Transcript

Mike:

Hello, this is Mike on money. I’m Michael Reese certified financial planner, and today we are talking about something that I hate with a passion, and that of course is taxes. I want to talk today a little bit about what our current president president Biden wants to do with tax rates, specifically capital gains tax rates. He wants to make them the biggest number, basically in the entire world. And we’re talking about exactly what he wants to do. So before we dive in and I get all hot and bothered, cause I hate this topic. You liked the video, click the like button below. Make sure you subscribe. If you haven’t already. And of course, feel free to share this with all your friends and relatives and neighbors. All right, here we go from CNBC. I’ve got this article, right, right here talking about five. It says here’s what it says. Biden’s top tax rate on capital gains and dividends would be among the highest in the developed world.

Mike:

Well, let me show you how to think about that. I hate that guy. Alright. Here’s what he’s talking about doing, okay. This is what he wants right now. Here’s how capital gains work. You have a 0% rate, a 15% rate and a 20% rate. And the idea is if you, if you have basically, you know, if you’re really low income earner, if you have capital gains or you have dividends, eh, you don’t really pay tax on them. But for most people, this is the vast majority of people. If it turns out that you’re making, it’s usually less than like 400,000 or something, oh, you’re paying about 15%. And if you’re making more than that 400,000, it might be four 50 for a married couple. You’re paying 20%. Right? But don’t forget a few years ago president Obama, he added something called a 3.8% surtax, which is

Mike:

A fancy way of saying, Hey, if you happen to make more than 200,000 or 250,000 of investment income, you gotta- surtax means more tax. Like I dunno why they just don’t say more tax because that’s what it really is. So really the top rate right now is the 20 plus 3.8 or 23.8%. So what is Biden want to do right? Mr. Tax and spend, what does he want to do? He wants to increase the number to 43.4% plus state tax.

Mike:

So I live in Texas, you know, right. Lone star state. Everything’s bigger in, except for guess what’s not bigger in Texas, the state income tax, we don’t have one ha take that. If you live in a different state some states have a state income taxes, others don’t. So like, if you’re in Florida, Texas, Nevada, you know, those are states with no income tax, but most states have a state income tax. What Biden wants to do is he wants to say, Hey guys, you know, we want the top tax rate to be 43.4. That’s what you give to the IRS. Plus if your state charges, state taxes, you got to pay them too. Right. But here’s the deal. Do you know? That is the highest number in the world. All except for one country. There’s one country, one just one that’s higher than that number. You know what that country is.

Mike:

Here’s the fun part about this. It’s the country that the guy behind the camera, my video guy, Luke, who’s filming this. It’s the country he’s from, Ireland. Ireland. Yeah. You didn’t know that, did you Luke? Yeah. So in Ireland they charge the highest tax rate is 51%. So Biden’s like I’m surprised he didn’t go for that number. Right. But here’s the point. What do you think is going to happen to the stock market? If he gets his way, if he gets his, when he goes from 23 to 43, that’s like 20% more tax. It’s almost double. What do you think is going to happen to all the big money in the stock market? They’re out of there, man, they’re going to sell, they’re going to get out. And they’re going to say, ah, we ain’t playing that game no more. That may very well crash

Mike:

the market. Just heads up. You do that. That’s a problem with a stock market. And I know, you know, here’s what he says. He’s like, oh, don’t worry about it. This is only going to be for people to make over a million dollars. If you make less than a million, you’re not even affected. Yeah. That’s right. Look, I’m 56 years old and I’ve lived long enough that I know what a politician says. I’m only going to tax the rich. Yeah. What happens to the rest of us? Yeah. You know, it’s going to trickle down to us. You just know it’s going to happen. Bottom line. That’s what he’s proposing. We’ll see if it goes through, I mean, this tax, the rich seems to always work. We’ll see if it happens, right. But whenever you see them talk about, we want to increase capital gains tax rates.

Mike:

That’s what they’re talking and capital gains tax rates, by the way, what does it apply to any stocks that you’ve held for longer than a year real estate that you’ve held longer than a year? Basically any investment asset that’s been held longer than one year. That’s what he wants to have happen. All right. Gang hope. That makes sense to you. Any questions, let us know, but in the meantime, that’s our topic for the day. So if you have anything like it, if you liked our commentary today, like the video subscribe, if you haven’t and feel free to share this with your friends and neighbors so that they also know what Biden wants to do with capital gains tax. We’ll talk to you again. Next time.