biden pushing for new capital gains tax

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:He’s just considering proposing that for people making over a $1 million the capital gains tax rate is the same as a the ordinary income rate.

It’s a way to avoid all the ridiculous games like the carried interest loophole that lets hedge fund managers making $50 million pay tax at a lower rate than w-2 employees making $200k.

But it should be higher, make it 1.5 mil or 1.75. These low numbers hurt the average millionaire man the most. A property owner that has two or three rentals will get totally screwed. This really hits hard for families trying to build generational wealth.

FTFY

How utterly cruel, they want to hurt the average man with 3-4 properties earning over $1M/year! Poor guy, how are his great great great grandchildren going to survive?

No not per year, it’s likely just once, when they liquidated the asset. It’s not salary. So everything they worked for, and paid off is basically useless. If you have a mortgage that you’ve paid off then go to sell and pay almost 50% in tax then it doesn’t make sense numbers wise. The interest paid on the mortgage and the tax on gains plus the income from the rents make this a losing endeavor. Why not just pass a law saying CEO’s have to be compensated in salary and cash bonuses and limit the stock they can get? Why go for a cash grab disguised as sticking it to the man. Be smarter.

This is me. Bought a house in 04 for $575k which was an obscene amount of money to me. The house was in a bad area and was more than I felt comfortable paying but, I took a chance. Lived in the house for 7 years, during that time I got married so household income doubled and savings increased. In 2011 with two kids entering school needed a house in better school district. Mortgage rates were low so rolled outstanding balance into new mortgage and set up an LLC and rented the house out for a decent amount and hoped to hold it as our retirement investment (sell and use proceeds for retirement) Today, the house is worth just over 1 million dollars. While we are not poor we most certainly are not thought of as the target audience for this new tax. If we sell the house for $1 million then $440,000. We would walk away with $560,000, this is less than we bought the house for 20 years ago. This is complete craziness.

You would not be affected. Your capital gains on the house are not the $1M you are selling for. Your cost basis is $575K. Selling for $1M, your capitol gains are $425K. The proposed change in capitol gains will not affect you at all. You would be taxed at the same rate before and after the proposed change. The top bracket that is being affected current starts around $518K for single filers and around $582K for MFJ filers.

You would be taxed at 0% for the first $92K and then at 15% for the rest (essentially $50K). And as a rental, you can also deduct costs that you made the improve the property during the period that you rented as long as they were not cosmetic (e.g. paint and carpeting do not count). So, you will be clearing much more than you think.

The new proposal makes zero change to your situation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:He’s just considering proposing that for people making over a $1 million the capital gains tax rate is the same as a the ordinary income rate.

It’s a way to avoid all the ridiculous games like the carried interest loophole that lets hedge fund managers making $50 million pay tax at a lower rate than w-2 employees making $200k.

+4

I can’t get exercised and angry over this. These people do not pay their fair share and the party they seem to support keeps wanting to tax poor people more “so they have some skin in the game.” Poor people’s skin is the what the rope is made of while the wealthy get to float above it all like ghosts.

What is the fair share?

Obviously if you do not have the money, cannot pay the taxes. Or if you do not have investment/business you can not pay the taxes. By this definition, the rich person must be paying most of the income/investment tax.

Yup. Some really wealthy avoid taxes in legal ways. Most of us in the $10M+ NW simply just pay the taxes. Majority of income is W2, rest is interest and cap gains from investments. We pay close to 45% yearly when you include state taxes. So yeah, cry me a river that we don't pay enough---we are the ones actually paying massive taxes at a very high rate. Pay SS at a high rate, and likely won't see most of it (I'm guessing 50% at most)

lol if you truly made a little bit of money you would know SS is capped at $168k. Up to that point you paid 12.4%. Now if you make 10 million you r social security withholding are about 0.002%.

. That’s not entirely true. Many of these high earners are self employed and they still pay the employer side on the FICA taxes on their entire income. These law firm parters that I do taxes for (making $2-10M+) pay an effective tax rates in the 40-50% including Fed, state and FICA taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:He’s just considering proposing that for people making over a $1 million the capital gains tax rate is the same as a the ordinary income rate.

It’s a way to avoid all the ridiculous games like the carried interest loophole that lets hedge fund managers making $50 million pay tax at a lower rate than w-2 employees making $200k.

But it should be higher, make it 1.5 mil or 1.75. These low numbers hurt the average millionaire man the most. A property owner that has two or three rentals will get totally screwed. This really hits hard for families trying to build generational wealth.

FTFY

How utterly cruel, they want to hurt the average man with 3-4 properties earning over $1M/year! Poor guy, how are his great great great grandchildren going to survive?

No not per year, it’s likely just once, when they liquidated the asset. It’s not salary. So everything they worked for, and paid off is basically useless. If you have a mortgage that you’ve paid off then go to sell and pay almost 50% in tax then it doesn’t make sense numbers wise. The interest paid on the mortgage and the tax on gains plus the income from the rents make this a losing endeavor. Why not just pass a law saying CEO’s have to be compensated in salary and cash bonuses and limit the stock they can get? Why go for a cash grab disguised as sticking it to the man. Be smarter.

This is me. Bought a house in 04 for $575k which was an obscene amount of money to me. The house was in a bad area and was more than I felt comfortable paying but, I took a chance. Lived in the house for 7 years, during that time I got married so household income doubled and savings increased. In 2011 with two kids entering school needed a house in better school district. Mortgage rates were low so rolled outstanding balance into new mortgage and set up an LLC and rented the house out for a decent amount and hoped to hold it as our retirement investment (sell and use proceeds for retirement) Today, the house is worth just over 1 million dollars. While we are not poor we most certainly are not thought of as the target audience for this new tax. If we sell the house for $1 million then $440,000. We would walk away with $560,000, this is less than we bought the house for 20 years ago. This is complete craziness.

You would not be affected. Your capital gains on the house are not the $1M you are selling for. Your cost basis is $575K. Selling for $1M, your capitol gains are $425K. The proposed change in capitol gains will not affect you at all. You would be taxed at the same rate before and after the proposed change. The top bracket that is being affected current starts around $518K for single filers and around $582K for MFJ filers.

You would be taxed at 0% for the first $92K and then at 15% for the rest (essentially $50K). And as a rental, you can also deduct costs that you made the improve the property during the period that you rented as long as they were not cosmetic (e.g. paint and carpeting do not count). So, you will be clearing much more than you think.

The new proposal makes zero change to your situation.

Not necessarily true. You ignored recapture. The capital gains income is stacked on top of this so it can push it into a higher bracket. If this personal has even a 200k in wage income it can easily impact them.

[Anonymous]

Just a reminder that if your house is worth twice what you paid and put into it, the increased value is not something you did, but is largely due to government actions. People want to buy your house because there are great public schools, access to quality healthcare, wee-managed public infrastructure, transportation, public parks, zoning and environmental laws that keep out noisy, smelly, polluting, and hazardous industries, and so on.

[Anonymous]

Anonymous wrote:Democrats have never met a tax they didn't like.

Biden also wants to impose a 25% tax on wealthy individuals for UNREALIZED gains.

Yup. Exactly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:He’s just considering proposing that for people making over a $1 million the capital gains tax rate is the same as a the ordinary income rate.

It’s a way to avoid all the ridiculous games like the carried interest loophole that lets hedge fund managers making $50 million pay tax at a lower rate than w-2 employees making $200k.

But it should be higher, make it 1.5 mil or 1.75. These low numbers hurt the average millionaire man the most. A property owner that has two or three rentals will get totally screwed. This really hits hard for families trying to build generational wealth.

FTFY

How utterly cruel, they want to hurt the average man with 3-4 properties earning over $1M/year! Poor guy, how are his great great great grandchildren going to survive?

keep taxing the crap out of people and they will instead take their investments overseas and avoid paying taxes (legally) in the US. They will find ways to avoid these new taxes. And it will hurt the US the most.

The US taxes worldwide income regardless of residency so it’s not easy to avoid tax simply by moving “investments” overseas— and of course it’s completely unclear what that even means. Most companies are multinational already and most foreign banks and brokerages want nothing to do with US citizens.

Just give up citizenship. Lotta wealthy will do it and move to Switzerland or Singapore.

Not so easy to give up your US citizenship and attain new citizenship. Your example of Switzerland requires that you have resided in Switzerland for 10 years, 3 of which must be the most recent years before your application. Until that time, you have to continue to retain your US citizenship and will be required to file your US taxes. You'll be able to deduct any taxes that you pay to your country of residency, but you will still have to pay your US taxes.

In Singapore, it's a little easier. You have to work in Singapore at least 6 months to apply for and get an Employment pass. Note that if you work for a multinational company, the company has to file that your job is located in Singapore. So corporate execs and other wealthy people who do not work in an office in Singapore, do not qualify. Once you've had your employment pass and have worked for at least 6 months, you can apply for permanent residency which can take some months to process. After you have your permanent residency granted, then you have to live for 2 years in Singapore. You have to live in Singapore for 3 years, 2 of which must be the most recent 2 years. Then you can apply for citizenship. The entire process takes about 4-5 years depending on processing speed. Rich people can likely make the process go closer to 4 years than 5 years.

But during this time you need to continue to pay US taxes. So, the wealthy will have to play the long game and hold onto their capitol assets while they establish residency and citizenship in foreign countries if they want to do that. It may be worthwhile for the uber-wealthy (say the top 0.1%), but will not be reasonable for the affluent like the top .1%-1%.

[Anonymous]

Oh come on. Are people this naive.

This budget is a model budget the same way republicans out out a model budget that effectively eliminates all social service programs. No one, including the person who submits them thinks it has any chance at ever becoming law. It’s intentionally put out there as a talking point only.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:He’s just considering proposing that for people making over a $1 million the capital gains tax rate is the same as a the ordinary income rate.

It’s a way to avoid all the ridiculous games like the carried interest loophole that lets hedge fund managers making $50 million pay tax at a lower rate than w-2 employees making $200k.

But it should be higher, make it 1.5 mil or 1.75. These low numbers hurt the average millionaire man the most. A property owner that has two or three rentals will get totally screwed. This really hits hard for families trying to build generational wealth.

FTFY

How utterly cruel, they want to hurt the average man with 3-4 properties earning over $1M/year! Poor guy, how are his great great great grandchildren going to survive?

No not per year, it’s likely just once, when they liquidated the asset. It’s not salary. So everything they worked for, and paid off is basically useless. If you have a mortgage that you’ve paid off then go to sell and pay almost 50% in tax then it doesn’t make sense numbers wise. The interest paid on the mortgage and the tax on gains plus the income from the rents make this a losing endeavor. Why not just pass a law saying CEO’s have to be compensated in salary and cash bonuses and limit the stock they can get? Why go for a cash grab disguised as sticking it to the man. Be smarter.

This is me. Bought a house in 04 for $575k which was an obscene amount of money to me. The house was in a bad area and was more than I felt comfortable paying but, I took a chance. Lived in the house for 7 years, during that time I got married so household income doubled and savings increased. In 2011 with two kids entering school needed a house in better school district. Mortgage rates were low so rolled outstanding balance into new mortgage and set up an LLC and rented the house out for a decent amount and hoped to hold it as our retirement investment (sell and use proceeds for retirement) Today, the house is worth just over 1 million dollars. While we are not poor we most certainly are not thought of as the target audience for this new tax. If we sell the house for $1 million then $440,000. We would walk away with $560,000, this is less than we bought the house for 20 years ago. This is complete craziness.

You would not be affected. Your capital gains on the house are not the $1M you are selling for. Your cost basis is $575K. Selling for $1M, your capitol gains are $425K. The proposed change in capitol gains will not affect you at all. You would be taxed at the same rate before and after the proposed change. The top bracket that is being affected current starts around $518K for single filers and around $582K for MFJ filers.

You would be taxed at 0% for the first $92K and then at 15% for the rest (essentially $50K). And as a rental, you can also deduct costs that you made the improve the property during the period that you rented as long as they were not cosmetic (e.g. paint and carpeting do not count). So, you will be clearing much more than you think.

The new proposal makes zero change to your situation.

This is annoying to me because DH and I fall into the impacted MCJ category and we are W2 earners (with some investments), little kids, almost done paying off student loans for bschool, living in a very HCOL area so we can use those bschool degrees, and then SALT is repealed and now this. And we have friends who make $250K, live in $2.5M mortgage free homes from mom and dad, and use trust funds to pay for private school and nannies. I will absolutely vote Biden for prez because I care about democracy and the environment but I find this type of proposal frustrating. Making $600K or $700K is a lot but when you are paying off loans, paying for kids, living in a HCOL area because that is where you need to live to get jobs that allow you to make that money a proposal like this and the repeal of SALT just hit really hard. I wish there were more blue dog democrats.

[Anonymous]

Anonymous wrote:Oh come on. Are people this naive.

This budget is a model budget the same way republicans out out a model budget that effectively eliminates all social service programs. No one, including the person who submits them thinks it has any chance at ever becoming law. It’s intentionally put out there as a talking point only.

This makes me feel better. Every time I see a headline like “Bezos pays no income tax” it makes me frustrated. Can’t we take away the numerous tax loopholes that only very wealthy people know about and are able to use before we tax every couple making over $582K way more?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:He’s just considering proposing that for people making over a $1 million the capital gains tax rate is the same as a the ordinary income rate.

It’s a way to avoid all the ridiculous games like the carried interest loophole that lets hedge fund managers making $50 million pay tax at a lower rate than w-2 employees making $200k.

But it should be higher, make it 1.5 mil or 1.75. These low numbers hurt the average millionaire man the most. A property owner that has two or three rentals will get totally screwed. This really hits hard for families trying to build generational wealth.

FTFY

How utterly cruel, they want to hurt the average man with 3-4 properties earning over $1M/year! Poor guy, how are his great great great grandchildren going to survive?

No not per year, it’s likely just once, when they liquidated the asset. It’s not salary. So everything they worked for, and paid off is basically useless. If you have a mortgage that you’ve paid off then go to sell and pay almost 50% in tax then it doesn’t make sense numbers wise. The interest paid on the mortgage and the tax on gains plus the income from the rents make this a losing endeavor. Why not just pass a law saying CEO’s have to be compensated in salary and cash bonuses and limit the stock they can get? Why go for a cash grab disguised as sticking it to the man. Be smarter.

This is me. Bought a house in 04 for $575k which was an obscene amount of money to me. The house was in a bad area and was more than I felt comfortable paying but, I took a chance. Lived in the house for 7 years, during that time I got married so household income doubled and savings increased. In 2011 with two kids entering school needed a house in better school district. Mortgage rates were low so rolled outstanding balance into new mortgage and set up an LLC and rented the house out for a decent amount and hoped to hold it as our retirement investment (sell and use proceeds for retirement) Today, the house is worth just over 1 million dollars. While we are not poor we most certainly are not thought of as the target audience for this new tax. If we sell the house for $1 million then $440,000. We would walk away with $560,000, this is less than we bought the house for 20 years ago. This is complete craziness.

You would not be affected. Your capital gains on the house are not the $1M you are selling for. Your cost basis is $575K. Selling for $1M, your capitol gains are $425K. The proposed change in capitol gains will not affect you at all. You would be taxed at the same rate before and after the proposed change. The top bracket that is being affected current starts around $518K for single filers and around $582K for MFJ filers.

You would be taxed at 0% for the first $92K and then at 15% for the rest (essentially $50K). And as a rental, you can also deduct costs that you made the improve the property during the period that you rented as long as they were not cosmetic (e.g. paint and carpeting do not count). So, you will be clearing much more than you think.

The new proposal makes zero change to your situation.

This is annoying to me because DH and I fall into the impacted MCJ category and we are W2 earners (with some investments), little kids, almost done paying off student loans for bschool, living in a very HCOL area so we can use those bschool degrees, and then SALT is repealed and now this. And we have friends who make $250K, live in $2.5M mortgage free homes from mom and dad, and use trust funds to pay for private school and nannies. I will absolutely vote Biden for prez because I care about democracy and the environment but I find this type of proposal frustrating. Making $600K or $700K is a lot but when you are paying off loans, paying for kids, living in a HCOL area because that is where you need to live to get jobs that allow you to make that money a proposal like this and the repeal of SALT just hit really hard. I wish there were more blue dog democrats.

Just FWIW, it was Republicans, not Democrats, who capped (not repealed) the SALT deduction, as a way to cut the overall cost of the 2017 Trump tax cuts.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Specific to home ownership, capital gains tax rate needs to take into account length of time home was owned in some way. Elderly can't downsize in retirement because the gains tax plus cost of selling is too prohibitive. People sitting in large homes they don't need and can't take care of because we make it too difficult for senior citizens to sell property.

Elderly couples have $500,000 of profit tax free. That’s plenty to pay the “cost of selling.”

Yeah, GMAFB. Anyone who makes enough on the sale of a home to pay capital gains tax can afford to downsize.

You sound like Dr. Evil when he asks for a $1M ransom to save earth. It’s not a lot of money anymore, especially when the cost of nursing homes can easily hit $70-90k for full time care. Basically, $1M is about five years of living for two people moving because of age limitations. And that’s before tax.

Not exactly a great way to reward people for staying off the government’s teat. It puts them in line for future assistance. Then again, maybe that’s what Biden wants.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I make close to 400k and can barely afford to buy a single family house. Biden can suck my D

400k/yr was rich like 20 years ago

I'm sorry, but that's ridiculous. You are either trying to buy a $1.5 mil house, or you are spending money like crazy.

A recent article showed how it’s so expensive to live in DC Metro that $100k goes as far as $50k. Pair that with student loans and the chaotic public’s schools that require parents to lean on private if they can and…voila. $400k gets you a coke and a hot dog at Nats stadium. NOT a SFH.

[Anonymous]

It’s a wealth tax. We need it. Not only to fund the government, but to address the social ills of too much wealth inequality. And, don’t start with “I worked hard for my money. You’re going to kill initiative in this country.” The people who will be impacted by this are not working hard, period. And those who have initiative will work hard despite this tax. Taxes have been much higher in the past, and the world didn’t stop.

[Anonymous]

Bad policy created by Washington DC is what is creating social ills in the first place.

[Anonymous]

Wish this would apply only to non-primary residences. What we really need is to control is Air BnBs and corporate investing in residential homes.