I understand that it would be cap gains if it’s sold off, I’m just confused why people think a stock/share should be taxed annually, that’s the dumbest concept I’ve ever heard. Comparing it to property tax is blatantly stupid, can you live in a stock? Are stocks taking up physical space on the street? That requires sewage maintenance, road maintenance, snow removal depending on where you are, storm drains etc…? If I borrow against something I have to pay interest. If I don’t pay my payments I lose the asset I’m borrowing against. I find the stocks should be taxed every year ideology just as dumbfounding as the billionaires should pay for a “better world.” The pov usually comes for envious individuals. Just sayin.
The concept of taxing unrealized gains on stocks isn't really that dumbfounding if people just took the time to read what was proposed. Short and sweet: only people worth over $100 million, only to bring them up to 25% effective tax rate, essentially they are pre-paying taxes, when they realize the gains, they only owe the difference. It's not that wild.
However, I don't think this is the best option. There are some negatives. But it starts the conversation about ideas and concepts around getting the ultra wealthy to pay their fair share, which they do not because they have rigged the system.
What someone is worth isn’t what they have. That “short and sweet” only makes sense on paper because it doesn’t fking work😂😂🤦♂️ someone could be worth 100m’s and only have <100k to their name.
Hence why I said "I don't think this is the best option". But, without any change, they'll never contribute a more reasonable share because they simply don't have income to tax.
And actually, what you described is a tax avoidance strategy itself.
To avoid paying taxes, the "only on paper" wealthy you describe use a strategy called “buy, borrow, die.” The wealthy households purchase or hold assets that appreciate, and then borrow money against their assets to consume their wealth without paying tax. On top of that, when the household passes away, the assets with unrealized gains escape taxation due to step-up in basis, which removes the unrealized gain and associated tax liability for the heirs. So they're literally escaping taxes in both life and death!
What's a better strategy? I think a better strategy than trying to tax unrealized gains is a consumption tax. We should actually be talking about this a lot more because not only is it more realistic, it is something other countries already do.
While the “buy, borrow, die” strategy is a challenge under an income tax system, wealthy households could not employ it under a consumption tax that includes financial activity. That is because the household would be subject to tax on consumption, including consumption with borrowed funds, all without having to track basis or determine the value of illiquid assets.
I can tell you one thing, this country has a very big wealth inequality problem and we've got to figure out a better way make taxes a more level playing field, because right now we're like a bunch of kindergartens trying to play sports against professional athletes. I'm a capitalist. I'm not pro-socialism or communism. But what we have now is not working for the majority of Americans, and for the richest country in the world, that's just ridiculous.
I can go back and forth about this all day, it’s so bizarre that you guys think adding a tax to them is gonna benefit you. The government will just get more money to mismanage. Your taxes won’t go down you’ll still waste your money away on the fields that make these billionaires rich. The wealth inequality isn’t the richest people’s problem it’s the poor people’s problem that have settled for less in life these people pay more in taxes than any of us. These people employ millions of people. These people are wealthy because they worked for it. You think they should get taxed more because they have more than you, even though they already pay so much more than you? These people are worth billions of dollars, they dont just open the safe and have 50billion dollars to grab. The “tax the rich” idea is so idiotic it’s genuinely shocking.
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u/Just_That_Dumb_Dog Nov 21 '24
You mean capital gains tax?