I will have to start by saying that I am not a financial advisor nor a tax expert so as such take my article with a grain of salt, and what I am writing doesn't not represent any advice whatsoever and it is just my opinion. With that out of the way let's start.
The new capital gains seems that will only apply to the wealthy and it will only kick in after $1,000,000.00. So you owning one Bitcoin Cash won't be affected by yet, not at least while BCH is under $1000 each. Those that will be affected immediately will be those living in the US, or that are citizens of the US, or that are living within the nation territories, everyone else may be affected but indirectly.
As it is right now many people are already paying around or close to 50% and if this tax is approve many will be push to a higher tax bracket where some citizens may start to pay over 50% of their wealth to the government. Let's us talk some numbers next.
Taxes on long-term capital gains – generally classified as an asset that's held for more than one year – currently range from 0% to 20%, depending on a person's income. Wealthier investors are also subject to an additional 3.8% tax on long- and short-term capital gains that's used to fund ObamaCare. The average top tax rate on capital gains at the state level is about 5.2%.
So if you start to combine all of the taxes together that's when you get to the magic number of 50% and in some cases even more, mind you that those combine taxes are paid they are not imaginary they are actual taxes that Americans must pay. So let's put some states as example: California's combined state and federal capital gains tax would be the highest at 56.7%, followed by New York at 54.3% and New Jersey at 54.2%.
Now you must know that capital gains are taxes to the gains not your principal but you also have to pay or had paid already taxes in your principal, what I am trying to say is that if you have managed to get to one million dollars they government wants to take half of your income or close to it once you combine all of the taxes together when you combine your state taxes and federal taxes that's when the see the tax bite.
Well if you make less than one million dollars a year you shouldn't worry, right? Well not so fast many people own houses in the or have a mortgage that in 30 years it will be paid in full, probably you will die before that happens but your children will inherit your assets, well they will have to pay taxes on that, in some states, and the price of houses has gone up recently which means that maybe your children will own some taxes on top of all the taxes that you paid when you were alive. And selling a house also is classified as capital gains, once you discount the loan that the bank gave you. So if you sell your house after the tax proposal is pass chances are you will pay more in taxes.
When it comes to stocks and paper wealth you are out of luck because there is a paper trail and as such you will have to pay what the government says, many wealthy individuals hired tax experts to try to find ways to minimize the tax burden, but going from 20% to almost 40% that will be a hard pill to take in my opinion.
And lastly cryptos I guess that's what you were waiting for when I was going to talk about cryptos, well if you leave in the US and hold crypto assets you have to pay capital gains, if you mined within its borders, if you bought within its borders, if you traded within it borders, you must pay. But the tax increase will only affect you if you have more than 20 BTC, or more than 1100 BCH.
If you bought your coins through a fiat exchange like Gemini, Coinbase or Robinhood or any service located in the US, or that ask for documents when you sign up chances the government knows exactly how much Bitcoin you have, and if you move your funds that will count as a capital event which you are suppose to report in your taxes, and if you sell you must also report your loses or gains like a little good slave that you are.
Now if you own those amounts the better advice will be if you must sell for fiat report your taxes, but if you don't want to pay taxes just don't sell and borrow against it if you have a business opportunity that may pay you more or put passive income in your wallet, otherwise leave your coins where they are. The capital gains will be a hard bite no way around it, but there are those who can be saved. And you can save on taxes in the future as well. Not financial advice or tax advice.
If you have let say $1000 and want to invest into Bitcoin Cash, you should buy your BCH or any other crypto for that matter with cash, and keep your mouth close about it, don't tell anyone that you hold 1 BCH. Those that bought their Bitcoin BTC let say at $1000 by using p2p exchanges they don't have to report anything to anybody, and they can just cross the US border and go to another country which doesn't have capital gains taxes or any other heavy taxes on the rich.
And this is one thing that everyone regardless if you are poor or rich right now should consider, which is future taxes, make no mistake the future of Bitcoin is Bitcoin Cash in my opinion and as such I do think BCH will reach a total price of $100 million dollars or more, now if you don't want to have other people putting their hands in your pocket be smart about it and start buying your Bitcoin Cash with cash. Not financial advice once again.
You see the only way to not pay taxes if to say to the government that you own nothing, even if you do and to do that you need to use private services to buy your initial amount, and that's another advantage added to Bitcoin Cash over Bitcoin Core. BTC is already expensive so as such the government will try to tax those who own that asset first, and if you hold one BCH which is not even close to the limit you will be okay, but you must buy your BCH in a way that there is no trail of you owning it, a good way will be to buy it with cash or with other crypto but has gone from fiat to crypto, crypto to crypto without kyc and crypto to BCH at the end.
Now why would you do that? because in the future you don't know how crazy politicians will be get today that 100% hike tax is only for people earning $1m or more, but tomorrow that could be $1000. The money machine is inflating your money supply, and they are printing bills which will bring inflation which means that assets will go higher in price and as such the government want to take your property.
And the taxes is not the only thing that you should expect from your government you will see soon capital control in the land of the slave, yes many stock holders will sell if that proposal is pass and they will try to get that money into other assets where that tax is hard to track, metals is one of them, so I suspect that immigration will be waiting for you at the border to see if you are not trying to get your gold to the other side without paying 100% in taxes to the government.
Smart money is already planing how they are going to avoid or find loopholes to this tax or pass it to consumers, but you can bet that the rich are already thinking how they will not pay this tax, and the government in response will impose capital control laws. Which will effectively be a trap for money inside the nation.
This has happen in the pass and will happen again, those that live from the government want to tax those that produce until a point where the one that produce is left with nothing and he loses his incentive to keep on working, why would you work if all your effort will be given to someone else that hasn't worked and that is just someone living for free?
Unfortunately our system is full of those that won't want to work, starting for the ultra rich who just want to live off the backs of the working poor, and those who live from the government that don't want to work because the government pays their bills too. Eventually if you taxes someone too much they will just pack and leave, and you as a Bitcoin Cash should think the same, if the government wants more than 10% of your cryptos is time to move somewhere else.
I have to write this when it comes to these sort of topics, I am mentally ill and I am just writing nonsense because I forgot to take my pill today, once I do I will realize that I am only writing nonsense, so I apologize in advance.
https://read.cash/@francis105d1
https://read.cash/@francis105d1/bidens-capital-gain-hike-and-your-assets-c44c1e4e
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