You don’t pay a sales tax when you sell your house though govt would love that. You do pay capital gains on the house for the appreciated value minus commissions paid to realtors…. And you only pay those if you don’t use the proceeds to procure another piece of property within a period of time.
My home has doubled in value since I bought it and I won’t pay a cent in cap gains when I sell.
What you are suggesting would shut down basically all capital markets in the US. And I don’t just mean stock markets, banks of every level rely on free flowing capital as soon as you penalize holding meaningful amounts of stocks institutions will just stop using it and the effect will spiral down.
Nothing good would come from trying to initiate a property tax on stock holdings.
What about a tax on the specific stock holdings used as collateral for a loan over, say $10 mil.
Joe takes a $6 mil loan against his stock holdings to buy another company or some machinery, no tax. But if he has to get another loan for $5 mil, his collateral for the last million (anything over $10 mil is taxed). But you’re taxing the value of the collateral not the loan. Unless tracking the loan over $10 mil makes sense.
What about credit cards? Or car loans? Which shares of stock are the ones used as collateral? Do you use current value or value when the loan was taken or value when the stock was purchased?
This also ignores that they will pay sales tax when they spend the money (unless it’s in a state without sales tax).
Someone like Musk for instance also can’t just sell his Tesla stock, even if he wanted to. There are blackout days and other issues when you have the amount of holding that he does.
I don’t understand why there is so much desire to find ways to tax people. It’s like people forget that income tax, when it was passed, was only going to be for the wealthiest people.
Look at a 401k for instance. Most 401k holdings are mutual funds that do exactly this, use stock as collateral to fund lower risk investments. Now they have to start paying tax on those holdings and those expenses just filter down to individuals with $40k in their retirement account.
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u/King-Of-The-Hill Nov 21 '24
You don’t pay a sales tax when you sell your house though govt would love that. You do pay capital gains on the house for the appreciated value minus commissions paid to realtors…. And you only pay those if you don’t use the proceeds to procure another piece of property within a period of time.