Standard operating procedure for the government. Introduce a new tax that only affects a very small percentage of the population. You know, the portion that just aren’t “paying their fair share”. The populace is fine with the idea, after all it doesn’t affect me. Step two, lower the threshold after a couple of years and don’t tie it to inflation. Step three, wait 20 years. At that point, you’ll have captured a large portion of the population in this totally unmanageable tax (imagine having to value and reach agreement on assets like real estate, classic cars, art every year with the government).
A good example of this is the Alternative Minimum Tax. When first enacted it affected just a few hundred people.
Wasn’t that the case for the income tax (16th amendment version) too when it was first introduced in the USA? Only would’ve affected a small group of people. But I may be misremembering my history.
But your take is 100% spot-on. Ultimately they’ll move the goalposts down to affect more and more people because they’ll never collect the revenue amount they planned for. Then suddenly everyone gets taxed on everything, see Canada’s latest tax changes.
I'm fairly certain that somehow the ultra rich will be unaffected, but us peasants will be. Your observation about the difficulty of assigning value to assets is so true. Canada enacted a capital gains tax effective 1972 which, since not retroactive, required 'Valuation Day" valuations of everything. Just a one time event, but a mess we lived with for years.
You also made a nice corollary as to why estimated value based property taxes also make no sense.
My working class grandfather tried for decades to sell his home / land that the state valued for over $1 Million. When he died we tried to aggressively sell the property but because of extreme zoning and EPA measures it was impossible to sell or build. We ended up selling the entire property for less than $250k at the hight of the housing boom.
What pisses me off is not the fact that the land was not worth what he thought, but that the government assessed it at a ridiculous value, charged him taxes on that value for decades, and then created a regulatory mess that made the land not developable.
Yes! This is also a good argument against property taxes, as this is exactly what they are, taxes on unrealized capital gains - RE values have doubled in the last 4 years because of all the funny money. My neighbor sells, makes a mint, and my taxes double. I haven't sold, but my tax bill has now doubled because my neighbor realized gains?
Agree with QTR 100% on taxing unrealized capital gains being a bad idea, even if limited to folk with wealth greater than I'll ever come close to reaching. So how about increasing the amount of realized capital loss deductible each year from $3000 to $10000? How about eliminating the cap entirely, you lose $50,000 you can deduct $50,000 from other income and if it doesn't erase your income entirely, carry it over till next year. Even better, how about allowing deductions for unrealized capital losses, to go along with taxation of unrealized capital gains. Let's have some fun, do away with the $100 million wealth cap ceiling, and fuck with everybody.
I couldn’t agree more, this is more legalized theft (as most taxes are). Congress & the Biden administration needed to stop spending OUR money like they’re living out some twisted version of Brewster’s Millions.
But what’s is really going on here?!? It’s the Cloward-Piven strategy which has been initiated by Cloward-Piven sycophant & fellow alum, Barack Obama, et al. This is the deliberate & systematic destruction of our economy in order to usher in a new Socialist utopia.
This article should be required reading for every congressman and woman, although half of them wouldn't understand it. 100,000,000 threshold this year, 5,000,000 in 5 years? If someone has major losses can they deduct them, I bet tax attorneys are licking their chops.
Unless I misread, you've missed what might be the most important reason not to tax unrealized gains. We'll make the example everybody's favorite boogieman: Elon Musk. He doesn't actually have a lot of money - what he has is a lot of unrealized gains. When he bought Twitter he couldn't just write a check, he had to sell a shit ton of Tesla stock to raise the funds. If you tried to tax his unrealized gains, what would he do? I think you see where I'm going, he'd have to sell another shit ton of Tesla stock to pay the tax. Spread this behavior around to everybody with over $100 million in assets and you're setting up the mother of all stock market crashes.
In my estimation, if one believes the wealthiest Americans have been fattened with Federal Reserve-fueled ill-gotten gains, then the appropriate policy is an airtight and frankly confiscatory estate tax. Taxing unrealized capital gains is a terrible idea.
Notice and be wary of the shifting overton window, even in the AIER piece that was quoted here. Taxing unrealized income is criticized, as it should be, but then less onerous tax regimes are suggested as alternatives. For those in support of freedom and against the state, this is the intellectual trap that has been set for you. Instead of arguing properly, that taxation of any kind is theft and therefore illegitimate, you are put in a position where you are doing your enemy's heavy lifting by defending taxation (as long as it's done in a certain way).
I can see this used to target the middle class and upper middle class via home valuations. If you buy a house and its value went up over a course of 1 year, you owe a tax on that gain. Remember, we are supposed to rent and be happy...
Come on man, it s the plan . The dems see a loss in November and their only choice is to totally destroy the economy for the next republican president. They did it in2015 . This is cloward piven on steroids. Dems have 6 months to destroy america
I agree. But, but, but, per Axios, lots of the billionaire gains were the result of misguided policy since 2008. So the billionaires get to have amassed their fortunes courtesy of the FED, and now get to leave. I understand how many people have 401k plans who have benefitted from those same insane policies but not like the new Chainsaw Als who borrowed hundreds of billions and bought back stock, exercised stock option comp and walked off with a fortune. See, e.g., the heads of the four largest airlines who spent 90% of FCF on buybacks and then begged for and got, $50 billion from us. They all should have been placed into a packaged bankruptcy and management fired and recapitalized, but I digress. FWIW, our military industrial base sorely needs to produce more, so that 90 bill is an investment towards that. Don't @ me
But we do need to tax stock compensation. The ability to take that, then leverage it up through loans against the stock, is critical to the wealth gap as well as making blowing the bubble economy into a huge monster.
Legislation taxing unrealised has already been introduced to parliament in Australia by the Marxist, I mean Labor, party on superannuation. It starts at a ‘whopping’ $3m and is not indexed.
It’s being fought hard but so far the govt is not bending. A truly unfair tax. If they do this unrealised gains on investment properties are next.
Standard operating procedure for the government. Introduce a new tax that only affects a very small percentage of the population. You know, the portion that just aren’t “paying their fair share”. The populace is fine with the idea, after all it doesn’t affect me. Step two, lower the threshold after a couple of years and don’t tie it to inflation. Step three, wait 20 years. At that point, you’ll have captured a large portion of the population in this totally unmanageable tax (imagine having to value and reach agreement on assets like real estate, classic cars, art every year with the government).
A good example of this is the Alternative Minimum Tax. When first enacted it affected just a few hundred people.
Wasn’t that the case for the income tax (16th amendment version) too when it was first introduced in the USA? Only would’ve affected a small group of people. But I may be misremembering my history.
But your take is 100% spot-on. Ultimately they’ll move the goalposts down to affect more and more people because they’ll never collect the revenue amount they planned for. Then suddenly everyone gets taxed on everything, see Canada’s latest tax changes.
I'm fairly certain that somehow the ultra rich will be unaffected, but us peasants will be. Your observation about the difficulty of assigning value to assets is so true. Canada enacted a capital gains tax effective 1972 which, since not retroactive, required 'Valuation Day" valuations of everything. Just a one time event, but a mess we lived with for years.
Oh yeah, and justify the hiring of more government staff to manage and audit the new reg. What a shit show I’m leaving to my grandkids.
You also made a nice corollary as to why estimated value based property taxes also make no sense.
My working class grandfather tried for decades to sell his home / land that the state valued for over $1 Million. When he died we tried to aggressively sell the property but because of extreme zoning and EPA measures it was impossible to sell or build. We ended up selling the entire property for less than $250k at the hight of the housing boom.
What pisses me off is not the fact that the land was not worth what he thought, but that the government assessed it at a ridiculous value, charged him taxes on that value for decades, and then created a regulatory mess that made the land not developable.
Yes! This is also a good argument against property taxes, as this is exactly what they are, taxes on unrealized capital gains - RE values have doubled in the last 4 years because of all the funny money. My neighbor sells, makes a mint, and my taxes double. I haven't sold, but my tax bill has now doubled because my neighbor realized gains?
Agree with QTR 100% on taxing unrealized capital gains being a bad idea, even if limited to folk with wealth greater than I'll ever come close to reaching. So how about increasing the amount of realized capital loss deductible each year from $3000 to $10000? How about eliminating the cap entirely, you lose $50,000 you can deduct $50,000 from other income and if it doesn't erase your income entirely, carry it over till next year. Even better, how about allowing deductions for unrealized capital losses, to go along with taxation of unrealized capital gains. Let's have some fun, do away with the $100 million wealth cap ceiling, and fuck with everybody.
I couldn’t agree more, this is more legalized theft (as most taxes are). Congress & the Biden administration needed to stop spending OUR money like they’re living out some twisted version of Brewster’s Millions.
But what’s is really going on here?!? It’s the Cloward-Piven strategy which has been initiated by Cloward-Piven sycophant & fellow alum, Barack Obama, et al. This is the deliberate & systematic destruction of our economy in order to usher in a new Socialist utopia.
This article should be required reading for every congressman and woman, although half of them wouldn't understand it. 100,000,000 threshold this year, 5,000,000 in 5 years? If someone has major losses can they deduct them, I bet tax attorneys are licking their chops.
Even if they did understand it- would they care?
Unless I misread, you've missed what might be the most important reason not to tax unrealized gains. We'll make the example everybody's favorite boogieman: Elon Musk. He doesn't actually have a lot of money - what he has is a lot of unrealized gains. When he bought Twitter he couldn't just write a check, he had to sell a shit ton of Tesla stock to raise the funds. If you tried to tax his unrealized gains, what would he do? I think you see where I'm going, he'd have to sell another shit ton of Tesla stock to pay the tax. Spread this behavior around to everybody with over $100 million in assets and you're setting up the mother of all stock market crashes.
In my estimation, if one believes the wealthiest Americans have been fattened with Federal Reserve-fueled ill-gotten gains, then the appropriate policy is an airtight and frankly confiscatory estate tax. Taxing unrealized capital gains is a terrible idea.
Notice and be wary of the shifting overton window, even in the AIER piece that was quoted here. Taxing unrealized income is criticized, as it should be, but then less onerous tax regimes are suggested as alternatives. For those in support of freedom and against the state, this is the intellectual trap that has been set for you. Instead of arguing properly, that taxation of any kind is theft and therefore illegitimate, you are put in a position where you are doing your enemy's heavy lifting by defending taxation (as long as it's done in a certain way).
I can see this used to target the middle class and upper middle class via home valuations. If you buy a house and its value went up over a course of 1 year, you owe a tax on that gain. Remember, we are supposed to rent and be happy...
Good read. So are they going to allow them to deduct their unrealized capital losses.
I laughed! Really, out loud. (I'm Canadian, nobody's moving here for benefit of our tax regime.)
Come on man, it s the plan . The dems see a loss in November and their only choice is to totally destroy the economy for the next republican president. They did it in2015 . This is cloward piven on steroids. Dems have 6 months to destroy america
about the rich emigrating to avoid new taxes - the US taxes Americans anywhere in the world on money made in the US.
Do you ever get the feeling this shit show is on purpose?
I agree. But, but, but, per Axios, lots of the billionaire gains were the result of misguided policy since 2008. So the billionaires get to have amassed their fortunes courtesy of the FED, and now get to leave. I understand how many people have 401k plans who have benefitted from those same insane policies but not like the new Chainsaw Als who borrowed hundreds of billions and bought back stock, exercised stock option comp and walked off with a fortune. See, e.g., the heads of the four largest airlines who spent 90% of FCF on buybacks and then begged for and got, $50 billion from us. They all should have been placed into a packaged bankruptcy and management fired and recapitalized, but I digress. FWIW, our military industrial base sorely needs to produce more, so that 90 bill is an investment towards that. Don't @ me
..
Yes, taxing unrealized gains would be awful.
But we do need to tax stock compensation. The ability to take that, then leverage it up through loans against the stock, is critical to the wealth gap as well as making blowing the bubble economy into a huge monster.
Legislation taxing unrealised has already been introduced to parliament in Australia by the Marxist, I mean Labor, party on superannuation. It starts at a ‘whopping’ $3m and is not indexed.
It’s being fought hard but so far the govt is not bending. A truly unfair tax. If they do this unrealised gains on investment properties are next.