Hey everyone kevin here we have a lot of updates on what the heck joe biden just said. We've got updates on all the crazy new taxes that are coming in and folks. I don't know what to do, but i think they're gon na be a whole lot of extra taxes coming. It's gon na be pretty crazy, but we're gon na talk about it.

Okay, anyway, so democrats and joe biden have announced their scaled back. 1.75, trillion dollar build back better plan. This is 50 of the expected cost of what joe biden wanted, which was three and a half trillion dollars. This is for the social infrastructure plan, not including the 1.2 trillion dollars already passed by uh the senate waiting for the house to pass it on the hard infrastructure package, this social infrastructure package right now, the scaled back version is expected, and after i go through this, We're going to go through some of the tax changes is expected to include universal preschool for all three and four-year-olds, which is funded for at least six years.

That is, six years of government funding for this. This program subsidized child care that caps, what parents pay at seven percent of their income, also funded for about six years. A one year. Extension of the child tax credit right now that three hundred dollars per month for children under six and that two hundred fifty dollars for children under eighteen for most of filers is expiring, uh this this tax filing season.

So it's only been passed for 2021, which means you get those monthly payments from july through the end of 2021. The monthly payments then stop. You claim the other half uh in your tax return when you file so likely in april now. If this gets extended for another year, your monthly payments would continue throughout 2022 and you'd still get that extra bonus.

When you file your taxes for the rest of 2021. In april, which is awesome, so it would be extra funding, extra stimulus, expanded tax credits for 10 years for utility and residential clean energy, including electric vehicles. We still don't have the exact details of this. How it'll include or exclude tesla, for example, extend the current pandemic-related, affordable care act, subsidies for an additional four years.

There's also talk and there's been a lot about this, but it's also expected to include uh the uh allowing medicare to cover the cost of hearing. But i don't see dental or vision right now now. What we need to do as well is talk about all the tax changes going on and how they might affect you, people, you know or companies that you patronize so first look there's a lot of bickering going on at this point. We still don't know when this is going to get passed.

We hope it's within the next few months or these things could essentially die. If we don't get this done this year, who knows we could end up having a disaster? Uh come early december as these packages try to get passed and then we have again the budget deficit, uh and uh debt ceiling, debate and potentially government shutdown debate and all that ends up coming back before the holidays in december. But anyway, right now so far, we have a pretty good idea of what kind of taxes we're expecting and the odds of each of them. In fact, bloomberg put together a phenomenal piece on this breaking down, what's likely and likely out and definitely out so what i'm going to do here is i'm just going to give you a quick, uh, quick idea of what these things are so definitely out.

Okay, this is a big one, very, very important. If you want to build wealth, you you got to know about this one, because it affects the way you invest. It affects the way anybody invests, everybody, no matter what your income is so, and i talk about this regularly in the stocks and psychology money group and the real estate investing group. That's because this is very important and we like building wealth by the way.

There is a coupon code expiring for this program tomorrow evening, that's october 29th in the evening, and then the next day on saturday, pricing will be going up for all of the programs listed down below use that coupon code 41 off before the price goes up. So definitely out eliminating the stepped up tax basis on inherited assets. So here's how this works. Let's say throughout your life, you start with a little two-bedroom house, a two-bedroom condo or whatever.

Then you buy a three-bedroom two-bath and you buy a four-bedroom two-bath and you buy a bedroom three bath and then you retire and let's say you kept these three properties as rental properties and you never sold them and now over your life. You've accumulated all these assets and let's say it: cost you about two million dollars to buy them all and now they're worth, let's say: 10 million dollars and because you've depreciated, the rental properties. Let's say you: basically, if you were to sell tomorrow, you'd have to pay taxes to keep things simple on the entire 10 million dollars. If you were to sell.

So if you were to sell you'd probably have to pay somewhere around 2.5 to 3.5 million dollars in taxes. Well, let's say: you're: 95 years old now and you're like okay, i'm going to sell everything! Well, you're gon na pay that two and a half to three and a half million dollars, and let's say you decide to do that today, you sell everything. Today you pay two and a half to three and a half million dollars tomorrow. Then, tomorrow you get hit by a bus.

Well, the government comes along thanks to the stepped-up tax bases and says sorry: you died. Let's just pretend you don't owe us this money anymore and they waive your requirement to pay that kind of money in taxes. So, the very next day your family can sell and pay no taxes at all on that 10 million dollars. That's how the stepped up tax basis works and removing any change or making any changes to that is out.

So no changes here, which means it is still a good idea to invest long term in real estate and stocks, especially real estate, because you can 10 31, which you can't do in stocks, which basically just means deferring taxes over and over and over again going forward. Until forever, so now billionaires tax we're going to talk about this in a moment, but this is right now actually listed as likely out irs bank reporting requirements. This has been a really politically hot uh and politically charged issue. Basically, this is where the irs and uh the congress were initially saying: hey.

Why don't we make it so that banks have to report any uh, the the net inflows to people's accounts and the net outflows to people's accounts? So that way, if let's say you had a hundred thousand dollars in deposits, but you only spent fifty thousand dollars or fifty thousand dollars of outflows on your account and now you're only reporting twenty five thousand dollars in taxes, uh or or taxable income. What happened to the other twenty five thousand right? That's what they wan na be able to track, and so they wan na see net inflows net outflows and they were going to do this by requiring all transactions over 600 to be reported. That has so far been so politically unpopular that now they're thinking about any transaction over ten thousand dollars, which has also been pretty politically unpopular. So right now they're thinking about getting rid of the entire thing here.

It basically just makes it easier to catch uh. Tax tax evasion is what they're trying to do eliminating carried interest. This has a lot to do with venture capitalists and the profits that they can make over time by investing other people's money. This is not so important.

Corporate rate hike okay, so this was big raising the corporate tax rate from the current 21, which keep in mind donald trump reduced it from 35 to 21. Raising this back up to 28 led the stock market or the idea of this led the stock market to shave like five percent off right away, we've kind of been having a little bit of an end of the year rally now and part of the reason. I believe is because the talk about raising this rate has so far been deleted. It looks like this is probably not going to happen.

We're not going to see an increase in the corporate tax rate, which has been very good and cheered by investors. I've been investing like crazy in february march april may june july, in a lot of the dips that we've had in the market, whether it's been in crypto or stocks, and everything is doing so freaking well right now, which is totally awesome. It's been making it a little bit harder to buy, i'm still looking for opportunities that are left over and i invest in opportunities that are left over and if you want to see all my buy sell alerts. Obviously, those come with the stocks and psychology and money program linked down below check that out before the coupon expires, but anyway higher individual tax rate.

This is raising the max tax rate on individuals making over uh roughly married individuals making roughly over 530 000 a year, capital gains rate hike and estate tax expansion. These things right now are actually just straight up likely out, but what's likely in is a 15 corporate minimum on book tax so or on on book, and then a tax on that give you a very, very quick and dirty example of this. Let's say: amazon invested 300 billion dollars into new factories uh in 2018, okay, and then they wrote this off over 30 years. Well, that would give them a 30-year straight line: write-off of 10 billion dollars a year that makes sense right, 30 years, divided by 300 billion.

That's a 10 billion write-off every single year. Now, let's say that amazon has income of 10 billion and they're like yay. We made profit of 10 billion well. This is where all the progressives on the left are like.

Oh, my gosh amazon made 10 billion dollars, but they're paying zero dollars in taxes. Why? Because this write-off offsets this income right here, it makes sense. They were encouraged to invest for the write-off and now they're they're uh. You know uh they're, they're, basically saving on taxes, because of that over time.

Well, the progressives are saying: well, we should tax this at at least uh 15 or 1.5 billion dollars, in this case irregardless or regardless, rather of uh of the fact that they have depreciation. So that explains this a little bit: the global minimum corporate tax, similar to the first thing, the expansion of uh, the three and a half percent investment tax, okay, so uh this is the niit. The net investment income tax and it's really on capital gains dividends. Rental property income really just applies to high income taxpayers.

I think you need to make more than 200 000 single 250 is a married filing jointly uh couple and any kind of investments you may get charged an additional 3.8 percent. This was the obama tax, expanding audits, limitation on business losses, sur tax on millionaires levy on corporate tax stock buybacks. These are all things being considered right now: the uh surtax on millionaires. This would basically levy an additional five percent tax on income above 10 million dollars and an additional three percent on income over 25 million dollars, so just extra taxes for the wealthy now uh.

In addition to that, there has also been a discussion about a potential billionaire's tax, and this was really a way of affecting seven to eight hundred of the wealthiest americans, and the idea here was to basically tax wealth. This would require audits to be done. This is uh kind of complicated to audit uh, not only the stocks but the real estate and and probably the crypto and all of the assets that billionaires have, and the idea here is really to help pay for the buildback. Better plan been a lot of negotiations about this, but a lot of folks see this as the perfect way to tax the rich, and they use famous quotes like how warren buffett pays a lower tax rate than a secretary.

Even though he pays more in taxes pays a lower tax rate, that's because long-term uh capital gains are taxed at lower rates than income right, ordinary income and, and so the idea here is hey. Well, if we audit how much wealth in billionaires have, then we would be able to tax them at some form of level on the wealth that they've created now some rumors have been that they could get taxed as high as 25 percent on their wealth on assets. They haven't even sold. This seems a little misaligned with general investor mindsets like if you haven't sold anything you shouldn't have to pay.

Taxes has always been the idea, but that leaves a lot of folks like complaining that people like elon musk can just enjoy their stock price going up forever and they just take little bits at a time to fund their lifestyle. But as their wealth goes up and up and up and up, the government actually isn't realizing any kind of tax on this, and so this, of course, is leading people like bernie sanders and elizabeth warren to substantially support this. They say the money is going to come from billionaires, who quote: don't pay their taxes and therefore have enough money to shoot themselves into space. Warren has been talking about a two percent wealth tax, which is different from, like the capital gains style rate to up to 25, that that rumor seems a little extreme.

It's more likely to see something like what elizabeth warren is saying like a recurring one or two percent wealth tax, essentially, rather than just like a one-time tax hit on appreciated wealth. Now, what's interesting is kirsten cinema, which is the holdout vote for democrats, has highly opposed any kind of higher taxes on even let's say, marginal income tax rates, but has supported a wealth tax on billionaires. So this is potentially a way to get get some taxes through pelosi says that this was raised about 200 to 250 billion dollars over 10 years. Some argue that the wealth tax is not constitutional.

They say that the constitution only has the ability to issue direct taxes. Uh, that's a quote directly out of the constitution and they say that direct tax would mean like direct income and that wealth is not a direct tax. So this is something that could potentially get argued in the supreme court if it came down to it. This would, for example, cost somebody like elon musk up to 50 billion dollars, if enacted, which again seems this would be on the extreme end if they went for the highest potential.

One-Time wealth, tax of something close to the capital gains tax rate on gains uh and a lot of folks say, like elon musk, has said: look the united states. Debt is 28.9 billion dollars, even if you he says, even if you text all billionaires at 100, you'd only make a small dent in that number. So obviously the rest has to come from the public and elon musk sees this as just basic math. He says that him using his money, is really good for humanity.

He was quoted, saying my plan is to use the money to get humanity to mars and to preserve the light of consciousness, so maybe put us all into robots. Okay, other opponents, like steve mnuchin, the former treasury secretary, says that a billionaire tax is likely unconstitutional and will have a lot of unintended consequences. The chairperson of the ways and means committee has said that this is coming too late in negotiations and that he also isn't sure that it's constitutional, joe manchin, does not support a wealth tax. He believes that everybody should pay their fair share, but the bill unfairly targets billionaires.

He says: there's a lot going on with this and it's very convoluted, i believe, there's going to be a way everyone's going to be able to pay, but i believe we will end up in in a way where it's not just billionaires, paying that everybody has to Pay so uh. It's also worth noting that half of taxpayers pay 97 of federal income taxes. Take a look at this chart right here, i'll hide myself for a moment. So it's easier to see on the bottom right there you see what top one percent share of income taxes paid, the top one percent paid forty point, one percent of all income taxes and then the next uh three percentage pay about the next ten percent.

So that's how you get to the top three percent, paying the paying 50 of all federal income taxes, and you can see the uh bottom. 75 percent only pays about 13 to 14 of all the federal tax revenue that the united states government receives so uh, then uh, then what this is really coming down to with a billionaire attacks is the belief that wealth is much more concentrated and that wealthy people Should pay more now there's some surveys on this in a 2020 survey, 58 of americans said, the existence of billionaires was neither good nor bad, and this is really the opposite of what we saw in the 1800s and 1900s, which is a little more historical, but we Had a whole lot more anti-wealth sentiment back then than we do now uh there was a lot of anti-landlord anti-manufacturing anti-owner sentiment in the 1800s and 1900s, and that's really subsided over time. But there is a really big difference between what young people believe and what older folks believe. In 2019, the cato institute found that americans under 30 were 20 to 35 points, more likely to resent the rich and 39 percent went as far as saying it is immoral for society to allow billionaires.

That's 4 out of 10 people in america under 30 believe it is immoral for society to allow billionaires. This is more than three times the rate of resentment and anger felt by those over 65 years old, so those over 65 have more of this uh understanding of well, maybe those folks earned it and they worked hard for it, whereas those under 30 uh have have A completely different view that no, this is not a socially just uh thing, so we'll see if, as younger generations become older, if that sentiment, sort of changes, but either way, uh they're gon na be some big taxes to be paid. So we're gon na have to uh. You know, take a little bit of money here.

I can't i can't get it out. We're gon na have to take a little bit and start paying some taxes. I guess uh anyway, just in case you're wondering this is a stack of uh, two dollar bills and uh. Let's just say it has to do with um a special event coming up this weekend.

Alright folks check out those programs linked down below and we'll see in the next one. Thanks again, you.