Tax burden under Biden's presidency

As I said, the upcoming presidential election will have some tremendous impact on us all financially. That's why I will forward more relevant information that is relevant to us one way or another financially. Below is a good writeup of what potential tax impact we may face if Biden is elected. 

Hope you find it useful and may also help you make an informed decision who to vote for !

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The biggest impact on your money is likely in the tax code.

Begin with corporate income taxes and the potential effect on stocks you own: Under the Trump tax cuts of 2017, the rate was slashed from 35% to 21%. Biden seeks to bump the rate back up to 28%.

On balance, that should mean publicly held companies will engage in fewer of those sweet, sweet share buybacks — in which firms can raise their share price without actually producing any new goods or services or making their existing operations more productive.

Then again, companies engaged in plenty of buybacks under the old corporate tax rate. If you're a CEO sitting on a pile of cash… and you look around and you don't see any good place to invest that cash in the future of your business… then you might as well raise the dividend or buy back shares.

Which is what most of corporate America was doing for the duration of the post-2008 "recovery," before and after the tax cut. Hard to imagine anything different under a pandemic-and-rolling-lockdown scenario, no?

And what about your own taxes?

Well, looking at Biden's tax blueprint, you might be surprised to learn he does not seek to repeal the Trump tax cuts lock, stock and barrel. (Barack Obama left most of the Bush tax cuts in place, too — even after he secured a second term.)

But if you're a higher earner, look out. The current top rate of 37% would revert to the pre-2018 level of 39.6% on incomes over $400,000.

On the other hand, if you're in a high-tax state, Biden seeks to repeal the $10,000 cap on the "SALT" deduction for state and local taxes.

But on the other-other hand, filers who itemize would have their deductions limited once they reach the 32% tax bracket — which for single filers this year is $163,300.

A more meaningful change would come to Social Security taxes, really the whole Social Security system. This is a development we've been watching for 18 months now.

Under present law, any income you earn over $137,700 this year isn't subject to Social Security tax. But under the Biden plan, Social Security tax would once again kick in at $400,000 and higher.

Because that $137,700 number rises with inflation every year, eventually the "doughnut hole" will close and all income would be subject to payroll tax.

And no, those higher "contributions" to the system during your working years would not translate to higher benefits in retirement. Social Security would become, well, just another income-redistribution scheme — which is not what Social Security's architects envisioned in the 1930s.