A simple economic lesson... raise capital gains to 43% will do what?

[Blues Man]

Capital gains taxes do hit the wealthiest people...but also are a target on the retired people...

Since Social Security is going broke...let's just crush them old people some more.

I don't agree with the Biden tax but if it passes and that's a big IF unless a retiree is making over a million a year in retirement he won't pay that high rate.

 

[JohnDB]

401ks and IRAs don’t see capital gains. The retirees that are hit by capital gains are doing fine. They’re the ones they maxed out other retirement accounts first.

I’d make retirement accounts better and simpler and make capital gains taxed like regular income.

Most of these sorts of accounts are full of funds and ETFs and other investment instruments that do pay taxes on capital gains. The accounts don't but the things they have invested in do.

 

[JohnDB]

I don't agree with the Biden tax but if it passes and that's a big IF unless a retiree is making over a million a year in retirement he won't pay that high rate.

Mutual funds pay taxes.

 

[rightwinger]

• 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

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.

www.cnbc.com

"Unintended Consequences"...
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.

401(k) Plan Research: FAQs

Frequently Asked Questions About 401(k) Plan Research How la

www.ici.org

Now that is just the affect on stock market and then on 401ks and then on the 60 million Americans with 401ks.

401(k) Plan Research: FAQs

Frequently Asked Questions About 401(k) Plan Research How la

www.ici.org

Now what about jobs in America?
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

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.”

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...

www.americanthinker.com

In summary folks... all the economic benefits of the "repatriation" and the capital gains tax cuts will result in nearly $10 trillion in economic losses to 60 million Americans at the minimum!

Stop hiding behind the small investors to protect the super wealthy

 

[colfax_m]

Most of these sorts of accounts are full of funds and ETFs and other investment instruments that do pay taxes on capital gains. The accounts don't but the things they have invested in do.

I don't think that's correct. The funds may sell holdings in them, and generate a gain, but those gains are distributed to the fund holders and then reportable on their income. If the income is reported in a tax-deferred account, then there's no capital gains. The fund itself is not paying capital gains for you.

 

[JohnDB]

I don't think that's correct. The funds may sell holdings in them, and generate a gain, but those gains are distributed to the fund holders and then reportable on their income. If the income is reported in a tax-deferred account, then there's no capital gains. The fund itself is not paying capital gains for you.

Funds are a corporate entity.... complete with a tax ID number and everything.

Trust me...they pay taxes....oh how do they pay! Distributions are double taxed.

Ask Charles Schwab if they pay taxes.... ROFL...that will generally cause lots of cussing before and after the affirmative.

 

[pknopp]

Tell that to all the company's that need a cash infusion that could go under if we don't buy into their turn around plan. Labor is paid, period! Investment is a crapshoot.

You said nothing to dispute what I said. If you lose money you also get to write that off. I don't if I lose my job.

 

[struth]

All income should be taxed at the exact same rate, whatever percentage that is decided to be. Manual labor or Capital Gains should be the same.

Interesting thought process....so simply say that if you sell your house, whatever profit from the house, ie from what you paid, to when you sold, should be taxed that year, along with your ordinary income, as income....and potentially shoot you through a few tax brackets....

So why would anyone really want to buy a house then...why not rent a house, and just keep putting money under my mattress?

 

[pknopp]

Interesting thought process....so simply say that if you sell your house, whatever profit from the house, ie from what you paid, to when you sold, should be taxed that year, along with your ordinary income, as income....and potentially shoot you through a few tax brackets....

So why would anyone really want to buy a house then...why not rent a house, and just keep putting money under my mattress?

Capital Gains on houses are not figured that way. Simplified you can roll C.G. into your next house.

 

[colfax_m]

Funds are a corporate entity.... complete with a tax ID number and everything.

Trust me...they pay taxes....oh how do they pay! Distributions are double taxed.

Ask Charles Schwab if they pay taxes.... ROFL...that will generally cause lots of cussing before and after the affirmative.

They don't pay taxes on your funds.

A: A mutual fund doesn’t pay taxes on capital gains of stocks sold during the year. You do. By law, the fund must distribute all income from dividends, interest and capital gains to the fund’s shareholders. Funds report such distributions to shareholders (and to the IRS) on Form 1099. And when a distribution is made, the fund’s share price is adjusted downward to reflect the distribution.

Motley Fool: Mutual funds aren't taxed twice

Q: If mutual funds pay capital-gains taxes each year for stocks they sold, why, when an investor then sells the mutual fund shares at a later date, does he also have to pay taxes on the gains?

www.dispatch.com

Charles Schwab makes tons of money and as a corporate entity they do pay taxes on their income. But they're not paying taxes on the capital gains of your funds.

 

[bendog]

Capital Gains on houses are not figured that way. Simplified you can roll C.G. into your next house.

And you house either goes to heirs/will devisees or a reverse mortgage.

I just don't see that the dems proposals on cap gains affects most or our taxes.

MSN

Now as rightwinger discussed, the plans could negatively impact the econ as a whole.

 

[JohnDB]

They don't pay taxes on your funds.

A: A mutual fund doesn’t pay taxes on capital gains of stocks sold during the year. You do. By law, the fund must distribute all income from dividends, interest and capital gains to the fund’s shareholders. Funds report such distributions to shareholders (and to the IRS) on Form 1099. And when a distribution is made, the fund’s share price is adjusted downward to reflect the distribution.

Motley Fool: Mutual funds aren't taxed twice

Q: If mutual funds pay capital-gains taxes each year for stocks they sold, why, when an investor then sells the mutual fund shares at a later date, does he also have to pay taxes on the gains?

www.dispatch.com

Charles Schwab makes tons of money and as a corporate entity they do pay taxes on their income. But they're not paying taxes on the capital gains of your funds.

You missed the part about reinvestment...most people check the box and don't even realize it.

A mutual fund is going to pay the highest tax rate as an expense...so no matter what you lose with higher taxes on both ends.

 

[colfax_m]

You missed the part about reinvestment...most people check the box and don't even realize it.

A mutual fund is going to pay the highest tax rate as an expense...so no matter what you lose with higher taxes on both ends.

No, I didn't. When the distribution is reinvested, it's still reported to the individual as income on their 1099s and the individual pays taxes on it, as long as it's in a taxable account.

You own the fund, you pay the taxes.

 

[JohnDB]

They don't pay taxes on your funds.

A: A mutual fund doesn’t pay taxes on capital gains of stocks sold during the year. You do. By law, the fund must distribute all income from dividends, interest and capital gains to the fund’s shareholders. Funds report such distributions to shareholders (and to the IRS) on Form 1099. And when a distribution is made, the fund’s share price is adjusted downward to reflect the distribution.

Motley Fool: Mutual funds aren't taxed twice

Q: If mutual funds pay capital-gains taxes each year for stocks they sold, why, when an investor then sells the mutual fund shares at a later date, does he also have to pay taxes on the gains?

www.dispatch.com

Charles Schwab makes tons of money and as a corporate entity they do pay taxes on their income. But they're not paying taxes on the capital gains of your funds.

They have several house created funds available. MOst brokerages do... even investment magazines do that. Investors business daily has a sleep of them. (Of course they promote them.)

But yes....death and taxes hit everyone.

Even single stocks will be affected.

Large corporations hold stocks as well as assets that generate revenue...

This is going to hurt everyone everywhere. There is no escape except by dividend paying stocks. (Usually referred to as value stocks)

Dividends are usually taxed at a lower rate than capital gains. But with the increases those stocks will become popular and generate capital gains until the tax is reduced....but usually Value stocks are a buy and hold like family members... you usually don't sell them and realize the capital gains.
6% paid quarterly reinvested looks a lot like 8% or more annually... depending...it can be more if capital gains are made. (Which inflation usually causes)

There's a reason why most of DC is purchasing value stocks. Might be a blue paw print there somewhere.

 

[JohnDB]

No, I didn't. When the distribution is reinvested, it's still reported to the individual as income on their 1099s and the individual pays taxes on it, as long as it's in a taxable account.

You own the fund, you pay the taxes.

You just go ahead and keep believing that...we can only hope that your mutual fund doesn't.

 

[colfax_m]

You just go ahead and keep believing that...we can only hope that your mutual fund doesn't.

I don't think you actually understand what you're talking about and you haven't given me any reason to believe your story.

I'm pretty literate when it comes to this, and then I've read a lot of articles, none of which are talking about this kind of "double taxation".

 

[bendog]

No, I didn't. When the distribution is reinvested, it's still reported to the individual as income on their 1099s and the individual pays taxes on it, as long as it's in a taxable account.

You own the fund, you pay the taxes.

This is not difficult, but the discussion may have confused me. If a mutual fund is held in a 401K or IRA, a fund investor does not pay capital gains on sales made by the fund..... ever? But we do pay taxes on selling a mutual fund, assuming we made any money on it?

I never considered this before. I only have a Roth account, and taxes are not really an issue.

 

[colfax_m]

This is not difficult, but the discussion may have confused me. If a mutual fund is held in a 401K or IRA, a fund investor does not pay capital gains ..... ever?

I never considered this before. I only have a Roth account, and taxes are not really an issue.

No capital gains ever in a 401k or IRA. That's the advantage in a tax advantage plan.

I'm sure there's minor exceptions someone smarter than me knows about, but I've had every sort of account. I only pay capital gains on a retail investment account.

 

[gipper]

Taxes are harmful?

To the poor and working class. Yes.

 

[JohnDB]

This is not difficult, but the discussion may have confused me. If a mutual fund is held in a 401K or IRA, a fund investor does not pay capital gains on sales made by the fund..... ever? But we do pay taxes on selling a mutual fund, assuming we made any money on it?

I never considered this before. I only have a Roth account, and taxes are not really an issue.

As you hold shares of stock or mutual fund in a an account that is for retirement that is tax free or tax deferred.

The corporate entities that you hold shares of do pay taxes as a regular business expense. Even if it is a mutual fund. Most mutual funds don't swap a lot of positions in a company quickly...it can require months to sell or acquire a position in a company.

Dumping or purchasing 380 million dollars of any stock in a day is going to affect profits. Most stocks aren't that liquid. So they are extremely slow about it all...but when they do it usually it is part of paying salaries and expenses. (They do usually have day trading as part of their daily life complete with options selling and buying)

However the larger tax burden a mutual fund has the lower the yield of a mutual fund.