Capital gains tax hikes.

I will have to start by saying that I am not a financial advisor nor a tax expert, so take my article with a grain of salt; what I am writing doesn't represent any advice whatsoever, and it is just my opinion. With that out of the way, let's start.

The new capital gains will only apply to the wealthy and will only kick in after $1,000,000.00. So you own one Bitcoin Cash won't be affected yet, not at least while BCH is under $1000 each. Those who will be affected immediately will be those living in the US, citizens of the US, or residing within the nation's territories; everyone else may be involved but indirectly.

Taxes on long-term capital gains – generally classified as an asset 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 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, that's when you get to the magic number of 50% and, in some cases, even more, mind that those combined taxes are paid; they are not imaginary. They are actual taxes that Americans must pay. So let's put some states as examples: 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%.

You must know that capital gains are taxed to the profits, not your principal. If you have managed to get to one million dollars, the government wants to take half of your income or close to it once you combine all taxes, state taxes, and federal.

If you make less than one million dollars a year, you shouldn't worry. Well, not so fast many people own houses or have a mortgage that, in 30 years, will be paid in full probably, you will die before that happens. Still, your children will inherit your assets, well they will have to pay taxes on that in some states, and the price of houses had 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 bank loan you. So if you sell your house after the tax proposal is passed, 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%, will be a hard pill to take, in my opinion.

And lastly, cryptos, I guess that's what you were waiting for when I talked about cryptos. If you live in the US and hold crypto assets, you must pay capital gains. You must pay if you mined within its borders, bought within its boundaries, and traded. 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 asks for documents when you sign up, and the government knows exactly how much Bitcoin you have. If you move your funds, that will count as a capital event that you are supposed to report.

If you own those amounts, the best advice will be if you must sell for fiat, report your taxes, but if you don't want to pay taxes, don't sell, borrow against it; otherwise, leave your coins where they are. The capital gains will be a hard bite, no way around it.

If you have, let's say, $1000 and want to invest in Bitcoin Cash, you should buy your BCH or any other crypto 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's say at $1000 by using p2p exchanges, don't have to report anything to anybody, and they can cross the US border and go to another country that doesn't have capital gains taxes or any other heavy taxes on the rich.

And this is one thing that everyone, regardless of whether they are poor or rich right now, should consider, which is future taxes. 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.

The only way to not pay taxes is 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 the government will try to tax those who own that asset first. You will be okay if you hold one BCH, which is not even close to the limit. Still, it would be best if you bought your BCH so that there is no trail of you owning it. A good practice will be to buy it with cash or other cryptos, but it has gone from fiat to crypto, crypto to crypto without KYC, and crypto to BCH.

Now, why would you do that? Because in the future, you don't know how crazy politicians will be getting 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 wants to take your property.

And the taxes are not the only thing you should expect from your government. You will see capital control soon in the land of free America. I suspect once capital controls are implemented, 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 planning how to avoid or find loopholes in this tax or pass it to consumers, but you can bet that the rich are already thinking about how they will not pay this tax. The government, in response, will impose capital control laws, which will effectively be a trap for money inside the nation.

It has happened in the past and will happen again. Those who live from the government want to tax those who produce until the ones working lose their incentives. It is like the donkey and the carrot; the donkey can never get the carrot and only walks and walks with the cargo on its back.

Unfortunately, our system is full of those who don't want to pay taxes. Eventually, if you tax someone too much, they (the taxpayer) will pack and leave, and you should think the same; if the government wants more than 10% of your cryptos is time to move somewhere else.

https://www.barrons.com/articles/biden-billionaire-tax-hike-51648584895

https://taxfoundation.org/biden-capital-gains-tax-rate-oecd/