Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • Dick Young’s Safe America
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Retirement Compounders®
  • Free Email Signup

You Got the Carrot, Here Comes the Tax Stick

March 26, 2021 By Jeremy Jones, CFA

By Pictrider @ Shutterstock.com

After doling out a few grand to Americans who mostly don’t need it, the Biden Administration and its left-wing allies in the Senate are prepping for tax increases to pay for an infrastructure program (read Green Energy Boondoggle). Biden wants to take back Trump’s corporate tax cuts, as well as hike rates on high-income earners (but dump the limit on state and local taxes that benefit high-income earners in blue states the most). And in a truly asinine move, he wants to hike the capital gains tax rate to the ordinary income tax rate for those making over $1,000,000. That’s an increase from 23.4% to 43% under his plan.

Somebody needs to point out to the tax-hiking crusaders in the administration and congress that the capital gains rate is the easiest tax rate to doge. Higher rates are unlikely to generate higher tax revenue, but they will definitely create perverse incentives and distort the allocation of capital that is vital to a thriving economy. The Republicans could guarantee a drop in revenue by promising to eliminate the capital gains rate as soon as they have the power to do so. Investors subject to such a confiscatory tax would likely hold onto their winners until the rate is eliminated.

A former wise president might have said, “These are loser moves!”

You can read more about the Senate’s tax-hiking scheme from here from Richard Rubin in The Wall Street Journal:

Democrats in Congress began building the policy case for sharp corporate-tax increases, arguing that Republicans went too far with their 2017 tax cuts.

Sen. Ron Wyden (D., Ore.), chairman of the Senate Finance Committee, said he and Sens. Sherrod Brown (D., Ohio) and Mark Warner (D., Va.) will soon release a more detailed framework for how multinational corporations should be taxed.

Sen. Bernie Sanders of Vermont, the Budget Committee chairman, released a plan Thursday that would raise $1 trillion over a decade. Sen. Elizabeth Warren (D., Mass.) said she is writing legislation to impose a minimum tax on profitable companies. Versions of some of those ideas are expected to appear in the tax-and-spending agenda that President Biden will unveil next week, and Congress is poised to act on them this year to help pay for infrastructure spending.

In all, Democrats are planning significant reversals of the 2017 tax law signed by then-President Donald Trump, though they aren’t calling for returning to the previous status quo. They are particularly eyeing features of the law that they say give companies incentives to move activity outside the U.S.

Read more here.

 

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • Liz Warren’s 158% Tax Rate
  • Happy Tax Freedom Day!
  • Why Bill Gates Wants to Raise Your Taxes
  • Author
  • Recent Posts
Jeremy Jones, CFA
Jeremy Jones, CFA, CFP® is the Director of Research at Young Research & Publishing Inc., and the Chief Investment Officer at Richard C. Young & Co., Ltd. CNBC has ranked Richard C. Young & Co., Ltd. as one of the Top 100 Financial Advisors in the nation (2019-2022) Disclosure. Jeremy is also a contributing editor of youngresearch.com.
Latest posts by Jeremy Jones, CFA (see all)
  • The Cloud Slowdown Is Hurting Amazon the Most - February 8, 2023
  • Real Estate “Power Buyers” Suffering Glut of Inventory - February 7, 2023
  • AI SEARCH WAR BEGINS: Google and Microsoft Join AI Battle - February 6, 2023

Search Young Research

Most Popular

  • You Aren't Getting These Yields from Your Bank Account
  • Tom Brady Retires, Again. Should You?
  • Suddenly, Holding Cash Looks Good Again to Many
  • What Your Survival Guy Invested in Today
  • Do You Trust This Rally?
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?
  • The Power of a Compound Interest Table
  • What Happens if the "Fed Put" Is Over for Good?
  • Warren Miller: If You Don’t Do It This Year, You’ll Be…
  • Early Advice from Her Dad on Tipping at Charlie Trotter’s

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Could this Be the Vanguard GNMA Winning Edge?

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

RSS The Latest at Richardcyoung.com

  • Big Hearted, Idealistic, Daring…
  • Yes, Your Children Are Listening to You
  • BEN CARSON: How Is Biden’s Speech Creating Unity?
  • Biden’s State of the Union Address Receives Rough Reception
  • Can a Capital Injection Save Bed Bath & Beyond?
  • You Aren’t Getting These Yields from Your Bank Account
  • Democrats’ Widening Schism
  • Jimmy Buffett Playing Key West
  • Whatever You Knew, Dave Hammer Knew More
  • Dragon Tours Open for Business

RSS The Latest at Yoursurvivalguy.com

  • Yes, Your Children Are Listening to You
  • You Aren’t Getting These Yields from Your Bank Account
  • Bidenflation Has Eaten Up Americans’ Pandemic Savings
  • Dragon Tours Open for Business
  • What Your Survival Guy Invested in Today
  • You Invest, They Win: FTX Edition
  • Your Retirement Life: Adventure Awaits
  • Zumwalt-Class Guided Missile Destroyers to Get Hypersonic Weapons
  • Early Advice from Her Dad on Tipping at Charlie Trotter’s
  • Treasury Bonds Ready to Rock and Roll

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2023 | Terms & Conditions

 

Loading Comments...
 

    loading Cancel
    Post was not sent - check your email addresses!
    Email check failed, please try again
    Sorry, your blog cannot share posts by email.