Do you support tax on unrealized gains?

[phypon]

Just now, Backintheday544 said:

There’s no current bill. The idea was put in the 2025 budget by the Biden Admin but the policies mimic this bill. From the $100 million net worth to the 25 percent tax, so you can see how they would possibly define things like non-tradable assets (like a house).

You said it yourself, there is no bill.  This is the policy of the Harris admin on her tax plan if she is elected.  There is no "mimicking".  The Harris tax plan is for people (you and me) to pay a capital gains tax on unrealized gains.  

[sherpa]

9 minutes ago, phypon said:

Those cap gains apply to everyone.  If you have a 401k (which most people do), that counts as a capital gain.  

 

Not true.

Money from a 401k is taxable at withdrawal, as regular income.

[The Frankish Reich]

4 minutes ago, Backintheday544 said:

To throw this out there to stop speculation. This is the bill the idea is based on:

 

https://www.congress.gov/bill/117th-congress/house-bill/8558#:~:text=This bill imposes a minimum,gains for the taxable year.
 

This bill imposes a minimum tax on individual taxpayers whose net worth for the taxable year exceeds $100 million. The tax is equal to 20% of the sum of a taxpayer's taxable income, plus net unrealized gains for the taxable year. The tax may not exceed 40% of the amount by which the taxpayer's net worth exceeds $100 million
 

Full bill here: https://www.congress.gov/bill/117th-congress/house-bill/8558/text#toc-H922BF7C44E41471A87A50FF6638398F4

Thanks. Not quite as unworkable as what I thought.

 

My partially informed take on competing proposals to bring in more tax revenue, from worst to best (well, least worst):

 

- increased tariffs. Distort not only U.S. consumer/business decision-making; also invite retaliation and raise costs on virtually everything

- increase corporate income tax (assuming it is a significant increase)

- the high net worth unrealized gains/minimum tax thing cited here. Economic distortions tempered by the limited applicability.

- social security tax, take away the ceiling on annual income (we need to shore up the so-called trust fund, and this is the least bad way of doing it)

 

that's just the ones I've heard in the current election season.

 

Bad tax breaks? 

- really bad: no tax on tips. Let's make everything a tip!

- not so bad: increase child tax credit (but beware moral hazard)

 

[phypon]

4 minutes ago, sherpa said:

 

Not true.

Money from a 401k is taxable at withdrawal, as regular income.

That's true as of now, but the policy of taxing unrealized gains would change that.  That's the point.  That's what an unrealized gain is.  You get taxed on it even if you don't sell it which is what an unrealized gain is in this context.

 

ETA:  Sorry, just re-read what you wrote.  I see your point.  However, there are instances where a 401k withdrawal could be taxed as a capital gain.  Point taken though, thanks for the info. 

Edited August 21 by phypon

[The Frankish Reich]

1 minute ago, phypon said:

That's true as of now, but the policy of taxing unrealized gains would change that.  That's the point.  That's what an unrealized gain is.  You get taxed on it even if you don't sell it which is what an unrealized gain is in this context.

I don't think anyone is proposing that, since that would render 401ks and Roths essentially useless. Particularly Roths.

[sherpa]

1 minute ago, phypon said:

That's true as of now, but the policy of taxing unrealized gains would change that.  That's the point.  That's what an unrealized gain is.  You get taxed on it even if you don't sell it which is what an unrealized gain is in this context.

 

No. That hasn't been suggested, and nobody would survive a minute proposing such lunacy.

this entire thing is a non issue.

[The Frankish Reich]

1 minute ago, sherpa said:

this entire thing is a non issue.

True.

It interests me only because it shows how stuck we are in the USA, thanks to historical inertia, with an extraordinarily complex, clumsy, and expensive system of raising government revenue. We section off (in theory, not in practice) social security and Medicaid from general revenues/expenditures. We rely only on the devices that have existed for a century or more: customs duties, estate taxes, capital gains taxes, progressive income taxes. We don't consider a VAT because everyone is scared to go there, and probably for good reason - I have to assume we'd never have a stand-alone VAT, but that it would be tacked onto existing taxes. We'll never mess with the fiction of the SS trust fund. So the ideas we're stuck with in this artificially limited debate are all bad ones, like those discussed here.

[phypon]

1 minute ago, sherpa said:

 

No. That hasn't been suggested, and nobody would survive a minute proposing such lunacy.

this entire thing is a non issue.

I edited my last post to your point.  I misread what you wrote and replied according to that.  For most, you are correct with regard to the 401K (for now anyway).

 

When talking about being taxed on an unrealized gain, yes, that is the policy suggested by Harris and Biden. And, I agree, it is lunacy, but this is what the Harris policy is.  Trade crypto?  Stocks?  Commodities?  Real estate?  Anything subject to a capital gain and you will have to pay if the value goes up before you sell.  

[sherpa]

1 minute ago, phypon said:

I edited my last post to your point.  I misread what you wrote and replied according to that.  For most, you are correct with regard to the 401K (for now anyway).

 

When talking about being taxed on an unrealized gain, yes, that is the policy suggested by Harris and Biden. And, I agree, it is lunacy, but this is what the Harris policy is.  Trade crypto?  Stocks?  Commodities?  Real estate?  Anything subject to a capital gain and you will have to pay if the value goes up before you sell.  

 

The entire thing is preposterous.

What they want to do is get into the pockets of the uber wealthy.

It's how they buy votes.

 

Still, a proposal that would cause an billion times more IRS oversight is not only idiotic, it's lunacy.

6 minutes ago, The Frankish Reich said:

True.

It interests me only because it shows how stuck we are in the USA, thanks to historical inertia, with an extraordinarily complex, clumsy, and expensive system of raising government revenue. We section off (in theory, not in practice) social security and Medicaid from general revenues/expenditures. We rely only on the devices that have existed for a century or more: customs duties, estate taxes, capital gains taxes, progressive income taxes. We don't consider a VAT because everyone is scared to go there, and probably for good reason - I have to assume we'd never have a stand-alone VAT, but that it would be tacked onto existing taxes. We'll never mess with the fiction of the SS trust fund. So the ideas we're stuck with in this artificially limited debate are all bad ones, like those discussed here.

 

Consumption tax.

Been discussed.

Got nowhere.

6 minutes ago, phypon said:

 

 

When talking about being taxed on an unrealized gain, yes, that is the policy suggested by Harris and Biden. And, I agree, it is lunacy, but this is what the Harris policy is.  Trade crypto?  Stocks?  Commodities?  Real estate?  

 

Harris is to economic policy as a brick is to gravity.

[phypon]

4 minutes ago, sherpa said:

 

The entire thing is preposterous.

What they want to do is get into the pockets of the uber wealthy.

It's how they buy votes.

 

Still, a proposal that would cause an billion times more IRS oversight is not only idiotic, it's lunacy.

 

Consumption tax.

Been discussed.

Got nowhere.

I completely agree that it's preposterous, but this is the type of policy that is on the table for a Harris admin.  I don't think that genie is going back in the bottle indefinitely with her running the show.  That's my point with this thread.  Just because it's preposterous doesn't mean she won't do it.  

[Pokebball]

1 hour ago, The Frankish Reich said:

OK, thanks for explaining. I get what you're saying now. The two thoughts ran together in the initial post.

 

I guess you could say property taxes do in general tax unrealized gains. That was the impetus behind the famous Prop 13 in California - property taxes could only go up by a certain small percentage until the property was sold, thereby allowing older folks to hold onto their homes.

 

 

Second point: https://www.investopedia.com/ask/answers/06/capitalgainhomesale.asp#:~:text=The seller must have owned,the capital gains tax exclusion.

So yes and no = "it depends."

 

As for the high net worth individuals: this is how I understand the Democratic proposal. Not for sale of a home, but for taxing unrealized cap gains.

The point you're missing is the sale of your home could generate capital gains. Before selling, those gains are unrealized capital gains, and therefore could be subject to this tax on unrealized capital gains.

[Backintheday544]

18 minutes ago, Pokebball said:

The point you're missing is the sale of your home could generate capital gains. Before selling, those gains are unrealized capital gains, and therefore could be subject to this tax on unrealized capital gains.

If your net assets are over $100,000,000 and assuming there’s no exemption for primary residence in the tax bill.

[Backintheday544]

Per AI:

As of February 2023, a study by Henley Partners found that 9,630 Americans have a net worth of over $100 million, which is considered centi-millionaire status.
 

So this tax would affect less than 10,000 Americans.

[Tommy Callahan]

here come the statist parrots to say how they support this. or don't support this, but other moronic Ideas to raise revenue to pay for ever increasing spending.  Not a peep about cutting cost and alternative revenue sources other than the taxpayers pocketbooks.

 

 

 

 

 

 

[Beast]

Regardless, targeting the wealthy is never a good thing. 

[leh-nerd skin-erd]

4 minutes ago, Backintheday544 said:

Per AI:

As of February 2023, a study by Henley Partners found that 9,630 Americans have a net worth of over $100 million, which is considered centi-millionaire status.
 

So this tax would affect less than 10,000 Americans.

Assuming it passed, for now. 

[Beast]

6 minutes ago, Backintheday544 said:

Per AI:

As of February 2023, a study by Henley Partners found that 9,630 Americans have a net worth of over $100 million, which is considered centi-millionaire status.
 

So this tax would affect less than 10,000 Americans.

So, when those having a net worth of over 100 million stop investing, how do you feel that effects the economy?

 

Do you think it will have no effect on the average Joe? Will the job market be good?

 

Think about that and answer truthfully.

 

Like it or not, the extremely wealthy keep a whole lot of people employed.

 

Edited August 21 by Beast

[Tommy Callahan]

5 minutes ago, Beast said:

So, when those having a net worth of over 100 million stop investing, how do you feel that effects the economy?

 

Do you think it will have no effect on the average Joe? Will the job market be good?

 

Think about that and answer truthfully.

 

Like it or not, the extremely wealthy keep a whole lot of people employed.

 

its not 1960 anymore. Its global.  takes a few mins and the HQ changes to the lowest tax region.  like Ireland. 

 

Shoot, if they move corporate rates to 28, and do this.  

 

That quick capital would fly out of this country.  For the actual 2% they claim to be targeting.

 

the rest would be stuck with the damage.

 

 

 

 

 

 

 

Edited August 21 by Tommy Callahan

[phypon]

11 minutes ago, Backintheday544 said:

Per AI:

As of February 2023, a study by Henley Partners found that 9,630 Americans have a net worth of over $100 million, which is considered centi-millionaire status.
 

So this tax would affect less than 10,000 Americans.

When income tax was first instituted it was only supposed to affect the wealthy.  Look what happened.  Don't defend a poor tax policy just because you like a certain candidate.  It's a horrible tax policy and once it is implemented in any form there is no turning back.

[K D]

Dems are so friggin stupid I can't handle it. Say you are a billionaire and the US passes this tax. Why wouldn't you just move to the Bahamas? Or anywhere on earth you want to live. By trying to scam rich people for a little more money you are just going to make them leave and then you get NOTHING!