressional Democrats a plan that retains nearly all of the entitlement programs they originally proposed. Instead of reducing this vast expansion of the welfare state, Democrats are merely increasing their use of budget gimmicks to pretend to fit them into a 10-year budget window. It’s still a mammoth fiscal confidence trick.

The leaks are piecemeal and the talks are fluid. But so far it looks like the White House is continuing to accommodate progressive demands and then bludgeon swing-district Members to go along. “Overall, almost every priority is included,” Rep. Ro Khanna (D., Calif.), a progressive leader, was quoted as saying. President Biden and Nancy Pelosi previously said they preferred to fully fund fewer programs. But they retreated, as usual, under progressive pressure.

Democrats appear to have dropped only two programs from their original plan: an entitlement for community college, and a nationwide renewable fuel mandate known as the Clean Electricity Performance Program (CEPP). Community college is one of the least expensive at some $120 billion over 10 years, and many states already subsidize it.

....Democrats want to retain every other big-ticket entitlement in fiscal drag. The biggest trick is a false sunset. News reports say the child allowance of $3,000 or $3,600 will last for only one year instead of five as in the House bill. This will cost $120 billion instead of $556 billion.

But the sunset is a ruse, since Democrats plan to renew the child allowance ad infinitum. Its real cost over 10 years is $1 trillion and another trillion the decade after that. This is a huge addition to the structural deficit—an entitlement for the middle-class without a work requirement—that will eventually be financed by higher taxes.

The ObamaCare subsidy expansion would reportedly last three years, but that’s also a phony sunset. Paid family leave might be cut to four weeks from 12, but eventually it will grow to 12 or more and extend beyond maternity and paternity leave to elder care and more.

Another reported ruse would start Bernie Sanders’s Medicare expansion to cover dental care as a pilot or more limited program. That could pretend to save $260 billion. But do you think a benefit provided to some seniors won’t soon be provided to all? Any program would create a political lobby of dental groups and others to make it universal.

None of this is lost on close budget watchers. Andy Laperriere of Cornerstone Macro figures the full 10-year budget cost of the mooted White House proposal is $4 trillion. Maya MacGuineas of the Committee for a Responsible Federal Budget says the child allowance and health subsidies alone in the bill would cost $3 trillion over 10 years.

https://www.wsj.com/articles/the-2-t...nion_lead_pos1

[Tiny]

Originally Posted by CaptainMidnight

.
My view is that the economy (meaning everyone, including workers) would be better off if the rates were kept very low and the code greatly simplified, with far fewer deductions and exclusions....At the very least, we need to be fully competitive with everyone else in the OECD.

.

Absolutely! Some of the wisest words written in this forum.

[Tiny]

Originally Posted by CaptainMidnight

.

Amid all the disingenuous rhetoric abut how the "rich" are going to pay full freight for whatever multitrillion dollar package gets shoved through, a few finance blogs have been abuzz with discussions as to just what is the incidence of the corporate tax. Although the corporation that's nominally the "taxpayer" obviously writes the check, how is the real burden apportioned? Progressives and many left-leaning journalists would have you believe that "rich people" pay the tax.

Although true to at least a fairly significant extent, that's far from the whole picture. Even left-leaning economists do not argue that none of the burden falls on customers and workers. The only question is how much. That depends on a number of things, such as the relative elasticities of supply and demand for labor, the firm's products at the point of final sale, various cost inputs, and the mobility of capital. The portions would obviously also vary by industry and over time.

It also should be remembered that to the extent capital bears a portion of the burden by way of reduced profits and share prices, a large percentage of US equities are owned by non-affluent Americans through 401(k) and other investment vehicles. The vast majority of such beneficial owners earn well under $400K annually.

Here is a concise piece on the issue by the Tax Foundation:

https://taxfoundation.org/who-bears-...corporate-tax/

.

The irony. Kyrsten Sinema is receiving tons of flack from progressives because she doesn't want to increase corporate taxes. They hate her more than they hate Trump right now. Well it turns out that Kyrsten's the true progressive. From your Tax Foundation link:

In a large study of German municipalities over a 20-year period, Fuest et al. (2018) find that slightly more than half of the corporate tax burden falls on workers. The study links administrative data from municipalities with firm level micro data, allowing the researchers to precisely estimate the impact of corporate tax changes on wages. The paper notes several different effects across workers. Higher corporate taxes reduced wages the most for low-skilled, women, and young workers. While many policymakers view corporate taxation as a form of progressive taxation, the authors show that accounting for these estimates of tax incidence would reduce the progressivity of the U.S. tax system between 25 and 40 percent.

[Ripmany]

Sell it as fertilizer

[oeb11]

Tiny and CM - thank you for your contributions!

[rexdutchman]

Cost Zero -0-0-0 ,,Hmm does anyone actually believe that LIE ,,, Gas is up a dollar from last year this time Hmm

[Texas Contrarian]

.

Well, now the situation may be coming into better focus. In answer to the thread title's question as to "who is gong to be paying for all this shit," it looks like we may have an answer.

Billionaires! And only billionaires. (Anyone buy that?)

Meet Senator Wyden's billionaire mark-to-market tax on accrued capital gains!

Here's the one-page summary that just came out this morning:

https://www.finance.senate.gov/imo/m...ne%20Pager.pdf

Over the next few days I plan to put out a note to investors, some of whom are already expressing concerns about what the ramifications of the new Wyden plan might be in the event that it or something similar is enacted.

To that end, I am interested in taking a few rhetorical torpedoes out for a test drive in an attempt to discover whether any of my fellow Political Forum scholars and worldly philosophers can add to them (or poke a hole in any of mine, for that matter). So, without further ado, let's open fire at this lemon!

For starters, a number of legal scholars have already opined on the issue of whether this turkey would even pass Constitutional muster. Many who know this issue better than I believe it to be very unlikely that the plan would survive 16th Amendment-related challenges once deliberated and decided by the conservative majority in today's U.S. Supreme Court. (Unrealized capital gains are NOT income!)

Then there's the "hard cutoff" at the $1 billion net worth mark. Senator Wyden, are you telling us that someone with a stated net worth of, say, $1.1 billion would be fully subject to the tax, while those worth "only" $900 million would get off with a full pass? In what universe does that make sense? Among all the people who may be hovering within shouting distance of the billionaire/non-billionaire threshold, I'll bet that more than a few are going to make damned sure they remain on the "non" side!

The idea is that in the first year, the tax would apply to all accumulated gains and the 23.8% levy applied thereto could be paid over a 5-year period in order to allow an orderly liquidation of sufficient funds to remit to the Treasury.

This applies only to tradable assets with publicly available market values. Non-tradable assets (private equity ventures, closely held businesses, commercial real estate, etc. would escape capital gains taxation until the date of sale, at which time the tax is owed plus interest based on the "added value" accruing to the investor as a result of the ability to defer the tax. (At least, that's how it's been described so far by a number of finance journalists.)

It shouldn't be difficult to see that over the next few years this would significantly incentivize the next generation of ambitious entrepreneurial founders to go the private VC or private equity route so as not to expose their (hopefully) skyrocketing fortunes to ultra-easy targeting by revenue-hungry officials.

Note a couple of things here:

First, private equity valuations are typically subject to as much as a 30-40% "range of reasonableness," whereas it's easy enough for the taxing authorities to check the market value on any given date for a publicly traded asset. Needless to say, Treasury would be forced to deal with an army of tax lawyers and appraisal experts representing wealthy clients on a daily basis. (And you can bet Benjamins to donuts that billionaires will have all the best professionals on their side!) Some observers have noted that this sort of never-ending wrangling is, in large measure, why France gave up on its "wealth tax."

Second, the public markets are much more volatile and subject to bull markets, "melt-ups," corrections, bear market plunges, etc. So the next Elon Musk wannabe might be highly motivated to keep his ventures within the private placement universe rather than deal with paying a big mark-to-market tax one year, and then waiting for a refund the next in case of a selloff, etc.

In such a world, there would seem to be little doubt that a number of future aspiring billionaires might choose to avoid the public markets altogether, especially with ventures they deem the most potentially promising. Aren't all Americans better off if given a full range of opportunities to be long-term investors in the next Apple or Alphabet or Google?

Additionally, the need for the very wealthiest to raise big money over a multi-year period by selling significant portions of their stakes will put downward pressure on equity values and likely knock several percentage points off U.S. big-cap stock prices.

Progressives promised not to raise taxes on anyone earning less than $400K annually. Yet the effects described here would significantly harm upper middle-class taxpayers earning well below $400K, but with substantial savings and investments in 401(k) accounts. Grossly underfunded public-sector pension funds would take a hit as well.

Could this not be fairly characterized as "trickle-down taxation?"

However, other than those little details, it looks to me like Senator Wyden came up with a great plan!

.

[FatCity]

whoops

[WTF]

Originally Posted by CaptainMidnight

.

Well, now the situation may be coming into better focus. In answer to the thread title's question as to "who is gong to be paying for all this shit," it looks like we may have an answer.

Billionaires! And only billionaires. (Anyone buy that?)

Meet Senator Wyden's billionaire mark-to-market tax on accrued capital gains!

Here's the one-page summary that just came out this morning:

https://www.finance.senate.gov/imo/m...ne%20Pager.pdf

Over the next few days I plan to put out a note to investors, some of whom are already expressing concerns about what the ramifications of the new Wyden plan might be in the event that it or something similar is enacted.

To that end, I am interested in taking a few rhetorical torpedoes out for a test drive in an attempt to discover whether any of my fellow Political Forum scholars and worldly philosophers can add to them (or poke a hole in any of mine, for that matter). So, without further ado, let's open fire at this lemon!

For starters, a number of legal scholars have already opined on the issue of whether this turkey would even pass Constitutional muster. Many who know this issue better than I believe it to be very unlikely that the plan would survive 16th Amendment-related challenges once deliberated and decided by the conservative majority in today's U.S. Supreme Court. (Unrealized capital gains are NOT income!)

Then there's the "hard cutoff" at the $1 billion net worth mark. Senator Wyden, are you telling us that someone with a stated net worth of, say, $1.1 billion would be fully subject to the tax, while those worth "only" $900 million would get off with a full pass? In what universe does that make sense? Among all the people who may be hovering within shouting distance of the billionaire/non-billionaire threshold, I'll bet that more than a few are going to make damned sure they remain on the "non" side!

The idea is that in the first year, the tax would apply to all accumulated gains and the 23.8% levy applied thereto could be paid over a 5-year period in order to allow an orderly liquidation of sufficient funds to remit to the Treasury.

This applies only to tradable assets with publicly available market values. Non-tradable assets (private equity ventures, closely held businesses, commercial real estate, etc. would escape capital gains taxation until the date of sale, at which time the tax is owed plus interest based on the "added value" accruing to the investor as a result of the ability to defer the tax. (At least, that's how it's been described so far by a number of finance journalists.)

It shouldn't be difficult to see that over the next few years this would significantly incentivize the next generation of ambitious entrepreneurial founders to go the private VC or private equity route so as not to expose their (hopefully) skyrocketing fortunes to ultra-easy targeting by revenue-hungry officials.

Note a couple of things here:

First, private equity valuations are typically subject to as much as a 30-40% "range of reasonableness," whereas it's easy enough for the taxing authorities to check the market value on any given date for a publicly traded asset. Needless to say, Treasury would be forced to deal with an army of tax lawyers and appraisal experts representing wealthy clients on a daily basis. (And you can bet Benjamins to donuts that billionaires will have all the best professionals on their side!) Some observers have noted that this sort of never-ending wrangling is, in large measure, why France gave up on its "wealth tax."

Second, the public markets are much more volatile and subject to bull markets, "melt-ups," corrections, bear market plunges, etc. So the next Elon Musk wannabe might be highly motivated to keep his ventures within the private placement universe rather than deal with paying a big mark-to-market tax one year, and then waiting for a refund the next in case of a selloff, etc.

In such a world, there would seem to be little doubt that a number of future aspiring billionaires might choose to avoid the public markets altogether, especially with ventures they deem the most potentially promising. Aren't all Americans better off if given a full range of opportunities to be long-term investors in the next Apple or Alphabet or Google?

Additionally, the need for the very wealthiest to raise big money over a multi-year period by selling significant portions of their stakes will put downward pressure on equity values and likely knock several percentage points off U.S. big-cap stock prices.

Progressives promised not to raise taxes on anyone earning less than $400K annually. Yet the effects described here would significantly harm upper middle-class taxpayers earning well below $400K, but with substantial savings and investments in 401(k) accounts. Grossly underfunded public-sector pension funds would take a hit as well.

Could this not be fairly characterized as "trickle-down taxation?"

However, other than those little details, it looks to me like Senator Wyden came up with a great plan!

.

This isn't going to pass.

They should just tax at death.

[Texas Contrarian]

.

Yeah!

I just saw that. According to Chairman Neal (House Ways and Means) the objection is that Wyden's plan has not been "properly vetted." (Gee, ya think?)

These clowns thought they were going to be in Fat City! (Sorry, FatCity. Just couldn't resist!)

(Now, not so much.)

The really good news is that after all this chaos there will probably not be a rate increase on either capital gains or qualified dividends.

Originally Posted by WTF

This isn't going to pass.

They should just tax at death.

Now it appears you are certainly right on the first point.

On your second, I do agree that they will likely rescind the step-up basis exclusion.

.

[Strokey_McDingDong]

Supreme leader is incapable of lying.