Kamala is So Taxing

Harris will tax your dead grandma before she cuts spending. August 22, 2024 [WEBSITE]( | [UNSUBSCRIBE]( Kamala is So Taxing SEAN RING Dear Reader, “Every generation gets the Bond it deserves,” goes the saying. The serious 60s got Connery. The frivolous 70s got one Lazenby and a heap of Sir Roger. The uptight late 80s got Dalton. The clean, carefree 90s got Pierce. The post-9/11 generation got Daniel Craig over a decade and a half, like butter spread over too much bread. Spectre was an intellectual insult. No Time To Die was merely unnecessary. It’s not for me to ever claim that a country deserves the politicians who run it. But a country votes for the politicians who run it. That’s all you need to know about America and its current flirtation with Kamala Harris. America may not deserve the melancholy stagnation (if it’s lucky) it’ll get with her, but it will have voted for it. As a newsletter writer, I’ll be of two minds about it, “like Larry Wildman driving off a cliff in my new Maserati,” as the immortal Gordon Gekko quipped in Wall Street. I would get four years of unlimited writing fodder in exchange for watching the country of my birth circle the drain that much faster. For as we know, you can vote your way into socialism, but you’ve got to shoot your way out of it. Oh, I’m overreacting, you think? I’ll retort that you haven’t read Kamala’s ideas on tax. Her ideas aren’t simply stupid; they’re dangerous. The only way an American politician can come up with ideas like this is if she has a Marxist father. Oh, check. Kamala Harris's tax proposals for capital gains, unrealized gains, and corporate profits reflect a progressive stance gone mad. It punishes wealthy individuals and large corporations in a haymaking attempt to address income inequality and generate revenue to fund Harris’ social handouts. However, the potential consequences of these proposals could lead to a significant reduction in investment, job creation, and economic growth, ultimately harming the very people these policies are intended to help. Let’s review what we know about them to see how horrible they are. Capital Gains Tax Harris supports aligning the tax rate on capital gains with that of ordinary income. This could significantly raise the maximum capital gains tax rate to as high as 44.6% for top earners, especially those making over $1 million annually. This alignment is not only a punitive measure against successful investors, but it also discourages risk-taking and investment, which are crucial for economic growth. For some reason, Harris continues to follow her muddleheaded old boss’s muddleheaded ideas. First, capital gains tax is immoral because it’s a tax on already taxed money. That’s right; you were taxed on your income. Then, you took some of your after-tax income and invested it. You invested so wisely that you made a whopping return. And now, that return is about to be taxed not at a separate rate, but at a rate equal to that you paid on the original income (which turned into the capital you used to make the investment). The whole notion disgusts me. But what’s worse is that Harris is putting your income and gains in the same bucket to be taxed at the same rate. They aren’t the same things. Your income, which shouldn’t be taxed at all, gets taxed at source, so there’s not much you can do about that until America gets a collective lobotomy. Your capital gain came only after you risked your investment, borne of your after-tax income. It shouldn’t be taxed at all. [CRITICAL Election Forecast Change From Jim Rickards]( I believe Donald J. Trump just won the 2024 election. But NOT for the reasons you may think… If I’m right, and crazy Kamala does what I’m predicting at the Democratic National Convention this week… The days leading to the election will cause complete and utter chaos in the markets. [Click here to see my updated 2024 forecast in my emergency election briefing.]( Unrealized Gains Harris backs introducing a tax on unrealized capital gains for ultra-wealthy individuals, another hare-brained proposal Joke Biden initially proposed. This tax would apply to individuals with a net worth exceeding $100 million, capturing gains on assets that have appreciated but have yet to be sold. This ill-considered measure is part of a broader push to ensure that the wealthiest Americans contribute “a fair share” to federal revenues, as unrealized gains currently represent a significant portion of untaxed wealth. First, I don’t know how you can objectively measure “net worth.” Oh, I know what it is. But I also know I’d use every loophole, foundation, company scheme, and trust to move my assets around to make my official net worth appear smaller than $100 million. It's a practical nightmare. But that’s not the point. Taxing unrealized gains is not just lunacy, it's a proposal that's hard to believe was even suggested. It’s the dumbest idea out there… and there are a lot of dumb ideas out there. Let’s run through it. First, let’s define what they want to tax. Let’s say you buy a stock for $10. Over a few months, the stock price grows to $18. You now have an $8 capital gain, but it’s not realized. You haven’t sold the stock yet to realize the gain. Therefore, you have an $8 paper gain, also known as an unrealized or uncrystalized gain. Under the current tax system, you pay no tax on this unrealized $8 gain. Let’s say your stock later rises to $20. You’re thrilled as your stock has doubled. Now, you want to sell at $20. Since you bought the stock at $10 and sold it at $20, you realized a $10 capital gain. The IRS will kindly ask you to pay capital gains tax (CGT) on the $10 gain. If you’ve held the stock for less than a year, it’ll be taxed as ordinary income. If you’ve held the stock for over a year, it’ll be taxed at 0%, 15%, or 20%. For the sake of this example, let’s say you’re in the upper tax bracket of 20%. That means you’ll pay $2 to the IRS because they said so. While I don’t like CGT any more than I like any other taxes, I can acknowledge that in the current system, at least you have the cash to pay the tax when you sell your shares. This system, flawed as it may be, at least allows for some level of financial planning and control. Commie Kamala wants to tax you on gains before you sell the shares. This is not just asinine, it's fundamentally unfair. Let me show you. Going back to our example, let’s say on December 31, 2024, the stock price stood at $18 after you had bought it earlier in the year at $10. The IRS would want $1.60 from you (20% of the $8 gain). Since you didn’t sell the shares, I hope you have some spare cash around! If we did this to every investor, they’d be forced to sell their shares sooner or later to cover their tax liability. It’s lunacy. Corporate Tax Rate Harris supports increasing the corporate tax rate from its current 21% to 28%, which seeks to reverse some of the cuts made under the Trump administration. She has even previously advocated for a rate as high as 35%, though her current stance aligns more closely with Biden's 28% proposal. This increase is intended to raise revenue while still being lower than pre-2017 levels. Aren’t people who think that companies pay corporate tax the cutest little things? I just want to pat them on the head and send them back to the sandbox. Shareholders, customers, and employees suffer (the correct verb) corporate tax. “Companies” don’t pay anything. Ultimately, a real, live person suffers tax. Also, let it be known: no legislation that targets “the rich” ever hits the rich. Because the rich are rich for a reason. And I’ll spell it out right now: Legal tax avoidance is integral to getting and staying rich. Notice I didn’t write “evading tax.” It’s important to note that no rule says, “Pay the maximum amount of tax you can.” It’s antithetical to freedom. The more power The State has, the less power private entities have. “But Sean, Zuck, Elon, and Bezos don’t pay nearly the tax they should!” To which I’d reply, “How much more would you like to pay for your Amazon goods? How much do you pay to show off for your friends on Facebook now? How much does it cost per tweet?” I’d also say, “Socialists often use the word ‘should.’ With ideas are this bad, they need to be enforced at gunpoint.” Wrap Up A presidential candidate seriously considering these taxation ideas in 21st-century America is a scathing indictment of everything from our education system to our culture. From taxing unrealized gains – God help us – to raising the corporate tax rate thinking people won’t realize they’re being fleeced, none of these ideas are smart. America must reject this communist tomfoolery in November, lest it further lose its identity as the capital of freedom on earth. All the best, Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… Takeaways from Rick Rule’s Resource Conference BYRON KING It’s mid-July, so where does one go? How about down to hot, muggy Florida for the annual Rick Rule resource conference in Boca Raton? Who doesn’t want to swelter in 95-degree temps in the shade and 95 percent humidity? Then again, and as an old friend – a rompin’ stompin’ retired Navy SEAL – says, “There’s no bad weather, only inappropriate clothing and poor preparation.” No need to fret, though. It was all okay because the heat and humidity was outside, while we were inside a superb venue with excellent air conditioning and many other great amenities. And c’mon; hot weather or no, I was there to learn and learn I did. Because Rick puts on one of the best resource-focused conferences you’ll find anywhere. (Another great conference is upcoming in New Orleans. See the P.S. at the end.) This recent event was four solid days of deep dives into junior and intermediate-scale resource companies, particularly gold and silver, royalty ideas, and the fast-evolving world of copper. Let’s look at four key takeaways, and I’ll list the names of several companies that impressed me greatly: Caveat Emptor When You Buy Gold Day One began with an insightful talk about gold by Dana Samuelson, president of the American Gold Exchange of Austin, Tex. He runs a sizeable operation, and when you sell hundreds of millions of dollars in gold and silver coins and bullion, you tend to know things. First, per Dana, “beware of fake gold.” Dana is a certified numismatist who has served for many years as an expert witness in litigation over quality and purity disputes and for the U.S. government in fraud and other criminal prosecutions. Dana’s point was that, with rising gold prices, the market has attracted fraudsters. Incidents are rising of coins and metal bars that are not what they purport to be. With ingots and some coins, gold and silver may be alloyed down in purity. You can only tell with sensitive measuring techniques. In extreme cases, a so-called “gold” bar may be nothing more than a gold veneer over a mass of far less valuable tungsten. More than a few coins for sale on websites may also be counterfeit, even ones inside those impressive-looking plastic slabs. This is not a reason NOT to buy physical coins, ingots, etc. But it IS a caution to be careful and judicious with whom you deal. Dana’s advice is to buy from established, reputable dealers. You should ask about the background of the people on staff, particularly their expertise in the field, as well as what testing equipment and methods they utilize to ensure the fineness of the metal offered for sale. And one final point: if or when the time comes to sell a coin or metal ingot, it helps to go to the dealer from whom you bought it in the first place. Good dealers ought to be willing to buy back what they sold you, allowing for price changes. And it’s not hard to understand that many dealers don’t want to buy products that they never carried or sold in the first place, like many specialty coins. Who Is Buying the Gold? Dana also offered solid insights into the current worldwide demand for gold. In essence, central bank gold buying has soared in the past two years, while investment demand for gold from Asia is way up as well. As for central banks, the historical trend is that about 15% of total annual global gold output from mines has gone into central bank vaults, but in the past two years, since mid-2022, that number has more than doubled. In fact, right now, about a third of the annual global gold mine output is being purchased by central banks. This alone is a major change in the supply-demand dynamics of the metal. It’s not hard to understand why central banks have increased their gold buying. It’s directly traceable to Western sanctions on Russia over the Ukraine military operation, which commended in February 2022. Shortly thereafter, The U.S. and Western allies froze about $350 billion in Russian-owned U.S. treasury securities; that is, state assets of the Russian Federation. Another way to say it is that the U.S. and Western partners confiscated Russian state funds, and this sent shock waves across the world. If the U.S. can freeze the assets of a nuclear power like Russia, what chance does anyone else have if politicians and bureaucrats in Washington decide to pull a money-grab? The immediate and most effective means to protect assets is to de-dollarize by selling off U.S. treasuries, and use the proceeds to buy physical gold. At least then, central banks can control their own fate via hard assets and avoid counterparty risk. Meanwhile in Asia – mostly China, but many other nations as well – investors are buying more and more physical gold and silver. The idea is to transfer funds out of depreciating local currencies, and at the same time avoid the traceability that comes with something like buying U.S. Treasuries. Meanwhile, gold is a hedge against inflation both in local currency as well as with U.S. dollars. Up and down the line, Asian gold buying is strong. Purchasers range from individual investors to family offices, banks, businesses and even governments, plus the above-noted central banks. Right now, considering the current world situation, people and institutions in many places wish to avoid local currencies and even dollars, and accumulate an immutable asset with the capability to protect wealth across years and even generations. Hence the trend towards gold-buying. Royalty Companies One part of the sector has done quite well with rising gold prices, namely royalty companies. These are not mining plays; they’re more like specialized bankers to the mining industry. And when gold prices rise, shares in royalty plays tend to move early and fast. Here’s how it works. Let’s say that an exploration or development project is proceeding apace out in the field, but the company needs cash. Management can issue new shares, but that dilutes existing shareholders. And most commercial banks won’t lend at decent terms to a project that isn’t producing gold or cash flow. So, along come royalty companies with a business model designed to advance funds into a project in return for a future payout, or even a stream of actual metal, when the project goes into production. There’s much geological thinking, engineering, and solid banking involved in the business, and every deal is different. However, the idea is that the royalty company puts money into a project in the early days and then benefits long afterwards from its foresight and patience. One great advantage of the royalty model is that the company avoids most day-to-day issues of running a mine. Royalty companies generally don’t worry too much about the price of diesel fuel, labor issues, operations logistics, or anything else. They put their funds into play with the project operator and then, after a while, collect a payout on the backend. You may have heard of some of the biggest royalty plays such as Franco Nevada (FNV), market cap over $24 billion; or Royal Gold (RGLD), market cap over $9 billion. These are both great companies, and have done well as gold prices rose, but they’re also so large that it’s kind of hard for them to grow organically. Right now, at this stage of the gold cycle, my view is to focus on relatively smaller royalty plays that can also benefit from rising gold prices, but with the ability to grow at faster rates; or they might get bought at a premium by the big guys that must deliver numbers back to Wall Street. Two names that I particularly liked at the Rule Conference are Osisko Gold Royalties (OR), with a market cap of about $3 billion; and a much smaller company named Empress Royalty (EMPYF), with a smallish market cap of about $34 million. Osisko came to life as a royalty play in 2014, as a spinout from the largest gold mine in Canada, called Canadian Malartic, located in Quebec (yes, I’ve been there). This mine is truly a long-life, cornerstone asset, paying out a lucrative, 5% “net smelter return” from operations. All this, and over the past decade Osisko also acquired interests in over 180 other royalties, streams and precious metal offtakes from across (mostly) North America. It’s fair to say that Osisko will be spinning royalty cash for many years to come. Another impressive company at the Rule conference was Empress. It’s relatively new, founded in late 2020. I’ve followed Empress for three years and watched management deftly deploy cash into a list of worthy assets in Mexico, Peru and Africa. Everything takes time, of course, but things are paying off now. Recently, Empress reported a profit, with even better prospects for the future as early investments move towards production and cash flow, and cash begins its journey back to the mothership. With both Osisko Gold Royalties and Empress Royalty, I foresee solid organic growth from the business model and the positivity of generally rising gold prices. That, along with continuing and growing profitability from royalties and streams coming home. Plus, we have the distinct possibility of upside via third-party acquisition. [Man Who Predicted Biden's Drop Out In October Issues Shocking New Election Prediction]( After calling Biden's withdraw, former White House advisor Jim Rickards issues an even more shpcking election warning… [Watch This Video to Learn More]( Gold, Silver, and Copper Now, let’s look at two promising companies that are each developing projects in the search for gold, silver, copper and more. These are not mining companies, as such, because just now they are not moving rock, crushing ore, and delivering products for sale. Instead, these companies are exploring and developing their mineral claims to move along the journey and become producing mines in the future. It’s important to learn now about strong development companies like these, while they’re still in the pre-operational stage. These kinds of plays offer significant future upside in terms of new discoveries, impressive development, and possible buyouts or spinouts to larger companies. Along these lines, “All wealth is created by a drill bit,” declared Sean Roosen, CEO of Osisko Development (ODV). “The rest is just filling in the details.” Speaking of drill bits, about twenty years ago, Sean discovered and developed the above-noted Canadian Malartic gold mine in Quebec. Then he sold it for a couple of billion dollars while spinning out a sturdy royalty into Osisko Gold Royalties. Now with Osisko Development, which is an entirely different company, Sean is back in the exploration and development business. His plan is to work in past-producing areas that still offer high probabilities of significant gold, and in the process uncover what the old timers missed. Thus, Osisko Development is currently working in three well-endowed mineral arenas: the Cariboo Mining District of central British Columbia; the Tintic Project in Utah, along a major geologic trend south from the gigantic Bingam Canyon Mine, operated by Rio Tinto; and the San Antonio Gold Project in Sonora, Mexico. In each area, Osisko Development holds large mineral claims and land packages, all backed up and supported by significant mining and production history. In this regard, each of these three areas present opportunities for large scale exploration with significant discovery upside. The company has aggressive, well-funded programs to conduct geologic work, drilling, engineering assessments and more. In a rising gold price environment, strong news flow should feed back towards the share price as Osisko Development creates internal value by building gold, silver and copper reserves. It’s a long-term buy and hold. Another great company I saw at the Rule conference holds phenomenal geologic real estate, and boasts of seriously large resources of gold, silver and copper, namely Seabridge Gold (SA). Over the past twenty years, when gold prices were much lower than now, Seabridge acquired a stable of gold-silver-copper projects across the U.S. and Canada. These include the Three Aces play in the Yukon (which I’ve visited), as well as a massive deposit called KSM in British Columbia, which may be the largest undeveloped gold project in the world at over 47 million ounces. And I could list more names and locales (Northwest Territories, Nevada, etc.), but believe me when I say that all of the projects are more than impressive. Added together, Seabridge’s gold, silver and copper numbers are eye-popping, which makes the company attractive as a takeover target. That is, hers’s the kind of play that could move anybody’s proverbial needle. Meanwhile, Seabridge is cashed up, and work is proceeding apace with exploration and development efforts. Whether on its own, or in partnership or takeover from another company, Seabridge is going places. In the near-term, I expect the company’s share price to do well just on the rising tide of gold prices. Longer-term, Seabridge is the kind of company that you buy and park away in a retirement or college account. The downside is limited, and the upside is wide open. Note: none of the companies I’ve discussed here are official recommendations from Lifetime Income Report. They will not be in the tracked portfolio, but I follow them and like what I see. If you buy shares, be sure to watch the charts, wait for down days in the market, use limit orders and never chase momentum. And with that, I’ll end here and thank you for subscribing and reading. Best wishes… Byron W. King Contributing Editor Rude Awakening P.S. – Consider attending the New Orleans Investment Conference this upcoming Nov. 20 – 23 for another superb resource-themed event. Note that it’s after the forthcoming presidential election, so the information will be all about how to invest in the context of a new and inbound administration. This one, down in the Big Easy, in the Riverside Hilton adjacent to the Mighty Mississippi, is the granddaddy of all the hard asset get-togethers. It dates back to 1974, begun by the late, legendary Jim Blanchard. This year marks the 50th anniversary of this important conference, so that alone offers a setup to be epic. For more information, click [here](. ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. 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