Here’s a short list of the ways President Joe Biden (D) and his Progressive-Democrat syndicate in Congress intend to take your money away from you.
- Raise the top individual income tax rate to 39.6%
This applicable to the group of Americans at the top of our economic ladder: single individuals with taxable income of more than $452,700 and married couples with joint taxable income of $509,300. Never mind that these folks, far from just sitting on their money, (re)invest it, which facilitates innovation and job support and creation. Notice, too, that this tax restores the marriage penalty to our tax code.
- the top capital gains tax would climb to 39.6% from 20% for Americans earning more than $1 million
This applies—Biden and his Progressive-Democrats claim—only to the very top. But it spills over. Preferential treatment of capital gains, which in the main are price increases that occur between when an asset is acquired and when it is sold, has under our non-flat tax code facilitated investing. That investing includes acquiring physical property and developing it for more valuable use for more people (housing development comes to mind), acquiring partial ownership of existing companies (which purchase money increases the value of those companies, which in turn increases those companies’ ability to raise money—for innovation and job support and creation), funding startup companies (which supports their innovation and job creation).
Capping interest in such investing limits all of those follow-ons.
- Increase levies on inherited assets
Increase the death tax, they mean. They want to do this in two ways. One is to lower the death tax exemption threshold to $1 million from the current $11.7 million. Think about how many small businesses and farms will be destroyed by this lowered threshold.
The other way is to eliminate altogether the step up in basis of inherited assets. The basis step up means that, whatever the value of the asset was at the time it was acquired, its basic value is reset to its market value at the time of the owner’s death. Without the step up, whether those assets are stock share or the physical property of those small businesses and farms, this move, apart from the lowered exemption threshold, will force the (taxable!) sale of the assets just so the cash necessary to pay the tax vig can be raised. And that ignores the costs and litigations that will occur as heirs are forced to reach years, decades, often generations into the past to locate that original acquisition cost.
It’s almost like Progressive-Democrats don’t want us to pass anything on to our heirs.
- End the private-equity tax break
This is the carried interest income that gets so much bad press. Carried interest is paid to partners beyond the value of their initial investment and is a payment for their efforts in increasing the value of the partnership (and in the value of each partner’s investment). While it’s accrued as an additional “fee” in real time, carried interest is retained by the partnership to support further investment and partnership growth and is paid out only when a concrete event occurs—an oil well comes home and is sold, or a hedge fund partnership is dissolved on reaching a preset milestone.
As such, carried interest is closely akin to capital gains, and the destruction of this has the same negative outcome for future investment as does damage to capital gains.
- Hike taxes on corporations
Biden his syndicate want to raise the corporate tax to 28% from the current 21% level. This will reduce American business’ competitiveness and encourage them to resume their move to lower, foreign, tax rate jurisdictions—at the expense of American innovation and jobs. It’s also part of the syndicate’s effort to get a minimum corporate tax level set globally by an international consortium, which itself is designed to reduce national sovereignty over fiscal matters.
It’s all because Progressive-Democrats insist they Know Better how, and on what items, to spend your money than you do.
