Oh, No! Higher Capital Gains Taxes For The Wealthy!

Oh, No! Higher Capital Gains Taxes For The Wealthy!

Lengthy editorializing (on my part) around the latest weekly jobless claims figures proved accidentally prescient on Thursday afternoon. Just hours after I knocked over a digital inkwell, spilling 800+ words about the distinction between "rich" and "wealthy," reports indicated the Biden administration was poised to float a capital gains tax of as much as 43.4% for the wealthy. The headlines, from Bloomberg, hit stocks, which were previously meandering near the flatline. I assume readers don
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10 thoughts on “Oh, No! Higher Capital Gains Taxes For The Wealthy!

  1. If this were to come to pass I would expect to see an explosion in shell companies hiding income and gains. Trump will could easily become a real billionaire selling advice on how to pay no tax at all.

  2. Does a higher capital gains rate act as a disincentive to trade and an incentive to buy-and-hold? Does that favor large caps over small and domestic over emerging?

    Does a higher capital gains rate further accelerate the shift from mutual funds to ETFs, which are generally more tax-efficient?

      1. Thinking about this a little more, I’m going to guess that investors come to see this more as a bargaining chip, meant to lubricate negotiations on a higher corporate tax rate where the initial 28% was itself a bargaining chip, to split the monied classes from the corporate classes, to split the high earners from the big estates, and to fire up the base. The ask is too much of a jump from current (2X) to expect the end result to be anywhere close.

  3. Under MMT, it makes sense to increase taxes to increase demand to match the increased supply of dollars. This would also cause a re-allocation away from investments and into spending as wealth is transferred from HNW individuals who don’t spend to the govt who is spending like a madman. Seems like sensible policy

  4. Mr. Lucky, I heard the other day that the tax people are going after Roger Stone and I don’t think they’ve given up on the Trumpers. I don’t know if his book would sell if he’s in jail for tax evasion. Might make for a musical on Broadway. Porky and Bess?

  5. Surprised the backlash this has received. Doesn’t it simply harmonise the marginal tax rate between capital gains and wage income? I always found it strange that idle capital receives preferential treatment vs the sweat of one’s brow in the US (in the country where I live it’s all taxed at the marginal rate, regardless of the source)

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