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"Courting moderates, House Democrats stop short of proposing the most aggressive plans to tax the rich."
Posted by: Ted King
Date: September 13, 2021 06:20PM
[www.nytimes.com]

Quote

House Democrats’ plans to raise taxes on the rich and on profitable corporations stop well short of the grand proposals many in the party once envisioned to tax the vast fortunes of tycoons like Jeff Bezos and Elon Musk — or even thoroughly close loopholes exploited by high-flying captains of finance.

Instead, the House Ways and Means Committee, influenced more by the need to win the votes of moderate Democrats than by progressive Democratic ambitions, focused on traditional ways of raising revenue to pay for the party’s $3.5 trillion social policy bill — by raising tax rates on income.

The proposal, which is set to be considered by the panel on Wednesday, does include measures to raise taxes on the rich. Taxable income over $450,000 — or $400,000 for unmarried individuals — would be taxed at 39.6 percent, the top rate before President Donald J. Trump’s 2017 tax cut brought it to 37 percent. The top capital gains rate would rise from 20 percent to 25 percent, a considerably smaller jump than President Biden proposed.

A 3-percent surtax would be applied to incomes over $5,000,000.

But more notable is what is not included. The richest of the rich earn little money from actual paychecks (Mr. Bezos’s salary from Amazon was $81,840 in 2020). Their vast fortunes in stocks, bonds, real estate and other assets grow each year largely untaxed.

The Senate Finance Committee wants to tax that wealth with a one-time surtax imposed on billionaires’ fortunes, followed by levies annually on the gains in value of billionaire assets, the way property taxes are adjusted each year to reflect gains in housing values. The Ways and Means Committee shrugged that off.

Representative Bill Pascrell, Democrat of New Jersey and a Ways and Means Committee member, conceded on Monday that the real wealth in the country is tied up in assets, not large salaries, but he said many Democrats were leery of going too far.

“I am very suspect of a wealth tax,” he said. “I think it’s perceived as ‘soak the rich.’ I don’t think it is, but that’s how it’s perceived.”
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The committee did take aim at a loophole in retirement savings exploited by billionaire Peter Thiel, who, according to a ProPublica investigation, was able to take a Roth individual retirement account worth less than $2,000 in 1999 and grow it to $5 billion, which could be completely shielded from taxation.
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To prevent such exploitation, the Ways and Means Committee would stop contributions to retirement accounts once they reach $10 million.

In other areas, the committee appears to be making only glancing blows at the nation’s highest fliers. Barack Obama, Mr. Trump and President Biden have all vowed to close the so-called carried interest loophole, in which private equity managers pay low capital gains tax rates on the fees they charge clients, asserting that it is not income since it is drawn from their clients’ investment gains.

Senate Democrats hope to close the loophole completely, saving the Treasury $63 billion over 10 years. The House proposal would force Wall Street financiers to hold their clients’ investment gains for five years before claiming them as capital gains and cashing out, a demand that could limit the use of carried interest, but would save a fraction of the Senate proposal, $14 billion.

Less taxes than what Biden was asking for means less programs he was hoping to do. What's going to be cut from his wish list? Climate change remediation efforts? Free pre-school and/or free community college?



e pluribus unum
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Re: "Courting moderates, House Democrats stop short of proposing the most aggressive plans to tax the rich."
Posted by: GGD
Date: September 13, 2021 08:10PM
Quote
Ted King
The committee did take aim at a loophole in retirement savings exploited by billionaire Peter Thiel, who, according to a ProPublica investigation, was able to take a Roth individual retirement account worth less than $2,000 in 1999 and grow it to $5 billion, which could be completely shielded from taxation.
- - - - -
To prevent such exploitation, the Ways and Means Committee would stop contributions to retirement accounts once they reach $10 million.

I fail to see how stopping contributions when the account reaches $10 million would have had any effect on the $2000 Thiel's Roth IRA invested in PayPal founders stock.
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Re: "Courting moderates, House Democrats stop short of proposing the most aggressive plans to tax the rich."
Posted by: Steve G.
Date: September 13, 2021 09:09PM
A local rep, ms Ocasio-Cortez

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Re: "Courting moderates, House Democrats stop short of proposing the most aggressive plans to tax the rich."
Posted by: Ted King
Date: September 13, 2021 09:38PM
Quote
GGD
Quote
Ted King
The committee did take aim at a loophole in retirement savings exploited by billionaire Peter Thiel, who, according to a ProPublica investigation, was able to take a Roth individual retirement account worth less than $2,000 in 1999 and grow it to $5 billion, which could be completely shielded from taxation.
- - - - -
To prevent such exploitation, the Ways and Means Committee would stop contributions to retirement accounts once they reach $10 million.

I fail to see how stopping contributions when the account reaches $10 million would have had any effect on the $2000 Thiel's Roth IRA invested in PayPal founders stock.

I don't know enough to give any worthwhile feedback on that, but maybe a part of the article I left out goes into that:

Quote

In a Roth I.R.A., small annual deposits of money from previously taxed income are allowed to gain in value free of capital gains taxation, as long as it the funds are withdrawn after retirement. But Mr. Thiel, the founder of PayPal and a prominent Silicon Valley conservative, opened his Roth, then deposited stakes in start-up companies at fractions of pennies a share, which then exploded when the start-ups took off. The gains in value — and investments made in other companies from those gains — will go completely untaxed if Mr. Thiel waits to withdraw it just before he turns 60.



e pluribus unum
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Re: "Courting moderates, House Democrats stop short of proposing the most aggressive plans to tax the rich."
Posted by: Lemon Drop
Date: September 13, 2021 10:10PM
Quote
Steve G.
A local rep, ms Ocasio-Cortez


Tickets to the Met gala are $35k, plus the couture gown...bit of confusing messaging there.
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Re: "Courting moderates, House Democrats stop short of proposing the most aggressive plans to tax the rich."
Posted by: GGD
Date: September 13, 2021 10:15PM
Quote
Ted King
Quote
GGD
Quote
Ted King
The committee did take aim at a loophole in retirement savings exploited by billionaire Peter Thiel, who, according to a ProPublica investigation, was able to take a Roth individual retirement account worth less than $2,000 in 1999 and grow it to $5 billion, which could be completely shielded from taxation.
- - - - -
To prevent such exploitation, the Ways and Means Committee would stop contributions to retirement accounts once they reach $10 million.

I fail to see how stopping contributions when the account reaches $10 million would have had any effect on the $2000 Thiel's Roth IRA invested in PayPal founders stock.

I don't know enough to give any worthwhile feedback on that, but maybe a part of the article I left out goes into that:

Quote

In a Roth I.R.A., small annual deposits of money from previously taxed income are allowed to gain in value free of capital gains taxation, as long as it the funds are withdrawn after retirement. But Mr. Thiel, the founder of PayPal and a prominent Silicon Valley conservative, opened his Roth, then deposited stakes in start-up companies at fractions of pennies a share, which then exploded when the start-ups took off. The gains in value — and investments made in other companies from those gains — will go completely untaxed if Mr. Thiel waits to withdraw it just before he turns 60.

It really doesn't. His entire lifetime contribution to his Roth was $2000, in the first year and never again. Contribution limits would have had no impact on it's growth. And this was also at the peak of the Dot Com boom, there was no real way to have predicted at that time how that initial investment would have performed over the next two decades. Lots of stocks from that time became totally worthless. But if that $2000 Roth was invested in AAPL then, it would be worth over $1 Million today, tax free, anyone could have done that.

And there are already IRA contribution limits and income requirements that make this whole proposal seem ridiculous. The maximum for 2021 is $6,000 (or $7,000 if you're 50+), and you can't contribute at all if your income is over a certain threshold.

So, this proposal seems to be saying that if the account reaches $10,000,000 we won't let you put in another $6K-$7K. Are they expecting that to make any sort of a dent it it's growth?

[www.irs.gov]
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Re: "Courting moderates, House Democrats stop short of proposing the most aggressive plans to tax the rich."
Posted by: $tevie
Date: September 13, 2021 11:38PM
Quote
Lemon Drop
Quote
Steve G.
A local rep, ms Ocasio-Cortez


Tickets to the Met gala are $35k, plus the couture gown...bit of confusing messaging there.

I think the idea is to be a trojan horse, so to speak.
And perhaps an answer to the dress below from a few years back, worn by some singer I've never heard of:

AOC came with the designer, so I suspect she did not pay for the dress, and maybe not even the ticket.The two share the same political views and it may be that it was Aurora James' treat. Or not. I'm not privy to all the ins and outs and media/pr/celebrity promotion that drives the event. But I'm fairly certain the idea was to make the other attendees uncomfortable.

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Re: "Courting moderates, House Democrats stop short of proposing the most aggressive plans to tax the rich."
Posted by: $tevie
Date: September 13, 2021 11:56PM
Here's Kamala Harris' stepdaughter in Stella McCartney, with someone's famous behind in the background:

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Re: "Courting moderates, House Democrats stop short of proposing the most aggressive plans to tax the rich."
Posted by: RgrF
Date: September 14, 2021 12:29AM
Where's Ivanka?
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Re: "Courting moderates, House Democrats stop short of proposing the most aggressive plans to tax the rich."
Posted by: $tevie
Date: September 14, 2021 06:45PM
Probably in Florida snuggling with Papa.


Here's Congresswoman Carolyn Maloney of New York:
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Re: "Courting moderates, House Democrats stop short of proposing the most aggressive plans to tax the rich."
Posted by: $tevie
Date: September 14, 2021 09:17PM
Quote
AOC
And yes, BEFORE anybody starts wilding out - NYC elected officials are regularly invited to and attend the Met due to our responsibilities in overseeing our city’s cultural institutions that serve the public. I was one of several in attendance. Dress is borrowed via @brothervellies
[www.instagram.com]



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