Biden's MASSIVE Stimulus Changes.

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 gonna be a whole lot of extra

taxes coming it's gonna be pretty crazy

but we're gonna 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 gonna 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 wanna be able to track and so

they wanna 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 gonna be some

big taxes to be paid so we're gonna have

to uh you know take a little bit of

money here i can't i can't get it out

we're gonna 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

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