So let's talk about the biden tax plan, it's quite exciting, a lot of interesting changes coming and i think, there's really an important discussion that needs to be had that mainstream media are unable or uncapable or doesn't want to have and in this video i want to Cover a lot of the a lot of the smoke screens, a lot of the nonsense that you don't hear in mainstream media about this upcoming tax plan, and this is gon na - be a nerd video, i'm a tax guy. I like it a lot. This is not a political video. It's me breaking down this tax plan with any tax plan, you have to have stated goals.

What are you trying to achieve right? Because the tax plan is just a way to collect money and drive behavior right? So what is this plan trying to achieve? I think if the biden administration were able to call it the way they really want to do, they would probably call it the rich tax reform, but they can't so it has a normal name. However, the whole idea of this plan is actually to pay. This is the bill for all the stimulus infrastructure acts. Somebody has to pay for this, and this is the way to collect the bill and the by the administration is trying to get the rich people to pay for these plans, which is a noble concept, and i totally applaud it.

However, we have to test of how effective this would be to actually get this to happen because having nice goals having nice intentions, you know what they say about nice intentions. You know the road to hell is paid with nice intentions, so we have to see if this plan actually makes that happen and by the way before we go through the specifics, we have to give a lot of respect to the biden. People they're, probably the only politicians in history that actually made a promise during the campaign and kept it once they got elected. Nobody should be shocked about this.

They spoke about tax increase through their entire campaign and now they're falling through. So if anything they're consistent, you know and they deserve my respect for actually falling through. Not a lot of politicians do so what are the specifics of this tax plan and it's not as complicated, but it's actually very interesting. So, first of all, there's going to be an increase.

According to this plan from 20 to 39.6 on capital gains tax. Whenever you sell assets, you pay a capital gains tax stocks, houses, cars right, so it's increasing from 20 to 39.6, but only for people who earn at least one million dollars per year, meaning rich right. I'm joking! I don't think people that are rich are. This was just a joke, so the second part is that the individual tax rate that we have right now has a tier system so for every additional income beyond a certain tier, you pay an increase rate, so the top rate right now is 37.

That's gon na be going up from 37 to 39.6. It's the same number as before, unless you thought i was kidding. However, there's also going to be a surtax for the rich raising both to about 43. Now, that's very hefty.

I know a lot of people. Mainstream media will tell you well in europe, they pay higher taxes and everything is fine. Well, first of all in europe, especially in countries like denmark and sweden, the government actually gives you a lot more than the us government provides for their citizens. However, having said that, you should know that the european tax numbers are not as high as they would have.

You think europe has an average corporate tax rate of 21, an average individual tax rate of 36 percent and an average capital gains tax of 19. So, according to these numbers, where the us is at right now is right on that average right down the middle, and if this tax plan goes through, the u.s is going to be at the top. As far as corporate tax and capital gains tax. However, not everything is gloom and doom.

We actually get to say fu to denmark, which is something i wanted to do for a long time. Denmark is currently the highest tax country for capital gains with 42, the highest european country. Now we actually get to say a few to them. Take over the first spot.

America is number one again, as always, at least in capital gains tax. Now, jokes aside, it's a very high rate and denmark believe you me has a completely different system than the u.s. As far as what the citizens are getting from the government, but that's a whole different discussion before we go through this, you know: will it achieve its purpose? What would it cause? Can the byte administration push this thing through senate? Does he have the votes? I don't think so. However, i wouldn't say that this thing is completely going away.

I think that eventually we'll see some watered-down version of this - probably some sort of a compromise. Around 25 corporate tax rate, around 30 capitals gains tax, and i think it's going to be much higher than it is today, but not as high as this plan suggests. However, and here's the trick check this out what is going to happen with the stock market, if you listen to all these guys in mainstream media, this thing is going to crash the stock market. No, statistically speaking, going back to the 80s, the stock market always crashes about four to five percent in the first six months after the announcement of a tax hike but check this out in the six months following the enactment of the tax hike, the s p.

500 goes up by 15 in six months, so all this fun about the stock market crashing because of the tax. It's not gon na happen. Statistically, it's a bunch of nonsense. Nothing is going to happen with the stock market long term, if you're not a day trader.

If you're not a swing trader, if you're a long term investor, you shouldn't give a about this, because this is going to do nothing if anything, it's a catalyst, long term proving my point again and again about day trading and swing trading being ineffective and about a Long term, investing being the only way to make money in the stock market, but that's a whole different discussion. So now that we know this, the actual question is what's going to happen with this: can we actually get the rich with this? Unfortunately, i think the answer is no sorry, here's why i don't know if you notice, but there's no increase in dividend tax. Only capital gains tax, usually dividend and capital gains, go hand in hand in every single country, including us. Why do you think there's no dividend? Tax in the system did they just forget? Is this an accident? I don't think so.

Here's the reason this dividend tax loophole and it's a gaping loophole. I mean a school bus can drive through it is there for the rich to get out of this quite simple. So it looks good in the newspapers - it's great pr, but it's not effective unless you raise the dividend tax along with the capital gains. This is a way out.

This is an escape route and it's there in plain sight. Essentially what you do is a rich person. You set up a company in singapore or hong kong, whatever country with an ex territorial tax system. You shift your taxes there by owning the stock.

Through these companies paying zero percent tax corporate tax, then withdrawing it as a dividend. They have no withholding tax boom. You get the money dividend tax. Is you guessed it 20, so 80 cents on the dollar just by setting up some corporation in hong kong or singapore, whatever that's just one example, there's literally thousands of structures.

We can build to get out of this when the dividend tax is 20 simple, but even then, even if you increase the dividend, tax you're just making it a little bit harder for them. I have plenty of clients who live through corporations. All you do, is you set up corporation, you own the stock through that u.s corporation and you pay 28 corporate tax and your entire life is running through that corporation. It buys your cars, your houses, everything and essentially you're living through that taking out minimal dividends and there's plenty of clients who live like this whole lifetime.

So this is actually not as effective as they want you to think it reads. Well, it has great pr, but as far as getting the rich people to pay for this, it's not gon na get the job done, at least for the very least just increase the dividend tax. But who knows this is just my opinion might be. Inaccurate might be wrong, might be the ramblings of a madman.

Who knows you got ta? Do your own research i'll, see you in 2030, allegedly blabla, mother, effing blah soon 2030. You.