Posted April 29, 2021
By Sean Ring
Terraforming America With Your Tax Dollars
Joe Biden Doesnt Take Enough of Your Money - Spends $80 Billion to Take More.
As if April 15th isnt a big enough slap in your face every year - now Uncle Joe wants to make sure he squeezes you for everything youve got.Under this new plan, banks and other payment providers would be required to tell the IRS how much money came into and out of individuals and businesses accounts each year, going far beyond the existing reporting of interest income.If this doesnt give you the willies, I dont know what will.Not only that, but the IRS would increase its enforcement staff by 15%. Allegedly, the plan would collect roughly $700 billion over ten years that would be otherwise uncollected.Interestingly, when the government has independent information about income, compliance rates are nearly 100%. This is just one reason I say if youre a W-2, you may want to reconsider.Where the government doesnt have such information - much of business income - estimated compliance rates are often about half that level.Im not supposed to be quietly happy about that, am I?I can see the new IRS marketing campaign now:Welcome to the IRS
Audits so gentle, not even your proctologist can tell!
And it gets worse from here
Biden Defies Congressman Nadler, Will Tax All Your Gains as Much as Possible
A few days ago, I wrote how Democratic Congressman Jerry Nadler inadvertently became Libertarian Congressman Jerry Nadler by tweeting, No one should ever be taxed twice on the same income. Its not fair and its not just.
Hear, hear!
Alas, Drowsy Joe Biden will ignore this rather fair call and stick it to anyone who has an estate to leave his children.
So lets start with the SALT tax deduction. Before President Trumps administration, taxpayers who itemized their tax returns were allowed to deduct in their entirety their state and local taxes from their federal income tax. The Trump administration capped that tax deduction at $10,000.
Who did that affect the most?
Blue state rich folk. Thats the real reason why Jerry Nadler, Congressman of New York, tweeted so hastily.
Never forget your Sowell!
But it seems the Biden plan is having none of that. In fact, it looks like Joe Biden is intent on looting any heavy purse he can get his crooked digits on.Heres how he proposes to do it.First, he will increase the capital gains tax - a tax on already taxed money - from 20% to 39.6%. (I hasten to remind you the blue states overwhelmingly voted for Biden. A self-inflicted pox on their houses!)Then, he will eliminate the step-up basis for inheritance tax, yet another tax on already taxed money.It works like this: Say youre leaving your heirs a portfolio of stocks. If those stocks have experienced a capital gain - highly likely in this market - you can pass this portfolio on CGT-free. That is, your heirs wont get whacked on the paper gain.This is formally called the step-in basis.It makes sense, as its not been a realized gain. Its just paper, and paper gains can disappear.However, the Biden plan wants to do away with the step-in basis and tax the capital gains on the stocks passed on from parent to child. This means your portfolio would get taxed twice: once for CGT and once for inheritance tax.Allegedly, this would raise $133 billion. But Congress must eliminate the step-in basis to create these gains - for the government, of course, not you! - according to a paper from the Wharton School.What you would ultimately leave your heirs with well, thats not what the government is concerned with, is it?And whats even more galling is that the market doesnt seem to care about this yet.
But wait! Theres more!
Kamala Harris Wants the US Taxpayer to Finance Planting Trees in OTHER Countries, Create Pathway to Citizenship for the Foreign Planters
For crying out loud, I wish politicians would stop throwing these grapefruits to me.
As Han Solo said in The Force Awakens, Its true. All of it.
Yes, Veep Harris is heading to Mexico to discuss the plan with Mexican President Andres Manuel Lopez Obrador. Of course, the White House is saying this is only part of the agenda. But the fact that any foreign official is trying to dictate US immigration policy - and getting the Veeps ear for it - is alarming.
Heres how the plan will work. The US Government will partially finance a program to plant 1 billion fruit and timber trees. Obrador suggested the USG grant 6-month work visas to the planters and create a citizenship pathway. Despite the fact, all that work will be done in Mexico and Central America.
Maybe Im missing something, but this makes no sense whatsoever to me. I guess youve got to plant the trees before you hug them.
And finally, for perhaps the scariest thing in the world for Americans
Want to Know What Happens to a Capitalist Mecca When the Communists Take Over? Look No Further Than Hong Kong.
My father used to tell me about Kai Tak Airport as a boy. About how he had flown into Hong Kongs old airport and saw someone taking a leak in their apartment as he was landing. Thats right; the airplanes would get so close to the nearby buildings upon arrival, you could see into its windows.
One of my favorite books, James Clavells Noble House, was set during the 1960s when Hong Kong was getting a massive boost from all the Shanghaiese financiers whod been lucky enough to escape Mao. What a page-turner!
I also recommend Taipan, again from Clavell, but set in the 1840s as a fictionalized rendering of the founding of Hong Kong and Jardine Matheson. The entirety of Clavells Asian Saga is genius in print, but the Hong Kong books are my favorites.
I lived in Hong Kong for three-and-a-half years, from March 2015 to September 2018, when it was well into its descent. Rents were astronomical, along with any consumption costs, and a general pall hung over the city as if it foresaw its impending doom.
That doom is well and truly here. Hong Kongs office space is very pricey because theres no flat land to build on and because so many people want to live there. Its the perfect intersection of low supply and high demand. And when youve got 1.4 billion people immediately north of you, that kind of pressure isnt going anywhere.
Nevertheless, the Communist takeover is starting to bite. Despite Beijings promise not to interfere in Hong Kongs affairs for 50 years, it decided to intervene after only 20 or so.
And now, Hong Kongs prices are finally starting to drop. That usually sounds like a fine thing. But Im going to venture that this is more to do with the vibrant entrepreneur leaving Hong Kong and seeking his fortune elsewhere than with a downturn in the cycle.
Its far from the only place this is happening. New York is currently experiencing a downturn, as well.
What do they have in common?
Covid, social unrest, and left-wing policies.
Americans generally look at Zimbabwe, Venezuela, or even back to the Weimar Republic and think, Thatll never happen to us. But a more apropos comparison may be to Hong Kong.
This is what happens when the Communist lunatics take over the Capitalist asylums.
With that, I leave you for today. Go out and have a great one!
I beg to remain, Sir, your most humble and obedient servant,
Sean Ring
Editor, Rude Awakening
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