Biden seeks $5 trillion tax hike. The one nobody is talking about.

Photo above - this home was (allegedly) built for $3,000 in 1913. Guess what it's listed for today?

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.

Back to the new White House tax plans. Like the 1913 income tax, it's going to start on "the rich". And people are going to chant – as they always do - “don't tax you, don't tax me . . . tax that other guy behind the tree”. (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' . . .

~Americans Overwhelmingly Reject Biden’s Plan To Tax Unsold Assets | Traders' Insight (ibkrcampus.com)~