Biden's capital gains tax proposal could crush the economy, experts say

[o_mlly]

Spending is still a separate variable in the equation. On their own, taxes are deflationary.

Taxes are never "on their own". This particular tax increase is targeted at high erarners. Higher-income households are less likely to reduce their spending because of an increase in taxes.

I didn’t say it was a good thing or a bad thing. I said it was deflationary, which it is.

Raising taxes on the very wealthy will not be deflationary. Capital flight from the U.S. is a bad thing (cp.).

What I described was a real belief held by, IIRC, some folks in the libertarian/Austrian camp. I was asking if you subscribed to that belief.

Not sure what you are referring to.

Inflation causes? Money supply matters.

Inflation effects? Prices increase.

 

[iluvatar5150]

Not sure what you are referring to.

It’s some economic quackery. If that’s not your thing, nevermind.

 

[Hans Blaster]

You wrote, "The duration of the hold is irrelevant ..." As it relates to the capital gains (the OP), you are wrong.

I wasn't talking about the tax rate. Please read what I wrote. Trading stocks does not grow the economy, the non-investment in the economy from stock trading is not affected by the duration of the period prior to sale.

A bit more? From 20% to 39.6% and higher depending on what state one resides. That's a 98% increase.

Oh, no the people who have to scrape by with selling stocks from long (1 year plus) duration purchases won't get half-off on their taxes any more. (States have nothing to do with Biden's power to sign federal tax law.)

Yes. Increasing the capital gains tax on high earners will cause those investors to move capital from the U.S. to countries with lower rates. Result, lower GDP, job losses, lower wages.

Ahh, the old "capital flight" canard. It doesn't matter what country we invest from the IRS will get us anyway.

You wrote, "I'm talking about all of those subsidies and tax incentives given out for opening a new factory, etc."

So, you think the politicians are better at picking winners and losers (using other people's money) than individuals (using their own money).

I didn't say that so I don't care about your examples. Now you are writing for me. How annoying.

Nope. Solyndra – $570 million taxpayer dollars wasted; Abound Solar – $401 million taxpayer dollars wasted; Calisolar – $280 million taxpayer dollars wasted; Fisker Automotive – $193 million taxpayer dollars wasted, etc.


Yes. The quote above this one is nonsense.

When new investments are financed with retained earnings (a balance sheet entry) it has no effect on the company's profit or loss (the income statement).

 

[Arcangl86]

So, you think the politicians are better at picking winners and losers (using other people's money) than individuals (using their own money). Nope. Solyndra – $570 million taxpayer dollars wasted; Abound Solar – $401 million taxpayer dollars wasted; Calisolar – $280 million taxpayer dollars wasted; Fisker Automotive – $193 million taxpayer dollars wasted, etc.

I find it interesting you mention the losses for those specific companies while not mentioning that the loan program as a whole made money.

 

[iluvatar5150]

I find it interesting you mention the losses for those specific companies while not mentioning that the loan program as a whole made money.

That is how the propaganda has been framed…

 

[o_mlly]

I wasn't talking about the tax rate. Please read what I wrote. Trading stocks does not grow the economy, the non-investment in the economy from stock trading is not affected by the duration of the period prior to sale.

? I quoted you verbatim. I have to take you at what you wrote. The OP is, "Biden's capital gains tax proposal could crush the economy, experts say". Are you arguing against the OP? Or just stating some off-topic opinion?

Oh, no the people who have to scrape by with selling stocks from long (1 year plus) duration purchases won't get half-off on their taxes any more. (States have nothing to do with Biden's power to sign federal tax law.)

An emotional appeal offering an inverted view claiming what is being just now proposed has always been in place. Nope.

Ahh, the old "capital flight" canard. It doesn't matter what country we invest from the IRS will get us anyway.

Nope. Foreign investors may simply shift their money from an ETF domiciled in the US to one domiciled in a foreign country. Foreign direct investment (FDI) is a considerable source of capital to the US.

More importantly, those investments moves that avoid the proposed non-competitive cap gains tax rates, will be used to build offshore operations resulting in fewer jobs for the US, loss of exports, and increase of imports.

I didn't say that so I don't care about your examples. Now you are writing for me. How annoying.

One who is confused is often also annoyed at being correctly informed.

I find it interesting you mention the losses for those specific companies while not mentioning that the loan program as a whole made money.

Nonsense. Corporate welfare disguised as economic development programs that involve direct assistance—including cash grants, low-interest loans, and tax breaks—to individual firms do not "make money" they can only lose and do lose money as the examples I gave show. These misguided uses of public funds serve only to sustain the privatization of profits and only the socialization of losses.

 

[Hans Blaster]

? I quoted you verbatim. I have to take you at what you wrote. The OP is, "Biden's capital gains tax proposal could crush the economy, experts say". Are you arguing against the OP? Or just stating some off-topic opinion?

YEs. Yes. Yes. I am arguing against the claim in the article/OP that half-off on taxes for the incomes of high-income stock traders, etc. is necessary to sustain our economy.

An emotional appeal offering an inverted view claiming what is being just now proposed has always been in place. Nope.

Not an emotional appeal. I reject the premise as I just stated.

Nope. Foreign investors may simply shift their money from an ETF domiciled in the US to one domiciled in a foreign country. Foreign direct investment (FDI) is a considerable source of capital to the US.

If this is about the domicle of EFTs that means its just about high-income stock trading. Nothing that generates any economic growth.

More importantly, those investments moves that avoid the proposed non-competitive cap gains tax rates, will be used to build offshore operations resulting in fewer jobs for the US, loss of exports, and increase of imports.

One who is confused is often also annoyed at being correctly informed.

Nonsense. Corporate welfare disguised as economic development programs that involve direct assistance—including cash grants, low-interest loans, and tax breaks—to individual firms do not "make money" they can only lose and do lose money as the examples I gave show. These misguided uses of public funds serve only to sustain the privatization of profits and only the socialization of losses.

I didn't say those incetive programs were good, I just said that they existed as inducements to make economic investments that were separate from the capital gains taxes. No change in the cap gains rate for individuals is going to induce Ford to build a new electric car plant or that local utility to build a wind farm. The tax doesn't apply to them.

 

[Arcangl86]

Nonsense. Corporate welfare disguised as economic development programs that involve direct assistance—including cash grants, low-interest loans, and tax breaks—to individual firms do not "make money" they can only lose and do lose money as the examples I gave show. These misguided uses of public funds serve only to sustain the privatization of profits and only the socialization of losses.

The examples you showed were four individual companies that defaulted as part of a larger loan program that ended up making in interest payments more than the total amount of default.

 

[o_mlly]

YEs. Yes. Yes. I am arguing against the claim in the article/OP that half-off on taxes for the incomes of high-income stock traders, etc. is necessary to sustain our economy.

The economy's problem is one of the federal government's running deficits year after year. The present inflation and interest rate increases are the direct effects. The solution cannot be to send more good money after bad but for our politicians to show some fiscal responsibility.

Note the programs Biden intends to fund with these tax increases. As usual, Biden’s vision for American workers and companies is clear — higher taxes and uncompetitive rates for the majority, to support government subsidies for a few.

Since the sausage machine is not nearly through with this outrageous proposal, I don't see much reason to continue in this thread.

The examples you showed were four individual companies that defaulted as part of a larger loan program that ended up making in interest payments more than the total amount of default.

Can you provide a link to the data that supports your conclusion?

Remember, we're broke, and the Treasury now pays ~ 5+% for its bills and ~ 4+% for its notes and bonds. If the subsidized loans were offered at below the cost to acquire those funds then the calculation for interest payments received from subsidized borrowers must be adjusted down accordingly.