Is Joe Biden's tax plan malarkey?

Is Joe Biden's tax plan malarkey?

Is Joe Biden'''s tax plan malarkey? [Video]

If you don't know what Joe Biden's tax plan looks like, this video interview does a good job.

Exquisitor said:

Is Joe Biden's tax plan malarkey?

Is Joe Biden'''s tax plan malarkey? [Video]

If you don't know what Joe Biden's tax plan looks like, this video interview does a good job.

Click to expand...

The video claims that Biden want to raise the capital gains tax to 43%. Back in the 1980's the cap gains rate was 60% for short term (less than one year) and 40% for long-term, and we had plenty of investment. The commentator's assertion that it will hurt investment is baseless. As Warren Buffett famously stated, "Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends. I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation."

Estates should also be taxed -- and have been historically taxed, with no negative economic consequences. The current rates are merely a boon to children who haven't done anything to earn their inheritance besides winning the sperm lottery.

Apart from a good job, the commentators are merely regurgitating long-held conservative -- pro-wealthy viewpoints on taxation, that have little bases in reality.

The rest of the video is about spending, not taxation.

If one wants to learn about Biden's tax plan without investing half an hour watching a biased video, I recommend this: Joe Biden’s tax plan, explained - Vox
Summary:
Biden also wants to raise the corporate income tax rate from its current 21 percent to 28 percent — still lower than the 35 percent rate that existed pre-Trump.

MTAtech said:

The video claims that Biden want to raise the capital gains tax to 43%. Back in the 1980's the cap gains rate was 60% for short term (less than one year) and 40% for long-term, and we had plenty of investment. The commentator's assertion that it will hurt investment is baseless. As Warren Buffett famously stated, "Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends. I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation."

Estates should also be taxed -- and have been historically taxed, with no negative economic consequences. The current rates are merely a boon to children who haven't done anything to earn their inheritance besides winning the sperm lottery.

Apart from a good job, the commentators are merely regurgitating long-held conservative -- pro-wealthy viewpoints on taxation, that have little bases in reality.

The rest of the video is about spending, not taxation.

If one wants to learn about Biden's tax plan without investing half an hour watching a biased video, I recommend this: Joe Biden’s tax plan, explained - Vox
Summary:
Biden also wants to raise the corporate income tax rate from its current 21 percent to 28 percent — still lower than the 35 percent rate that existed pre-Trump.

Click to expand...

I would be for it if all that revenue would be used to pay down the debt, but instead it would be used to create more free stuff programs.

bradt99 said:

I would be for it if all that revenue would be used to pay down the debt, but instead it would be used to create more free stuff programs.

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There is no reason to pay down the debt. Just keep deficits below economic growth and the debt becomes more irrelevant over time.

But this thread is about taxation.

MTAtech said:

There is no reason to pay down the debt. Just keep deficits below economic growth and the debt becomes more irrelevant over time.

But this thread is about taxation.

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IF Trump is reelected which I think he will be, I hope he works on reducing the budget deficit in his second term since the economy is doing good.

bradt99 said:

IF Trump is reelected which I think he will be, I hope he works on reducing the budget deficit in his second term since the economy is doing good.

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The economy has been doing well for 8 years. I think that's a pipe dream to think Trump has any real interest in reducing deficits. He said in 2016 he would pay off the debt. Instead, his policies went the other way with deficits increasing.

As I said above, during the campaign he was critical of deficits and debt but then went on to increase both. He said that he would make health care better, cheaper, cover more people, etc., and then had a plan that was more expensive, covered fewer people and worse in every respect. Now he's in court trying to get Obamacare declared unconstitutional, which would throw tens of millions off insurance. He said he'd protect Medicaid and now he's cutting it.

Blind faith may have a place in religion but not in a politician who shows no devotion to his promises.

bradt99 said:

I would be for it if all that revenue would be used to pay down the debt, but instead it would be used to create more free stuff programs.

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You're kidding me.

Do we need more free stuff programs?

How much does this raise?

MTAtech said:

The economy has been doing well for 8 years. I think that's a pipe dream to think Trump has any real interest in reducing deficits. He said in 2016 he would pay off the debt. Instead, his policies went the other way with deficits increasing.

As I said above, during the campaign he was critical of deficits and debt but then went on to increase both. He said that he would make health care better, cheaper, cover more people, etc., and then had a plan that was more expensive, covered fewer people and worse in every respect. Now he's in court trying to get Obamacare declared unconstitutional, which would throw tens of millions off insurance. He said he'd protect Medicaid and now he's cutting it.

Blind faith may have a place in religion but not in a politician who shows no devotion to his promises.

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Time to start taxing them.

MTAtech said:

The video claims that Biden want to raise the capital gains tax to 43%. Back in the 1980's the cap gains rate was 60% for short term (less than one year) and 40% for long-term, and we had plenty of investment. The commentator's assertion that it will hurt investment is baseless. As Warren Buffett famously stated, "Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends. I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation."

Click to expand...

Let me start by saying Buffet is the furthest thing from an authority on taxation there is. This is a man who built his entire career around tax avoidance. Consider something for a moment.

He has built a conglomerate around established industries, with huge positive cash flow, and a capitalization of around a half a trillion dollars and change. Yet, despite the size and income generating capacity of the business he has never paid himself anything regarded as a meaningful salary. He instead keeps the cash in the business, since he owns a huge chunk of the business it is essentially just him deferring gains. I have no problem with this, until it turns into him talking about tax rates. He always talks about his secretary paying more in taxes than he does. Well, that is because she makes more money than he does. Warren pays himself ~150k a year salary, has no dividends, and his corporation pays for all his travel and other expenses. So he has a taxable income of ~150k. His assistant makes more than twice that, no **** she pays more in taxes. How did this happen? Oh, it's because Warren *refuses* to pay out a dividend because he doesn't want to pay taxes, despite the fact he is currently sitting on north of $100B in cash in BRK.

To the policy point, he is forgetting something as well. Throughout modern history we have generally had higher nominal income and capital gains rates, however that's an irrelevant metric. The relevant metrics is effective rates, what people actually paid. So while statutory rates were higher, effective rates were largely the same because of more loopholes and breaks. Secondary to this point capital and corporate gains are less a choice of domestic policy and more often relative to international competitive peers.

MTAtech said:

Estates should also be taxed -- and have been historically taxed, with no negative economic consequences. The current rates are merely a boon to children who haven't done anything to earn their inheritance besides winning the sperm lottery.

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No negative economic consequences? Substantiate that. I have a lot of experience that would show the opposite. Best case, family farms and businesses. What if your family has a 10,000 acre farm in Iowa and the owner dies, who is going to pay the multi-million dollars in taxes? Or a family owned business worth $100MM? How do you pay the taxes without selling the farm or the business? You can't. That's why you get a monstrous trust system. Avoiding estate taxes is incredibly easy and is often referred to as a "stupidity tax". Moreover, push that issue and people simply turn in their passports in their old age to save their families from the tax.

Nothing like citing a Vox article when it comes to economic seriousness.

bave said:

Let me start by saying Buffet is the furthest thing from an authority on taxation there is. This is a man who built his entire career around tax avoidance. Consider something for a moment.

He has built a conglomerate around established industries, with huge positive cash flow, and a capitalization of around a half a trillion dollars and change. Yet, despite the size and income generating capacity of the business he has never paid himself anything regarded as a meaningful salary. He instead keeps the cash in the business, since he owns a huge chunk of the business it is essentially just him deferring gains. I have no problem with this, until it turns into him talking about tax rates. He always talks about his secretary paying more in taxes than he does. Well, that is because she makes more money than he does. Warren pays himself ~150k a year salary, has no dividends, and his corporation pays for all his travel and other expenses. So he has a taxable income of ~150k. His assistant makes more than twice that, no **** she pays more in taxes. How did this happen? Oh, it's because Warren *refuses* to pay out a dividend because he doesn't want to pay taxes, despite the fact he is currently sitting on north of $100B in cash in BRK.

To the policy point, he is forgetting something as well. Throughout modern history we have generally had higher nominal income and capital gains rates, however that's an irrelevant metric. The relevant metrics is effective rates, what people actually paid. So while statutory rates were higher, effective rates were largely the same because of more loopholes and breaks. Secondary to this point capital and corporate gains are less a choice of domestic policy and more often relative to international competitive peers.

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Buffett makes million a year in capital gains and pays the capital gains tax, which is lower than ordinary income rates. His $150,000 a year salary is irrelevant to the taxes that he pays.

bave said:

No negative economic consequences? Substantiate that. I have a lot of experience that would show the opposite. Best case, family farms and businesses. What if your family has a 10,000 acre farm in Iowa and the owner dies, who is going to pay the multi-million dollars in taxes? Or a family owned business worth $100MM? How do you pay the taxes without selling the farm or the business? You can't. That's why you get a monstrous trust system. Avoiding estate taxes is incredibly easy and is often referred to as a "stupidity tax". Moreover, push that issue and people simply turn in their passports in their old age to save their families from the tax.

Nothing like citing a Vox article when it comes to economic seriousness.

Click to expand...

The "family farm" example is always the one used by those who want to undercut the estate tax. Except, that according to the IRS, almost no working farmers pay an estate tax. Neil Harl, an Iowa State University economist whose tax advice has made him a household name among Midwest farmers, said he had searched far and wide but had never found a case in which a farm was lost because of estate taxes. ''It's a myth,'' Mr. Harl said.

And yes, there is no linkage between tax rates and economic performance. As you can see from the below graph, there is no correlation between low top tax rates and high GDP growth. We see that in periods that the tax-rates were high, we had high GDP growth and in periods of low taxes, we had low growth. There is no correlation.

MTAtech said:

Buffett makes million a year in capital gains and pays the capital gains tax, which is lower than ordinary income rates. His $150,000 a year salary is irrelevant to the taxes that he pays.

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Citation.

According to Buffett himself 99.9% of his net worth is in Berkshire Hathaway, a stock which pays no dividends and distributes no capital gains. As such, Warren pays no taxes on his unrealized profits and gains from activity from within BRK. Unless you have a copy of his tax return, then there is nothing to substantiate your statement.

His $150,000 salary is relevant to the taxes he pays, because that is the only line item on his tax return very likely most years (until he recently started trust gifting). Warren, despite a ~$100B net worth, could do his taxes in 10 minutes with TurboTax.

MTAtech said:

The "family farm" example is always the one used by those who want to undercut the estate tax. Except, that according to the IRS, almost no working farmers pay an estate tax.

Click to expand...

That is largely, as I said before, because the estate tax is the "stupid tax". It is incredibly easy to avoid with some rather basic planning. Which is why almost nobody actually paid the estate tax even before the TJCA changes. You really have to be either incredibly stupid, lazy, or die suddenly. The first two rarely go well with extremely rich.

MTAtech said:

And yes, there is no linkage between tax rates and economic performance. As you can see from the below graph, there is no correlation between low top tax rates and high GDP growth. We see that in periods that the tax-rates were high, we had high GDP growth and in periods of low taxes, we had low growth. There is no correlation.

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This is an intellectually lazy data point. You are failing to discriminate between statutory and effective rates, either because you don't want to see the truth or you are ignorant to topic. Again, I will reference EU nations. Look at their GDP data for the past 70 years. They have consistently underperformed the US in GDP growth rates by ~.4%/yr on average. Doesn't sound like much until it compounds into ~30%, which also eviscerates job growth, wage growth, discretionary spending growth and.... revenue growth.

This is precisely why even the most leftist euro-trash nation abandoned high capital gains rates, high taxes on the wealthy, and especially high corporate taxes and wealth taxes.

Next?

Democrats violate the rules of Economics 101. Macro and Micro Economics were two of my favorite classes in college and one thing I learned was raising taxes really has very harmful unintended consequences. When you raise taxes you kill jobs and you end up hurting those who you are trying to help, the poor and lower class. Although people think they are punishing the rich, they really are punishing the poor. Everything trickles down in an economy. The rich stay rich, since taxes go up they spend less and hire less help which trickles down to less jobs and less consumers of the products made.

Trump and the Republicans have it right, lower taxes and you improve prosperity for everyone. The rich, the middle class, the poor all benefit from lower taxes.

Mortician said:

Democrats violate the rules of Economics 101. Macro and Micro Economics were two of my favorite classes in college and one thing I learned was raising taxes really has very harmful unintended consequences. When you raise taxes you kill jobs and you end up hurting those who you are trying to help, the poor and lower class. Although people think they are punishing the rich, they really are punishing the poor. Everything trickles down in an economy. The rich stay rich, since taxes go up they spend less and hire less help which trickles down to less jobs and less consumers of the products made.

Trump and the Republicans have it right, lower taxes and you improve prosperity for everyone. The rich, the middle class, the poor all benefit from lower taxes.

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So you learned Trickle-down economics in college? Where did you go, Trump University?

bave said:

Citation.

According to Buffett himself 99.9% of his net worth is in Berkshire Hathaway, a stock which pays no dividends and distributes no capital gains. As such, Warren pays no taxes on his unrealized profits and gains from activity from within BRK. Unless you have a copy of his tax return, then there is nothing to substantiate your statement.

His $150,000 salary is relevant to the taxes he pays, because that is the only line item on his tax return very likely most years (until he recently started trust gifting). Warren, despite a ~$100B net worth, could do his taxes in 10 minutes with TurboTax.

Click to expand...

Unless you have a copy of his tax return, then there is nothing to substantiate your statement.

Mortician said:

Democrats violate the rules of Economics 101. Macro and Micro Economics were two of my favorite classes in college and one thing I learned was raising taxes really has very harmful unintended consequences. When you raise taxes you kill jobs and you end up hurting those who you are trying to help, the poor and lower class. Although people think they are punishing the rich, they really are punishing the poor. Everything trickles down in an economy. The rich stay rich, since taxes go up they spend less and hire less help which trickles down to less jobs and less consumers of the products made.

Trump and the Republicans have it right, lower taxes and you improve prosperity for everyone. The rich, the middle class, the poor all benefit from lower taxes.

Click to expand...

There is absolutely no empirical evidence that raising taxes to rates below what economists call the highest optimal rate (70%-80% top rates) has any negative economic impact. If you disagree, please cite a time when taxes were raised and the economy causally declined. Instead, history is full of long stretches of time when top rates were 70-90% and the economy boomed.

bave said:

According to Buffett himself 99.9% of his net worth is in Berkshire Hathaway, a stock which pays no dividends and distributes no capital gains. As such, Warren pays no taxes on his unrealized profits and gains from activity from within BRK. Unless you have a copy of his tax return, then there is nothing to substantiate your statement.

His $150,000 salary is relevant to the taxes he pays, because that is the only line item on his tax return very likely most years (until he recently started trust gifting). Warren, despite a ~$100B net worth, could do his taxes in 10 minutes with TurboTax.



That is largely, as I said before, because the estate tax is the "stupid tax". It is incredibly easy to avoid with some rather basic planning. Which is why almost nobody actually paid the estate tax even before the TJCA changes. You really have to be either incredibly stupid, lazy, or die suddenly. The first two rarely go well with extremely rich.

Click to expand...

Nobody pays taxes on UNREALIZED capital gains. That’s why an inheritance tax is necessary — to capture unrealized gains from wealthy estates.

Buffett buys and sells stocks frequently and pays his legally required taxes on the gains he made. He has no duty to pay more than is required. If you don’t like the law, change it.

The overall point is that taxes on the wealthy are going in the wrong direction—down, when they should be going up.

Moreover, the second post in this thread undercuts everything the thread said about Biden’s tax plan.

JohnfrmClevelan said:

Unless you have a copy of his tax return, then there is nothing to substantiate your statement.

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Actually, Buffett has made it very clear that his entire net worth is in BRK stock, with the exception of a very basic home. His salary and compensation from BRK are public record. He has said he doesn't itemize his taxes. There is no indication he is any secondary sources of income (speaking fees, director fees etc).

Given the above, it is pretty easy to calculate his taxes. Can you even admit that the guy has orchestrated his entire company to make sure he pays as little in taxes as possible?

MTAtech said:

Nobody pays taxes on UNREALIZED capital gains. That’s why an inheritance tax is necessary — to capture unrealized gains from wealthy estates.

Buffett buys and sells stocks frequently and pays his legally required taxes on the gains he made. He has no duty to pay more than is required. If you don’t like the law, change it.

The overall point is that taxes on the wealthy are going in the wrong direction—down, when they should be going up.

Moreover, the second post in this thread undercuts everything the thread said about Biden’s tax plan.

Click to expand...

Again, intellectually lazy.

Look at the number of estates that paid federal estate taxes, it is almost zero. It is generally called the "stupid person tax" because with proper planning it is nearly entirely avoidable and always has been.

Buffett does not buy and sell stocks frequently. From all of the statements he has made he actually only owns one equity position.

Why is it terrible when taxes on the wealthy in the US are 3-4% below the EU average, but the lower/middle class taxes are ~20% below their EU comparative?