Biden Eyes Your Wallet
A former Biden aide says Democrats Seek $1 Trillion in New Taxes.
The White House will propose $1 trillion worth of new taxes, according to Sarah Bianchi, head of U.S. public policy and political strategy at Evercore ISI and the former director of economic and domestic policy for then Vice President Joe Biden.
Officials including Treasury Secretary Janet Yellen have started suggesting what will be in the White House plan. Bianchi says hiking the corporate tax rate to 28% from 21%, establishing a global minimum tax and raising what’s called the global intangible low-taxed income rate to 21% will be in his plan. The plan will probably include nearly doubling capital-gains taxes on those with income over $1 million, and likely will include taxing unrealized gains at death, ending carried interest and raising the top individual income-tax rate.
Other possibilities include restoring the 2009 estate tax policies, limiting individual deductions, phasing out some business income deductions and establishing a financial transactions tax.
Tax Stew Synopsis
- Hike the corporate tax rate to 28% from 21%
- A global minimum tax on corporations in foreign tax havens
- Double the capital gains tax on wealthy citizens
- Hike death taxes
- Tax unrealized stock gains at death
- Hike the to income tax rate
- Restore 2009 estate tax policies
- New financial transaction tax
Icing on the Tax Cake
That’s not all. The icing on the tax cake is wealth tax sought by Elizabeth Warren, Bernie Sanders and the Progressives in detail.
For discussion, please see Democrats Ponder a Wealth Tax to Pay for Free Money Handouts.
Biden never proposed a wealth tax but Secretary of State Janet Yellen said “the administration is undecided”. So, consider it on the table.
Everything is on the tax table, except of course spending cuts.
Mish
We may be paying as much income and sales taxes as the Canadians soon. And local governments in many places are pondering record setting real estate tax rate hikes. But it all worth it for not having the Republicans in control.
The 1031 Exchange provision has been in place since 1921. I’ll take my chances on that one riding out the storm one more time. That’s my best tax break, ever.
Everyone realizes that corporations never pay any tax regardless of whether they avoid taxes or charge their customers to pay the taxes.
I’m all in favor of eliminating taxes on corporations so long as we also strip them of their fraudulently acquired “personhood” and all the rights and privileges thereof.
Makes sense to me.
I would start taxing the inheritances of widows (and less frequently, widowers) when their spouses die. Did Steve Jobs’ widow really need a full exemption from inheritance taxes to maintain her lifestyle of the rich and famous? Steve was not known for making significant donations to charitable organizations.
The tax man is less of a problem then Putin infiltratrating the Republicans on the Senate intelligence committee:
Your favorite media will continue to push this narrative (to deflect attention from China) until it is too late to stop the inevitable war. This story is a nothing burger, which you would understand if you had an open mind.
The same people complaining about the debt should be taxed.
Certainly it is reasonable that those wanting to see new spending programs should pay more taxes to pay for them.
No it’s not reasonable. The tax cut was not paid for and the money should be recouped from those that got it.
That is very different than your first statement. So, now we have three options from this thread, and one from another thread:
Of these, 3 is OK, 4 is good, I strongly favor 2, and 1 is ridiculous. For me, I think the debt should be reduced. I have no problem with paying a bit more taxes, but only if spending is also reduced. Expecting people who want to see the debt reduced to gladly pay more taxes even as spending is increased is going to lead to anger.
Let’s say your manager gives you a $1 per hour raise and on your next check it shows up but,you are taxed on that increased right away and your $1 per hour increase actually is more like 70 to 75 cents increase after taxes.
Now let’s says Gates,Bezos, or Musk has a week where their stock holdings increase by $2 billion and none of them sell any stock during that time then they don’t have to pay any taxes on the increased stock value.
Sorry to say but, this tax system is set up to favor the very wealthy.
By the same token, then, I’m sure you would agree that if you own a house, and it goes up in value, you should have to sell it, or at least, take out a new loan against it so that you can give a portion of the increase in value to the government?
What happens is that earned income – wages- also known as working for a living has the very highest tax rates, so it makes it difficult for the workers to save. But for those with inherited capital it means it is generally never taxed again because of the step up in basis and the $11.7 million per parent exclusion from estate taxes $23.4 of wealth passing to the children and a step up in basis on all of it so no capital gain taxes on that wealth so if they are smart the trust funders pay little or no taxes again relative to their wealth and so they get richer and richer. So the tax on tax is a big propaganda lie. Its a huge scam on the 90% of Americans that actually work for a living and are getting squeezed due to the huge federal debt that the rich are skating from and not paying a fair share relative to their wealth and income.
The top 1 percent paid a greater share of individual income taxes (38.5 percent) than the bottom 90 percent combined (29.9 percent). The top 1 percent of taxpayers paid a 26.8 percent average individual income tax rate, which is more than six times higher than taxpayers in the bottom 50 percent (4.0 percent).
Finally, I meet somebody who understands the difference between high income and wealth.
The media constantly conflates high earned income with wealth, and almost nobody gets the difference. Thanks for this excellent example. If my book on investing ever gets written, this concept is going to be an entire chapter, because it’s so important and so universally misunderstood.
The step up in basis is the biggest tax giveaway to the rich. What it means is that there is no tax on a tax – it means there is no death tax on the first $23.4 million for the children of a married and no capital gains tax on the gain on that $23.4 million so the cries about a death tax are a huge propaganda farce. It means the rich never pay taxes on most of their assets, not estate taxes and not capital gain taxes – and capital gains are earned almost entirely by the rich. It is wholesale fleecing of the 90% of the US population and sold to us by the 10% paying lobbyists and think tanks to lie about it.
One thing that will be interesting, with all these increases, is what the Federal revenue ends up being as a percentage of GDP. Over the last 50 years there have been countless different tax codes, and countless different maximum rates, yet the Federal receipts as a percentage of GDP have been amazingly constant at about 16-17.5%. There have been times where it dipped a bit lower than that, such as 2003-4 and 2009-12, and times where it was bit higher, such as 1996-2001 and 1980-82. What we have not seen, however, is cases where increases brought in notably more revenue. Will this time be different?
Closing large corporate loopholes would help. There is no way a company like Amazon should be paying single digits in federal corporate taxes.
I have no problem with that. Do keep in mind, though, that corporations are fictitious entities, and can’t really “pay” taxes, since they aren’t consumers. What they can do, however, is act as tax collectors, and pass taxes along to consumers in ways that are invisible to consumers, so they don’t realize they are paying taxes. Any time you buy a good or service, some portion of the price reflects the tax that the corporations involved paid, not only the corporation that made it, the one that shipped it, the one that sold it, the utilities that supplied the energy along the way, and so on. Since you are the end of the line, the ultimate consumer, you are the one who does “pay” the tax. If no taxes were collected along the way, and the good was half the price, you could buy twice as many goods.
In my opinion, corporate taxes are one of many statutes that we enact that increase the power of major corporations at the expense of small business. Why? If taxes were applied equally, all companies would pay the same tax, and all would collect the same tax from their customers, and it would be unbiased. However, the tax code is complex, and filled with loopholes, as you mention. The result is that big corporations, like Amazon, have an army of accountants and tax lawyers to minimize taxes, and as a result, pay a lower portion of taxes than a small business.
I have no opposition to using corporations as tax collectors. I definitely support closing loopholes, and putting smaller businesses on an equal footing with big ones, but, considering that the big ones not only have armies of accountants and tax lawyers, they also have armies of lobbyists, I don’t see that happening.
Hey Mish, quit whining. You helped this crazed far left take over the country. Suck it up and bend over.
None of those touch anybody here. Why do you want to carry the load for rich people?
Well, it is obvious. People in the money management business would favor people with money because that is how they get paid.
Good Party time for the top 01% is over. the US had higher econ growth when taxes were…higher; 1960’s expansion was longer than the 1980’s expansion. the 1990’s expansion was longer than the 2000’s expansion. then then Trump tax cuts failed to lift growth, productivity and wages. in fact the economy shrank 2.50% in 2020; and the Trump maladministration ended a net 2.50 million fewer jobs than when he started. The moral of the story higher taxes do not correlate with negative growth.
The 50s60s 70 s were growth because needs (cars houses fridge etc). Now we are a mature economy everyone pretty much has what they need. Unless say your fridge breaks you dont really need a new one. Combine that with the no recession mentality creating destruction to rebuild from and you get low growth.
Good luck getting a new fridge, the demand is grossly outstripping the supply. The same with new cars, building materials, furniture, etc. I ordered appliances for my new house in July with earliest delivery of November, finally got them in February. I think it’s worse now.
OH, right, the economy grew in the 1960s and shrank in 2020. Let’s ignore the WWII destruction of Europe’s industrial base and Covid.
Europe was booming too . Well , the tax cuts did not cure Covid. the Rethugs answer for everthing is tax cuts and defund EPA , the IRS and other govt watch dogs.
what is your excuse for the boom in the 1990’s that outstripped the growth in the 1980’s. That expansion only lasted 7 years. the 1990’s expansion lasted 10 years. The BHO expansion was longer the 72 month Bush 43 expansion.
therefore, higher taxes help…the economy.
Re: the ESTATE tax – “A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural.”
Disagree with it? Take it up with Adam Smith, the father of laissez faire! 🙂
I’m not wealthy and we don’t make over 400k per year. Where’s my new tax? Oh yeah, there isn’t any.
I will inherit some money from family eventually, but not millions. So not likely to get hit by a big estate tax either. I’m no doubt in the majority on that front.
Even if I had to get taxed some more on that, it’s justified. I’m a boomer. The wealthy and those who were lucky enough to come along before educational and housing costs hit the roof, like me, have an obligation to lend a hand to the generations after that, who got the shorter end of the stick. We weren’t brilliant or any harder working, just lucky by our timing of birth.
This country has gone off the deep end under trumplings with gangster capitalism, laissez-faire attitudes, white nationalism, and greed and selfishness. It’s time to bring a bit of realism and fairness back. For all of us. The 40 year cycle that started under Reagan is turning. The wealthy and corporations need to pay more, they’ve reaped the whirlwind of the past 40 years and stacking the government.
Beef up and renew the infrastructure. Address climate change. Tackle the white grievance justice system. Make education more affordable – even if it means subsidizing higher quality 2 year junior colleges as feeder systems to get people through 4 years more affordably. Improve the chances for the younger generations to get a leg up. Bring back fair voting rights for all. Thanks Joe, you da man to bring it.
The wealthy pay the highest share of total tax revenue, ever, I believe.
Nothing is stopping you from writing a bigger check to the U.S. Treasury if you wish to do so.
Is that a picture of twins? The average age in that picture is ? 76.5…. and you all voted for this….lol I love it. We all know politicians are most productive past the age of 75….
“Everything is on the tax table, except of course spending cuts.”
Politically, you can’t cut taxes without raising spending and you can’t cut spending without raising taxes. So I bet the republicans get some spending cuts in exchange for the tax increases.
Biden’s covid relief bill was a bigger tax cut than Trumps. Included: $1,400 in tax credits per person. Up to $1,600 in extra tax credits per child. $10,400 in tax free unemployment benefits. Tax free loan forgiveness. Add it all up and the average person will see a $3,100 tax break this year. A lot more than Trumps.
Thank you!
Biggest difference – the republican tax cut helped the wealthy and connected. Biden’s plan is aimed at helping the average person and the poor.
I like the child tax credit, but — to be honest — I would have preferred that spendthrift states like Illinois hadn’t received billions in “aid” as part of the package.
I like the child tax credit portion of the bill and think it makes a lot of sense, but — in truth — the “aid” to spendthrift states (cough…Illinois….cough) I could’ve done without.
If you’re going to count the $1,400 stimulus payments and $10,400 of unemployment benefits as “tax cuts”, then you have to count them as “tax increases” once they expire or when people go back to work – i.e. the most regressive “tax increase” in history. Also, if you’re going to count this government spending as a “tax cut”, then what government spending is not a tax cut?
Teddy Roosevelt proposed the estate tax. He didn’t want Americans to be like Europeans. Every generation should earn their way.
A fine justification to take wealth from citizens to give it to a clearly more deserving group of lawmakers with which to buy votes.
Pipe dreams, will never pass the Senate. I lived in the old days before Reagan when income tax was up tp 90%. No one ever paid it . There were enough loopholes to drive a truck thru.
The wealth tax will never pass the senate (as well as the minimum tax on book earnings pushed by Warren). The other items probably will, they are looking for a lot of pay fors for their infrastructure and recovery bills, but the lobbyists will certainly water them down. The GILTI changes especially will be quite massive if passed similar to the rumors (21% rate on foreign “deferred” earnings determined on a country by country basis).
Reagan had corporate rates at 35% and we managed, 28% doesn’t bother me. Isn’t it just undoing Trump’s previous cut anyways?
Most of the points on that list don’t bother me but I’ve always found an estate tax to be more than a little disturbing. The government shouldn’t have so many monetary incentives for its citizens’ deaths. Like someone else mentioned, it’s also a tax on a tax since presumably tax was paid on income used to buy things that constitute an estate.
The game is rigged in such a way that poor people stay poor, along with their descendants and that’s not ok. If all we can come up with to fix it is tax schemes and redistribution of wealth then we’re not trying hard enough.
When the corporate rate was 35% in US what was the tax rate in rest of the world. Now compare the 28% with rest of the world.
The step up in basis is the biggest tax giveaway to the rich. What it means is that there is no tax on a tax – it means there is no death tax on the first $23.4 million for the children of a married and no capital gains tax on the gain on that $23.4 million so the cries about a death tax are a huge propaganda farce. It means the rich never pay taxes on most of their assets, not estate taxes and not capital gain taxes – and capital gains are earned almost entirely by the rich. It is wholesale fleecing of the 90% of the US population and sold to us by the 10% paying lobbyists and think tanks to lie about it.
I know that sounds good, to say that people who are poor will always be poor, and that people who are rich will always be rich. While it sounds good, it isn’t true. The US Government did a study of income mobility in the ten years between 1996 and 2005. What did they find?
There are other findings as well. In today’s world, where it’s a given that people blend facts and opinion, it’s a given that making up facts is ok, because they are no different than opinions. Instead, lets try a different approach. Let’s start with facts, and then then, from there, reach conclusions.
On the other hand, only 64% of people now believe that they can do better than their parents, the lowest percentage in decades, so not all is well. Interestingly, taken together, there IS income mobility, but there also is a large portion of the people who don’t think there is. That is a bad thing because those beliefs could become a reality. So, on the one hand, the US has more income mobility than the vast majority of countries of the world, yet there is a lack of faith in it?
Yes, we should strive to increase income mobility, but, we also, it would seem, need to bolster people’s opinion that they can succeed. We definitely don’t want people to have a self-fulfilling prophecy that they can’t succeed, so there is no reason to try.
Income Mobility is not the same as Socioeconomic Mobility. The study says between 45-58% of those making less than around 15k made more than 19k by 2005. I’m not sure I’m willing to celebrate that.
The study also ends before the Great Recession where apart from all the obvious things we know about, lending standards were made stricter. Most of the lower two quintiles have not been allowed to buy a home since 2009. Rents have increased while wages have stagnated since the previous recession. The last 20 years tell a very different story than those 10. The drop in rich folks income? Dotcom bust.
I appreciate the want for facts and data but I’ve read yours and I’m not convinced. That was a different era even though it’s not that long ago. The Feds been meddling too much since then to pretend it isn’t.
I support estate tax as a great way to break the disenfranchizing feedback inheritance creates. As long as trusts remain, there will be a loophole to pass along wealth to heirs. Biden needs to cut Hunter out of the will and earn his own way in life to show how sincere and fair the estate tax will be.
You guys have a short memory. Trumps 4 yrs pushed the debt up from 19.9 to 27 trillion with republican control of the the senate for half the time. Oh yeah with a tax break that benefited the wealthy.
In my opinion
Everyone bags on the dems for raising taxes when republican tax cuts add to the national debt just as fast.
Seems on the political front republicans cut taxes enrich the rich/ look good to their voters and look better when the dems raise taxes.
Wish someone smart would figure where we would stand today if we used the tax code from say 1975. Wonder if we would be in such a debt hole.
Look at a chart of Federal Tax receipts as a percentage of GDP. It has remained abou 17% from the 1950s to the present, with a few minor changes. None of the changes in the tax code have never changed that significantly for very long.
“Everything is on the tax table, except of course spending cuts.”
It is spending that keeps politicians in office. It is a huge political campaign fund, paid for by the tax payers.
In Illinois, the campaign funds are taxing people out of their homes. Yet they keep supporting more campaign funds.
What was the corporate tax rate before Trump? If I recall you opined the cut was misguided. As far as taxing the rich more what’s the cutoff? Biden coming for ne and you? Hardly!
The corporate tax rate in the US was the highest among the OECD – even Obama knew it had to be cut. What, $4 trillion/year isn’t enough for you??
But few paid anywhere near that top rate due to all the juicy deductions that our tax law allows corporations. As I recall, the average company that actually paid taxes, as opposed to companies like Amazon , Google, FB, etc, paid about 21%.
I think it was more like 12%. We need an AMT of 15 or 20% so loopholes are closed. It should be a 3 tier system that favors small businesses that are private
Tax deductions are available in those other countries too. US corporations had the highest statutory and effective tax rates in the OECD. My point stands.
What corporation paid 28% only ones with really bad accountant’s. You’re ignoring deductions and credits
The revenues from corporate tax have never even reached 400 billion – EVER. What $4T are you talking about????
I wasn’t referring to corporate taxes producing that much. That’s all federal revenues from all sources.
OK, if the total is an issue, then let’s cut the people’s tax rates and raise the corporate tax rates. There was a time when corporations were paying 40% of the total taxes. Now, it is more like 8 or 9 percent.
You can only squeeze so much blood from the middle class turnip. Who should pay more taxes. Maybe the people who have benefited the most over the last 30 years.
What in the proposal targets the middle class?
As much as Biden holds press conferences, expect even less.
Hasn’t he surpassed Fuckwad’s 4-year total already?
And just the beginning! Does not even cover half of their 2 trln give aways thus far
I’m not sure how you compare the two. The 2 trillion spending was a one-time spending bill. The proposed taxes would increase tax revenue every year.
And does not even begin to address their geopolitical policies alienating key close allies from Australia thru Japan and Sth Korea to Taiwan the UK and Israel
Add in ALL their geo-political policies which are isolating best allies from the UK through Australia to Japan and SthKorea, while going soft on China and refusing to maintain the red lines in the sand or demand investigation and accountability on the virus
Really “death taxes”? The estate tax has been part of the code for eternity. There is an exclusion of over 10 million on paying it. Don’t wait for me to have my heart bleed for those who get taxed. Capital gains should be taxed at the same rate as income per R. Reagan.
So yeah, not that worried about .14% of the population https://www.cbpp.org/sites/default/files/archive/estatetaxmyths.pdf
I think it’s fair to index capital gains to inflation. You shouldn’t have to pay on phantom gain that is really just inflation. You should get your money back in “real dollars.”
Well I think my paycheck should be indexed to inflation. To give those of wealth a break vs those that actually do work for a living is wrong.
An estate is taxed at death, after taxes have been paid on all income that created the estate in the first place. You may think citizens are here to work for the government, but that’s as far from the central principle of American governance as you can get.
Should your house be indexed to inflation?
Yeah back in 1797 they had no idea on what governance was.
“According to the IRS, a temporary stamp tax in 1797 applied a tax of varying size depending on the size of the bequest, ranging from 25 cents for a bequest between $50 and $100, to 1 dollar for each $500. “
This is just a small part of the price of a stolen election. Thanks GOP leadership for cowering in your caves.
Here’s hoping this is enough to start the second Civil War, and this one will make the first go-round look pretty civil.
The election was not stolen. Blame Trump and a second time for the Senate losses in Georgia.
Exactly. There is no way a President should not be re-elected during a crisis, unless he handles it really, really badly. Trump had not one, but two, and handled both Covid and Floyd badly. The result was that he was so broadly despised that he inspired a massive turnout to vote against him. The new voters didn’t care about other races, so down-ticket Republicans fared reasonably well.
Then, as you accurately point out, Trump also sabotaged the Republican Senatorial Candidates in Georgia by demanding an extra $1400, when it was Republicans who worked hard to limit the checks to $600. Obviously, anyone who wanted another $1400 should vote for the Democrats, and they did. Trump also worked to divide the Republicans in Georgia, another way of sabotaging the candidates. Thanks to Trump, the Democrats got the sweep, and took control of the Senate.
If you don’t like these change, blame Trump. He took office with a majority, and divided and divided the Republican Party until they lost both houses. So long as he remains the voice of the Republican Party, I can’t see them returning to power. He seems determined to stay active in the party, so get used to these kinds of changes.
I like the part where you pray for a Second Civil War. That’s not demented or evil or un-American at all! Makes it super-easy to dismiss anything you say, thanks.
Having served 10 years in both the USMC and the US Army in what certainly could be termed as foreign civil wars, I would say that any wish for a civil war is a fools wish indeed. We could surely be better served by our politicians, but civil war is no answer. Also, Mish is quite correct- Trump unseated himself far better than any adversary that one might name.
The this election wasnt stolen. Prior elections were stolen via the whole voter supression rackett.
We should try and focus on the core problem, way to many undereducated under employed, under productive people in the USA.
If we educate our people, and stop importing everything from cheaper offshore manufacturers most of the big social issues will solve themselves.
Keep going down the road we are and it will get very ugly indeed.