BRETT: President Biden’s gonna do what’s essentially the fill-in for a State of the Union Address, though it’s not the State of the Union Address. It’s a joint address to Congress. The Senate will be there, the House will be there, and they’ll be listening to all these big ideas that President Biden has to roll out. And one of the biggest, maybe the biggest potentially dangerous idea that he’s gonna roll out is this capital gains tax hike.
This thing is monstrous. We’re talking about a capital gain tax hike so serious and severe that it caused the Dow to plummet last week at the end of the week. He wants to “raise taxes on millionaire investors, fund education and other spending priorities as part of an effort to overhaul the U.S. economy. Biden will also seek an increase in the tax on capital gains to 39.6% for those Americans earning more than $1 million.”
And reports are saying that the president will release that proposal formally as this week unfolds as part of the goal to fund the American Families Plan. So, we’re looking at a massive tax hike, a massive, insane tax hike at a time that we really don’t need that. Well, Rush talked about capital gains in his on-the-spot analysis of the Democrat debate from 2019.
RUSH: “What you do is you raise the capital gains tax. It is obscene that rich people, who make their money investing, get such a small tax rate compared to people who are working for their money.”
Now, there are people who do nothing but play the stock market, that’s how they earn their money. They sit there and they trade stocks, and they try to trade in a way that makes ’em a lot of money. And on capital gains, appreciated stocks — stock that you buy and it gains wealth or gains value and money — the capital gains rate is 15%, 18%. I forget what it is. He wants to raise that ’cause (impression), “It just isn’t fair! It’s not fair that people who don’t work should have a little rate where people who are working pay more.”
And lowering the capital gains rate is what results in unforeseen amounts of money pouring into the country’s Treasury. No matter how you slice it, these people want to start raising taxes. They get into guilt trips about having money and being rich and agreeing that they’re not paying enough in taxes. It becomes tiresome. It’s just, it’s worn out. Nothing new. Nothing but guilt over having been successful and a promise to get rid of the success, get rid of the wealth, a promise to make the rich “pay their fair share.” You talk about a tired, worn-out cliche that the rich aren’t paying their fair share when the top 1% is paying almost 50% of the entire tax burden now?
BRETT: When you look at the arguments that are being laid out by not just Joe Biden and Kamala Harris, but at the Treasury department level, where you got Janet Yellen going around the world attempting to cobble together an agreement with all these other countries that there will not be any of these other nations out there that will undercut everybody else in terms of tax rates. Right? So we’re gonna have a 28% corporate tax.
“Let’s make sure everybody gets together and collude.”
Remember when “collusion” was a big word?
Well, they’re gonna saying, “We’re just gonna get all these countries together, and we’re just gonna agree, nobody goes below 28%. Are we all in agreement here? Nobody goes below 28%.” So you take this discussion that’s happening in the United States today — and this is important to understand, because money is fungible, and money will flow to the places it is respected and valued.
You’re not gonna go and invest in a country that’s got a 50% tax rate or 100% capital gains rate. You’re gonna say, “I’m not going to that country preponderance I don’t want to put my money in that country. I want to go to do with it. I’m gonna go where there’s blue skies and I can make money and I can make a profit my own and all that sort of stuff.”
So you have Yellen going around and deciding, “Okay, let’s collude with all these countries to agree to a minimum corporate tax rate so that no company can go find a greener pasture someplace else.” So there’s no escape, there’s no escape at all. Then you have President Biden talking about raising the capital gains tax rate. As Rush explained brilliantly, right?
That’s the appreciation, and then you get hit for that difference — and Biden wants to take it to like 40%, basically. We’re talking about a massive amount of money getting drained out of the market. Remember what I said. Money will go to the place it’s respected. If you’re treated poorly as a customer, you’re not gonna go back to that restaurant or back to that bar or back to that store. Well, money behaves in the same way.
Investors behave if the same way, and investors are the evil class of people, right? That’s what happened we’re supposed to believe. “The investors are evil!” No. The investors fund… Because you’re investing their money in a 401(k) or an IRA or some other fund that you’re using or you’re an individual investor who got a great inheritance and you want to — you want to use that to invest, what does that fuel?
That fuels innovation. Biden and how are you and Pelosi and Chuck Schumer think that the only innovation that can get funded is if you use government dollars pumped into a sector — the green sector, the Solyndras of the world, that sort of stuff. That’s the way you build wealth. Nonsense. Where was the government money that went into Google or Apple?
Where was the government money that went into Snapchat, that went into all these others? These are the investors who ponied up money and said, “Yeah, that I think Instagram might work. I want to be a part of that. I want to buy a piece of that.” Why do you think people were running to Bitcoin? Because they want to put their money someplace where the government doesn’t have an easy time grabbing it.
So the consequence of this is you’re gonna have what? Less innovation. The stock market will not claim the way it has. All of that is gonna be a huge challenge. These are the same politicians — in Biden and Harris and Bernie and Elizabeth Warren and the whole lot of them — who are all fabulously wealthy. These days are not people selling pencils on a corner. These are people who have made their millions and billions, right?
These are people who are doing very, very well for themselves.
So who is really being targeted? It’s not gonna be the rich Wall Street fat cat with the hedge funds. It’s not gonna be that guy, and it’s not gonna be poor people because poor people… It’s not directly impacting, you know, poor people because they’re not plowing a bunch of money into investments. It’s going to be what they call “the strivers,” those people that are climbing up the ladder.
Those people that are trying to become the next Jeff Bezos or the next Elizabeth Warren or the next Hunter Biden with all this wealth. That’s who’s gonna end up getting hurt is the striver class, the people who stay up late and chart their path forward, who are trying to get funding for their companies. This will hurt venture capital.
This is gonna hurt a whole lot of stuff out there ’cause people are gonna say, “I’m not gonna invest in this. I’m gonna take my investment and I’m gonna go to Singapore. I’m gonna to southeast Asia. I’m gonna go over in the Middle East where they’ll respect my money.” That’s a fundamentally dangerous thing that we’ve got going on here, folks.
This is a fundamentally dangerous approach. And what this is, is an attempt to corral you by getting that minimum possible corporate tax rate around the world, so you have nowhere to go. It’s got the policy practical effect of putting you up against the wall, holding you against the wall with one hand while taking your wallet out with their other.
Because capital gains aren’t just stocks and hedge funds or any of that. They’re houses; they’re real estate; they’re property; they’re businesses; they’re things of value you might want to sell. You have a right to keep your things, and you have a right to profit off of your things. Government wasn’t there with you when you took the risk. Government doesn’t deserve a piece of it right now.