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President Biden proposing a large Capital Gains Tax hike on the Wealthy

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4 hours ago, Akkula said:

Janet Yellin and is talking to global leaders about a global minimum tax for corporations.  What we have now is a "race to the bottom" where there is an incentive to try to jurisdiction shop for the lowest tax rate.  If that wasn't the case, you would locate your business for business reasons and not for tax reasons.  

What we have now is a system for corporations just like we have for labor and environmental laws.  They are incentivized to go to the lowest of the low and then re-import everything with "no strings attached" importing. 

It is kind of like what Texas tries to do to California to lure corporations there with shitty labor and environmental laws and no taxes.  Ultimately that system is not good for either state but it sure as hell is good for mega corporations....until Mexico does the same thing to Texas, and Vietnam does the same thing to Mexico.

That is the idea behind a global minimum tax....but for me...I just think they should completely eliminate the corporate taxes and make them pass through profits every years.  That would solve the problem and you could just recoup the revenue at the individual level. 

Bingo.  Tax cash flow leaving country at a reasonable rate.  If you set a minimum tax you can be sure some country will cheat.   It’s another dumb tax law from the Dems they can’t enforce.    

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8 hours ago, Joe from WY said:

All the people who are like "oh but the poor rich people will have to pay more in taxes! OMG!!!" should realize most of them will borrow against their assets and avoid the taxes entirely as they do already anyway.

So how does that work? 

they borrow against assets but to be considered a loan they must make some payments back.....   I’m trying to map out the flows but clearly I’m missing a key part of the strategy.  
 

+++++.  Do I have to pay you a retainer to get an answer?  :-(.  Lol

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46 minutes ago, sactowndog said:

@bornontheblue you do know that Joe is a tax Lawyer that gets paid for creating these loop holes.   

People like Joe are why the Capital gains rate should be equal to the income tax rate.  Besides it being incredibly inefficient given today’s global markets, I’m not going to bet against Joe’s ability to leverage any delta in rates whether it is deserved or not.   

I get he Is a tax attorney. I’m a practicing Certified Public Accountant and make a living doing this. @Joe from WY and I have discussed taxes in prior conversations. @Joe from WY from my observation it appears  you are knowledgeable in corporate taxation ? I do some very small C-Corps, but I mostly work with partnerships, S-Corps, Trusts, and high wealth 1040. I do some pro Bono work for a few people I know with simpler 1040s 

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1 minute ago, bornontheblue said:

I get he Is a tax attorney. I’m a practicing Certified Public Accountant and make a living doing this. @Joe from WY and I have discussed taxes in prior conversations. 

True and I am not questioning your expertise.  In fact, I have asked you questions directly. 
 

But I am guessing your are operating with a very different clientele.  Most people in your domain are more than likely wealthy small/medium business owners.  But I would guess his clientele are Silicon Valley Uber elite and Fortune 500 CEO’s.   I suspect your reality and perspective is quite a bit different than his.   

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22 minutes ago, bornontheblue said:

I get he Is a tax attorney. I’m a practicing Certified Public Accountant and make a living doing this. @Joe from WY and I have discussed taxes in prior conversations. @Joe from WY from my observation it appears  you are knowledgeable in corporate taxation ? I do some very small C-Corps, but I mostly work with partnerships, S-Corps, Trusts, and high wealth 1040. I do some pro Bono work for a few people I know with simpler 1040s 

 

yeah my thought on Joe also 

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I mean anyone who is paying attention on this board could do quite well for themselves.  For some reason, a lot of very smart people post here.  
 
For example, @BSUTOP25 posted about some of his automation work and I thought how correct he was and in the downturn moved a good portion of my stock portfolio to downturned automation stocks which have done well.

@East Coast Aztec talked about oil and gas and investing right at the bottom which has also gone up.    

It’s a broad range of people with broad diversification and straight up smart.  

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11 hours ago, bornontheblue said:

If they eliminate the capital gains tax you will see a massive selloff and drop in the stock market. People will sell now to lock in their low tax rates while they can. 

Okay, so what

What are they going to do with the $$$?

No matter what they do, it will be a boom to some sectors. :shrug:

 

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12 minutes ago, renoskier said:

Okay, so what

What are they going to do with the $$$?

No matter what they do, it will be a boom to some sectors. :shrug:

 

I was just stating what will happen. Not trying to argue a point. Calm your tits. 

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2 hours ago, sactowndog said:

Bingo.  Tax cash flow leaving country at a reasonable rate.  If you set a minimum tax you can be sure some country will cheat.   It’s another dumb tax law from the Dems they can’t enforce.    

I disagree with capital controls.   That is what Argentina always tries and nobody wants to invest there.   Plus what if every country did that?  It would freeze international trading and investment.   It reminds me of the old mercantilist system. 

The only option here is for countries to work cooperatively.   It is like game theory.... if you compete once, the other country will retaliate.  Cooperation is in the mutual interest. 

If the USA did a global minimum tax,  they could enforce it and other countries want it too.  If they made a global labor and environmental standard they could also enforce it. Just look at FATCA....we unilaterally made almost every country, including Switzerland disclose tax cheaters secret bank accounts. 

The only reason we have a haven't done these things yet is because we have a conjob trickle down system.  Clinton allowed corporate written NAFTA to pass without tax, labor,  and environmental enforcement.   Just fix those problems and actually think of other stakeholders than just letting the trickle down folks write the thing.   We have proven giving all the benefits of trade to the wealthy doesn't work. 

 

 

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5 hours ago, soupslam1 said:

What percentages of the above incomes do YOU think the federal tax should be? 

Lots of people say the rich should pay more but they never seem to want to commit to what they think is fair. What say you for annual incomes of $1M, $10M, and $100M. I say 25%, 40%, and 50%. 

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7 hours ago, Akkula said:

I disagree with capital controls.   That is what Argentina always tries and nobody wants to invest there.   Plus what if every country did that?  It would freeze international trading and investment.   It reminds me of the old mercantilist system. 

The only option here is for countries to work cooperatively.   It is like game theory.... if you compete once, the other country will retaliate.  Cooperation is in the mutual interest. 

If the USA did a global minimum tax,  they could enforce it and other countries want it too.  If they made a global labor and environmental standard they could also enforce it. Just look at FATCA....we unilaterally made almost every country, including Switzerland disclose tax cheaters secret bank accounts. 

The only reason we have a haven't done these things yet is because we have a conjob trickle down system.  Clinton allowed corporate written NAFTA to pass without tax, labor,  and environmental enforcement.   Just fix those problems and actually think of other stakeholders than just letting the trickle down folks write the thing.   We have proven giving all the benefits of trade to the wealthy doesn't work. 

 

 

It’s not capital controls as the amount to export cash is no more than a corporate tax. It is a corporate tax they would have paid anyway.   Capital controls don’t allow you to export your cash at all.

To stretch a point to make a point assume a company is 100% foreign owned and made and removed all profits from a business.   Under a corporate tax scenario that profit gets taxed before the company extracts it.  But if you remove a corporate tax and tax only income, the foreign company can run the company tax free.   No local workers are getting paid.   So your bolded portion in your paragraph below never happens and you don’t recoup the revenue.  
 

That is the idea behind a global minimum tax....but for me...I just think they should completely eliminate the corporate taxes and make them pass through profits every years.  That would solve the problem and you could just recoup the revenue at the individual level
 

 

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7 hours ago, Akkula said:

I disagree with capital controls.   That is what Argentina always tries and nobody wants to invest there.   Plus what if every country did that?  It would freeze international trading and investment.   It reminds me of the old mercantilist system. 

The only option here is for countries to work cooperatively.   It is like game theory.... if you compete once, the other country will retaliate.  Cooperation is in the mutual interest. 

If the USA did a global minimum tax,  they could enforce it and other countries want it too.  If they made a global labor and environmental standard they could also enforce it. Just look at FATCA....we unilaterally made almost every country, including Switzerland disclose tax cheaters secret bank accounts. 

The only reason we have a haven't done these things yet is because we have a conjob trickle down system.  Clinton allowed corporate written NAFTA to pass without tax, labor,  and environmental enforcement.   Just fix those problems and actually think of other stakeholders than just letting the trickle down folks write the thing.   We have proven giving all the benefits of trade to the wealthy doesn't work. 

 

 

To the bolded points above......

Who cares if other countries follow suit?   

If China did it today companies would only generate a ton of unused tax credits.   Again you aren’t restricting investment.  You are merely taxing Country A cash gained from Operations and Investments minus Country A cash spent on operations and investments.   If another country removes all tariffs and implements this model, good for them, we have a global expansion.

The problem isn’t just that countries signed trade without tax, labor and environmental enforcement.  Global corporate entities arbitrage those differences to drive global profits.   My proposal reduces the arbitrage incentive, which you can control, versus trying to do tax, labor and environmental enforcement which you can’t control.  

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9 hours ago, bornontheblue said:

I was just stating what will happen. Not trying to argue a point. Calm your tits. 

First of all, I disagree with your premise that there will be a "massive sell off" in the stock market.

Such a shift would affect capital gains across all investment platforms, so any decision to divest from one market, stocks, bonds, real estate, etc., will lead to reinvestment elsewhere; it will be a zero sum conclusion.

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11 minutes ago, Joe from WY said:

Yeah. All I handle is corporate tax issues (primarily on a state and local level). Some LLCs and S-Corps but by and large it's all corporate tax.

Yes. It's all giant companies for the most part.

I’m curious.  Comment on my exported cash flow tax idea.  

Again it would tax cash gained from US operations and investment minus cash spent on US operations and investments.   

Companies could reduce their tax bill by re-balancing operations or repatriating cash as short term/long term investments.   

It is not a tax on gross profit as short term investments into US accounts count as cash spent.   

Corporate income tax would go away so transfer cost accounting would not matter.   

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5 minutes ago, Joe from WY said:

I think that's a hell of a good idea, honestly. Funny you bring this up too because I was just talking with my brother about a similar idea yesterday. I know people on here have attacked you on it (for reasons I don't quite understand) but I think it's a great plan...it would incentivize investment in the US, and way moreso than current policy implementations are doing.

Thanks 😀.  Your approval means a lot and is motivation to keep refining it.  Feel free to steal it and help tune it.  I’m going back to school to do the economic theory (re:Math) behind it and prove the economic theory.   Sucks at 60.  

I’m not completely certain on the global nature of Corporate taxation to model the impacts.   I believe Provinces in China and Germany for example each have their own additional tax so I might ping you for advice when I’m ready.  Haven’t done much math since high school so it could be a long slog.  
 

 

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16 hours ago, soupslam1 said:

What percentages of those incomes do YOU think they should be? 

I would raise the top marginal rate to 50% as it was under Reagan. 

Thay Haif Said: Quhat Say Thay? Lat Thame Say

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23 hours ago, Joe from WY said:

No shit. They're all like those Dodgers owners (the McCourts, who owned it before the current group) who borrowed against all their shit/assets and paid themselves in a "loan" so as to avoid taxes.

Not to mention that on a corporate level, it's an even bigger joke given that nobody pays taxes there on a federal level. They even skirt on things like payroll and sales taxes if they can. The people here opining about how awful it is that rich people might have to pay more taxes are either incredibly stupid or incredibly naive. Or both.

Speaking of which, it appears to me there's no bigger legal fraud than season tickets to professional sports. For several years the wife and I bought 20-game season pass to the Dodgers, (Her choice as I'm a Giants fan.) I would attend about half the games and my wife would take along a relative or friend to the rest. Frequently sitting around us were in the Lodge section were various groups of 20- and 30-somethings with a gaggle of little kids who couldn't possibly have paid for 5-6 $60 seats. Clearly their employer bought the season seats and wrote them off as allegedly being a means of taking prospective customers out to the ballpark when in reality they were passed along as freebies to employees.

I'm curious what take the CPAs here have on that.

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On 4/22/2021 at 2:34 PM, SalinasSpartan said:

Sounds fine to me. 

Of course it does...it doesn't affect you. We should all strive to be so apathetic towards that which does not affect us. :blink:

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