Impacts of recent Capital Gains law proposal

[egri]

Originally Posted by BobC

As an earlier poster, Jayshum, accurately pointed out, individuals are subject to graduated federal tax rates or tax brackets. You don't end up paying the highest possible rate on every single dollar of taxable income that you earn. At least not under current federal tax law, and I doubt such a new tax law allowing that to happen would ever be passed.

My concern with that is the brackets come down over time, while rates generally go up. Adjusted for inflation, when the income tax was introduced, the top bracket was 7% on incomes above $12.9 million. Now it's 37% on everything above $500,000. Four years after the tax started, the top rate was 67%, and with the exception of a few years in the 1920s, it stayed above 60% (and often above 70/80/90%) until the late 1980s. Since then it's been going back up, with occasional cuts never sending it back down as low as it was before. If someone is smart enough to build a successful business from scratch, they're probably also smart enough to look at that trend, then find the Cayman Islands on a map, as Sir John Templeton did.

[BobC]

Originally Posted by egri

My concern with that is the brackets come down over time, while rates generally go up. Adjusted for inflation, when the income tax was introduced, the top bracket was 7% on incomes above $12.9 million. Now it's 37% on everything above $500,000. Four years after the tax started, the top rate was 67%, and with the exception of a few years in the 1920s, it stayed above 60% (and often above 70/80/90%) until the late 1980s. Since then it's been going back up, with occasional cuts never sending it back down as low as it was before. If someone is smart enough to build a successful business from scratch, they're probably also smart enough to look at that trend, then find the Cayman Islands on a map, as Sir John Templeton did.

With the Tax Reform Act of 1986 they dropped the top individual tax bracket rate from 50.0% down to 38.5% on taxable income in excess of $54,000 for single individuals, starting in 1986. In contrast, the top individual tax bracket rate for 2020 is 37.0% on taxable income in excess of $514,800 for single individuals. And I believe the highest the individual tax bracket rate has been during this period from 1986 was 39.6%, with the lowest top bracket rate during this same period at 35.0%. So in truth the top tax bracket rate is actually lower today than it was about 35 years ago in 1986, and during those ensuing 35 years has never been more than 1.1% higher, at a top bracket rate of 39.6%.

As I noted above, the top individual tax bracket rate for single taxpayers started at $54,000 back in 1986, and has since risen to now starting at $514,800, almost 10 times what the top bracket rate started at back in 1986. Meanwhile, in looking up a few measures of inflation in time over that same 35 year period from 1986 to today I found:

The average annual inflation rate over that 35 year period is 2.55%

$1 in 1986 adjusted for inflation is worth $2.42 today in 2021

The CPI (consumer price index) in 1986 = 109.600

The CPI in 2021 = 264.877

Given all that, I think an almost ten times increase in the amount at which an individual starts to pay income taxes at the highest marginal tax rate over the same 35 year period as these inflation measures is not too shabby. So exactly where are you getting your data from that indicates that since the late 1980's that the top marginal tax rates have been going up, and that the tax brackets have been going down?

As for business owners potentially moving away from the U.S. if they begin to feel their tax burden is becoming too heavy, that is one reason that all the rhetoric spewed about having the rich and well-to-do pay an even bigger share of their income as taxes is just that, rhetoric, to appease a portion of the voting masses. The government knows they can't afford to completely alienate a good portion of their business community and its leaders, for fear they would pull up and move elsewhere. The business world has changed so much since WW2 with major leaps in technology, tranportation/logistics, computers and the internet, and the globalization of the marketplace. Companies that used to just worry about producing/providing for the U.S. market are now able to go global and easily reach and deal with customers and suppliers anywhere in the world. And that has become even more pronounced in the midst of the covid pandemic as companies and people started being forced to work more remotely than they ever had been before. And as a result, to pick up and move business operations and people to other parts of the world may not be as difficult and far-fetched as previously may have been thought. So now the federal government does have to pay attention to how they tax and treat businesses and their owners else possibly lose them to other countries. Luckily we are still one of, if not, the top consumer economies in the world. That will keep a majority of businesses from ever leaving due to the need to be here in the U.S. to fill our consumer needs. And then of course, despite all the negative things that have occurred in recent times, an overwhelming majority of Americans still consider this the greatest country on the planet and would rather live in the U.S. than anywhere else in the world. But despite all that, our government will likely still not go overboard with tax increases to the business community and its owners/leaders for fear of starting to change such pro-U.S. thinking.

[pbspelly]

I've never understood the justification for the stepped-up basis, particularly for things like stocks. Someone gives you stocks they bought for $5000 that are worth $10,000 when they give them to you, and you sell them for $10,000, you owe capital gains on the $5,000 gain. Someone dies and leaves the same stocks to you in their will, and you sell them for $10,000, you owe nothing on the $5000 gain. Why does their death wipe out tax liability for the $5000 gain? I'm not a tax lawyer, and maybe there is some justification, but I don't see it.

Likewise, the carried interest treatment for hedge fund manager income has always seemed like a huge loophole to me.

[Exhibitman]

Originally Posted by pbspelly

I've never understood the justification for the stepped-up basis, particularly for things like stocks. Someone gives you stocks they bought for $5000 that are worth $10,000 when they give them to you, and you sell them for $10,000, you owe capital gains on the $5,000 gain. Someone dies and leaves the same stocks to you in their will, and you sell them for $10,000, you owe nothing on the $5000 gain. Why does their death wipe out tax liability for the $5000 gain? I'm not a tax lawyer, and maybe there is some justification, but I don't see it.

Likewise, the carried interest treatment for hedge fund manager income has always seemed like a huge loophole to me.

As to the former, the justification is that the government has already had its bite at that money via the unified tax credit. When you die right now you can pass the first $11.7 million tax-free. After that you pay estate tax. The asset has already been 'taxed' when it passes, with valuation at fair market value, so the idea was that the G doesn't get a second bite at the asset at the decedent's basis when the heir sells it.

As to the latter, it is total BS: there is no reason other than good lobbying on the part of the rich for earned income to be taxed at a higher rate than any other income. The idea of investment being encouraged is crap; no one who builds a business does so based on taxes, except the accountants who file them.

[pbspelly]

Originally Posted by Exhibitman

As to the former, the justification is that the government has already had its bite at that money via the unified tax credit. When you die right now you can pass the first $11.7 million tax-free. After that you pay estate tax. The asset has already been 'taxed' when it passes, with valuation at fair market value, so the idea was that the G doesn't get a second bite at the asset at the decedent's basis when the heir sells it.

As to the latter, it is total BS: there is no reason other than good lobbying on the part of the rich for earned income to be taxed at a higher rate than any other income. The idea of investment being encouraged is crap; no one who builds a business does so based on taxes, except the accountants who file them.

So the government has already had its first bite, but only if the estate is worth more than $11.7 million. Otherwise there is no bite at all, right? Maybe they should eliminate the step-up basis unless the asset was taxed as part of an estate that exceeded $11.7 million. The main argument against an estate tax is that the decedent already paid taxes on those earnings or property during his or her lifetime. So it isn't fair for the government to tax the same thing twice. But that wouldn't apply for unrealized capital gains, right? Taxes have never been paid on that, and with the step up basis, they never will. I'm sure there are complications and stuff I am not seeing, but it seems to me that this is a loophole.

[Exhibitman]

Originally Posted by pbspelly

So the government has already had its first bite, but only if the estate is worth more than 11.7 million. Otherwise there is no bite at all, right? Maybe they should eliminate the step-up basis unless the asset was taxed as part of an estate that exceeded $11.7 million. The main argument against an estate tax is that the decedent already paid taxes on those earnings or property during his or her lifetime. So it isn't fair for the government to tax the same thing twice. But that wouldn't apply for unrealized capital gains, right? Taxes have never been paid on that, and with the step up basis, they never will. I'm sure there are complications and stuff I am not seeing, but it seems to me that this is a loophole.

Absolutely, it is a loophole, but one that has a practical purpose to it: the credit is designed not to force the heirs to highly appreciated residences, farms or smaller businesses to sell off the assets to pay taxes. Used to be $3.25 million but was jacked up and indexed to inflation. The UK, by contrast, taxes inheritances worth more than 325,000 pounds unless left to a spouse or charity, which forces lots of heirs to sell off the family jewels, family home, family business, or family land, to pay it. It is also why so many of the historic estates either have been gifted to the National Trust or opened commercially to pay the inheritance tax. When our estate tax was pegged low, it was not unusual for many people who you would think of as average middle class or professional class to have to engage in all sorts of machinations (bypass trusts, irrevocable life insurance trusts, etc.) to find ways around the estate tax because a nice home in a desirable area, a decent retirement savings, plus any other sort of asset and a life insurance policy would trigger taxation. It also bred a lot of cheating: offshoring funds, cash and hard asset holdings with 'five finger discounts' to heirs with access to safe deposit boxes, and so on.

[pbspelly]

Maybe I'm being obtuse, but I still don't quite see the reason for the step-up rule. Why not simply have a rule that heirs only have to pay the capital gains tax when they sell the asset? You inherit a stock worth $100,000 with a basis of $25,000, you don't have to pay any estate or inheritance tax (or it falls under a generous $11.7 limit), but if you sell the stock you have to pay tax for the $75,000 gains.

I personally benefited from the step-up rule when my father passed away, and I'll admit I did not voluntarily give the government any money. But even then I recognized that there was something wrong with the law. From a tax perspective, several years of capital gains on some stocks was just erased as if they had never happened.

[egri]

Originally Posted by BobC

With the Tax Reform Act of 1986 they dropped the top individual tax bracket rate from 50.0% down to 38.5% on taxable income in excess of $54,000 for single individuals, starting in 1986. In contrast, the top individual tax bracket rate for 2020 is 37.0% on taxable income in excess of $514,800 for single individuals. And I believe the highest the individual tax bracket rate has been during this period from 1986 was 39.6%, with the lowest top bracket rate during this same period at 35.0%. So in truth the top tax bracket rate is actually lower today than it was about 35 years ago in 1986, and during those ensuing 35 years has never been more than 1.1% higher, at a top bracket rate of 39.6%.

As I noted above, the top individual tax bracket rate for single taxpayers started at $54,000 back in 1986, and has since risen to now starting at $514,800, almost 10 times what the top bracket rate started at back in 1986. Meanwhile, in looking up a few measures of inflation in time over that same 35 year period from 1986 to today I found:

The average annual inflation rate over that 35 year period is 2.55%

$1 in 1986 adjusted for inflation is worth $2.42 today in 2021

The CPI (consumer price index) in 1986 = 109.600

The CPI in 2021 = 264.877

Given all that, I think an almost ten times increase in the amount at which an individual starts to pay income taxes at the highest marginal tax rate over the same 35 year period as these inflation measures is not too shabby. So exactly where are you getting your data from that indicates that since the late 1980's that the top marginal tax rates have been going up, and that the tax brackets have been going down?

As for business owners potentially moving away from the U.S. if they begin to feel their tax burden is becoming too heavy, that is one reason that all the rhetoric spewed about having the rich and well-to-do pay an even bigger share of their income as taxes is just that, rhetoric, to appease a portion of the voting masses. The government knows they can't afford to completely alienate a good portion of their business community and its leaders, for fear they would pull up and move elsewhere. The business world has changed so much since WW2 with major leaps in technology, tranportation/logistics, computers and the internet, and the globalization of the marketplace. Companies that used to just worry about producing/providing for the U.S. market are now able to go global and easily reach and deal with customers and suppliers anywhere in the world. And that has become even more pronounced in the midst of the covid pandemic as companies and people started being forced to work more remotely than they ever had been before. And as a result, to pick up and move business operations and people to other parts of the world may not be as difficult and far-fetched as previously may have been thought. So now the federal government does have to pay attention to how they tax and treat businesses and their owners else possibly lose them to other countries. Luckily we are still one of, if not, the top consumer economies in the world. That will keep a majority of businesses from ever leaving due to the need to be here in the U.S. to fill our consumer needs. And then of course, despite all the negative things that have occurred in recent times, an overwhelming majority of Americans still consider this the greatest country on the planet and would rather live in the U.S. than anywhere else in the world. But despite all that, our government will likely still not go overboard with tax increases to the business community and its owners/leaders for fear of starting to change such pro-U.S. thinking.

My source is the IRS, Table 23. I can't link an Excel file, but it gives the tax brackets, and I used the BLS's inflation calculator here. I misspoke when I said tax rates stayed above 60% until the late 1980s; they went down below that in 1982. They bottomed out at 28% in 1988, then went up a few years later to 31%, up again to 39.6%, down a hair to 39.1%, then 38.6%, then down to 35% in 2003, still above where they were in 1988. Then they went back to 39.6% before going down to 37%, still above the 2003 level. For the brackets, the trend since 1913 has been that they get lower. Even after recent hikes, the cutoff for the top bracket, when adjusted for inflation, is below where it was in 1981.

As for the rhetoric about taxes, I'm not sure how far this can go before breaking the 'No Politics' rule here. A lot of it is coming from Janet Yellen, who doesn't have to worry about what "the voting masses" think, and the 1993 increase narrowly passed in the Senate, with the vote of the junior Senator from Delaware. The 2003 cut did not have his support. He also helped pass the 2012 increase, and has criticized the most recent cut. There is a willingness there to raise taxes in a sluggish economy, and oppose cutting them in similar circumstances. This is already playing out at the state level; the Wall Street Journal has been running articles for months about New Yorkers who relocated to lower tax states in the past year, while the state is contemplating raising its tax rates, already some of the highest in the nation.

[KCRfan1]

Nobody is ever taxed into prosperity.

[earlywynnfan]

Originally Posted by KCRfan1

Nobody is ever taxed into prosperity.

I'd bet nobody has been kept from prosperity by taxes, either.

[egri]

Originally Posted by KCRfan1

Nobody is ever taxed into prosperity.

Originally Posted by earlywynnfan

I'd bet nobody has been kept from prosperity by taxes, either.

Anyone else reminded of this? https://www.youtube.com/watch?v=l0zaebtU-CA

[BobC]

Originally Posted by egri

My source is the IRS, Table 23. I can't link an Excel file, but it gives the tax brackets, and I used the BLS's inflation calculator here. I misspoke when I said tax rates stayed above 60% until the late 1980s; they went down below that in 1982. They bottomed out at 28% in 1988, then went up a few years later to 31%, up again to 39.6%, down a hair to 39.1%, then 38.6%, then down to 35% in 2003, still above where they were in 1988. Then they went back to 39.6% before going down to 37%, still above the 2003 level. For the brackets, the trend since 1913 has been that they get lower. Even after recent hikes, the cutoff for the top bracket, when adjusted for inflation, is below where it was in 1981.

As for the rhetoric about taxes, I'm not sure how far this can go before breaking the 'No Politics' rule here. A lot of it is coming from Janet Yellen, who doesn't have to worry about what "the voting masses" think, and the 1993 increase narrowly passed in the Senate, with the vote of the junior Senator from Delaware. The 2003 cut did not have his support. He also helped pass the 2012 increase, and has criticized the most recent cut. There is a willingness there to raise taxes in a sluggish economy, and oppose cutting them in similar circumstances. This is already playing out at the state level; the Wall Street Journal has been running articles for months about New Yorkers who relocated to lower tax states in the past year, while the state is contemplating raising its tax rates, already some of the highest in the nation.

Regarding your argument that the tax rates are generally increasing:

I did forget about the temporary drop to 28% in 1988 that lasted a few years, but you originally mentioned a big tax drop in the late 80's and I assumed you meant the initial big drop from 50% to 38.5% for 1986 taxes filed in 1987. Your comparison can't be as simplistic as just looking at the maximum tax bracket rates though, can it? In 1988 when the top tax rate had dropped to 28%, certain high income taxpayers that year were subject to a phase-out of the 15% tax bracket and the personal exemption which actually increased the top marginal rate on a portion of their taxable income to 33%. Plus, the standard deduction and personal exemption in 1988 for a single individual were $3,000 and $1,950, respectively, while for 2020 a single person got a standard deduction of $12,400, which is much higher than the combined 1988 deductions and will also impact the tax rate difference against your premise. Also, the reason from tax drop from 38.5% to 28% percent was due to the full implementation of the Tax Reform Act (TRA) of 1986. But along with the TRA implementation was another provision whereby the Passive Loss Rules were put in place and business investors in passive investment activities could no longer simply deduct their passive losses against all other income. The government expected there would be a significant increase in taxable income due to this new Passive Loss provision so one of the reasons that they dropped the tax rate so much was to take into account this expected jump in taxable income. So the drop in the top tax rate wasn't just a simple straight rate reduction. The government was only trying to keep the overall tax revenue about the same as it had been the previous year before the rate drop was put in place, and therefore adjusted the rates downward to try and do that. So you really are comparing apples to oranges when just looking at the low 28% rate that was there for a few years. Oh, and that Passive Loss Rule caused a major problem for the real estate industry and triggered a huge crisis with a lot of Savings & Loans failing because of it. The government actually had to intercede and go in and take over and rescue a lot of S&Ls across the nation to dodge an even bigger economic disaster. And of course when they found out the expected increases to taxpayer's taxable income wasn't matching up with the rate reductions they thought would still bring in about the same overall tax revenue, they had to bring the tax rates back up after just a few years.

And also, you cherry picked the year you started your comparison to make your argument that the tax rates were generally going down. You took the year with the lowest top marginal tax bracket rate over the last 100 years to make your argument. Heck, I can do that also with any date over a series of years. Just go through it and pick out the lowest (or highest) point in the data over time, and then argue that from that point forward the trend is going to be higher (or lower). Had you instead of starting with 1988 gone back say 50 years to 1970, or 25 years to 1995, and just looked at the same top tax bracket rate as your determining factor over all those years, your argument would have failed to hold up in both of those instances. So much for the generally declining tax rates argument.

Now regarding your argument that the tax brackets have been going lower, by lower do you mean something like the amount of taxable income (adjusted for inflation) that an individual starts getting taxed at the highest marginal tax rate each year on is going downward? Assuming so, my first issue is you immediately bring up 1913 as a starting point. By the way, the federal income tax was passed in 1913, but the actual first year of tax was 1914, so that should be your reference point/year. That very first year the top income tax bracket rate was a whopping 7%, and didn't start till $500,000 of taxable income. And using the CPI Inflation Calculator you referenced me to, $! from back at the start of 1914 would be worth $26.05 at the end of 2020. So if my math is correct that would mean a comparable, inflation adjusted, top marginal rate tax bracket for 2020 should start at about $13,023,700, right? Well, if that is your starting reference point then of course those tax brackets have gone lower over the years. But that very first tax year is in no way a valid, comparable year to use for the purpose you are intending. To begin with, Congress had just enacted an income tax for the very first time ever and had no prior experience or point of reference to figure out where to set the rates and brackets. And then there was also a $3,000 personal exemption deduction in 1914. So that meant for every single person their first $3,000 of 2014 income wasn't taxed. Well, I looked up some wage figures from 1914 for trades people in New York City (plumbers, carpenters, etc.) and found back then they only made about $30-$35 a week. Well, I would expect that such New York City wages would likely be on the high end of the average U.S. workers wages for 1914, and if so, at $35 a week in pay they didn't even come close to making $3,000 for the year. So that means that probably very few people ended up owing any income tax for 1914. And having recent average annual U.S. household incomes at around $70K, that would mean for a comparable treatment on 2020 tax returns you would probably have to set the standard deduction to $70K or even more. Also, one of the suspected reasons that Congress did pass the income tax was that they were looking at the political landscape and foresaw that Prohibition was an increasingly important issue in the country at the time, predominantly being backed by women who were also pushing for the right to vote as well. (Sorry, there I go getting political again!) Anyway, before the income tax law was enacted, a large part of the federal budget came from things like excise taxes on products like liquor. It was suspected that the enactment of the income tax was in part a pre-emptive move on the part of the government so that should Prohibition eventually get passed, they would already have a vehicle in place to generate needed revenue to replace the lost excise taxes on alcohol. However, within a couple years after that first tax year, the U.S. involvement in WWI was starting and Congress bumped the top tax rate up to 67% and started adjusting the brackets to begin bringing in more meaningful revenue from income taxes to help pay for the war effort. And then of course, the Volstead Act creating Prohibition was passed and ratified soon after the end of WWI so the government did end up needing to replace that lost excise tax revenue after all, and thus we were off and running on income taxes more like we know them today. So that very first couple of years Congress didn't really need much revenue from income taxes, and therefore those first years shouldn't be considered as proper or comparable ones for the comparison with tax brackets today. Plus, you were already using 1988 as a starting point for the other side of your argument about increasing tax rates. If you are making an argument about various things occurring over a period of time, shouldn't you be using the same period of time for all of them, Again, cherry picking your years to help prove your premise?!?!?!?!

Then you continue with your argument of tax brackets going lower by next referencing to 1981. Again, why wouldn't you use the same 1988 beginning to your comparison period you used for the other side of your argument unless you were cherry picking the starting year to help support your premise? Also, how does using 1981 tax brackets even help your argument anyway? It looks like you're saying that even with recent hikes in the amount where the current top tax bracket rate starts at in 2020, when you make adjustments for inflation it ends up being below the amount where the top tax bracket rate starts at in 1981. Am I getting what you are saying correctly? Because if so, when I go back and again use the CPI Inflation Calculator you referenced and pointed me to, I entered in the starting point of the top tax rate bracket for a single individual in 1981, which was $41,500, and entered in that value as of January, 1981 and then asked the calculator to show me what the inflation adjusted value of that amount would be in December, 2020 dollars. The answer came back as $124,249.09. The top tax bracket rate in 2020 for an individual starts at $518,400. It somehow doesn't look lower to me. I then thought that maybe you were confusing 1980 taxes that are filed in 1981 as the year you were cherry picking, since the the top individual tax rate bracket for a single individual that year started at a much higher $108,300. So I entered that into your CPI Inflation Calculator as a January, 1980 starting amount, and when adjusting it for inflation to December, 2020 dollars, it came back as $362,587.84. Though much higher than the inflation adjusted cutoff amount for the 1981 top tax rate bracket, it still isn't close to the 2020 top tax rate bracket cutoff amount of $518,400. So much for the other side of your argument about the general lowering of the tax brackets.

Now on to your last paragraph.

First off, none of my posts are political. I am merely stating facts and items of common knowledge (or what should be common knowledge) in regards and in response to questions and/or comments of others that in this thread have revolved around proposed tax laws, and how they may impact those of us in the hobby we're in. I'm just trying to help make sure that people on the board don't hear or see something posted that turns out not to be right, and then end up making a bad decision because of it. See my last paragraph in post #37 of this thread so you know what I'm talking about.

The initial post you directed back at me was post #39, where you quoted a portion of my comments from the aforementioned post #37. In that earlier post #37 I was merely responding to Casey2296 regarding the tax scenario he was laying out as to how he perceived this proposed new capital gains tax law would apply in a particular situation. His understanding of the way the proposed new law would work was not entirely accurate, and myself, along with another poster, Jayshum, both responded to set the record straight for both Casey2296, as well as anyone else who read his post and was thinking what he had said was entirely correct. (By the way, why didn't you quote and respond to Jayshum also?) Anyway, in post #39 you quoted me talking about how there are tax brackets with varying rates. And then in response you talk about how you see income tax brackets are trending down over time while since the late 80's the tax rates have been going up. Then you finish off with a sentence about how a smart business owner will see these trends you outlined, and because of that, go looking for the Cayman Islands. Which pretty much implies that you could see him then moving out of the U.S. to the Caymans somehow because of changing trends and increases in U.S. taxes.

And then in my initial response back to you in post #42, I merely took what you said and questioned/corrected some of your statements and tried to point out how your premises didn't seem to be accurate. My question in that response to you asking exactly where you got your data from to back up your arguments was supposed to be a rhetorical one. I didn't expect you to look at my numbers and information and still think you were right. And by the way, I did make a mistake in the first and second paragraphs of my post #42 where I said the top tax bracket rate for a single individual in 2020 started at $514,800. I accidently transposed a couple numbers and the correct amount should be $518,400, my bad.

I then went on in that same post #42 to address your comment about business owners potentially moving away from the U.S. if they start to perceive that tax rates here are becoming so onerous that it behooves them to go elsewhere, and how with the increases in technology and everyone working remotely and all, that it was now a lot easier to actually do than many would have once thought. But I was also saying that the U.S. government isn't that stupid and knows it now has to be wary and compete with other countries around the globe in regards to taxes and such so our U.S. businesses and business owners don't get the urge to up and move elsewhere in the world. My comment about the taxing the rich rhetoric was simply a reference to the fact that no one in government is ever going to come out and say to the voting public (which is made up mostly of lower and middle income people) that they are afraid if we keep raising taxes to business owners that they may end up moving out of the country, therefore we're going to raise the taxes of all you lower and middle income people instead. They won't say it, but if push did come to shove, the government would raise taxes for the middle and lower income classes to protect the business community and make sure they stay here. That is just plain common sense, and I'm not sure how you think that is some political statement. I've made no mention of any specific politician or political party, nor gave any opinion or preference on anything. I then finished up by pointing out that there are still a lot of reasons that even in an increasing tax situation that most U.S. business owners aren't going to start thinking about moving out of the U.S., and before it did possibly start getting to that point, I would expect the federal government to take steps to make sure that doesn't really happen.

So now from your response back to me in post #50, I hope you are finally convinced that your arguments and premises regarding tax rates and brackets from your first paragraph are not valid. And as for your second paragraph, I've already addressed your veiled threat of breaking the "No Politics" rule. Your next line referring to "A lot of it coming from Janet Yellin" is supposed to be what, a reference to who you feel is doing all this talking about taxing the rich and not the poor, and if not, what is "it"???? In my original post about this I never said anyone in the government was spewing the tax the rich rhetoric, I just said it was out there. And since it was you that brought it up, not me, if Janet Yellin said something that didn't sit well with the "voting masses", and it caused problems in the economy or the markets, you don't think she would catch a ton of grief from from the powers that be? Then you start talking about the 1993 tax increase just narrowly passing, with a Delaware Senator's vote being the difference, and then how the 2003 tax cut didn't have his support while the 2012 increase did, and then he's criticizing the recent tax cut and suddenly you mention a willingness to raise taxes in sluggish economic times, and oppose cutting them in similar times. What exactly does any of that have to do with what we were discussing? Is that somehow supposed to be supporting your "the brackets are falling and the tax rates are going up argument", and if so, how? Or has it got something to do with the possibility that business owners may move from the U.S. if they don't like tax hikes they may be getting hit with? I mean, who cares if a 1993 tax increase just narrowly passed? The thing is, it passed. If you win a ballgame in a close 1-0 nail biter, or a 10-0 blowout, it still counts the same, just 1 win. And how is this one Delaware Senator going to specifically affect anything remotely related to tax rates and brackets going up and down, or business owners fleeing the U.S.? So then your final line is maybe the most puzzling of all, where you say "This is already playing out at a state level", what is "This"? And then you make reference to articles in the WSJ about New Yorkers relocating to other states because of possible state tax increases. In your earlier posts you implied businessmen may move to places like the Cayman Islands because of perceived increases in taxes coming. But now switching to talking about these same business people just moving between different states, that is a totally different topic and issue. You were originally talking about federal tax rates and brackets changing, how (and why) are you suddenly switching to comments involving states? You have lost me!!!!!!!!!!!!!!!!!!!