It’s hard to believe how extensive and expensive Biden’s new tax proposals are. Their impact would be to kill any chance of economic growth for a decade.
He gets away with it politically by targeting only a small section of the taxpayers — those making more than $400,000 in income. But it is only that small slice of the tax base that provides most of the investment capital.
The top $400,000 in income is only 1.8% of all taxpayers but they pay 42% of all federal income tax revenues.
In other words, they are the employers and investors in our economy. The old question arises: Have you ever gotten a job from a poor person?
Look at how enormous Biden’s tax proposals are:
• It would raise the top rate on taxes to 44.6% from its current 37%
• It would raise the capital gains tax from 23,8% to 44.6%. Effectively eliminating the capital gains tax break.
• It would raise corporate taxes from 21% to 28%.
• It would impose a 25% tax on unrealized capital gains.
• It would raise Medicare taxes from 3.8% to 5%.
This proposal would, in effect, raise the torte to 49.6%, just under half of your income.
Capital gains tax increases are especially dangerous. They usually produce no net gain in government tax revenues since those who would sell, thereby triggering the tax, elect to wait until the rate comes down.
The converse — is that a lower capital gains tax stimulates sales and produces more revenue for the government, This is precisely how Clinton eliminated the entire budget deficit — but cutting capital gains taxes.
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