Reading through the new Democratic tax proposal all I can think of is that if you are successful, they want to be highly penal to you. It goes back to the Obama attitude of “you didn’t build that”.
Left-wing Democrats always counsel me that I took public roads to get to my destination with public utilities and I should pay my fair share.
Left-wing Democrats that counsel me usually have government jobs or jobs with a steady salary. They are immune to the ups and downs of daily business life and the accompanying risk that comes with it.
Since I am hitting retirement age, I paid close attention to the new rules Democrats are proposing on saving for retirement. Basically, they are changing long-established rules of the game in the 9th inning.
If you aren’t a government employee that gets a defined benefit pension with a cost of living increase every year, you have to save for retirement. I started saving at age 21. My wife and I plowed everything we could into retirement.
Since I was self-employed, I had no structured way to save. My accountant set up a self-directed plan for me. I invested it in no-load funds that replicated the stock market. But, I also could do other things with it.
I could actually trade in it. I did.
I could invest in alternative assets in it. I did.
I could buy income-performing assets in it. I did.
I could invest in startup companies. I did.
All three of those things were not sure things. Even investing in the stock market wasn’t a sure thing. Markets go up and down. I had to absorb the losers. As anyone knows that actually traded, not every trade works out. I had losers and winners. I put money in some startups in my retirement, and many didn’t work out.
You can’t write off the losers when you use your retirement to invest. You 100% absorb the losses with no carryforwards and no benefit to ease the pain. The risk is 100% yours.
Oh, and by the way, my investing activity helped people manage their risks. It helped create jobs. It helped create opportunity for other people that I didn’t even know.
What Democrats also fail to realize is that wealthy people don’t shove their money in a mattress only to pass it along to their progeny.
Wealthy people do all kinds of productive things with it. When they die, it gets donated to charities or gets passed along to their family or whatever they pass it to. By the way, they earned the money so they ought to be able to do with it what they want.
Free enterprise and risk-taking is the only way to build sustainable wealth. The other huge benefit is when people do that they not only raise their standard of living but the standards of living for lots of other people. Government transfer payments and government programs do nothing. We have had all kinds of anti-poverty programs since 1965. Guess what we have created? A permanent cycle of poverty among some families.
Of course, data be damned we have to stop anecdotes.
Peter Thiel turned a $2000 investment into $5B in an IRA. Big deal. What is wrong with that? He could have lost everything. I wish a reporter would ask a politician that question and watch them stumble for the answer. Especially since quite a few of them have traded the markets on inside information or at least their family members have.
Maybe America could get behind changes in the tax code when politicians had ethics around their own investing.