healthmyths
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- Sep 19, 2011
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- President Joe Biden is expected to raise long-term capital-gains tax for the wealthiest Americans to 43.4%, including a surtax. That would be higher than the top federal tax rate on wage income. How the Biden capital gains tax proposal would hit the wealthy
![www.cnbc.com](https://image.cnbcfm.com/api/v1/image/106872316-1619099593911-gettyimages-1313837979-whthurs_028_ad_042221_2021042291511580.jpeg?v=1619539334&w=1920&h=1080)
How the Biden capital gains tax proposal would hit the wealthy
President Joe Biden is expected to double the top long-term capital gains rate to 43.4%. But investors shouldn't necessarily rush for the exits.
1) Analyses show that every 10% gain in the capital gains tax rate leads to a 7% change in capital gains realizations. That suggests Biden’s rate increase — which represents a 66% effective increase in the rate, could lead to a 45% to 50% increase in capital gains sales, which could create a large downward force in the market.
So this would mean 401K fund managers would be selling easily 50% reduction in values.
So what are 401ks value today:
About one-third of U.S. adults (35%) said they personally owned stocks, bonds or mutual funds outside of retirement accounts in a Pew Research Center survey from September 2019.
With 39% of the $6 trillion total 401K assets invested in the market..or about $2.4 Trillion will be at risk of dropping at least 50% in value.
At one point under Trump
U.S. companies have repatriated $1 trillion since tax overhaul
U.S. companies have repatriated $1 trillion since tax overhaul
That's still short of the $4 trillion in overseas profits that President Trump would return as a result of the 2017 tax law.
![www.latimes.com](https://www.latimes.com/favicon-32x32.png)
Corporations have brought back more than $1 trillion of overseas profits to the U.S. since Congress overhauled the international tax system and prodded companies to repatriate offshore funds, a report showed Thursday. (snip)
Investment banks and think tanks have estimated that American corporations held $1.5 trillion to $2.5 trillion in offshore cash at the time the law was enacted. Before the overhaul, companies were incentivized to keep profits overseas because they owed a 35% tax when bringing it back and could defer payment by keeping funds offshore.
The law set a one-time 15.5% tax rate on cash and 8% on non-cash or illiquid assets.
Compare and contrast the way that Presidents Trump and Obama chose to stimulate the American economy, each of them generating roughly a trillion dollars in “stimulus.”
![www.americanthinker.com](https://www.americanthinker.com/images/bucket/2019-12/218043.jpg)
One trillion dollars have flowed into the American economy as Trump’s tax law changes allowed companies to repatriate profits without tax penalty
President Trump’s tax reform has delivered more than a trillion dollars of stimulus to the American economy through corporations repatriating profits held overseas in order to avoid penalties that the tax law had imposed on bringing home the fu...