How are we going to pay for all this shit?

[adav8s28]

Originally Posted by Tiny

OK, The COVID relief bill just passed will cost 1.9 trillion. Biden has just proposed another 2.2 trillion for Democratic priorities and infrastructure, and reportedly will propose another 2 trillion spending bill in April for more Democratic Party priorities. That adds up to about 6 trillion in round numbers.

Alexandria Ocasio Cortez and Joe Manchin believe the $2.2 trillion just announced is too low. AOC wants it upped to $10 trillion and Manchin wants $4 trillion.

And then there's the Green New Deal, beloved by all the progressive Democratic Politicians. The American Action Forum estimates that would take $51 trillion to $93 trillion over the next ten years.

So most of this money is supposed to come from people who make more than $1 million a year, and all of it from those who make over $400,000 per year. President Biden has promised people making less than $400,000 per year will not have their tax rates increased.

Here's a link to the IRS tax statistics:

https://www.irs.gov/statistics/soi-t...d-gross-income

The latest year available is 2018. In that year, the total taxable income of people making over $1 million per year was $1.6 trillion. If you add the amount of taxable income of people making from $500,000 to a million a year, that goes up to $2.3 trillion.

However, these people are already paying a large % of their income in federal and state income taxes to help pay for existing programs. Let's say 30% of their income to be conservative -- I'm pretty sure it's more than that. That means if you take every dime they make, that they're not already paying in taxes, you end up with $1.1 trillion ($1 million cutoff) or $1.6 trillion ($500,000 cutoff) to pay for all this shit the Democratic Party politicians are proposing.

There's a snowball's chance in hell these politicians can do what they want to do by just taxing the rich.

Senator Joe Manchin of W. Virginia has his own plan. Under his plan Billionaires will pay a 15% tax on income. According to Senator Manchin that won't hurt anyone.

I am sure Bezos, Gates, Larry Ellison and Zuckerberg will get to keep their primary and vacation homes and won't miss any meals.

https://www.yahoo.com/news/manchin-p...155700379.html

[Turd Ferguson ATX]

How do we pay for all this? Easy. Just do like south Africa and take everything from the white people.

[greenbook]

You are half right, in my opinion, just print money and forget actually paying for it. That's how the fed has been controlling interest rates at such unrealistic low levels, buying bonds on the open market, borrowing money in the form of securities repos and depositing that in banks, which in money supply speak, is net zero. How long is that sustainable? Hell if I know.

[The_Waco_Kid]

Originally Posted by greenbook

You are half right, in my opinion, just print money and forget actually paying for it. That's how the fed has been controlling interest rates at such unrealistic low levels, buying bonds on the open market, borrowing money in the form of securities repos and depositing that in banks, which in money supply speak, is net zero. How long is that sustainable? Hell if I know.

and you are completely wrong. the two segments of your post i highlighted are a classic contradiction in terms. you can't borrow/overspend massively and simply float more bucks (fiat bucks) into the economy and ignore the debt that incurs.



sooner or later the bill comes due. and when it does .. it will be painful.

[adav8s28]

Originally Posted by The_Waco_Kid

and you are completely wrong. the two segments of your post i highlighted are a classic contradiction in terms. you can't borrow/overspend massively and simply float more bucks (fiat bucks) into the economy and ignore the debt that incurs.



sooner or later the bill comes due. and when it does .. it will be painful.

If the democrats are to get a big infrastructure deal passed it will take all 50 of them (plus Kamala to break the tie). The one percent will probably have to pay a little more in taxes.

[Tiny]

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!

.

I've been following this closely, as depending on how all this plays out I may dump shares and recognize capital gains this year. While I believe the billionaire's tax is lunacy, if it happens the probability they'll jack taxes up on people like me goes down.

The situation on the billionaire's tax has been changing hourly the last couple of days. I think at this point it's unlikely it will happen. Manchin publicly said he doesn't like it. Neal, the Chairman of the House Ways and Means Committee, says it won't happen. Pelosi has privately been poo pooing the idea. Wyden and Warren are still pushing for the tax though. Warren cornered Manchin in an elevator late this afternoon, and this was probably the subject of conversation.

Earlier today Democratic leaders appeared to believe Biden would stroll over to the House this evening or tomorrow morning, after a framework for the Build Back Better bill had been announced, and try to persuade the House progressives to go ahead and pass the infrastructure bill. I do think he'll go to the House tomorrow, but don't think there will be a deal in place before he goes to the Glasgow summit.

Anyway, I don't have much to add to your points. You've thought this through much better than I have, especially how this is likely to affect the propensity of entrepreneurs to raise money in the public markets. The one thing I might add is that, unfortunately for the up and coming multi-billionaire, equity values for many private companies are well established by equity rounds in their companies. Maybe this tax would encourage them to borrow more and raise less from venture capital or private equity.

Another thought, you mentioned you're going to have people who will have a net worth of, say, $900 million one year, then maybe $1.1 billion the next year, then perhaps it goes back down to $800 million in the third year. How are they going to handle that if the bulk of the taxpayer's assets are in private businesses or real estate? And also, a related point. Apparently the reason they're charging interest on the increase in the value of private assets (those that aren't publicly traded) is to dissuade the billionaires from privatizing their public companies. Anyway, what will the interest rate be? If they're actually going to knock out the motivation to privatize, they'll have to set the interest rate at a high level.

As you said, this is going to create lots and lots of work for tax lawyers and the like. I bet the way that they're putting this together on the fly, the lawyers and accountants are going to find lots of loopholes. The politicians and the bureaucrats don't have the brains and/or balls to prevent billionaires from sheltering the bulk of their fortunes from the estate tax, and I suspect the situation will be the same with this. That said, it will probably be hard for the billionaires to avoid the first hit, being the 23.8% tax on their unrealized capital gains as of 12/31/2021.

I kind of shot my wad on the subject yesterday btw. The first post is before I found out how they were going to treat assets other than publicly traded stock, and about the provision to allow the billionaires to pay the huge first year's tax liability over 5 years:

https://www.eccie.net/showpost.php?p...1&postcount=12

https://www.eccie.net/showpost.php?p...0&postcount=14

In addition to what you mentioned, paid parental leave is probably out of the bill.

[Tiny]

CM, From your link, I see,

"The interest rate used is the short-term federal rate plus one percentage point, and no interest accrues prior to the date of enactment of the proposal or the first tax year the individual is subject to the Billionaires Income Tax, whichever is later."

That's not going to dissuade people from privatizing public companies.

[Tiny]

Originally Posted by adav8s28

Senator Joe Manchin of W. Virginia has his own plan. Under his plan Billionaires will pay a 15% tax on income. According to Senator Manchin that won't hurt anyone.

I am sure Bezos, Gates, Larry Ellison and Zuckerberg will get to keep their primary and vacation homes and won't miss any meals.

https://www.yahoo.com/news/manchin-p...155700379.html

adav8s28, Manchin is in favor of a 15% minimum tax on corporations, which has a lot of traction. He's the only one talking about a separate idea, to impose a 15% minimum tax on higher income earners. I don't think that's going to raise much money, because almost every wealthy individual pays at a higher rate. The criticism from Democrats who favor the billionaire's tax is that unless you have a wealth tax (even though they're not calling this a wealth tax, because of constitutional concerns described by Captain Midnight), you're not going to raise much from the billionaires.

As to your comments about Bezos et al, please see my first link in reply to CM above.

[Strokey_McDingDong]

You can become a provider to help pay for it.

[The_Waco_Kid]

Originally Posted by adav8s28

If the democrats are to get a big infrastructure deal passed it will take all 50 of them (plus Kamala to break the tie). The one percent will probably have to pay a little more in taxes.

if you think only the one percent are going to pay for all this massive nonsense pork barrel spending you are so wrong.


you'll pay for it. i'll pay for it. the next 3 generations will pay for it.


get it now?

[Tiny]

Originally Posted by The_Waco_Kid

if you think only the one percent are going to pay for all this massive nonsense pork barrel spending you are so wrong

Yes that sounded a lot like a Democratic Party talking point. Kind of like “the $3.5 trillion reconciliation bill won’t cost anything.”

[The_Waco_Kid]

Originally Posted by Tiny

Yes that sounded a lot like a Democratic Party talking point. Kind of like “the $3.5 trillion reconciliation bill won’t cost anything.”

exactly. let's just print up more fiat moohla, let's forget what that will do to the dollar which you may need a wheelbarrow to buy a loaf of bread

or you can stand in your GOV line and get your loaf of bread, wedge of cheese, pound of baloney and scrap of meat.

yeah it's happened before. it will again. if stupid people have their way.

[adav8s28]

Originally Posted by Strokey_McDingDong

You can become a provider to help pay for it.

If all the clients are into self gratification like you are that won't work.

[adav8s28]

Originally Posted by Tiny

adav8s28, Manchin is in favor of a 15% minimum tax on corporations, which has a lot of traction. He's the only one talking about a separate idea, to impose a 15% minimum tax on higher income earners. I don't think that's going to raise much money, because almost every wealthy individual pays at a higher rate. The criticism from Democrats who favor the billionaire's tax is that unless you have a wealth tax (even though they're not calling this a wealth tax, because of constitutional concerns described by Captain Midnight), you're not going to raise much from the billionaires.

As to your comments about Bezos et al, please see my first link in reply to CM above.

It has been said that Amazon does not pay any taxes at all, sort of like our former president Trump. Yahoo sees Manchin's idea a little differently than you do.

Sen. Joe Manchin, a key centrist Democrat negotiating the party’s massive social welfare spending bill, criticized a new plan to tax billionaires but came up with his own formula.

Manchin, of West Virginia, pitched a “patriotic” 15% tax on the nation’s billionaires that would ensure they pay enough.

“That’s called a patriotic tax,” Manchin told reporters on Wednesday.

[lustylad]

Dim-retards should stop now... they are an embarrassment to every sane American!


Fly-by-Night Taxation

The Democratic tax show has become a tragi-comedy of errors.

By The Editorial Board
Oct. 27, 2021 6:44 pm ET


There’s never been anything like this, and we’ve been around a long time. Democrats are writing tax policy for a $22 trillion economy on the fly, floating new tax increases willy-nilly, with little thought to the consequences and no time for public debate.

One day it’s an increase in tax rates on corporations and the affluent. But wait, that doesn’t have the votes. How about a carbon tax? That won’t fly either. Hey, there goes Jeff Bezos. Let’s tax him and 699 other billionaires. It polls well. Everyone hates billionaires!

Oh, but that may be unconstitutional. We still need money, so let’s try a 15% corporate minimum tax—though be sure to exempt investments in green energy and other pet progressive ideas. So it will have to be a minimum tax on some companies but not others. Bring on the Gucci Gulch lobbyists, campaign checkbooks at the ready.

And don’t forget to cut taxes for some of the rich by restoring the state and local tax deduction, though only for two years. Need those New York and New Jersey House votes.

Then let’s rush to get all of this “framework” agreed to by Thursday so President Biden can have something to boast about at the global climate gabfest that will do nothing that matters about the climate.

What a spectacle. For a century Democrats have been the party of higher taxes, but at least they paid some attention to the policy merits. Tax writers Dan Rostenkowski and Lloyd Bentsen were serious people. This crowd has no clue what the consequences of their proposals will be, and they don’t much care.

This would all be low political comedy if Democrats weren’t treating the U.S. economy, the federal fisc, and millions of livelihoods like playthings. Tax policy should be about raising money to finance the government in the most efficient way possible while doing the least amount of economic harm. The Democrats’ main goal these days seems to be to do explicit economic harm for its own sake.

Take Senate Finance Chairman Ron Wyden’s proposal for a wealth tax on billionaires. He finally released the details late Tuesday, and they’re worse even than advertised.

Currently assets are taxed only when they are sold and capital gains are realized. Democrats want to tax the unrealized gains of billionaires with more than $1 billion in assets or $100 million in income for three consecutive years, which the U.S. has never done.

But he also wants to make this tax retroactive. Mr. Bezos, for example, would have to calculate his unrealized gains from the date of his initial investment to the present. He would then have five years to pay this initial wealth-tax bill, which in the Amazon founder’s case could run into the tens of billions of dollars.

This is after-the-fact wealth confiscation—merely because some politicians think Mr. Bezos has too much money. Yet Mr. Bezos made that money legally playing by the tax rules that politicians passed.

Many if not most billionaires hold most of their wealth in unrealized gains. Paying that retroactive bill could require that Mr. Bezos sell his Amazon shares in a way that could affect the company’s stock price. And that in turn would affect the 401(k) holdings of millions of Americans. So in the name of punishing billionaires, Mr. Wyden would hurt the retirement savings of millions of non-millionaires.

Faced with such a punitive tax, many billionaires might choose to move abroad and give up their citizenship. But Mr. Wyden also won’t let them go freely. Under current law, a U.S. citizen who renounces his citizenship is required to pay the unrealized gain on his property, as if it were sold on the date of renunciation. But payment of the tax can be deferred until the time the asset is sold, although interest on the taxes owed will accrue until the sale.

As we read Mr. Wyden’s proposal, he would end the deferral, so the former citizen would owe the tax immediately. This amounts to a forcible sale of assets so the government can confiscate a large part of it. It’s a way of making it so painful to leave the U.S. that billionaires will have to stay. The word for countries that do this sort of thing is authoritarian.

This is the rotten tax policy you get when a party is scrambling and desperate to pass legislation that is increasingly unpopular as more Americans discover what’s in it. The familiar tax increases that people understand are proving to be a hard sell. So Democrats are rummaging through the attic of bad socialist ideas to find some way to pretend they are paying for their multi-trillion-dollar spending blitz. The best result would be for the entire farce to collapse from its own dead weight.

https://www.wsj.com/articles/fly-by-...en-11635371820