Maybe they just don’t have the personnel to go after smaller accounts than the ones you highlighted.
But it’s become clear to me that there’s a lot of hot air about actual numbers on both the costs of a bill that’s not even finalized or how to pay for it. It seems to me that a lot of people are ready to guarantee without substantiating that the bill will be easily paid for by various tax changes as a way to justify the amount spent. Just like the Trump Tax cuts were justified by projections of sustained 4+% GDP growth. We all know how that turned out (it never went past 3%). But until I see CBO scoring for it, I’m gonna take any numbers provided by either side as highly suspicious.
The IRS has been severely underfunded for years. I was an auditor for a few years and my manager said I got lucky with when I applied because there hadn’t been a new hire in 3 years. People transfer to other locations or retire, and it can be a very slow process to get that position backfilled, I guess sometimes it can take years.
That’s sure to be popular with Buffet, Apple and just about all investors.
If I understand the dynamics right, it’s also gonna be hard to pretend that this is not a tax on middle class considering anyone owning stock will see lower earnings due to it. And it’d also stack with the increased tax rate on capital gains. Slowly but surely, it looks to me like Dems are doing a great job at rallying all they can against their giant spending bill considering the increasing pile of proposed tax hikes that are gonna come with it.
26.5% corp tax rate (higher than China! ), lower for very small biz 18-21%
25% cap gain rate
3% “surtax” on the Evil Rich (ETA: that’s extra income tax bracket >$5M, also on capital gains)
Link to more coverage in my above post. Other proposals include
rolling back the $10M estate tax exemption to the prior $5M one, plus removing various estate plannign trusts
forcing IRAs of $10M+ to start high distributions and banning contributions
High-income people with tax-preferred retirement accounts totaling $10 million or more would no longer be able to contribute to those accounts and would face sharply higher mandatory distributions once the account balances reached that level.
all retroactive for this year, or at least as of now. As you say, no word on step up on death or SALT cap removal.
wash sales for all assets, big IRA’s would have 50% RMD’s for the amount over their limit each year, banning back door Roth conversions for high incomes, bans the big after-tax 401k conversions entirely, bans IRAs holding accredited investor type private assets and revokes the IRA status of those currently holding such assets, etc.
Yes, and if they hadn’t called it that, probably no one would have noticed or cared. Even the “back door” Roth was a bad choice of words.
If they’d called it the “Suckers Bet IRA, of course we’re going to tax this again” instead of “Roth IRA”, they might have never attracted enough assets to go after when the socialists need to fund their latest wish list.
You’re looking at it all wrong. You are thinking they are only doing this because they need to raise funds. I’m thinking it’s just a good time to close the loopholes we’ve been talking about for so long.
The backdoor or a loophole is called that because it circumvents the original intent. It’s only a matter of time before these things are forbidden, especially after the big stories like Romney and Thiel.
And shall we shut down the 401k plans while we were at it? That was an unintended consequence of the obscure subsection (k) of some law and it created a booming retirement saving vehicle.
With the tax code, IRAs and such were always tax breaks and always intended as such to encourage savings. To call them a “loophole” is just hostile political language aimed at harming their beneficiaries and trying to justify breaking the original terms retroactively.
There were never rules that said your IRA can’t be bigger than $X, since there was clearly no intent to punish investment success. Time was when that would have been unAmerican. They had limits for how much you could put in (I remember many many years of $2k max not adjusted for inflation as it is now), and even that was cut down or cut off if your income was too high or you already had a retirement plan at work.
The Roth conversion option was explicitly allowed later, having not been originally, as a way to raise short term revenue projections by encouraging people to pay their taxes sooner in exchange for not paying them later. So instead of getting a lifetime of tax free appreciation that you signed up for and paid extra taxes for, now you could get a lot of that money handed back to you since you invested too well - no tax break going forward and maybe a 10% penalty for being forced to take it out sooner than retirement age.
Sounds more like a 10% IRA confiscation if they do it that way, but don’t worry, for now it’s only $10M and the Evil Rich. Wait til they’re done printing at the Fed and see if $10M buys a nice house…
I was mostly referring to the actual loopholes – the circumvention of the income limit (backdoor) and the circumvention of the contribution limit (mega backdoor).
The elimination of back-door Roth IRA strategies is stated to take effect after 12/31/2031 in the draft. That is a decade from now. I’m assuming that it is a typo.
The current $7,500 EV tax credit, which allows taxpayers to deduct part of the cost of buying an electric car, phases out once an automaker hits 200,000 cumulative EV sales, and both Tesla TSLA, -0.65% and General Motors GM, -0.75% already have sold more than 200,000 electric vehicles.
Under the new proposal, that cap of 200,000 would go away, so buyers of EVs from Tesla and GM would get credits again.
In addition, the credit rises by $4,500 for union-made vehicles assembled in the U.S., with another $500 for cars that have at least 50% domestic content, along with batteries made in the U.S. So the total possible credit can be as high as $12,500.
Here we go again.
Don’t see any restrictions on selling the cars used, or exporting them?
If you ask the IRS right now, they will tell you they have a backlog on paper returns, so they will tell you to wait. How long? As long as the IRS tells you that there is a backlog. So essentially a year… or more.
), lower for very small biz 18-21%