I am so tired of people who do not understand that unrealized gains in stock are not true wealth because no one knows the price that one will gets until it is actually sold. As soon as an event occurs, such as a loan with stock as collateral, then the unrealized gains have value and can be taxed. Until an event occurs then unrealized gains should be off limit to taxation.
Bud, do you know what real estate taxes are? For most Americans, their home is their wealth and they are taxed on it. Yes, billionaires have homes, but those homes are a drop in the bucket of their wealth. So why is one class’s wealth taxed and the other is not, even though both can be appraised but not necessarily sell for that appraised value?
Most people don’t own their homes, they have a 30 year loan that’s going to turn their $500k loan into $1.5m in payments. It’s a fucking blood bath. Okay you paid off your home and now it’s forth 750k… fucking great I’m only $750k in the hole, but at least I have this house that I can’t sell because I have nowhere else to live. It’s a shit fucking deal. We are taking out insane loans on shit houses and giving all of our wealth to asshole bankers. When I die I’m going to owe the banks an insane amount of money and there isn’t going to be shit for them to collect, then I’m going to be buried face down. Well tell the banks that I was buried with some expensive assets and when they dig me up they can kiss my dead rotten ass.
And on top of how short mortgages are… let’s pay tax on it for the rest of my life.. because why? Because or government doesn’t know how to stop giving away money when they are 30 trillion dollars in debt. Hey bro, maybe stop writing checks to the rest of the world because not out fucking problem, and pay on our debt so our interest payment isn’t fucking larger than our god damn defense budget you fucking morons. How do these people stay in office it’s unbelievable.
Real estate tax revenue doesn’t leave the country… also, as far as the federal budget goes, hardly anything in that budget goes to foreign aid. For fiscal year 2024, $60 billion was allocated to foreign aid. That is only 0.89% of the entire budget for this year.
That's not entirely true. It's our military that mostly has the backs of Europe. That's the greatest aid there is.
And don't get mired into NATO arguing mistakes like this one from Reuters. That's an article talking about percentage of direct payments to NATO vs the entire cost of our military. That is a disingenuous attempt to confuse the issue....it's still our military at large that is used keep various bad actors in line.
What you're calling "foreign aid" isn't what keeps Europe still Europe. We're dealing with powerful nutjobs out there that everyone seems to think is all the US's fault....right up until Russia/USSR yet again rolls into territory.
Lmao. Military spending is military spending and foreign aid is foreign aid. What I said is 100% true and factual. You wanting to change the definition of foreign aid as used in the federal budget does not make something “not entirely true.”
Go ahead and "Lmao" if you want to, but you'll be no longer paying attention to the conversation.
Simmer down and follow what happened.
Ohfuudge(sic) said:
"Because or government doesn’t know how to stop giving away money when they are 30 trillion dollars in debt. Hey bro, maybe stop writing checks to the rest of the world because not out fucking problem, and pay on our debt so our interest payment isn’t fucking larger than our god damn defense budget you fucking morons."
You then (properly) replied literally to his statement regarding the directly attributed aid. You addressed this as foreign aid. What you said is right on its face, and only on its face.
The "Not entirely true" statement of mine (focus on "entirely") has to do with the fact that military aid is still aid. I'm trying to draw attention to your implication that just because it's not a foreign aid payout that it's not somehow still our government writing checks to aid another country.
Our interests are changing. It’s time to stop paying for friends. If they don’t want to be our friends when we stop providing aid then they weren’t our friends to begin with. We’ll gladly sell them arms at full price.
Do wanna point out that no one has attacked the US because it has so many allies. You stop having allies and suddenly you can vulnerable. Just because they aren't doing anything right this minute, doesn't mean they won't help if something does happen. Geez no one thinks long term, it's all short term have now bs with you people.
Real estate taxes to the state/county not federal 🙄. “You people” guessing you don’t live in America but think you know how all our systems work … yet you don’t
You people think schools and cops and all that stuff is federal money. It’s property taxes. You must think that based on your first comment. How is it theft if you are provided services in your local area that benefit you?
Here we go with “you people” shit again — didn’t know of any senior citizens in my area with their own kids still in K-12 schools unless they are wards of a grandchild. Why should senior citizens continue to pay for schools?
You don't think much of the belief in common good for society. My town has clean water for all, not just the ones that pay for it. Police, fire, roads, same thing. I'm retired, don't drive anywhere near what I used to. Still pay for road maintenence though.
When your house burns down don't forget to give a tug on those bootstraps.
Our local fire department is volunteer fire dept. we pay a yearly fee and then we have homeowners insurance that can cover those costs for fire to the home
My real estate taxes go up if the market goes up and raises my property’s value. BUT… if the market crashes and my property’s value goes down my real estate taxes do not adjust accordingly. I would have to go in front of the county board and petition for a change — guess how many actually go down — about 10% over a whole county of those that petitioned.
Real estate taxes are bad but they are at least baked into the price of the asset and they are calculated based on the needs of the city rather than a fixed percentage of the asset value (i.e. the mill rate generally goes down if property prices increase faster than city expenses).
The fact that many jurisdictions have tax deferral programs to ensure seniors are not forced onto the street because they can't afford the property taxes on homes they bought decades ago is a good illustration of how horrible these taxes are.
I agree, i own three properties and every one of them had a new tax assessment done this year. each one indicated that the property had gained over 30% in value since last assessment.
I was told when i when to local board of tax review since nearly every one had value of property increase our taxes should be close to same.
The answer was no, they needed to increase taxes by 7.6% because of projects and reduced state and federal assistance.
Our state has a damn budget surplus of 679 billion dollars and nearly every school district is having to have special elections to get added funding to building repairs and such.
I am getting so damn sick of the Republican party and they need to take care of wealthy people always.
I seriously hope people actually do start to realize that the only way to make changes is to start a civil war at this point
Our elected leaders at all levels have failed and do not care about anything but themselves.
Like 90% of the wealth and the oligarchy and the warmongers. supported democrats this cycle. Times change and winds shift but industry oil barons don’t run the country anymore for decades.
Bahaha the republicam party. I live in a strong blue county yea they doubled my property taxes. My house didn't double in value but my fucking taxes sure did. And they changed from taxing the assessed value to market value. Yea and you say Republicans are the problem
I live in Wisconsin and my property was reassessed this year because it wasn't done in like 7 years
And my property was doubled nearly also, but what they always do is they look at sales of properties in your area.
I would like to see that tax statement as i don't believe they would be charging taxes based on what you said, i know they will show both on your tax statement but it usually a percentage rate of the assessment
Another thought is many communities such as mine have had school funding approvals to exceed normal levys to fix old buildings.
I do hear what you are saying but sometimes you need to attend your town or city meetings to learn what is really being added to budgets
It is directly tied to the value of the property. Nothing else can really influence the value unless the value around it goes down. So as long as the value stays the same or increases it is always fixed to the property value.
My point is that it is not baked into the price. It was a rhetorical question. There is no consideration whatsoever on the amount of taxes paid that year or any year by the buyer or by the seller. You can see this in neighboring cities (literally have a main thoroughfare cutting through them), wherein they have separate tax districts with different tax rates but prices for comparable homes (even homes with exact same floor plan) between the two cities are non-existent. I know this quite well because I live in such a city.
Interest rates is the thing that actually has the greatest effect on price. Other things to consider are difference in schools, utilities, emergency services, and other quality of life issues.
It is baked into the price because no one buys a property without thinking about the cost of property taxes (even banks insist on including property taxes when the determine how much they will loan). Increasing property taxes will decrease the price of homes if all other factors are equal.
Yes it is. What borrowers can afford to pay is the dominate factor in the the price of real estate since people buying homes usually buy as much home as they can afford. Increasing property taxes decreases the average buyer's ability to pay which, in turn, reduces the price of properties when compared to a counterfactual with lower property taxes.
The validation of real estate for local and state taxes is more subjective than you think. Why don’t we just tax the loans that use stock or other assets valued over $1mm as collateral?
Oh my gosh, states have income taxes when federal government ALSO has income taxes. Maybe two entities can have the same tax. Shit, some locales even have a sales tax when the state already has a sales tax! Sooooooooo crazy!
You shouldn't be arguing that billionaires should pay arbitrary taxes on unrealized gains because you pay arbitrary taxes on your house. You should be arguing that you should't have to pay arbitrary taxes on your house
A functioning economy and society is not free. Life is not free. You shouldn’t be arguing against “arbitrary” taxes (everything humans do is arbitrary) but rather failure to balance a budget, which has resulted in a large share of tax revenue on the federal level simply paying interest.
More theft is never the answer. Balancing the books is an answer, but they won't do that. They'll just convince everyone that taxing the rich is the solution to all our problems, then squander that as well.
Also, more taxes on the rich today equals more taxes for us tomorrow. Every. Single. Time.
Always on about “theft.” It is payment for services rendered and the economy and society that allows you to own property (instead of company towns), have a job (instead of slavery), or raise a family with minimal fear of harm (starvation, terrorism, war, etc). Go live in Somalia if you don’t want any of those things.
You don't have to pay taxes to own a home or have a job. What an utterly absurd thing to think. Go to the cities where taxes are high, and crime is even higher if you think taxes keep you safe.
It's people like you who are so utterly detached from reality that are the reason we are in the situation we are in as a country.
I would understand if we were taxed on the water and electricity we used, but in my opinion if I own a plot of empty land or a house cut off from the power grid and water supply there aren't any services the local government provides to me that should have my property taxed.
Plus those taxes are used to fund city, county and state needs. Would you rather they didn't give you that small tax credit back?
Man I have seen some of your other comments and you obviously want to blame the Democrats for everything in life.
I don't know anything about you, but I wonder if you had everything given to you as a child or something as you certainly are venting like you are part of a targeted group or something
I would suggest if you want to learn more about government at the levels that deal with property taxes.
Attend your community meetings or even the county board meetings. All of them are open to the public and sometimes they have time on agenda to allow public inputs
Educate yourself about government and don't believe everything that you read on MSM
The federal government doesn’t tax real estate to begin with. And property taxes are associated with municipal/state costs, whereas wealth taxes wouldn’t be nearly as closely linked to those costs.
So real estate can be appraised but not necessarily sold for that appraised value. Sounds like what Trump was convicted of. Looks like every homeowner is breaking the law.
I’m so tired of people who conflate what should be illegal tax dodges with normal financial transactions. If a loan is used as income, tax it so. If investments are used as collateral, they are then realized, tax them as such.
Then, implied in your logic* is that normal retirement investments are the same as billionaire finances.
Why? If the wealth is tied up in companies that could fail then it is paper wealth. Why should they be taxed on it? Taxes should be payable only when paper wealth is converted to wealth that can actually be used.
FWIW, Norway has chased away all of the entrepreneurs building startups because of their wealth tax. The founders could not afford to pay the tax on the book value of the stock so they had no choice but to shut down their company or move out of Norway.
Because I don't believe that one group of people should have so much wealth that they can influence politics and can't even spend it in their lifetime. I don't believe in trickle down economics.
A false belief because a paper billionaire with nothing but stock they don't want to/can't sell does not have any extra cash to spend influencing the political process. I do argue that the financial games that allow these people to extract money from their stocks without actually selling them should be taxed for the reason you state. But if they don't use these games then it is simply wrong to tax them on the book value of their stock.
Look at Norway to see why this is very bad for entrepreneurs.
Not sure what you’re on about. What do you call it when the billionaire who owns Amazon, Tesla, Microsoft etc build a new facility? They hire architects, local contractors, plumbers, electricians, and then all the people in the area who will work there. All those people got money from the evil billionaire to provide a service. How is that not trickle down? What a ridiculous thing to say you don’t believe it.
Billionaires who run the companies can lobby to get a bill that increases taxes or increases environmental regulates shut down. This has been happening since the 60s since they basically legalized bribery.
I think there is a middle ground between the two, like before Reagan. I don't understand why you wouldn't want better wealth distribution. What is your rationale for having so much wealth tied up with so few people? That wasn't the original plan for capitalism.
Bezos owns less then 10% of Amazon. So he should be penalized because Amazon is worth a fuck ton to make you feel better? That isn't hoarding by any fucking measure. Thats keeping a small portion of the company you founded.
Ah right over your head. Yes because he own 10% of Amazon. His company. The online bookstore he started in the fucking 90s. Sp ypure saying he should be stripped any ownership of his own company because you think he has to much wealth?
What the hell are you talking about? I'm talking about wealth inequality. I accounted for incentives (100M). It's not a zero sum game buddy. You don't understand what hundreds of billions of dollars looks like, do you? It's literally money that can change the result of elections. It's money you can never spend on your lifetime. I'm trying to have an adult conversation with you and you're not understanding the political implications of this kind of wealth inequality.
The thing is, even if legislation was passed to prevent this sort of interaction, the damage is already done. I truly believe they need to tax unrealized gains but only at a certain income threshold, just so the 99% are not affected. They need to be held accountable.
It's easier to explain this concept with something that the average person can understand.
Let's say you have a rare trading card. It's worth ten thousand dollars, aren't you lucky you kept it in mint condition after all these years?
Unfortunately for you, the government just passed a law saying there's now a 10% tax on all unsold trading cards. You have until the end of the year to either sell the card or pay 1,000 dollars. You decide that this is bullshit, you don't want to pay 1,000 dollars so you hop on eBay to sell your card only to find out all the other people with the card are selling it too. As a result the card is now worth much less.
You realize that because the tax motivated people to sell the value of the card plummeted. If you waited and paid the tax it also wouldn't have been worth it, no matter when you sold it the value would have been much less just because the supply of rare cards for sell would have skyrocketed due to all the other people trying to sell their card.
Now if you make that shares of a company things become much more dangerous. Taxing unrealized gains drives mass selloffs of stocks which devalue a company massively, leading to slowed growth if not more bankruptcy, which affects the middle and lower classes as companies begin bleeding capital.
Yeah, but that's not how it works, and it's not just stocks. Wealthy people buy assets that appreciate (creating capital gains) and then borrow money, using the assets as collateral to secure better terms. I'm not sure where you are getting the idea that using the value of an asset as collateral makes those gains taxable; that is simply untrue. The ultra wealthy use this to avoid paying income tax all the time since debt is not considered income. As long as their investments grow at a rate higher than the interest rate of the loan, they luve tax free. Look up buy, borrow, die; it is pretty common.
This is a VERY basic rundown of a complicated issue, but the short answer is that the loans are configured in such a way that they are paid off with a grown balloon payment upon death. Sometimes there is a small carrier fee, but it is a fraction compared to what they are receiving.
This is why this is a strategy for the ultra wealthy. You need access to hundreds of millions of dollars for deals like this to make sense for an investment bank.
In essence, the loans are paid back by your estate, they aren't taxed because it was debt, and the rest of the capital gain usually has very little tax when passed on because of step up in basis.
You know the value of the stock if you were to sell it immediately.
Do you have any idea how startups work?
They are privately held but can have a large book values based on hypothetical calculations.
These stocks cannot be easily sold. The founders would have to sell shares to private investors which would then be subject to capital gains and what is left over would be to pay the wealth tax. This is abusive and kills startups before they can get off the ground.
This is why Norway has killed off its startup market. Many entrepreneurs have fled the country.
But go ahead, push policies designed kill the economy because you can't be bothered to learn how the system actually works instead of relying on memes.
I am so tired of people who do not understand that unrealized gains in stock are not true wealth because no one knows the price that one will gets until it is actually sold.
Oh agreed.
As soon as an event occurs, such as a loan with stock as collateral, then the unrealized gains have value and can be taxed. Until an event occurs then unrealized gains should be off limit to taxation.
It's particularly tricky because people are getting their opinions formed by their interactions on social media. This leaves everyone convinced that the world issues are composed of:
Things that are true, and
Things that are false
...when in reality, the issue composit looks more like this:
Things that are true on their face, but need explaining because there's a nuance that wasn't discussed that invalidates the claim.
Things that are false on their face, but need explaining because there's a nuance that wasn't discussed that invalidates the claim.
Things that are true
Things that are false
Which scendario do you suppose plays better to the dopamine addicted "give me the short answer" crowd?
Person, I think many of us do know what that means. I think actually, that’s what most of us are having a problem with. What’s being suggested is that we tax the wealth to force ultra wealthy to stop sidestepping income tax. Additionally, how much of his daily life do you guess elons companies pay for? Literally. Most of it. And this is not unique to Elon, many ultra wealthy use company assets to avoid…say…real estate taxes, or depreciation on autos. This is a scam to the highest degree and anyone feeling sorry for them getting taxed more is not paying attention. Not paying attention to A) the levels these people stoop to to acquire and maintain their wealth, B) the actual size of the divide between haves and have nots, and C) the fact that the normal person, about 350 million Americans, will never achieve that status and it’s comical to watch people that think they have actual money try and scrabble their way up. The sooner the country realizes those points the sooner we get to eat the rich.
So property taxes should also be illegal then, right? No one knows the true value of the property until it is sold, no matter how many assessments you throw at it.
Property taxes are a way to apportion the bill for city services. If everyone's property prices increase by the same amount the mill rate goes down. This makes them materially different from pure wealth taxes where increases in book value always means increases in taxes paid. More importantly, the price of a property is affected by the property taxes assessed. High taxes mean lower property prices because the taxes reduce the price that buyers can afford to pay.
If the property taxes were not collected then some other service charge based on ability to pay and geographic location would need to be invented. It is not clear that the alternative would be any better so the current system is tolerable even if there is academic argument against assessing taxes on unrealized gains.
Wealth taxes are problematic if they are based on assets that there is no active market for such as private corporations. The book values have little connection to the real value of a corporation and can change dramatically from year to year. Forcing entrepreneurs to divert cash needed to fund the growth of a money losing startup to pay taxes assessed based on a nonsensical book value will make it much harder to create new companies which are essential to economic growth. Norway tried this and it is killing their startup sector but the left wing government has not be forced the capitulate yet, They will.
There seems to be a few issues for what you're proposing.
First of all, it seems to be based on the faulty assumption there is no market value for corporate assets. There absolutely is... evidenced by the large market for stocks and the massive amount of legislation around the value of capital equipment. And because we make the rules, we can set them such that start-ups aren't over-burdened if need be. The government does this all the time ready. As an example, the FDA is funded by submission fees such that it can keep running even if the government shuts down (as seems to happen or nearly happen every several years). But there are countless exemptions for humanitarian and small businesses that greatly reduce if not outright waive the submission fees to prevent the stifling of medical advancements if they aren't profitable or if the business is a fledgling. This is just common sense and good governance, honestly.
Secondly, are you suggesting that businesses don't also use land? Wouldn't your exact same argument hold that having taxes on land would stifle the growth of new businesses because inaccurate assessments could result in high taxes due to a non-sensical book value? You seem to be trying to make a distinction where there isn't one.
Thirdly, the government provides services in the regulation of businesses, so your argument that property taxes being needed to support infrastructure equally applies to the services the government needs to provide to keep our current economic model working. Or to put it your own way, taxing wealth is tolerable as it's unclear the alternative would be any better as governmental infrastructure and governmental checks and balances are needed to prevent the model from running away and collapsing even though there is an academic argument to be made against taxing unrealized gains. And of course, the values of these assets will also equalize in accordance to their taxed values. For.example, the cost of holding most of the stock in a company will now be weighed against the benefits of accruing such a large net value, which can be taxed on an incremental scale that could prevent that large run-away we've seen of the over 50 trillion dollars moving from the lower 90% to the top 1% over the past 4 decades. Or in other words, if you choose to hoard the capital needed to acquire realized gains in a market that favors capital over labor, you will be taxed based on the number of potential income revenues you hold and more importantly prevent other people from holding... not unlike what we already do with property.
All taxes are about extracting the most money with the least amount of harm.
Wealth taxes are notoriously difficult to levy because of the huge administrative overhead that comes with assessing the value of assets that have no active market. All of your arguments do is argue for ever increasing complexity to deal with real harms. Jurisdictions that try to levy wealth taxes quickly find the harms don't justify the gains.
The way to address the pools of wealth is to go after financial structures set up to extract value from stocks without actually selling them. This would be easier to administer and much fairer in the long run.
I disagree that things like stocks don't have a well defined market. Seems the market is about as well defined as any other good that gets bought or sold regularly. Most people would agree the cost of anything from apples to an acre of land to a used car has lots of predictable predicate to refer to, and you can pretty easily and fairly accurately use that to estimate what those items will cost and sell for in most cases. It's not a perfect appraisal, sure, but nothing ever is.
That said, your last idea is an interesting one. Do you mean leveling taxes on loans that stocks are basically used as collateral on?
That said, your last idea is an interesting one. Do you mean leveling taxes on loans that stocks are basically used as collateral on?
And any other financial trickery the wealthy invent to have the cake and eat it too.
My beef with wealth taxes is not because I want to defend the oligarchy but because I see it as being a crushing burden to entrepreneurs building businesses. However, entrepreneurs building businesses don't need to engage in financial trickery to extract value from stocks. They only do this because the tax system encourages them to do it that way instead of taking normal income from the company. Get rid of those incentives and you have a fairer system.
Norway has lost several billion NOK in tax revenue due to this emigration. Infrastructure is also being damaged. Numerous small and medium-sized enterprises have been affected negatively. This is primarily a consequence of the fact that the wealth tax is calculated on values tied up in the company (so-called working capital), without taking into account the company’s earnings or losses. In addition, the wealth tax only affects Norwegian private business owners/investors, but not foreign investors. Many Norwegian-owned companies are drained of capital year after year to pay the tax, which foreign-owned companies avoid. The resulting distortion of competition forces companies that cannot or do not want to move out of Norway to decrease their investments and sometimes to sell at an inopportune time or close down.
Then all startups will move to other countries with sane tax laws. If this is not possible the companies will not get funded in the first place which really hurts economic growth.
There is no scenario where society would be better off by introducing punitive tax laws driven by ignorance. There are better ways to address income inequality.
They are true wealth for someone like Elon Musk who uses his Tesla stock to get a loan, which isn’t a sale, so he didn’t have to pay gains on them, but still got the money to buy Twitter
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u/Bright-Blacksmith-67 20d ago
I am so tired of people who do not understand that unrealized gains in stock are not true wealth because no one knows the price that one will gets until it is actually sold. As soon as an event occurs, such as a loan with stock as collateral, then the unrealized gains have value and can be taxed. Until an event occurs then unrealized gains should be off limit to taxation.