The only people who get a tax benefit for charitable contributions are those who itemize. Trump's tax reform decreased the number of people by two thirds. So instead of whining about the wealthy not getting quite as big of a tax break from charitable donations, why aren't you complaining of the tens of millions of people who no longer get any tax break for charitable donations?
The standard deduction is now more than most could ever deduct when itemizing(12,400 for single filers and 18,650 for HOH), so it is kind of irrelevant that many don't get any tax break for charitable donations any longer. They are better off now than they were when the could itemize.
Exactly. If you wanted a boat, you'd get a boat. If you want your money to grow, you'd invest. That's true regardless of the capital gains rate.
Eh, not exactly. There is an element of risk involved with making any real money. Typically, the lesser the risk, the lesser the potential gain. Conversely, the higher the risk, the higher the potential gain. If capital gains taxes on potential profits are higher, I am much less inclined to take the risk. It is a balancing act. Keep in mind, short term capital gains are taxed as regular income, therefore those with higher incomes whose tax rate will certainly be raised while their deductions are lowered will be less inclined to invest as the risk/reward factor has increased substantially. In my case, I would be more inclined to buy another boat or potentially invest in foreign real estate. I am actually already looking into the latter. Another boat is a bit too frivolous for me, after all, I am a Conservative. We are not nearly at the level of Bill Gates or most professional athletes, but the Biden/Harris tax plan will most certainly affect us.
What I have never understood is this idea about the rich not paying their fair share. When it comes to the Gates, Bezos and Trump's of the world I can see that to a point due to their enormous offsets, depreciation, etc., but there is a huge difference between them and someone working but making say 500k/yr. Using the 35% tax rate, this person would pay $151,761.00 in federal income tax. This doesn't include that in all likelihood this person is paying more in property taxes as well since that tax is based solely on the value of property. A person making 50k/yr obviously pays considerably less. Both drive on the same roads, their kids go to the same schools, etc. How do we come up with the idea that the guy throwing 150k into the pot ever year is not paying his fair share? The fair share has nothing to do with how much money somebody makes. That is like saying the price of a movie ticket should be based on how much money you make. If you make 500k, then your movie ticket is $200 instead of $20 for the guy making 50k. I understand this to a point, meaning people who can't put food on their table should pay less, but after the necessities, the rest of the stuff is just wants and desires. The guy that earns more money has more money for discretionary spending...that's life, but it doesn't mean he isn't paying his fair share.
What you envision isn't really the point. To be competitive in the world economy, we either have to be the best at what we do, cut our pay rates to the bare minimum, or enact protectionist policies. I vote for the first option. Biden and Trump are in the last category. No one is in the second category unless you happen to actually own a business.
I am not sure how using solar panels to run a plant is necessarily correlated to making the best widget. Buyers, by and large, don't care how or where something is made. They want the best product for the best price. Even if we made a slightly better product, of which there is no guarantee, if we are non-competitive on price due to green-energy manufacturing restraints that other countries do not have to adhere to, we will lose. The only way this works is if our product is considerably better than other products even though it is higher priced. I don't see anything in the Biden/Harris plan that would ensure or even promote product quality and frankly, that isn't the job of government anyway. Their job really should be to stand out of the way as much as possible and not intervene. Let the free-market work. It will not work when our companies are on an uneven playing field with much of the world, particularly China. Now if you are ready to shut down trade with China or tariff their products to a point where they are as expensive as ours, you may be on to something, but not sure we are at that point.
It's actually going to benefit the majority of families. The marginal tax rate for the median income family is 12%. That means they get a 12% tax benefit from contributing to their 401k. Biden's plan increases that to 20% (using the hypothetical number since they haven't set it in stone). Most families will therefore get an increased incentive to contribute to their 401k. I like that. I like it quite a lot. Does it bother me that the wealthier will get less of a benefit? Not really. They'll keep contributing for that 20% benefit because that's still a good deal. What else are they going to use to save for retirement with that benefit other than IRAs?
Well, the point of this discussion was that Biden was supposedly only going to raise taxes on people making more than 400k/yr. Clearly, that has been proven to be incorrect. People making between $40,126 to $85,525 are in the 22% tax bracket so even this group would be paying more taxes by virtue of having less pre-tax deductions if they contribute to a 401(k). 40k is quite a bit from 400k I would say.
You got a good point. I'm not exactly in favor of this last bit. I see the pros and the cons, but you're right on this point.
DBA, you're a smart person. Thanks for the interaction.
Thanks for the discussion. I disagree with many of your points, but at least you are thinking them through and understand why you will be voting for Biden/Harris.