patrick.net

They benefit from the changes they want. I think it’s as simple as that.

That's interesting. If they can simply double the nominal value of all assets while creating enough value to keep the real value constant, then tax revenue will be much higher.

A $100K income is taxes at a much greater percentage than a $50K income, even if the buying power stays the same.

Patrick says

That's interesting. If they can simply double the nominal value of all assets while creating enough value to keep the real value constant, then tax revenue will be much higher.

A $100K income is taxes at a much greater percentage than a $50K income, even if the buying power stays the same.

Right. But wouldn't it inroduce people who don't pay much taxes now to the joys of being a tax donkey?

That's the fun part.

Patrick says

That's interesting. If they can simply double the nominal value of all assets while creating enough value to keep the real value constant, then tax revenue will be much higher.

A $100K income is taxes at a much greater percentage than a $50K income, even if the buying power stays the same.

For many years supposedly, republicans have wanted to change the way cap gains are taxed because of this. Inflation causes your asset to numerically inflate, which you must pay cap gains on. But, inflation may make it so that your buying power is actually lower at the new, numerically higher, price. So they suggested indexing cap gains for inflation, which IMO makes a helluva lot of sense.

Many homes across the usa appreciated at about the inflation rate over the last 30-60 years. The owners look at the large numerical gain, and think it was a "great investment", but often it was 90% inflation. Cap gains murders this situation.

the biggest threat to your wealth is the government. Perfect example closed small businesses, and they went out of business

I read that xiden is at odds with pelosi and the wealthy dems who want salt reenacted and his initial plan does not include it. Killing salt mainly affected leffoid coastal elites.

I propose the following change to the tax code....

All capital gains are taxed as regular income but the basis for capital gains is adjusted for inflation. That's going to simplify the tax code by not having short-term verses long-term considerations and not having capital gains verses earned income considerations.

To adjust for inflation is also very simple. We already have to report the basis cost and the time of purchase. So, now we have a little table published by the IRS. It shows a value for every month since 1960. In January 1960 the value is 1.000. That value is adjusted in each successive month to reflect the inflation from Jan 1960 to that month. For example, January 2021 would probably be something like 8.5. Then, when reporting to the IRS, I take my basis, multiply by the table's value for when I sold the asset and then divide by the value in the table for when I bought the asset. Simple as that. Any purchase before 1960 is treated as the 1.0000 value (or we could make the table go back farther if you really want.)

There will be immediate gaming of the system with people buying on the last day of the of the month and then selling on the first day of the next month. So, modify the above by allowing people to not adjust at all or to use the starting month (the divisor) as 3 months after the purchase date. People won't be allowed to use the month of the purchase date. Maybe the table could also be adjusted slightly so that there is no 3-month period where the numbers go down. This change should put a very gentle pressure on people to hold for a long time, which is something the current system aggressively and abruptly targets with its all-or-nothing long verses short status.

farmer2021 says

Ha Ha!
This is funny , Why not just print "tax money".. It is not like we never ran deficits.

We have printed tax money. We are at record tax receipts. This is because of all the capital gains taxes that have been collected as people and institutions have sold stocks and real estate assets that have gained in value. The asset prices have gained value because interest rates have gone down substantially. Rates have gone down because the Federal Reserve has been printing money and buying up bonds to the tune of $120 billion per month with this printed money.

farmer2021 says

This means you can adjust "losses" against W2 without limit.
It will encourage gambling on stocks.

Great! Another simplification. You don't have to carry losses over for years at a time.

The math would get much harder with negative inflation.

Misc says

The math would get much harder with negative inflation.

Actually, it wouldn't get any harder at all. It's still just a multiply and a divide. And... is there any 3-month period in the last 60 years where that table would actually be lower?

Notice, also, that I said the taxpayer could either use the calculation or nor not. If there were a negative period then you could just opt to pay full income tax on the transaction.

Oh! We have this great internet! Here's a table of inflation (not sure if it's the appropriate measure of inflation, but it's a good start) which has the negative monthly values conveniently listed in red!
https://www.statbureau.org/en/united-states/inflation-tables

I should add that the above calculation (which would apply to houses in addition to stocks), might be a real eye-opener to a lot of people. Imagine someone who bought a house 40 years ago for $80k and sold now for $250k thinking that they were a genius and made a Great Investment™. They do the inflation calculation and find out that their basis is actually $233k

I'm using: https://www.usinflationcalculator.com/

Yes, over long periods of time real estate gains just a smidge over inflation. Stocks about 1% over the inflation rate.

We are now in a historical anomaly where interest rate have declined for about 45 years running. This has boosted asset values over that time frame.

This has greatly allowed the government to gain capital gains taxes simply by fictionally increasing asset values.

Hircus says

democrat plan to inflate assets, then tax them?

you are assigning thinking and planning powers to those who don't have brains.

Running the printing press is easier..

Ever seen this quote?

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.”

-Thomas Jefferson.

Well, that will happen within 10 years. It's not like people weren't warned. People have been pointing out that the Federal Reserve is just a criminal organization. They were called crazy conspiracy nuts.

It will fail them, everything the Democrats does blows up in their face. They are pathetic losers with short sighted visions.
Sounds like a plan that will be super easy to short and make ten times more money otherwise.

Wharton's Jeremy Seigel thinks the fed is pumping and that will push at least 20% inflation in the next 1 to 3 years both in stocks and real estate. F. FED f. Democrats.

Tenpoundbass says

It will fail them, everything the Democrats does blows up in their face.

They got away with a election steal.

HeadSet says

They got away with a election steal.

It's blowing up in their faces, and it's starting to get entertaining watching the Rinos defend the Lifelong Huckster Democrat vote grifters, and it's even equally funny watching the The Commies defend the very GOP RINOS they have destroyed this nation over, since Bush Jr. came in office. Now everyone of the cock suckers are their best friends, it's American Constituency mainly the Patriotic ones, that they detest.

I'm still wagering that this administration doesn't make it to 4 years, not without a major overhaul and shake up. The Democrats may retain power, but it wont be Xoe Xiden or Cumonya Harris in the oval office on January 19th 2025.

If our election system gets cleaned out, and your average voter becomes a zealot Civics custodian paying attention to local politics and things they can directly affect, through joining the party and keeping it clean and clear of it. Then I would wager to say, the 2020 election steal would have been worth it.

We were going to have a repeat of RINOs shitting on Trump at every turn, and Trump playing the powerless victim of every Deep State and unelected Hack that usurped his power. I was not looking forward to that. And if Trump let the Establishment rub their Mandingo all over his face, and made America "Take IT!". Then there was nothing that says he would done anything to make his enemies mad. The last thing America needed was another Trump administration where he kissed the worst people on the planet Asses, because he took his base for granted.

We do this right, we wont need Trump in 2024.

I always thought the reasoning for low interest rates was to raise asset prices for taxes. The problem with how far they are going now isthey risk hyperinflation which will make taxes they collect worth a lot less.

RC2006 says

The problem with how far they are going now isthey risk hyperinflation which will make taxes they collect worth a lot less.

Also makes the existing government debt much less of a problem.

I don’t believe that the democrat plan is complex, although evil.
1. Spend more and more to buy more votes.
2. Bring in more and more foreign workers who eventually vote Democrat (e.g. California)
3. Tax the wealth of the legal workers and savers.

In the typical Democrat mind, there is no shortage of money for welfare schemes; the money is just in the “wrong hands”, so spend like crazy and get the money from the retirement accounts of the higher classes, while insulting them and calling them “racist” if they dare to keep their own money.