Epic Real Estate Investing - I Dug Into Kamalas New Unrealized Capital Gains Tax, And Heres What I Found... | 1336

Episode Date: August 28, 2024

In this eye-opening episode, we dive into the controversial 25% minimum tax on unrealized capital gains, championed by Kamala Harris and integrated into Biden’s March budget. While initially aimed at ultra-wealthy investors, this proposal has the potential to shake up the financial landscape for everyone. Join us as we dissect the mechanics of this new tax, exploring how it could reshape investment strategies and challenge financial freedom. We’ll uncover the far-reaching consequences for younger investors and examine historical precedents that suggest this could eventually affect the middle and lower classes as well. We also address the broader economic implications, including potential increases in costs and job losses. This episode is a must-listen for anyone concerned about their financial future and looking for insights on navigating these turbulent changes. Tune in to stay informed and explore alternative investment strategies to safeguard your financial well-being. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Let's go. All right, they're back at it. There's an alarming proposal. circulating with surprising support. Progressive reform like this, I'll strike that, aggressive reform like this under the guise of fairness and equality, could fundamentally turn your financial future upside down. If Kamala gets her way, investing as we know it, we'll be dead. And not just for the wealthy, like they're telling you, see, what's being proposed as a tax for the ultra wealthy will affect everyone. We've seen it before, more than once. And I've got the receipts, but

this is more than just a tax proposal. It's a massive power grab that threatens financial freedom, as we know it. Now, the idea of taxing unrealized capital gains surfaced a few years ago by the chair of the Senate Finance Committee, Ron Wyden of Oregon, which raised some eyebrows. And then those eyebrows were further raised by senators and Wall Street investors when the then-new U.S. Treasury Secretary Janet Yellen, during her confirmation hearing, support for this proposal in the interest of boosting government revenues. It didn't get very far. And many simply forgot about it. But this administration, they're relentless about getting into your pockets and controlling your life. And it's all back on the table. Turns out they didn't

forget. So here's the thing. At Epic, we show people how to invest in real estate so they can escape the daily grind and retire early. And tragically, some of the most practical avidavits available for people to retire early are under fire with Kamala's unrealized capital gains tax proposal. Here's how this works. Normally, you pay taxes on gains when you sell an asset, like when you sell a property or cash out your stocks. But with this proposal, you'd have to pay taxes every year on the increased value of your assets, even if you haven't sold them. For example, if your Tesla shares grow from $1,000 to $1,500 in a year, you have to pay tax on that $500 profit, even if you didn't sell the stock. In simple terms, you would owe taxes on the increased value of your

property, stocks or business shares every year, whether you sold them or not. Imagine being hit with the tax bill for money you never received. But Matt, this is just for people with $100 million in wealth. Well, I'll get to that in a minute, but a tax on unrealized gains presents all kinds of problems for investors, not to mention it would step all over the appeal and benefits of investing, if not kill the endeavor altogether for those looking to get ahead in life. Here's what I mean. This unrealized capital gains tax proposal would unfairly burden younger and upstart investors who typically start their investing careers cash poor. You see, any profits from their investing efforts could generate a significant tax bill without the corresponding

cash to pay for it. Thus, these investors have two options. One, don't make a profit, which would make investing pointless. Or two, liquidate assets prematurely to pay the tax. Both of these options remove the incentive to invest. But Matt, this is proposed just for wealthy investor. Yeah, I know, and I'll get to how this proposal's impact will be far-reaching and cross-class lines, which would include, but wouldn't be limited to creating a huge hurdle while crushing ambitions for taxpayers to hit a certain level of wealth. Translation, don't get too big for your bridges, young gun. Further, annually liquidating assets to pay your tax bill would serve as kryptonite to compound interest. The very cornerstone that

taxpayers rely on for their retirement plans. I mean, all of a sudden, Dave Ramsey and I would be on the same team. Can you imagine that? Dave's 40-year discipline savings plan that he promotes could realistically take 80 years to produce the same result. At least. I mean, already, most people don't make enough to save enough for Dave's plan to work, but now they wouldn't live long enough for it to work either. Yeah, but Matt, I'm saving for retirement inside of a 401k. Well, I wouldn't get too comfortable with your tax-deferred retirement account either because this administration, they've got plans for that, too. But let's get to the reality of this. The proposal as it stands targets those with $100 million or more in assets. Bullet dodged for you, right? No. Ask yourself,

how long will that $100 million threshold stay there? But they would never apply this to the little guy or even the middle class, right? Well, that's what a lot of people think. But they already have. Did you know the same type of tax was proposed in 1913? The income tax itself was proposed to affect only the top 1% of earners. But now, everyone pays it. The alternative minimum income tax introduced in 1969. That was originally just for a handful of high-income earners. But by the 2000s, millions of households, including those earning far less than the ultra-wealthy,

were subject to the AMT. Creating significant financial burdens for taxpayers, it was never intended to target. So if you think this tax will stay locked on billionaires forever, wake up. Once this door opens, it will lead to more taxes for everyday investors and likely even homeowners. And the way they'll justify it by saying that everyone needs to pay their fair share. Sound familiar? To be clear, this is not in the proposal right now, but it is not out of the realm of possibility. But for now, how could this affect you, even if you're not ultra wealthy?

Well, easily, this isn't just about rich folks. It's about the ripple effect. I mean, think about what happens when big investors get squeezed by attacks like this. They're not going to just eat those costs. They're going to pass them down. They're going to pass them down via higher rents, more expensive goods and services, fewer jobs being created. And if you're a small investor trying to build wealth, how do you compete when the rules keep changing? The government already takes a buy out of everything you do.

This could be just one more way that they take a bigger slice. So let's be real. This isn't just about closing the wealth gap or making the tax system more fair. There's a growing fear here that this is a step toward more centralized control. And the phrase, you will own nothing and be happy, is starting to feel less like a joke and more like the reality. The government has been inching toward more control over our financial lives for years, and this could be the gateway to something much bigger.

You know, policies like these, they start out as reasonable, but slowly morph into tools that erode individual freedom and property rights. So here's what's on the table. The Biden-Harris administration is proposing a 25% minimum tax on unrealized capital gains. It's already in Biden's March budget. And Kamala Harris and others are backing it under the banner of fairness and reducing wealth inequality. So despite how sweet this may sound to some people, this proposal could be a disaster for entrepreneurship and investment.

if it passed, it would discourage people from taking risks, from starting businesses and reinvesting profits. I mean, why would anyone want to expand a real estate portfolio or build a business if they're penalized for their success before they succeed? When capital dries up, innovation stalls, and the entire economy takes a hit. People are worried that this isn't just about collecting more revenue, and rightfully so. It feels like a deeper move toward controlling wealth and eroding financial freedom. I mean, we've seen these small policy changes turn into bigger overreaches before. And the fear is that this could be the next step and a long march toward centralizing power. You know, today's conspiracy theory could be tomorrow's reality if we're not careful.

No, man, this time it's different. No, it's not. It's all in the same playbook that we've seen being run over the last 36 months. You know, after COVID hydroxychloroquium. Ivermectin, the Russian collusion hoax. Hunter's laptop, January 6th, Gretchen Whitmer's kidnapping plot. Those were all once conspiracies. So what makes unrealized capital gains for all different?

Enframed with everything else I just mentioned, it feels even more possible that it will reach you at your income level, doesn't it? So what can you actually do? Well, first, stay informed. Policies like this, they can move fast. And the last thing you want is to be caught off guard. Second, consider diversifying your investments to spread your risk. maybe look into assets that are harder to tax in this way, like certain real estate strategies or even alternative investments like art, collectibles, and jewelry.

And I suppose you could talk to a tax strategist now rather than later, but I don't know how much they could do, but what you don't want is to be scrambling to figure out how to navigate this if it does get passed. And then I guess that would give you one more actionable item. Vote. And that wraps up the epic show. If you found this episode valuable, who else do you know that might too? There's a really good chance you know someone else who would. And when their name comes to mind, please share it with them.

And ask them to click the subscribe button when they get here and I'll take great care of them. God loves you and so do I. Health, peace, blessings and success to you. I'm Matt Terrio. Living the dream. Yeah, yeah, we got the cash flow. We didn't know home for us. We got the cash flow.

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