Get ready for more stock market volatility. A LOT more . . .

Photo above - in Dogecoin we trust. Reverend Elon recommends you buy crypto. And shares of "X".

If you’re like me, you don’t earn $1 Million a year. That’s a nice round number though, isn’t it? Politicians can claim “my new tax only applies to millionaires”.

What’s this new tax? The capital gains tax. When you sell stock that you’ve owned for more than year, and you’re “a millionaire”, your new tax hit will DOUBLE, from 20% to 39.6%. See link below.

But what if you’ve owned it for 10 years? Let’s assume you’re a “conservative” investor, and you saved some of your pay in a stock market account, like you were told. In an S&P index fund, just like you were told. Conservative money management – not Bitcoin, Gold, or meme-fad-stocks. If you did that ten years ago, the S&P was at 2,000. Today it’s near 6,000. Triple. Expect to pay 40% tax on the gain from 2,000 to 6,000. If your account has a balance of $100,000, congrats – it’s now only worth $60,000 after taxes. Maybe less, if you have to pay state taxes too. Kiss about half of your home down payment goodbye, suckers. This is Biden’s plan, anyway.

Someone with a dunce cap on is probably shouting with glee right now: "serves them right. This will bring home prices down."

Except the opposite is probably true. People might RUSH to withdraw money from a stock index fund which will be taxed at much higher rates, and jump headlong into real estate IMMEDIATELY. And in the future, there will be no incentive to hold stocks long term. Since short term and long-term gains are both going to be taxed to the moon. We should expect Uber drivers and Starbucks baristas who have side hustles as day traders to increase the stock churn. People will be willing to take more chances, since market volatility will already have increased.

If you believe you can get rich day trading Tesla, Doggy-coin, Lithium mining companies, and GameStop, your moment has arrived. Everyone should hang onto their hats. The US president who doesn’t personally own ANY stocks is now setting the rules on how stocks will be taxed. Good luck and dog-speed.

I’m just sayin’ . . .

How Biden’s Proposed Capital Gains Tax Could Impact Your Investments (msn.com)

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LeopoldBloom · M

I'm old enough to remember George H.W. Bush saying in his nasally voice "Capital gains tax cut!"

Taxes aren't just to raise revenue. They can be used to encourage or discourage investment in various sectors of the eoconomy. Increasing the capital gains tax on stock investments could be seen as a way to direct more investment to direct ownership instead of securities.

But don't worry, Biden proposes, Congress disposes. The Republicans will never do anything to inconvenience their rich donors who make most of their money in the stock market. It's not just day traders, but big investors who keep their money there long-term and live off of dividend checks. This is DOA in the House, the only question is whether Mike Johnson tears it up or just crumples it before he puts it in the circular file.

The point of this is to appeal to low-income, working-class voters who don't have money in the stock market and have no problem with capital gains being taxed higher.

SusanInFlorida · 31-35, F

@LeopoldBloom

i'm old school. i don't believe taxes should be enacted to manipulate human behavior. just to raise revenue. i would prefer no "behavior" taxes on . . .

- alcohol and tobacco (just ban them if they're harmful)
- buying Tesla cars with rebates.
- operation of state run lotteries
- different real estate tax rates on homes, commercial, farmland, and churches/universities
- rebates for backyard windmills and rooftop solar
- higher fuel taxes on diesel than on gasoline

windinhishair · 70-79, M

Once again, your conclusions are not accurate. If you took out a portion of your income in a stock market account as part of an IRA or 401K, you do NOT pay capital gains on future income. You WILL pay taxes on what you take out in the future, but as ordinary income, not capital gains.

https://www.marketbeat.com/financial-terms/capital-gains-401k-ira/

SusanInFlorida · 31-35, F

@windinhishair you completely misread my post. i make that VERY argument. try again.

windinhishair · 70-79, M

@SusanInFlorida Actually, that isn't what you said:

Let’s assume you’re a “conservative” investor, and you saved some of your pay in a stock market account, like you were told. In an S&P index fund, just like you were told. Conservative money management – not Bitcoin, Gold, or meme-fad-stocks. If you did that ten years ago, the S&P was at 2,000. Today it’s near 6,000. Triple. Expect to pay 40% tax on the gain from 2,000 to 6,000. If your account has a balance of $100,000, congrats – it’s now only worth $60,000 after taxes. Maybe less, if you have to pay state taxes too. Kiss about half of your home down payment goodbye, suckers.

If you deferred your pay in a stock market account as part of your IRA or 401K, like you were told, even though the value appreciates over time, you will pay future taxes on withdrawals as ordinary income, not as capital gains. You will NOT be paying 40% on capital gains.

Read your post again. Perhaps you meant something else.

SunshineGirl · 36-40, F

That's an awful lot of "mights" and hypotheticals . .

You have shown yourself in your posts to be in favour of reducing government debt. In the nation at large there seems to be an appetite for government spending on a grand scale to stimulate economic activity.

Increasing taxes on unearned income seems to me to be a wholly unexceptional and equitable way of closing the gap between these two objectives.

SusanInFlorida · 31-35, F

@SunshineGirl voters have an appetitie for "free stuff". that's why politicians increase the national debt - to buy the votes of single issue voters:

- student loan forgiveness
- 100% tariffs on cheap electric cars
- $44 million libraries for a town of 22,000 adults and kids.
- Obamaphones
- section 8 housing

etc.

MethDozer · M

. Democratic presidential nominee Vice President Kamala Harris last week proposed a 28% tax on long-term capital gains, or assets owned for more than one year, for those making more than $1 million annually.

Oh NOOOO, those poor victimized wealthy elites

SusanInFlorida · 31-35, F

@MethDozer all the people don't pay taxes are with you. stand strong. get high.

MethDozer · M

@SusanInFlorida I very much doubt the 1% is with me.

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