With the election of Joe Biden to the Presidency, you're probably here seeking to understand how much your taxes are going to go up.
The answer: most people will see no tax increases.
The tax plan that Joe Biden has rolled out is targeted at individuals making more than $400,000 a year, less than 1% of the population of the US. If you (like me) are not one of these lucky individuals, then it's very-likely that nothing in this article is going to apply to you.
But, for argument's sake, let's hop in the Model S, drive over to the penthouse, and analyze what Biden's tax code plans mean for you.
If you make over $400,000 a year
First, Biden is going to impose a 12.4% tax on incomes over $400,000 to fund Social Security, split evenly between employers and employees. This is a new tax, because Social Security taxes in the past have been capped on income at or below $137,700.
People who made over $137,700 had a tax break where they didn't have to pay into Social Security for all of their income. Biden's tax plan still allows people making over $137,700 to not pay the Social Security payroll tax for income above that amount as long as they make under $400,000.
When your income exceeds $400,000, you then have to start paying the tax again. This creates an interesting tax structure where people's income at the very bottom and the very top of their income is being taxed for Social Security, but income in the middle is not.
Second, while Biden is likely to keep many of changes from the Tax Cuts and Jobs Act, he has stated that he is going to revert the marginal tax rate for individual incomes above $400,000 from 37% back to the previous 39.6%. As with the Social Security tax, this does not kick in unless your income goes above $400,000.
Individuals making above $400,000 will also have their incomes above $400,000 see itemized deductions capped at 28%. That means if your income is over $400,000 and your tax rate is over 28%, you have less options for itemizing your deductions to get a lower tax rate.
Some business owners have benefitted from deducting up to 20% of their business income as well as 20% of the dividends from qualifying Real Estate Investment Trusts (REITs) on their taxes. Biden is proposing phasing that out for incomes above – drumroll - $400,000.
But what if you're not just making $400,000 a year? What if you are making even more than $400,000 a year? What if you earn over $1 million a year? That's when Biden's really going to hit you where it hurts – your investments.
Most people pay taxes on what's called "earned income," referring to things like your salary at your job. The tax rates for that range from 10% to 37%, depending on how much you make. If you make money from investments instead, that's a whole different story.
If you buy an investment and sell it for a profit within one year of purchase, you would pay your normal income tax on any profit you make. But if you hold the investment for longer than a year, you pay a reduced tax rate between 0% and 20%, depending on your income.
If you make over $200,000 ($250,000 for married couples), you would also pay a 3.8% tax on net investment income. What Biden is proposing is taxing any income over $1 million the same regardless of it comes from your salary or your long-term investments.
The wealthiest people in the US have seen a large amount of their income come from investments, and this measure would keep the wealthiest Americans from paying less in taxes than average working people just because the money comes from holding stocks or real estate instead of a traditional job.
If you make under $400,000 a year
Let's say that you, like more than 99% of Americans, do not make $400,000 a year. Does this mean Biden's tax plan will not affect you at all? There's actually a decent chance you might see some changes to your taxes.
Biden is proposing bringing back the First-Time Homebuyers' Tax Credit, originally created to help the housing market during the Great Recession, and provide up to $15,000 for first-time homebuyers. With interest rates at historic lows, this may be another incentive for you to consider dipping your toes into the real estate game and becoming a homeowner.
Biden is also proposing expanding the Child and Dependent Care Tax Credit from $3,000 up to $8,000 for one dependent and $16,000 if you have multiple dependents. The maximum reimbursement rate would also adjust from 35% to 50%. If you have kids or other dependents, this may reduce how much you pay in taxes by giving you a child tax credit the money you spend to support your family.
Biden also has a few very targeted tax cuts and tax benefits that will apply to a much smaller group of people. One is expanding the Earned Income Tax Credit (a tax credit for low-income people who are very close to the poverty line) and allowing people over the age of 65 to also claim the credit even if they do not have dependent children.
He would also provide a refundable low-income renter's credit, reinstate tax credits for the purchase of electric vehicles and improvements to your home to make them more energy-efficient, as well as exempt forgiven student loans from taxable income. These may not apply to as wide a group of people, but if you're older, a renter, looking to live a more green lifestyle, or seeking forgiveness for student loans, Biden's tax proposals can have you looking at a smaller tax bill.
Biden's plans for inheritances
At first glance, it looks like everyone making more than $400,000 a year will pay higher taxes and everyone else will pay less taxes than they currently do. However, there is a part of Biden's tax plan that may have an impact on you even if you are lower income – if you have a rich family.
The Tax Cuts and Jobs Act raised the threshold at which estate taxes are paid and lowered how much they have to pay in taxes. If you stand to inherit an estate worth $11.6 million dollars today ($23 million if you are a married couple), right now you don't pay taxes on it.
If you inherit more than that, you would pay a top rate of 40% tax. Biden is proposing lowering the threshold where the tax would kick in back down to $3.5 million ($7 million for married couples) and raising the tax rate back to 45%. This will affect roughly 0.3% of estates. If you are in the 99.7%, you do not need to worry about the Biden inheritance policy.
Now, the next part is closing an inheritance loophole called the "stepped-up basis" loophole. Right now, when an heir inherits an asset, they only pay taxes on the gain in value of the asset from the time that they inherited it.
Let's say your parents bought $100 worth of stocks decades ago and today those stocks are worth $10,000. If your parents passed away and left you the stocks, you would be allowed to sell them immediately and not pay any taxes.
If you held the stock and the price rose to $12,000, you would only pay taxes on the $2,000 in value the stocks gained since you inherited it. This because the initial value of the stocks would be "stepped-up" to the value at the time you inherited it rather than the value at the time your parents bought it.
This loophole has allowed the very wealthy to leave very valuable assets to their children without needing to pay taxes and allowed generations to pass large fortunes to their children. Biden has proposed closing this loophole and not stepping-up the value of an asset when it is inherited; taxes will instead be paid on the value of the asset from when it was first purchased.
This part of the plan has yet to be fully fleshed-out by Biden, but it appears to be modelled after a proposal from the Obama administration. That plan allowed an exclusion of $100,000 per person (rising with inflation) and excluding $250,000 for primary residences ($500,000 for couples). It also allowed a 15-year payment period and tax deferrals for family-owned small businesses. Biden may roll out similar provisions once he rolls his tax plan out before congress.
Does any of the Biden tax policy outlines even matter?
Biden has presented something of a wish list for his tax plan, but that doesn't mean he can wave a magic wand on January 20th and put it into place. This plan will require significant negotiations in Congress, and if Republicans retain a Senate majority, they may refuse to even allow a bill to have a hearing. Ultimately, Biden's tax proposals may change significantly as they work their way through Congress and if they are not able to garner enough support, they may never come into effect.
Over the past month, both Haiti and Afghanistan have been pummeled by tragic disasters that left devastation in their wake.
In Haiti, a 7.2 magnitude earthquake erupted, leading over to 2,189 deaths and counting. A few hours later, in Afghanistan, Kabul fell to the Taliban just after U.S. troops had pulled out after 20 years of war.
In many ways, these disasters are both chillingly connected to US interference. The United States invaded Haiti in 1915, ostensibly promising to restore order after a presidential assassination but really intending to preserve the route to the Panama Canal and to defend US creditors, among other reasons.
But the US forces soon realized that they were not able to control the country alone, and so formed an army of Haitian enlistees, powered by US air power and intended to quell Haitian insurrection against US controls. Then, in 1934, the US pulled out on its own, disappointed with how slow progress was going. Haiti's institutions were never really able to rebuild themselves, leaving them immensely vulnerable to natural disasters.
Something similar happened in Afghanistan, where the US sent troops and supported an insurgent Afghan army – only to pull out, abandoning the country they left in ruins, with many Afghans supporting the Taliban.
In both cases, defense contractors benefited by far the most from the conflict, making billions in profits while civilians faced fallout and devastation. While the conflicts and circumstances are extremely different and while the US is obviously not solely to blame for either crisis, it's hard not to see the US-based roots of these disasters.
Today, in Haiti and Afghanistan, civilians are facing unimaginable tragedy.
Here are charities offering support in Afghanistan:
1. The International Rescue Committee is looking to raise $10 million to deliver aid directly to Afghanistan
2. CARE is matching donations for an Afghanistan relief fund. They are providing food, shelter, and water to families in need; a donation of $89.50 covers 1 family's emergency needs for a month.
3. Women for Women International is matching donations up to 500,000 for Afghan women, who will be facing unimaginable horrors under Taliban control.
4. AfghanAid offers support for people living in remote regions of Afghanistan.
5. VitalVoices supports female leaders and changemakers and survivors of gender-based violence around the world.
Here are charities offering support in Haiti:
1. Partners in Health has been working with Haiti for a long time, and they work with the Department of Health rather than around them, which is extremely important in a charity.
2. Health Equity International helps run Saint Boniface Hospital, a hospital in Haiti close to the earthquake's epicenter.
3. SOIL is an organization based Haiti, "a local organization with a track record of supporting after natural disasters." They are distributing hygiene kits and provisions on the ground to hospitals and to victims of the earthquake.
4. Hope for Haiti has been working in emergency response in Haiti for three decades, and their team is comprised of people who live and work in Haiti. They focus on supporting children and people in need across Haiti.
When the new Tiffany's campaign was unveiled, reactions were mixed.
Tiffany's, the iconic jewelry brand which does not (despite what some might be misled to believe) in fact serve breakfast, featured Jay Z, Beyoncé, and a rare Basquiat painting in their recent campaign.
The aesthetics were undeniably luxe and historic. The campaign showcased the rarely-seen Basquiat painting Equals Pi (1982), which the brand acquired for the background's proximity to its distinctive Tiffany blue. Also notably historic is that Beyoncé was the first Black woman to wear the 128.54 carat Tiffany Diamond.
Before Beyoncé, the only other stars to wear the yellow diamond were Mary Whitehouse, wife of American diplomat Edwin Sheldon Whitehouse, Hollywood icon Audrey Hepburn, and singer Lady Gaga.
"Beyoncé and Jay-Z are the epitome of the modern love story …. Love is the diamond that the jewelry and art decorate," said the press release accompanying the campaign.
The campaign, titled "About Love," is stunning and has both classic and contemporary references. The image of the couple posing in front of high art recalled the iconic stills from their "APESHIT" music video, for which they famously rented out the Louvre and posed in front of the Mona Lisa.
THE CARTERS - APESHIT (Official Video) www.youtube.com
Their "APESHIT" photo made a giant cultural impact for its juxtaposition of Western beauty and Blackness. Tiffany's campaign seemed to have similar goals — showcasing Beyoncé and Jay Z as the peak of luxury, this time juxtaposing the Basquiat and the Tiffany diamond.
As a Black couple, their appearance in such a luxury campaign was a big move for representation, but in a post 2020 landscape, there was an outcry of criticism.
Despite the aesthetic beauty of the image, the high capitalist undertones didn't sit right with some on the internet — largely younger demographics. Though this campaign was an effort by Tiffany's to appeal to younger audiences and make the brand feel more relevant, Twitter's verdict was clear: a blood diamond wasn't the way to go.
The diamond, which was mined in South Africa in 1877, comes from origins laden in the implications of colonialism. The practice of mining in South Africa at the time was exploitative and destructive, eschewing the livelihoods and safety of African miners and their communities for... what? Money? So Tiffany could try to sell us some dream of affluence using Black celebrities as to "Blackwash" the history behind their treasured piece?
The Washington Post also had some choice words, saying: "Its campaign does not celebrate Black liberation — it elevates a painful symbol of colonialism. It presents an ostentatious display of wealth as a sign of progress in an age when Black Americans possess just 4 percent of the United States's total household wealth. If Black success is defined by being paid to wear White people's large colonial diamonds, then we are truly still in the sunken place."
Alongside the campaign, Tiffany & Co have promised to donate $2 million to HBCUs to fund scholarships and internships. But this measly amount (considering the multi-billion dollar net worth behind LVMH) is not enough to cover up that, despite their performative efforts to promote "diversity," Tiffany's is entrenched in a colonial history that neither beauty nor Beyonce can make us ignore.
While Black representation has been increasing over the past few years, the question of how we are represented is starting to be considered with more nuance. And as we examine the structures of wealth and hierarchical values, many people are starting to ask whether these should be the standards we aspire to anymore.
Jay Z and Beyoncé have come under fire before for their promotion of Black Capitalist values — which the kids don't seem to want. Jay Z especially seems invested in the trappings of traditional (read: white) success and wealth. His cannabis line recently unveiled a campaign based on the work Slim Aarons — which was famously focused on "attractive people doing attractive things in attractive places" — and its unashamed opulence raised some eyebrows.
Images like this aren't as revolutionary as they once might have been since they reinforce the status quo and tell marginalized people to reach for the same luxuries and lifestyles deemed aspirational by the people who have oppressed them.
Anti-capitalist theory has been around as long as capitalism has, but younger generations are more likely to question the status quo — even when it comes packed with Basquiat and Beyoncé.
The conversation about the Tiffany campaign is indicative of how Gen Z thinks differently about money and what it means to them. They are less likely to be seduced by the luster of the aspirational, and more receptive to relatability.
No more does financial literacy seem restricted to the pretentious or the elite — we get it, finance bros; you love capitalism. With Cleo, understanding your money is something that can align users with their values.
And those values don't look like blood diamonds or corporate pandering.
- Sorry, Beyoncé, but Tiffany's blood diamonds aren't a girl's best friend - Washington Post
- The Black-white wealth gap left Black households more vulnerable — Brookings
- The Unashamed Opulence of Jay Z's Luxury Cannabis-Themed Slim Aarons Photoshoot — Popdust
- ATTRACTIVE PEOPLE DOING ATTRACTIVE THINGS IN ATTRACTIVE PLACES WITH SLIM AARONS — Elle Decor
Road trips can be a lot of fun — but they can also drain your wallet quickly if you aren't careful.
From high gas costs and park admission fares to lodging and the price of eating out every night, the expenses can add up quickly. But at the same time, it's very possible to do road trips cheaply and efficiently. Without the headache of worrying about how much money you're leaking, you can enjoy the open road a whole lot more. Here's how to save money on a road trip.
1. Prepare Your Budget, Route, and Packing List in Advance
If you want to save money on a road trip, be sure you're ready to go. Try to count up all your expenses before you hit the road and create a budget. It's also a good idea to plan your route in advance so you don't end up taking unnecessary, gas-guzzling detours. And finally, be sure to pack in advance so you don't find yourself having to buy tons of things you forgot along the way.
2. Book Cheap Accommodations — Or Try Camping
All those motel rooms can add up surprisingly quick, but camping is often cheap or free, and it's a great way to get intimate with the place you're visiting. You can check the Bureau of Land Management's website for free campsites. Freecampsite.com also provides great information on If you don't have a tent or don't want to camp every night, try booking cheap Airbnbs or booking hotels in advance, making sure to compare prices.
camping road tripConde Nast Traveler
If you're planning on sleeping in your car, a few tips: WalMart allows all-night parking, as do many 24-hour gyms. (Buying a membership to Planet Fitness or something like it also gives you a great place to stop, shower, and recharge while on the road).
3. Bring Food From Home
Don't go on a road trip expecting to subsist on fast food alone. You'll wind up feeling like shit, and it'll drain your pocketbook stunningly quickly. Instead, be sure to bring food from home. Consider buying a gas stove and a coffee pot for easy on-the-go meals, and make sure you bring substantial snacks to satiate midday or late night cravings so you can avoid getting those late night Mickey D's expeditions.
Try bringing your own cooler, filling it with easy stuff for breakfast and lunch — some bread and peanut butter and jelly will go a long way. Bring your own utensils, plates, and napkins, and avoid buying bottled water by packing some big water jugs and a reusable water bottle. Alternatively, try staying at hotels or Airbnbs with kitchens so you can cook there.
4. Avoid Tolls
Apps like Google Maps and Waze point out toll locations, so be sure to avoid those to save those pennies. (If it takes you too far off route, you might have to bite the bullet and drive across that expensive bridge).
You can also save on parking fees by using sites like Parkopedia.
Road TripThe Orange Backpack
5. Save on Gas
Gas can get pricy incredibly fast, so be sure that you're stopping at cheap gas stations. Free apps like GasBuddy help you find the most affordable gas prices in the area. Also, try going the speed limit on the highways — anything faster will burn through your tank. Be sure that you don't wait till you arrive at touristy locations or big cities to fill up.
6. Get a National Park Pass
All those parks can get really expensive really fast. If you're planning on visiting three or more parks, it's a great idea to get an America the Beautiful National Parks Pass. For $80 you can get into every National Park for one year.