Build back better dead?

[odysseus2000]

Interesting moves in the US by democrats to "kill" 'Build Back Better'

This looks to have hurt anyone expecting handouts such as legacy auto for BEV and seems likely to weigh heavily on inflation expectations.

Cynics may argue that Manchin is trying to protect the coal miners in his constituency, but what ever it seems to be a huge trouble for Biden.

I thought this would get through, but it now looks unlikely:

https://www.theguardian.com/us-news/202 ... -democrats

Regards,

[Lootman]

Manchin's opposition to the bill is a short-term negative on the market.

But one can easily take the view that longer-term such a contraint on Democrat excess might be good for the markets. At least if you believe that markets also want longer-term fiscal prudence.

Manchin may disassociate from the Dems altogether which would destroy the Dem control of the Senate and the 2022 threat of a new liberal SCOTUS member, and again that should be good for markets longer term.

[odysseus2000]

Manchin's opposition to the bill is a short-term negative on the market.

But one can easily take the view that longer-term such a contraint on Democrat excess might be good for the markets. At least if you believe that markets also want longer-term fiscal prudence.

Manchin may disassociate from the Dems altogether which would destroy the Dem control of the Senate and the 2022 threat of a new liberal SCOTUS member, and again that should be good for markets longer term.

Maybe but if the bill is dead then a lot of expected government spending will not happen and a lot of US companies although crying for fiscal responsibility, like putting their shovels into free cash.

It will be interesting to see what the Prez does now.

Regards,

[scrumpyjack]

I don't really follow US politics but the democrats, like any large party, must be a coalition of a fairly wide spread of views and it seems to have been captured by, on US standards anyway, the extreme left wing (Warren, Sanders, AOC etc), not dissimilar to what happened to Labour with Corbyn etc.

If that is so, it was exceedingly ill advised of sleepy Joe and Pellosi etc to allow themselves to be railroaded into a public spending programme of such mind bending fiscal incontinence whilst having only a majority of one. Many democrats will have had great reservations about it, I suspect, and are probably relieved that Manchin has forced some common sense into the debate. I guess there will as ever end up being a compromise. I think they call it pork barrel politics over there. They'd better sort it out well before the midterms or Biden's failure will be epic!

[odysseus2000]

I don't really follow US politics but the democrats, like any large party, must be a coalition of a fairly wide spread of views and it seems to have been captured by, on US standards anyway, the extreme left wing (Warren, Sanders, AOC etc), not dissimilar to what happened to Labour with Corbyn etc.

If that is so, it was exceedingly ill advised of sleepy Joe and Pellosi etc to allow themselves to be railroaded into a public spending programme of such mind bending fiscal incontinence whilst having only a majority of one. Many democrats will have had great reservations about it, I suspect, and are probably relieved that Manchin has forced some common sense into the debate. I guess there will as ever end up being a compromise. I think they call it pork barrel politics over there. They'd better sort it out well before the midterms or Biden's failure will be epic!

Its not that simple as some members will have got their own vested interests funded in the bill as it was, the so called Pork Barrel stuff, and so Biden and his team can argue that things are not getting better due to the actions of their opponents and can appeal to the voters: If you vote them out we can get back to building back better... etc.

For many years Presidents have tried to get a line item veto whereby a President could strike out some aspects he/she did not like and let the rest go through, but it has never been implemented in any effective way and the Supreme Court has said that such powers for the President would be unconstitutional. Usually US legislation contains various Pork barrels to bring members into line by giving them something they can celebrate with their electors.

This can run for some time, but the mid terms will likely force something to be passed to give members things to say they achieved & how they need re-electing to do more etc.

Regards,

[ursaminortaur]

I don't really follow US politics but the democrats, like any large party, must be a coalition of a fairly wide spread of views and it seems to have been captured by, on US standards anyway, the extreme left wing (Warren, Sanders, AOC etc), not dissimilar to what happened to Labour with Corbyn etc.

US extreme left wing democrats would be regarded as centre-right (or at most centre-left) in Europe or the UK.

[odysseus2000]

I don't really follow US politics but the democrats, like any large party, must be a coalition of a fairly wide spread of views and it seems to have been captured by, on US standards anyway, the extreme left wing (Warren, Sanders, AOC etc), not dissimilar to what happened to Labour with Corbyn etc.

US extreme left wing democrats would be regarded as centre-right (or at most centre-left) in Europe or the UK.

Dunno, Elizabeth Warren is getting pretty close to extreme even by European standards:

https://www.dailymail.co.uk/news/articl ... oader.html

Regards,

[PeterGray]

I can't see Warren's comments as in anyway extreme. She was referring to previous years when he paid nothing or tiny amounts. His claim that he will pay large sums this year came after her remarks and is yet to be shown to be true.

Expectations that the very rich should shoulder a larger than average share of tax revenues are hardly revolutionary in Europe (of which the UK is a part), and it's well documented, even by people like Buffet, that the very rich in the US in general pay far far smaller amounts of tax in proportion to their income and wealth compared to the poor.

[Lootman]

I don't really follow US politics but the democrats, like any large party, must be a coalition of a fairly wide spread of views and it seems to have been captured by, on US standards anyway, the extreme left wing (Warren, Sanders, AOC etc), not dissimilar to what happened to Labour with Corbyn etc.

US extreme left wing democrats would be regarded as centre-right (or at most centre-left) in Europe or the UK.

Sanders calls himself a socialist and wants a NHS-style healthcare system for the US. That is pretty left-wing.

AOC never met a public programme at taxpayer expense that she didn't like. And she is very anti-Israel even though she represents a city with 1.5 million Jews.

Warren wants regulations on finance that exceed anything that the UK has.

There is definitely danger from the left-wing of the Democrat party. It is actually Manchin who is the voice of moderation in that party.

[murraypaul]

I don't really follow US politics but the democrats, like any large party, must be a coalition of a fairly wide spread of views and it seems to have been captured by, on US standards anyway, the extreme left wing (Warren, Sanders, AOC etc), not dissimilar to what happened to Labour with Corbyn etc.

US extreme left wing democrats would be regarded as centre-right (or at most centre-left) in Europe or the UK.

Sanders calls himself a socialist and wants a NHS-style healthcare system for the US. That is pretty left-wing.

For the US, yes.

For Europe, it is entirely mainstream.

[Lootman]

US extreme left wing democrats would be regarded as centre-right (or at most centre-left) in Europe or the UK.

Sanders calls himself a socialist and wants a NHS-style healthcare system for the US. That is pretty left-wing.

For the US, yes. For Europe, it is entirely mainstream.

Most European countries don't run healthcare as a giant government department like the UK does. Rather their model is more a hybrid of private and public provision, often based on insurance systems.

Sanders wanted MediCare-for-All which is essentially like the NHS which is at the extreme left-wing side of the spectrum of healthcare delivery even in Europe.

But also, why should the US be like Europe? People have always emigrated there precisely because it is not like Europe. Personally I prefer having a choice of systems available around the world. Gives me a greater diversity of options. What is the point of the US if it just like Europe?

[murraypaul]

But also, why should the US be like Europe? People have always emigrated there precisely because it is not like Europe. Personally I prefer having a choice of systems available around the world. Gives me a greater diversity of options. What is the point of the US if it just like Europe?

I don't think it should.

The quote you replied to was "US extreme left wing democrats would be regarded as centre-right (or at most centre-left) in Europe or the UK."

So I think describing how US political views would be seen in Europe is pretty on-topic.

[Lootman]

But also, why should the US be like Europe? People have always emigrated there precisely because it is not like Europe. Personally I prefer having a choice of systems available around the world. Gives me a greater diversity of options. What is the point of the US if it just like Europe?

I don't think it should.

The quote you replied to was "US extreme left wing democrats would be regarded as centre-right (or at most centre-left) in Europe or the UK."

So I think describing how US political views would be seen in Europe is pretty on-topic.

I never said your post was off topic. However I do think people like Sanders, Warren and AOC are left-wing even by UK standards.

Of course in some ways the US is more left-wing anyway. Some US cities have rent control, which the UK hasn't had for 40 years. The US has retained public ownership of its mail and passenger rail systems even whilst the UK has privatised its. Many areas of the US have public utilities for power and water. The US spends at least as much on public healthcare provision as the UK does. And so on. Yet Warren, Sander, AOC etc. want to spend far more again.

[TUK020]

And she is very anti-Israel even though she represents a city with 1.5 million Jews.

Why does everyone seem to automatically conflate 3 different things?
- People of Jewish ethnic origin
- The Jewish religion
- The state of Israel.
It is possible to have very differing opinions of the above three things.

[Lootman]

And she is very anti-Israel even though she represents a city with 1.5 million Jews.

Why does everyone seem to automatically conflate 3 different things?
- People of Jewish ethnic origin
- The Jewish religion
- The state of Israel.
It is possible to have very differing opinions of the above three things.

It may be possible but many people cannot or do not manage it. American Jews are overwhelmingly in favour of the existence of a Jewish state. In fact it is the support of Americans in general that has been crucial in the survival and flourishing of Israel. A left-wing US government would be an existential threat to Israel.

To be fair to AOC she dials back the rhetoric a bit on this topic, presumably because of her constituency. But she does support a couple of her fellow "Squad" members to parrot their anti-Israel line.

Sanders is Jewish so he also tends to finesse his views on this. As is fellow leftie Chuck Schumer.

[odysseus2000]

Peter Gray
I can't see Warren's comments as in anyway extreme. She was referring to previous years when he paid nothing or tiny amounts. His claim that he will pay large sums this year came after her remarks and is yet to be shown to be true.

This all comes back to tax and when it should be levied.

As things are tax is only due when one receives income or capital gains, not when one has unrealised income or unrealised capital gains.

Most of Musk's wealth was, until recently, in unrealised capital gains. He borrowed money against these unrealised assets for his expenses and such but left the shares to appreciate. Most investors would applaud that.

If instead the law required a tax on unrealised gains, how would it work?

If i e.g. have unrealised gains of £x would I have to pay tax on this? Suppose I paid 30% or 0.3X and then the shares that were once unrealised gains become unrealised losses. Would I then have to pay negative tax, i.e. get paid by the government?

I am not sure how one can operate a tax system which taxes unrealised gains although it is regularly proposed by politicians, but perhaps there is a way that I have not thought about.

Regards,

[Lootman]

I am not sure how one can operate a tax system which taxes unrealised gains although it is regularly proposed by politicians, but perhaps there is a way that I have not thought about

It could work because in some cases it does work that way. Professional traders are taxed on a mark-to-market basis, meaning effectively that they are taxed on their unrealised gains each year.

I read once that Australia taxes individuals in that way but have no idea if that is actually true.

However it is an appalling way to tax individuals since they may have no cash to pay the tax, which of course is why nearly everywhere taxes transactions rather than notional wealth.

[absolutezero]

Peter Gray
I can't see Warren's comments as in anyway extreme. She was referring to previous years when he paid nothing or tiny amounts. His claim that he will pay large sums this year came after her remarks and is yet to be shown to be true.

This all comes back to tax and when it should be levied.

As things are tax is only due when one receives income or capital gains, not when one has unrealised income or unrealised capital gains.

Most of Musk's wealth was, until recently, in unrealised capital gains. He borrowed money against these unrealised assets for his expenses and such but left the shares to appreciate. Most investors would applaud that.

If instead the law required a tax on unrealised gains, how would it work?

If i e.g. have unrealised gains of £x would I have to pay tax on this? Suppose I paid 30% or 0.3X and then the shares that were once unrealised gains become unrealised losses. Would I then have to pay negative tax, i.e. get paid by the government?

I am not sure how one can operate a tax system which taxes unrealised gains although it is regularly proposed by politicians, but perhaps there is a way that I have not thought about.

Regards,

Easy. It's a one way street motivated by the usual left wing politics of envy.
You would get taxed on unrealised gains.
If the assets then fall in price, oh dear. No refund for you.
If you have unrealised losses, oh dear. We'll come back next year and hope you have some gains.

[scrumpyjack]

Whatever the timing of Musk's tax payments, when one looks at the relatively contributions of Musk and Warren to the good old US of A, Musk is in a totally different league to her. He has built from scratch several major businesses, PayPal, Tesla and Space X for a start, generating employment for huge numbers of Americans and lots of tax for the state and what has she achieved other than being an overhead to the US taxpayer?

It is remarkably stupid of her to try and bad mouth Musk and does not indicate to me that she is suited to high office. Sadly I come to that conclusion with most politicians of whatever party! As I recall, AOC's spat with Amazon resulted in them abandoning plans to set up a headquarters in NY employing 25,000. Another stupid politician.

[Lootman]

Whatever the timing of Musk's tax payments, when one looks at the relatively contributions of Musk and Warren to the good old US of A, Musk is in a totally different league to her. He has built from scratch several major businesses, PayPal, Tesla and Space X for a start, generating employment for huge numbers of Americans and lots of tax for the state and what has she achieved other than being an overhead to the US taxpayer?

It is remarkably stupid of her to try and bad mouth Musk and does not indicate to me that she is suited to high office. Sadly I come to that conclusion with most politicians of whatever party! As I recall, AOC's spat with Amazon resulted in them abandoning plans to set up a headquarters in NY employing 25,000. Another stupid politician.

Yeah, Warren is actually the most annoying of the US lefties.

Sanders at least has some seniority, and was an independent voice for that most independent of States (Vermont) decades ago. I quite liked him when he was a quirky outsider and it is only in the last few years that he has adopted delusions of grandeur. And even then, like Corbyn, he was doomed from the start.

AOC is the opposite. If she wasn't young, attractive and hip, she probably would not garner the headlines. Her ideas are off the wall of course, but she does have a certain charisma. My suspicion is that she will get bored of politics because she cannot get anything done, and quit before she is old enough to qualify to be President (age 35).

Warren has none of those redeeming features. She is just as annoying and irascible as all heck with really nothing else going for her. Ditto Schumer.