We knew it was coming. Sometime this fall, expect it to heat up. It all depends on the Senate being able to use the “Budget Reconciliation” maneuver to squeak the tax law changes through without a single Republican vote.
FIRST: Higher Corporate Tax Rate. Currently it is 21%, Democrats want to raise it to 28%. Many corporations are already planning to move offshore in anticipation of this. There go some jobs!
SECOND: Higher Top Tax Rate. Currently it is 37%, Democrats want to raise it to 39.6%.
THIRD: More Social Security Taxes Paid. Currently stop at $142,800 in wages, will start again for wages over $400,000.
FOURTH: Eliminate Section 1031 Real Estate Exchange. Expect Real Estate Professional’s Lobbyists to go bonkers over this one. This may be a negotiable item. If Democrats get enough new contributions to their election campaigns, they may magnanimously drop this. Time will tell.
FIFTH: Wealth Tax. Democrats in their raging jealousy over wealthy folks, want to start a whole new tax. Folks with net worth over $16 million and up would pay this annual tax. It will start at 1% of total wealth and top out at 8% for those with $5 billion or more. At that rate, it would take a little over 12 years for the U.S. government to confiscate almost all of a rich person’s wealth. I wonder how long the super-rich will stay American citizens when this tax gets enacted?
SIXTH: Tax On Unrealized Gains. Another catchy name for this is “mark to market.” If a person’s income is high enough to upset the Democrats, then they will tax the pretend gain, before the asset is sold. Probably going to send a lot of new business activity toward all kinds of appraisers when a taxpayer has to have an annual appraisal of real estate, jewelry, collectibles, etc. every year.
SEVENTH: Eliminate Long-Term Capital Gains Tax. Currently, if you hold an asset for at least one year, then sell it, the gain is taxed at rates less than the normal tax rate bracket a person is in, up to a maximum Capital Gains Tax Rate of 20%. Democrats want the wealthy (Who do you think that is? Your guess is as good as mine.) to pay tax on Capital Gains at the top marginal rate for the taxpayer. (39%?)
So, if you are a high-income taxpayer, this is going to really hurt. This will most likely cause a deep recession by pulling massive amounts of capital out of play. Less money available in the market equals less business profits, which translates into laid off workers, etc. The good news, when voters realize they got a bad deal, they usually vote a free market Republican into office who will work hard to get rid of most/all of this garbage and ignite the economy into a massive strong growth trend where almost everybody wins. Gee. Isn’t that what the last president did in 2017?
Did you hear? Prov 11:21 says, “Most certainly, the evil man will not be unpunished, but the offspring of the righteous will be delivered.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com Also on Facebook.
