Hey Jessavers
Governments have spent big on lockdown measures all over the world, and they've borrowed big to keep it going. We have not created this much money in a short period of time since World War 2. $4.1 trillion was spent on World War 2, over a 6 year period when adjusted for inflation that's around 60 Trillion USD.
The damage of these past 2 years will still need to be calculated, but if we look at the 6 or so Trillion the US has created, you can imagine the world's governments are getting closer to that 60 trillion range which would be on par with the spending of World War 2, in a shorter period of time.
If we consider how much governments are spending, you can imagine they'll be looking at ways to cover those debts. While many countries have reached a point where the debt can't be paid, they will still try.
President Joe Biden is expected to raise long-term capital gains tax for the wealthiest Americans to 43.4%, including a surtax. That would be higher than the top federal tax rate on wage income.
Now it's always politically palatable to validity the rich, but what comes for one class tends to come for all of us in the end.
Tax them, not me
If there's one thing I've learned about tax narrative, people are always willing to advocate a tax on anyone but themselves.
- Tax the richer; they have more than enough as it is
- Tax the poor; they need to pay their fair share
Governments have put all income classes at loggerheads and get them to encourage funding the government through the confiscation of assets and income.
If we look at the rates people are expected to take, you can imagine wealthy individuals will either not cash out of assets, leverage loan markets and rack up debt to write off against tax burdens and avoid these tax implications, which will then fall on the middle-class asset holders who don't have these luxuries.
US Leads who will follow
The US has always been known as one of those investment-friendly governments, it might not seem like it, but relative to the rest of the world, the US is pretty business and financial market-friendly. If they are looking at tax rates of 42%, you can be sure that other countries, especially around Europe, will follow the lead.
I don't think any country has really come out of the lockdowns unscathed, so you can imagine the motivations of governments to encroach on your earning potential and savings.
If you were one of those, who are able to come out of the lockdowns unscathed by the job losses and inflation, now you're going to be hit by taxes.
Crypto holders are a soft target
Crypto is an emerging asset class with ALOT of upside potential, and many crypto investors get in with the idea of getting out and being fiat wealthy. This makes you a soft target for these new tax implications. If you are cashing out into fiat, remember, it's their money, so you have to play by their rules.
If you are going to make profits, make sure you factor in the tax rates and ensure that there is a worthwhile profit you're cashing out. Just remember, when taking profits, you'll pay mining fees, exchange fees, slippage, fiat exchange fees and then 20-40% will be taxed depending on your country.
Have your say
What do you good people of HIVE think?
So have at it, my Jessies! If you don't have something to comment, "I am a Jessie."
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