It’s The Taxes, Stupid

“It’s way past time we put an end to the era of shareholder capitalism.” — President Joe Biden, July 9, 2020

Does $9 million Joe Biden invest in even one share of any publicly traded company?

If not, how can he understand markets let alone their importance to the dreams of more than 180 million Americans?

Did Joe Biden just declare a $6 trillion war on the 55 percent of Americans, who invest in shares and/or stock-based mutual funds?

Considering that more than one-half of all Americans of all income and wealth levels invest in their futures by means of buying shares or stock-based mutual funds, shouldn’t we be concerned when the leader of the free world wants to end shareholder capitalism?

Sounds like the punitive redistribution playbook devised by Bernie Sanders, Elizabeth Warren and Kamala Harris. And Biden is a moderate? Right CNN?

Biden The Moderate wants to hike of the corporate tax from 21-28 percent and has proposed the near doubling of the federal capital gains taxes from 23 percent to 44 percent. Oh, the latter only applies to those making more than $1 million. What will be the cumulative impact of these two initial punitive redistributive tax increases on every investor large or small? FUD.

That is Fear, Uncertainty and Doubt. Wall Street investors detest and loathe FUD.

Surely these increased revenues will be used to pay down the nation’s record $28.23 trillion cumulative debt or $84,785 per every American woman, man and child? This staggering amount is an unprecedented 127.7 percent of the nation’s world-leading $22.10 trillion Gross Domestic Product (GDP). It’s the country’s fourth largest expenditure at $398 billion.

The answer is not a penny.

What does the Bidenesque end of shareholder capitalism mean for public employees and state teachers and their pension funds? How about seniors nursing their nest IRA eggs? What about parents investing in their 401k’s for their children’s education? What about Millennials becoming retail investors for the first time via Robinhood and other trading platforms?

Ever hear of Charles Schwab, Joe? Tax him too.

Keep in mind $1 million is a lot of money, but note what it was five years ago, 10 years ago, 20 years ago before inflation.

Under the Biden plan a seven-figure California-based overachiever would be confronted with a 39.6 percent federal capital gains tax, a 13.3 percent state capital gains tax, and a 3.8 percent Obamacare investment income tax or a cumulative 56.7 percent levy on any gain coming from the investing of discretionary funds.

Ready to invest even more, when governments take nearly 60 percent? A Californian could reduce this amount by 13.3 percent by moving to Texas, Washington or Nevada. Oh — they are already doing that.

What about the impact on investors and the economy of the 28 percent corporate tax?

Will companies once again ex-patriate their overseas gains? Yes as they have before.

Treasury Secretary Janet Yellen is asking her foreign colleagues to pass a corporate minimum tax. Reminds Almost DailyBrett of a doctor prescribing a second pill to counteract the side effects of the first pill.

The Joys Of Other People’s Money

“Tax the rich, tax the rich, tax the rich. We did that. God forbid the rich leave.” — New York Governor Andrew Cuomo

“The problem with socialism is that you eventually run out of other people’s money.” — Former UK Prime Minister Margaret Thatcher

The National Association of Manufacturers (NAM) projected 1 million job losses based on the Biden Tax Plan.

And what about the impact of rising taxes and escalating federal spending? Will a return of 18 percent Jimmy Carteresque inflation be in the offing?

And don’t you know that soaking the rich ends up with a corresponding dynamic response? Cuomo lamented about New Yorkers moving to zero state income tax Florida. Heck, even the Rolling Stones left the 98 percent effective tax rate Britain — not a typo — for France in the early 1970s.

Should we be concerned about raising taxes and exploding spending? It just seems so easy because it is. As Almost DailyBrett has concluded before, it takes zero brains to raise a tax.

And don’t we all know, it will never be enough. The government will have reach down lower into income levels to find even more money it wants to spend.

As Winston said: “It is, perhaps, the end of the beginning.”

https://www.economist.com/leaders/2021/04/29/how-to-tax-capital-without-hurting-investment

https://www.nam.org/tax-increases-would-cost-a-million-jobs-13370/

https://www.businessinsider.com/joe-biden-net-worth-lifestyle-real-estate-family-wealth-assets-2020-1

https://www.usdebtclock.org/

https://www.realized1031.com/capital-gains-tax-rate

It Takes Zero Brains To Raise A Tax

It’s The Vaccine Stupid

Taxing the Fab Four; Exiling the Stones

Taxing the Unpopular

How much intellectual heavy lifting does it take to raise a tax?

Prioritizing and carefully reducing expenditures requires mental gymnastics, but one doesn’t need an Ivy League degree to increase taxes…even though most of these collegiate thoroughbreds advocate doing just that.

Once you have decided to hike taxes to fund even bigger government, more spending (and borrowing), the obvious question is whom should you tax? The answer is oh-so-easy, those who have the worst public relations.

Let’s put on our social justice hats and indulge in a little Schadenfreude and/or sadism.

Who do we most want to suffer? Here are some predictable candidates and potential targets…all in desperate need of better brand management.

Tax the Rich: This is obviously not a new subject (e.g., class warfare) or a new target for increased taxation. Congress recently passed and the president signed the latest tax increase on the rich. Last November, Californians approved Proposition 30 with its “temporary” tax increases on the wealthy, prompting the second best golfer on the planet, Phil Mickelson, to complain (and later to apologize for daring to question taxation in the Land of the Free).

Maybe we should be apologizing to him for imposing a 39.6 percent federal rate, a 13.3 percent (California) state rate; 1 percent state mental health surcharge; 3.8 percent state Medicare surcharge; San Diego County property taxes on his $15 million home; 8 percent sales tax and 20 percent on any capital gains. Essentially, Phil works from January 1 to at least August 31 to pay all of the governments with their hands out.

In the 1970s, the Rolling Stones fled England to escape its punitive 98 percent tax rate (e.g., working from January 1 until December 15 every year to pay the government). Should Mickelson at least move out of California to no-income tax Texas or Florida to reduce his personal tax bite by at least a third? Sounds like a good idea.

Some mocked Phil for complaining about his taxes, insinuating that he had not achieved or earned his income. Let’s see: he won four of the PGA’s grand slam events and 40 tournaments. That fits my definition of achievement. Let’s celebrate it…Oh…Sorry I didn’t mean to hurt anyone’s feelings…

Tax the Endomorphs: Isn’t it fun to snicker at those who can’t push themselves away from the dinner table? “Do I look fat in my outfit?” “Do you have to ask?” “Why do you live to eat as opposed to eating to live?”

There is no doubt that obesity is a major societal problem, so do we “solve” it by making the government obese? Some have suggested a “fat tax.” My first question is what constitutes “fat?” Is this restricted to people who are overweight or obese according to the Body Mass Index (BMI)? That would be one fat tax.

Denmark recently rescinded its fat tax because the heavy dynamic types were going across the border to Sweden and Germany to satisfy their caloric fix. The tiny Scandinavian country was also inadvertently punishing its fine cheese and meat industries, making them uncompetitive in the face of foreign competition.

Tax the Smokers: This dwindling group (for more reasons than one) is probably the most unsympathetic in the eyes of the general public. For example, they are permanently illiterate when it comes to the warnings on the side of each pack.

There is little public relations can do to save them from themselves and/or the nicotine. How much further can the government extract from these addicted people? It seems the government is just as hooked on nicotine-stimulated revenues even in the face of more smokers biting the dust.

Just four years ago, Congress passed and the president signed the sweet sounding, “The Children’s Health Insurance Program Reauthorization Act of 2009.” The key was a tax increase on smoking, increasing the federal tax on a pack of smokes from $0.39 to $1.01. This tax is levied on top of the myriad of state taxes on cigarettes, such as $0.87 per pack in California; $1.18 in Oregon; $3.02 in Washington and a whopping $4.35 in New York.

Tax the Lawyers: What do you call 500 lawyers at the bottom of the ocean? A good start.

Whenever a group has earned being the butt of bad jokes with impunity, you know they need help from a public relations standpoint. But do they really need help? Those most inclined to raise taxes on them are the ones that are the political allies of the powerful trial lawyers. Don’t plan on reading about a lawyer’s tax anytime soon, particularly when Democrats control at least one house of Congress and the White House as well.

Tax the Pale Males: There are no greater symbols of white privilege than the pale male (e.g., 43 of America’s 44 presidents). Can you imagine being a rich pale smoking male endomorph attorney?

How many times can you tax this bastard? Ah heck, let’s just confiscate all of his income in the name of “the public good.”

http://ballotpedia.org/wiki/index.php/California_Proposition_30,_Sales_and_Income_Tax_Increase_%282012%29

http://www.cnn.com/2013/01/28/opinion/navarrette-mickelson-freedom/

http://www.forbes.com/sites/matthewcampione/2013/01/25/phil-mickelson-is-moving-from-california-a-mistake-actually-he-should-have-moved-sooner/

http://en.wikipedia.org/wiki/Phil_Mickelson

http://economist.com/news/europe/21566664-danish-government-rescinds-its-unwieldy-fat-tax-fat-chance

http://en.wikipedia.org/wiki/Cigarette_taxes_in_the_United_States

http://en.wikipedia.org/wiki/Tobacco_Master_Settlement_Agreement

https://almostdailybrett.wordpress.com/2011/10/04/taxing-the-fab-four-exiling-the-stones/