For those who. hate Elon Musk

Exactly. I was showing that Tesla did previously use Nvidia's chips and then later dropped the use.

Mike

 

As an attempt to paint Nvidia being bitter about that. Tesla may have continued using their chips on the server side while dropping Nvidia from the cars. None of which has a bearing on Musk's actions with directing chips for Tesla to his private companies.

 

liz warren gets over a minute of applause at dnc: /

she must have really laid into musk

 

The billions of Musk make an easy target. Comparatively - Bezos seems to get a free pass from politicians for his billions. Wonder why.
Musk/non-union attacks are another 'wonder why'. Don't orher manufacturers build vehicles in Mexico & the south w/out unions?
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bezos doesn't run X or make constant negative references to democratic policy

 

When people talk about that "8% tax rate" for the super rich, they are including your paper gains on that unsold stock as current income. Their proposed wealth taxes would tax these "unrealized capital gains." Real hard cash tax payments on paper 'profits'.

Warren's "2¢ tax" -- 2% of total net worth above $50 Million, 6% above $1 Billion -- would compound over time to take 50% from the former group every 34 years, and 50% from the later group every 11 years. And they would still owe income (capital gains) taxes on the remainder when sold. Bill Gates already be at around 90% taxed away, Warren Buffet even higher, slashing their life philanthropy.

I don't support a wealth tax, but would support getting rid of tax preferences for investment income. I.e. tax capital gains (and maybe dividends too) taxed at the same rates as ordinary wage income, instead of the today's reduced rates. No taxes on too-often-illusory paper profits until they are converted into actual hard cash.

Disclaimer: A significant portion of my retirement resources are "unrealized capital gains." I'm not even remotely close to being touched by Warren's proposed wealth tax, but would see a significant tax increase from my own proposed invenstment-income tax plan.

 

I have a stock I paid about $2 for back years ago accounting for splits. Paid taxes on the dividends. Now at $200 or so. How much of that increase in value is due to inflation? An item that cost 100 dollars in 1960 costs 1,045.29 dollars at the beginning of 2024.

You have a house you paid $70k for 50 years ago. Now worth $700k. But to replace it would cost not the $70k but closer to $750k. Have you really made a profit?

So how should the basis be computed? How should the holding period be factored in?

 

These taxing of wealth and paper gains is because payments in stocks allows the avoidance of paying taxes by using securities backed line of credits against the stocks.

Anybody could set up a SBLOC to take value out of a portfolio when needed to push off selling until better tax circumstances, or if selling is blocked for some time. It is a smart move. The uber wealthy have enough value in securities that they can juggle finances to put off having to sell to cover these loans practically indefinitely. Then they die, and step up negates any gains for taxing.

Tax Planning Tip: How To Use An SBLOC To Lower Your Taxes Today - Financial Planner Los Angeles

 

Yes - and ... FICA takes away a ton of the other deductions you could normally write off. One of the few things they don't take away is taxing Roth's & their subsequent gains - under the principal it was already taxed.
Over our several decades of generating income, the main purpose was to offset inflation that has ranged anywhere from 3% to 15%. After retiring you may live another 30 years. That means in order to live moderately - you'll need a million dollars because of inflation (ie the worthless Fiat dollar ever being constantly deflated in purchasing power). If you make 5% on that 1 million e/ year, the government wants to take $50,000 ... just because you were prudent enough to offset inflation.
It's a Fool's game. But it's the only game in town.
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If adjusted for inflation, then that would be an $18 gain from inflation alone, and $80 from market growth.

Should bank savings account interest be adjusted the same?

= = = = = = = =
EDIT: Note that eliminating the tax preferences on capital gains, and adjusting capital gains basis for CPI, e.g. to accommodate long term inflation on home appreciation, are not at all incompatible. Tax policy could do either, or do both without tripping up over each other.

 

As part of any such change, I'd support removing the capital gains basis step up at death too.

With no capital gains basis step-up, and no reduced tax rate for such gains, I'm not sure we need any estate tax / death tax either. The government wouldn't get any money at death, but the heirs have to pay up at full wage rate whenever they liquidate some assets for spending money, or to invest elsewhere.

 

Look again. That 7.65% FICA is really two parts: 6.20% for Social Security (OASDI), and 1.45% for Medicare (HI). Only the first part has a wage base limit anymore.

The wage cap on the Medicare portion was removed long ago, so high wage employees keep paying it all year. In addition, an Additional Medicare Tax of 0.9% was added for high wage employees in 2013, bringing their side of the Medicare tax to 2.35% on wages above the trigger threshold. Though I understand this addition is only on the employee side, not the employer side.

 

Then there's getting hit by social security's IRMAA - oh not a tax? - because they call it a surcharge? LOL
Ask Social Security how to avoid it next year? They tell you don't make so much money.
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While it ain't working out, an inheritance tax in a democratic society is a tool to curb the growth of an aristocratic class.

 

IRMAA is Medicare, not Social Security.

For some reason, I never paid any attention to IRMAA in my future budget planning. But after some changes last year, and looking ahead to start Medicare next year, she suddenly jumped to my attention.

 

I would hope those other changes I mentioned, raising taxes on investment income to match taxes on wages, would help do this.

The 3.8% Net Investment Income Tax, also applied to higher income taxpayers since 2013, moves in this direction, but only part way.