Biden seeks $5 trillion tax hike. The one nobody is talking about.
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[i][b]Photo above -[/b] this home was (allegedly) built for $3,000 in 1913. Guess what it's listed for today?[/i]
Stop reading now if you have zero assets. No home, no 401K, no farmland, no savings invested in the stock market. You have no worries. You already pay zero (or almost zero) taxes. The latest plan from the white house is to start taxing savings and other "unsold assets". But you probably don't have any. Some of us do. See the link below.
The president's proposal is to assess a new tax – up to 25% - on personal and business unsold assets. What's an unsold asset? Farmland. Shares of stock. An apartment building. Possibly a restaurant, depending on how ritzy it is. There are a bunch of different income and asset caps being floated while they monkey around with this. Trying to find the sweet spot where ordinary people will feel safe . . . convinced that it can't ever happen to them.
Let's take a look at the history of income taxes, though. In 1913, the income tax was invented. 1% tax on anything you earned above $3,000. Which sounds hilariously small, except $3,000 in 1913 is about $100,000 today, due to inflation. The actual tax rate someone at the level pays is more like 15 or 20% today. Depending on where that money comes from, and how artful your tax accountant is at ferreting through the 2,208 pages of tax code to shelter your dough. People with higher incomes have better tax accountants. Which is why Warren Buffet complains that he pays less taxes than his “secretary” (she earns $300,000 a year). Warren does NOT explain why he doesn't share his tax accountant with his secretary, however.
[b]Back to the new White House tax plans[/b]. Like the 1913 income tax, it's going to start on "the rich". And people are going to chant – as they always do - [i]“don't tax you, don't tax me . . . tax that other guy behind the tree”.[/i] (This quote is attributed to Democrat Senator Russell Long, 50 years ago. He was the son of notorious demagogue politician Huey “kingfish” Long, who was assassinated when he announced his candidacy against FDR for the 1936 presidential election.)
Should I feel worried about the new "rich guy" tax? Well, a 1913 dollar did inflate to $30 since that time. The more accurate way to think about it is that a 2024 dollar buys what 3 cents would have in 1913. A baby ruth bar?
If President Biden's plan - to take 25% of people's “unsold assets” and spend it on government stuff - is so great, he should campaign on the idea, and get our feedback. Not keep it a secret. We always seem to get hit with massive tax and spending increases nobody ever discussed, the minute the election is over.
I don't currently have millions in capital gains in my 401K. Nor is my ailing Mom's home worth that much. The home which my sister and/or I might one day inherit. But given the ridiculous history of US inflation, who knows where this will end? If $3,000 from 1913 becomes $100,000 today, that means that $300,000 today eventually becomes about $90 million, right? That's what a 3 bedroom house on a quarter acre will be worth eventually, given the trendline. We'll also probably have a $600 an hour minimum wage, if we use the same inflation rate. And people will point out – absolutely correctly, when that happens – that $600 an hour is not a living wage.
I'm just sayin' . . .
[u][b]~Americans Overwhelmingly Reject Biden’s Plan To Tax Unsold Assets | Traders' Insight (ibkrcampus.com)~[/b][/u]
We have an entire infrastructure that needs to be rebuilt. Roads, bridges, highways, water pipes, new lakes and reservoirs....capping wells that are spewing methane....etc.
It doesn't come cheap. Reagan cut the tax rates and the nation has never recovered from it.
@JSul3 nearly a trillion dollars was approved for "infrastructure spending" by the obama administration.
due to lax controls, the states mostly spent this money on higher salaries for government workers, and shoring up state employee pension funds that had been mismanaged.
@ElwoodBlues i included a link. which you clearly never read. please point out what parts of biden's plan are different from my link.
the point of the post - which clearly went over your head, is that over the years, politicians have steadily made the original 1913 income tax more oppressive. the actual rates today are:
10% on the first $16,500 (individual taxpayer) would have been zero in 1913
12% on earnings between 16,500 and 61,000 (would have been zero in 1913)
22% on earnings between 61,000 and 100,000 (would have been zero in 1913)
24% on earnings over 100,000 (would have been 1% in 1913)
There's a link to the 2024 tax brackets below, in case people aren't familiar with them
the point of the post is that if the 1913 tax bill could go up 2,400% on incomes over $100,000, and have new rates/brackets imposed on people earning middle or lower class incomes who were entirely untaxed at first, then what do you think will happen over time to the new tax Biden is preparing?. that it will never be increased, or applied to the rest of us?
2024 Tax Brackets and Federal Income Tax Rates | Tax Foundation
@SusanInFlorida (1) Links begin with 'https://' and you did NOT supply one. (2) I found your source, and it also asserts without support your claim about [quote]President Biden's plan - to take 25% of people's “unsold assets” and spend it on government stuff -[/quote]
They have no link to support it, and neither do you. Perhaps you, and they, have mistaken the following: [quote]Minimum income tax for wealthy taxpayers
Biden said in his SOTU address that imposing a 25% minimum tax on income for those with wealth of more than $100 million would generate $500 billion over 10 years to help fund benefits such as childcare and paid family leave. The 25% minimum tax on total income would be generally inclusive of capital gains.
Repeal deferral of gain from like-kind exchanges
A deferral of gain would be imposed up to an aggregate amount of $500,000 for each taxpayer, or $1 million for joint filers, per year for real property exchanges that are like kind. Gains from like-kind exchanges in excess of $500,000 for an individual or $1 million for joint filers would be recognized by the taxpayer in the year of transfer of the real property subject to the exchange.[/quote]
That removal of deferral of gains is very different from your claim. I'm just sayin...
People are going to be a lot more accepting of the governments plans to tax them more if they demonstrate that they will start spending those tax dollars more sensibly...😷
@SusanInFlorida [quote]fortunately, i don't have to solve the rest of the worlds economic problems. i feel overmatched against congress and the federal reserve already.[/quote]
Have you considered how you can easily solve your problem by simply moving to another country that doesn't have the problems that upset you so much in America? After all, it should be obvious, that as an individual, you simply don't have the power to make things better for yourself here.
Consider one of these ten countries = https://upstox.com/news/business-news/economy/top-10-countries-with-the-largest-budget-surplus/article-64947/
@Diotrephes Among that list of "outliers" is an interesting one. Norway. Which also shows up on the worlds happiest country list often. It also one of the more heavily taxed nations. In fact if an American moves there, they can go to Univestity and get a degree for free.. Of course, you have to learn to speak Norwegian..😷
@whowasthatmaskedman [quote]Among that list of "outliers" is an interesting one. Norway. Which also shows up on the worlds happiest country list often. It also one of the more heavily taxed nations. In fact if an American moves there, they can go to Univestity and get a degree for free.. Of course, you have to learn to speak Norwegian..😷[/quote]
It's taken me decades to learn how to speak American English. It would probably take me a thousand years to learn how to speak Norwegian.
@SusanInFlorida Since you mentioned that you might inherit your mother's house, I suggest you might want to familarize your family with the [b][i]Lady Bird Deeds[/i][/b] https://www.elderneedslaw.com/beneficiary-deed#:~:text=Yes.,death%20of%20the%20current%20owner.
@Diotrephes i don't play an attorney in my free time. and if i were to interject myself into my mom's estate planning, it would actually BE greedy, in addition to looking greedy, She has an attorney already. Let's pray the will was drafted competently and ethically.
inherit or not, my sister and i love mom. we expect that her end of life medical expenses may consume most of her estate before she passes, anyway.
@SusanInFlorida [quote]i don't play an attorney in my free time. and if i were to interject myself into my mom's estate planning, it would actually BE greedy, in addition to looking greedy, She has an attorney already. Let's pray the will was drafted competently and ethically.
inherit or not, my sister and i love mom. we expect that her end of life medical expenses may consume most of her estate before she passes, anyway.[/quote]
I fully understand your position.
The benefit of[b][i] Lady Bird Deeds[/i][/b] and [b][i]Transfer on Death Deeds[/i][/b] is that they allow the real estate property owner to transfer the property to the beneficiary without going through probate, which can be a lenghty and costly process. There is no need for a lawyer to be involved and when I did my Transfer on Death Deed it only took five minutes at the county real estate office and cost just $46.
You will need a will for all other assets unless you have joint bank accounts, in which case the money will go to the joint asset holder without any paperwork or taxes.
The thing about a person's assets is that another person may or may not want them. You may not want your mother's house but your sister might want it or vice versa. The other person may want to be bought out, which puts a strain on the other person.
Suppose the house is left to you and your sister in a will. How will you resolve the ownership? You will have to go through probate, get pissed at each other, spend a lot of time and money, and end up unhappy.
IMO, it is much better to have an open adult discussion and resolve the issues before they happen. Then discuss the issue with your mother and you both tell her how you would like it to be handled while she is still able. Otherwise, expect some conflict.
If your mother is lucky she will have a Medicare Advantage plan which will pay all of her medical expenses except for a few thousand, which is the max out-of-pocket amount each year.
BTW, be sure to get at least two dozen or more death certificates because you will need one for each account your mother has.
