Here are my thoughts on the new 2023 budget and tax plan, where the money is going, and the impact this could have throughout the stock market and economy - Enjoy! Add me on Instagram: GPStephan

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THE NEW 2023 TAX PLAN CHANGES:

28% CORPORATE INCOME TAX (UP FROM 21%)
https://taxfoundation.org/increase-co...
They estimated that a 28% corporate tax rate would reduce GDP by 0.7% - or, $160 billion dollars, stock and wages would marginally decline…and, 138,000 full time jobs would be lost. Thankfully, they estimate that the “loss” would be gradual, but it could amount to a GDP decline of nearly $720 billion dollars over 10 years…which, is LARGER than the $694 billion of tax revenue that would be generated in its place.

As a result, they believe that - long term - a higher corporate tax would result in incomes dropping by 1.5%-2%. On top of that, another study found that raising corporate taxes was the “most harmful for growth,” suggesting - INSTEAD - that we tax “consumption,” or “recurring tax on immovable property” - which, is another way of saying: higher real estate taxes.

TAXING UNREALIZED CAPITAL GAINS
ONE: It sets the precedent that unrealized profits can be taxed - which, some argue is unconstitutional. For example, “the Constitution denies Congress the power to levy a direct tax unless it’s “apportioned among the several states” in proportion to population. That means that the tax must be spread evenly among every person in every state.”
https://www.heritage.org/taxes/commen...

TWO: It would force business owners, who might not have the cash or liquidity to pay this tax bill, to sell a portion of their ownership, potentially losing control of their company - or, sending the stock price falling by allowing more shares to enter the market.

THREE: It sets a dangerous precedent that unrealized gains CAN BE TAXED - and, that threshold becomes an arbitrary number that could be changed over time. After all, what’s to stop them from eventually passing this on to business owners with more than $50 million…down to $10 million…down to $1 million…and, pretty soon - everyone pays some type of unrealized capital gain depending on how well they do?

TOP INDIVIDUAL TAX RATE OF 39.6%
That means, if we use the 2022 tax table as an example…the income that people make over $539,900 would NOW be taxed at 39.6%, instead of 37%….so, that would mean a tax INCREASE of $2600 per $100,000 you make ABOVE $540,000 per year…and, it would raise $186.8 billion.
https://taxfoundation.org/2022-tax-br...

Of course, there are OTHER tax increases within this plan, as well…from repealing the 1031 exchange if you have more than $500,000 in profit…getting rid of oil and drilling tax deductions…considering coal royalties to be “income” versus a capital gain…modifying estate and gift rules…and, about 30 other increases throughout 120 pages of text that takes WAYYYY too long to read through….
https://www.novoco.com/sites/default/...

Hope this helps clarify things!

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