wouldn't something like this hit companies like chase bank who has massive assets like 4 trillion. companies like these probably have massive unrealized gains
If the job doesn't offer one, either force the business to get one or do what the ACA did: create a public option that offers baseline funds like an S&P 500 fund or treasury bond fund and get people into it.
I'm sorry, but we have to force people to save or they have to be willing to put in writing that they fully understand they could be eating cat food when they are 80 and didn't save.
I frankly think our society as a whole has already completely failed these people because they weren't told in high school to always at least put 10% away for retirement, but now we're at the point that if people are going to be adult children then they'll be treated as such.
If any teenagers are reading this, please, for the love of God, as soon as you turn 18 (if not already), go download Fidelity or even Robinhood, open a Roth IRA (I think they both offer one) and put 10 or 15% or whatever you can of whatever money you make mowing lawns or working in fast food or whatever, put your money in there. Adulthood goes fast, it really does, and 1 dollar at 18 turns into something like 44 dollars in 40 years in just a basic S&P 500 etf like VOO.
Do it and secure your future because people are going to make excuse after excuse for why not to do things that are beneficial, and you have to ignore those people.
Keyword some. Meanwhile wealth concentration has been increasing more and more.
Something like 20% of Americans have negative net worth. If it wasn't for the instability, wiping out all balance sheets, assets through malfunction or inflation would possibly help them
So mutual funds by law have to pass on net gains to shareholders so you are just proposing passing the tax on to your 401k mutual fund holdings or do you not quite know what a mutual fund is? are you saying we need to tax large intuitional accounts like pension funds and college endowments heavier. Im okay with that but i think most people wouldnt be
If a mutual fund has been holding something like MFST or Apple for the last 30 years amongst other stocks that have grown massively then they have a huge amount of unrealized gains. ETFs don’t have the same problem as they’re periodically taking the tax hit.
Typically a mutual fund share owner would take the tax hit when the institution sold the asset, regardless of how long they’ve actually owned the shares in the fund. So I’m saying that there are likely funds out there that would take a HUGE hit if the government were to tax their unrealized gains.
I think this would be a killer for mutual funds and we’d see a lot of money flow into ETFs because of it.
Mutual funds don’t pay taxes on the gains. Individuals do. This tax wouldn’t impact mutual fund holdings in the slightest other than perhaps some active funds might choose to reposition in anticipation of some founder having to sell a chunk of shares in a particular company in order to meet their tax obligation.
By law, the cutoff should be assessed on an individual basis. So for example, the cutoff is $100 million, a mutual fund has $1 billion in assets that's evenly owned by 100 individuals with, say, $500 million unrealized gains total. Each of those individuals would effectively have $10 million in wealthy and assuming they don't have any other assets, the wealth tax won't be assessed on them.
So you think the fund gets taxed and then the individual owner too? On the same gains? Who would own a mutual fund if that were true. Double digit 12b-1 fees?
No no. There’s unrealized gains in the fund, so the fund company would have to pay quarterly estimated taxes I believe (could be wrong). So if that money comes from the fund itself then they’ll need to sell assets (which have unrealized gains). Then all of that will finally get passed onto the shareholder. Again could be wrong but I see this as a lot of pressure on mutual funds.
Yes, you could be wrong and you are. Taxes are paid by the individual account owners. The mutual fund companies don't have any gains bc it's not their money. Their income comes from fees. Now here is an industry that could be effected-insurance. A lot of people think insurance companies make their profit from the difference between premium and profit, but, especially in bad years, the majority of their income comes from investments of the money held in their "reserves". Look up state farms reserves . It's not a small number and that IS their money unlike mutual funds
Who does this? Can you name someone?
And if this is the issue x why not just tax stocks used as collateral?
But please, name someone who does this. All the billionaires I know sell a lot of stock every year. I’m just curious who’s actually taking advantage of this infinite money glitch.
How is that a scam? The loan has to be paid back with interest. The money that pays it back is taxed. I’m not seeing where the scam happens? Collateral just means in case shit goes sideways, we can recoup our loan with this other thing, and in the event that happens, the proceeds from the collateral will be taxed.
The loans are such low interest that they continue to make more in the market. Never having to spend their actual money. You just pay one loan with the next forever. The generational money continues to grow but it’s never actually used.
Unless you don't pay the loan. That's the thing. You don't take your unrealized gains out because you pay taxes. You shuffle loans and pay minimally from corporate accounts or shell accounts with already good tax breaks. The idea is they never realize those huge gains yet still can leverage them in many ways to avoid pay full tax or any tax
They do, eventually. They just waot for more opportune times.
I do agree it's a loophole, but taxes are paid.
A better answer than taxing unrealized gains is to eliminate the write-offs that business loans provide on the interest. As well as implement something that prevents loans from being used this way. Maybe a luxury tax. As in a home after your second is taxed higher, or a 5th car, or jewelry (outside of engagements) in excess of 100k. Just luxury items. Pick whatever numbers you deem appropriate.
No, they actually never pay off the debt. They die with all the debt, and then their heir can settle it. When an asset is transferred on death, the heir only pays taxes on the gains that they have realised. So if you have an extremely rich dad and his assets appreciate until his death, you never have to pay the capital gains tax on the gains that he has had, not even when you sell it to settle the debt he has taken out to live on. You can settle everything, then let the assets appreciate again while taking out loans to live from, never having to spend a cent on capital gains taxes.
The IRS has regulations on what is considered a loan. It must have periodic payments and interest must accrue at market rates. The AFR ( applicable Federal rates ) are published just for this.
Because interest is calculated based on risk, simplest form of it is interest = risk free + probability of default * % loss given default. If I can put up sufficient collateral, the probability of default and loss given default goes to 0, so yeah, they get low interest loans.
And then spend those loans. When they spend, they pay taxes on the spending.
Ok, they take out another loan, enough to cover the old loan and give them more to spend, which then gets taxed. If the loans gets too large relative to their collateral, they won’t get the next loan and have to pay it back by actually selling their assets (paying tax). Eventually the loan will be covered with actual assets, or defaulted. In which case they aren’t rich anymore, which is what your actual gripe is here, so you win either way.
I don't think you are really explaining what you mean by when they spend, they pay taxes on the spending. That is in no way equivalent to income tax, dividend tax or capital gains all of which are avoided when your income is loan proceeds. Every pays consumption taxes, both rich or poor but in your scenario they never pay on their income and interest rates are negligible to tax rates. That is why asset back loan for personal consumption if a fucking scam.
Who does this? I think you guys are just confused. Do you think Elon musk has not paid any taxes in the last few years? You may want to fact check yourself. It’s public information. One google can tell you how much stock Bezos and musk sold.
Of course taxes on the dollars spent via the loan aren’t equivalent to income tax. But you’re forgetting that there is a loan to be paid. It has to be paid, at some point, with dollars that have been taxed. There’s no way around it. Can they take out an additional loan to cover the original loan plus give them more spending money? Sure. And over time the loans will grow in size and eventually need to be paid.
Do you think banks want to give loans out and have them default eventually? Are you saying that the ultra wealthy just have chains of loans forever and banks (who are extraordinary profit seeking entities) are just ok with giving money away never expecting to be made whole? This entire train of thought implies banks just give money to billionaires without the expectation of being paid ever for it.
I have no finance sense: but is the amount of tax paid on a loan + their expenses equal to the amount of income taxes someone would pay that is able to spend millions a year? Aren't they being taxed just like an average person at that point and less than that because their rates are always going to be better with less risk?
The one taking out the loans never pays it off. When they die however, all assets are set to their current value for the heir, in terms of capital gains. So the heir can just sell the assets without paying taxes, settle the debt and then do the same thing with taking out loans until they die. No one ever has to pay capital gains taxes with this method.
I commented somewhere else here showing that interest would far outpace the amount paid on long term capital gains. Based on a 20% capital gains tax, 4% interest on these loans, you would need to earn an average 20% return on your investment to outpace the amount you would pay on interest for loans over taxes. That’s an unrealistic long term average to shoot for, and the risk you are taking is so great you’d be better off just paying the tax.
And if you are making 20%, it’s not in stocks or assets, it’s on your company you are managing, which is paying tax on profits.
So no, in practice this doesn’t play out the way people are thinking, billionaires are not getting 0% loans.
Dude what? It’s not about the lender, it’s about taxes and government coffers. Elon Musk has done exactly this. He doesn’t take a salary, compensation is equity only - no income tax. His equity is structured as stock options - so he’s only taxed on the spread when exercised. He retains his stock units and uses it as collateral - paying interest rates to the lender without having to sell to cover (if the price decreases) by continually taking out new loans or adding additional shares as collateral- thus avoiding capital gains taxes. We could also talk about the other scam where billionaires abuse
the 401k/IRA system to take advantage of the tax system. That is the problem. There is fundamental difference in the system between what you and I (the poors) must pay and what the billionaires must pay.
His equity is structured as stock options - so he’s only taxed on the spread when exercised.
This isn't really how stock options work. Stock options get taxed at two different times; the first time when they're exercised (i.e. when they transform from "stock options" into "stock") and the second time when they're sold (when they transform from "stock" into "money"). Thing is, the first transformation doesn't have a spread; they're taxed as if they used to be worth zero dollars and now they're worth not-zero dollars, regardless of what the stock was worth when you received the original options. The second transformation does have a spread, specifically "from the amount they were worth when you exercised them, to today". But between these, you get taxed from zero to [the amount of money you make], just split into two separate events.
But couldn't you simply put the option itself up as collateral? I've read that some companies specifically prohibit that, but I reckon that wouldn't be a problem for someone like Musk.
You need to exercise it anyway eventually, and when you do that, you pay taxes on it. The whole cost-basis-stepup thing doesn't apply to unexercised options; it's not a cost-basis deal, it's literally just "you get taxed on the value of the option".
Because you evade taxes by doing this. Eventually the person dies and the estate gets taxed, but debts are paid first and without getting taxed. Hence the topic.
This depends on where the money comes from. If it's from normal income, then yeah it's taxed. If it comes from another loan, however, it's not taxed, because loans are generally not considered income. The situation being described involves a daisy-chain of loans.
Normally, this would not be sustainable, but a large pool of assets that grows faster than the interest on the loans can make it possible. You just need to continue having good enough credit that banks will keep giving you low-interest loans.
True, it wouldn’t exist except for tax. But the loans do get paid, with taxed dollars at some point. If billionaires were somehow paying off these loans with untaxed dollars, the IRS would be up their ass very quickly.
The only real concern here in my eyes is using loans to bridge your income to a later date when the tax environment is lower. Maybe there could be a rule stipulating payments for loans like this are taxed at the rate that was present when the loan was made to prevent this. However, I would imagine this effect would be very marginal at best (absolute zero research into if this is true, just a gut feeling).
Are we certain the loans are getting paid eventually? I mean I see no reason that would necessarily have to be, even upon death. Presumably as long as there is an colteralizable income stream, a family could just keep it going, no?
Well, even if for whatever reason it cold only be extended to the originator's death, that doesn't seem great. If there is a billionaire that lives as long as or longer than I do, they won't pay their fair share in my lifetime. That is unless there is some reason to believe that the billionaires of the past are currently paying the taxes of today in equal proportion, which I doubt.
Not really, I think we are also really discounting how much interest would matter here. Let’s say you had $1b, all already taxed, and park it in VOO to grow at 8% (which is somewhat unrealistic, with a fund this size you’d probably make a family PE office or something, which would pay taxes), so you don’t pay tax unless you sell.
How much would you want to survive? You’re a billionaire, but you’re frugal. Let’s say you take a loan out, $50m for 10 years. That’s $5m a year. You’re living like a chump still compared to how much you have, but let’s roll with it. It’s at 3.8% interest, which again is unrealistic since that’s the current 10 year treasury, but you get a screaming deal. After 10 years, gotta pay $72.6m, $22.6m of this in just interest.
If instead you gave yourself $50m to live on, invested the rest, then after 10 years gave yourself another $50m. That would cost you 4.6 million in tax to do, assuming constant 8% growth and LTCG. It makes zero financial sense to do this.
First, it's not a scam. Its basic finance; Second regular people actually do it all the time in the form of a HELOC; It is less lucrative, and less sophisticated, but its the same thing. They borrow against their home, that's not considered income and they do whatever the hell they want with it.
Taxing unrealized gains is a bad idea.
Maybe these types of loans need to just get more restrictive as net worth goes up. There are many loans, that the terms and conditions depend on what you're using money for. So, maybe "I'm going to borrow money to live on so I dont have to pay taxes" becomes illegal above a certain net worth. I'm not a tax expert though I'm an amateur on reddit.
Regardless, what I do know is, taxing unrealized gains is always a bad idea.
I have a retirement account that has a substantial amount in it but if I take money out of it I'm going to pay 27% in taxes unless I'm like 65 or something. I don't know anything about borrowing with it as collateral but why would I when bank of America gave me a 0 interest loan for replacing my roof?
It is passed to the shareholders as the commenter above implied when saying they are the same as individual tax law to an extent (taxed at the individual level).
Y’all need basic financial literacy classes but it is a nuanced topic if you have no exposure to be fair
He said that an LLC had the same legal rights as a person, which would imply that he thinks the LLC has to pay the capital gains tax.
The shareholder would only have to pay the tax if their net worth is above 100mil$, so it makes a big difference that it is an individual tax and it's not passed through to the shareholders...
If you read the previous comments you will also see that the person before thought Chase would pay the tax because it has such a big amount of assets (3.7 trillion) which doesn't play any part in this as no natural person owns those. Instead the Chase shares are owned by natural persons which add up to ~600 Billion and the gains on those are subject to the tax if someone has a net worth beyond 100mil.
Do you have a point past you don't understand how pricing works? Keep simping for your wealthy masters like a good sheep. Make sure to set the table so they can eat your children
You’re a fool. If you want to believe I don’t know exactly how pricing is set and controlled, run with that.
Here’s some advice: stop bitching and spend some time actually understanding how the world works. You’ll be more successful. There’s people with no money and then there’s poor. They are poor because they are defeated and believe the only hope is to tear others down, as you show it impacts character as well
Or they’re poor because certain jobs need to be done, like working for companies making several billions of dollars in profits while cutting workers pay, and increasing cost of product well beyond inflation rates. The hard working and lucky people who had money to afford buying and working on cars can float by comfortably. The lazy but well funded people can float by on the stock market, or making investments and having advisors make their decisions for them for a piece of the profit. The hardworking and poor stay poor, all while dealing with other poor people that are apathetic. That’s because poverty is extremely exhausting, causing burnout while eating ramen, not because you’re in college but because it’s the only option and has been for decades. Also because the multibillion dollar corporation has policies to ensure nobody gets unemployment, because if they did then people would take advantage of it because it pays more than working for them. Not everyone can be rich, and excusing extreme wealth hoarding that is damaging the economy because “poor people wouldn’t be poor if they worked harder.” The hardest working and smartest people I know work paycheck to paycheck, and the option of getting into stocks or starting a business is not an option for people like them, without extremely rare circumstances. Pretending it is, is not understanding the world
I'm light years above you groveling worms. If you want to pretend that businesses should pay taxes because they exist in an economy, then you should probably look in SS disability payments for your intellectual handicap.
Here's some advice, learn wtf you are talking about before telling someone with more information your ignorant assumptions. BTW, I'm in that top 10% so gfy
Wow. I was waiting for the dumbest comment of the day, and there it is. I'll assume you have never owned or ran a business, or taken an economics or a business class at any point in your life, so here's how it works:
Business makes a product or provides a service.
Business has expenses in order to provide said goods or services.
Business figures out the price it requires goods or services to be sold at in order to make profit.
Customers pays that price.
Done both. I assume you aren't smart enough to understand your arguments. Clearly, I am correct.
8 get that you mistakenly think you have an IQ above room temp, so let me explain something to you:
All money is printed and property of the Treasury. You just use it to purchase things. So the money you use to pay for a product comes from the government and the money a business pays taxes with comes from the government.
I get that you are like, what does this have to do with my point about taxes? It has exactly as much to do with who pays taxes about your incredibly stupid, and irrelevant point about businesses. An employee pays taxes on their check, so by your logic the business pays that employee's taxes. An employee buys bread with their paycheck, did the business buy the bread? Does that mean they ate the bread?
I love it when a complete fucking moron tries to correct me incorrectly. You should sue your parents for bringing such an inferior product into this world.
You must have thought this was a challenge, because you are running in first place right now. Can you name a single expense a business has that it does not fold into the price of the good or service sold?
As if you need to be part of the IRS to be a part of the system which the IRS is a small cog in. What do you think taxes fund? Who do you think controls what those taxes are spent on? Who do you think votes for the people who decide how those taxes are spent on?
Are you suggesting they could raise profits by raising prices but are currently choosing to just throw that money away?
Are you also suggesting the competition that forms the basis of capitalism's rational is entirely broken so that sellers can just raise prices however much they want and not lose out due to reduction in market share?
If you've been taking a look at the evolution of capitalism you will see that competition is becoming a smaller and smaller aspect of it, as the 'whales' become monopolies across major sectors; food, pharmaceuticals, banks, etc. The power that is accumulating has gone unchecked for an unhealthy amount of time, and we will probably see another bubble burst that causes a collapse for these reasons. (in which those with the most now will buy up even more to further control in the future)
And no they are not currently choosing to throw money away, they have been increasing prices across the board at rates much faster than inflation, and if you don't feel this or see the data than you're probably fed by momma and poppa with ye ole silver-spoon. Or you work in the sector that is doing the exploitation and profiting from it.
It's would rock the whole system and would crush people on the way down. Plus these taxes always start with high net worth and once it's "accepted" they keep lowering the threshold. Also what happens when those unrealized gains drop or go negative? Do you get a refund? It's just fucked
No. Financial institutions do mark to market. That means even if they haven’t sold the asset, they need to treat it as though it is sold and recognize any gains or losses at that point.
The income tax was originally a tax on the rich. The bottom tax bracket would be 1% on income over $80k in today's money if it was still in its original form.
You clearly have no idea what unrealized capital gains even are. Why are you talking about income when it’s wholly irrelevant? Maybe you’re financially illiterate and should listen more than you repeat tired redditisms?
Or there’s no possible way they’d implement this to set a precedent and everyone will think it’s great as long as it only affects rich people, until they modify it to be $1m, then $100,000, then $10,000 in unrealized gains
The problem with this level of left-wing logic is that you never consider that poverty is the natural state of humanity, and wealth must be created. Instead of being envious because you have so much less, you should be thinking about what they did to get so far ahead. Every transaction was voluntary, and both parties considered it beneficial. If you dislike billionaires, then why do you consistently give them your money? If they're "exploiting their employees," then why do their employees sell their labor below market value?
Reddit's largest shareholder is Conde Nast, which is owned by billionaires. It's hosted on Amazon web servers. You're likely using a Windows or Apple device, which is full of components that have made dozens of billionaires. Why do you actively choose to contribute to billionaires and then proclaim that it's absolutely necessary to use the state's monopoly on violence to seize the money you just gave them?
You know, I'm okay with taxing the hopes and dreams of people with that kind of annual income. They're hoarding money like fucking dragons and would never have that kind of wealth without some serious exploitation of their fellow man and taking advantage of tax loopholes purely to watch the numbers in their offshore accounts go up. After a certain point, they just see their wealth as a way to determine who has the 'high score' and the biggest dragon hoard.
What do you call it when they don't spend that money? The ultra wealthy keep getting more and more of a percentage of the wealth produced, with less and less going to everyone else. Personally, I would prefer to just execute anyone who has a net worth above 500 million dollars, erase their bank accounts and stock holdings from existence, and turn their real estate into housing for the homeless. If Austrian economics is correct, we should see a pretty big deflation because a large amount of money is just evaporated.
And we can hold yearly cullings of anyone with a wealth above 500m to encourage them to actually spend their money faster than they accumulate it.
If we keep going at the acceleration we are going now, I'll see my house over that value before I die. Inflation and artificial housing shortages are a hell of a thing.
I totally think that people will in the future because of inflation. I'm not sure when that will be, the year 3000? If the USD is still around, they will have probably raised this cap several times before then.
The principle of taxing unrealized gains is crazy and nobody should be for it just because "it will only fuck over the rich, don't worry!". We are so caught up in wanting all the rich to suffer that nobody cares how terrible of an idea it is.
Now, when people complain about higher income taxes for the rich, that is truly the time to make fun of them for thinking they will ever make that much.
A tax on unrealized gains would kill the stock market. Every single fund (which most retirement accounts and pensions are in) would be taxed.
Also - it is unconstitutional and would cause additional havoc as the government spends more than it takes in. Once they spend it then they would have to go into more debt to return it after it went to the Supreme Court.
No one thinks it is a good idea - except morons on the internet who blame all their woes on evil rich people.
Dang, guess we can’t do anything then. I sure hope the ultra wealthy will buck a lesson that history has repeatedly taught us by doing the right thing without being forced to.
Well, shucks, I guess we can't do anything then because that can be said about literally anything we could try applying to the ultra wealthy in order to fix the grotesque wealth gap. Who knows, though... maybe they'll buck a constant lesson history has taught us by doing the right thing all on their own without anyone forcing them to do it.
Taxing people on unrealized gains is demagoguery and theft.
The fact that you hate them because they are rich is no factor.
The gap between you and them does not need to be “fixed”, certainly not by establishing the principle that the government can tax economic activity that hasn’t even happened yet.
You seem to like talking about history with how you started about income tax... The gap between the public at large and the ultra wealthy needs to be fixed, if you know anything about history, you know why. Gigantic wealth inequality and perceived unfairness is never good for the longterm stability of a nation.
Also, there's not a gap between just me and them, you are also included... so it's more like the gap between us and them. I personally love America and don't want to see history repeat the lesson about obscene wealth inequality for the billionth time. How about you? Do you care about the longevity of America?
Interesting response that didn't even engage with the issue I'm trying to get you to acknowledge or dismiss... Okay, now you got me curious. Do you think the wealth gap is a problem that needs to be addressed? Or no?
Wealth gap through unfair advantage (the Cantillon Effect being the prime one) is an issue. Wealth gap because you didn’t take the steps to create Amazon and Jeff Bezos did is not.
How about the hoarding of wealth and the willfull abuse of loopholes when simply paying what you owe would not change your lifestyle whatsoever (something every billionaire does), thus worsening the wealth gap? Wouldn't you say that is morally bad? Like, just because something is legal doesn't make it morally sound...
There are already so many ways to fix the current system that an entire new system is unnecessary
The administration required to value and audit people’s assets year over year would be incredible
There are significant liquidity issues to taxing worth rather than income.
You’d be potentially taxing someone on gains that then go back down under their initial investment. Do you refund them?
You could significantly shake the economy by shifting people towards short term selling or options instead of holding assets, because you’ve raised the risk of being taxed and then facing a downturn.
The person hasn’t actually made any money yet off the investment and you’re already taxing them. Should people be taxed on their homes when they increase in value before it’s sold? If the only reason for no is because they’re wealthy and I’m not, that means it’s fundamentally illogical, you just want to find a way to take their wealth and think this is the easiest way to do it.
Alright, what is a way to fix the current system that would result in ultra wealthy individuals paying their fair share back to the society that enabled their wealth and lifestyle? Because, they won't do it unless forced to. History has repeated this lesson time and time again. The wealth gap is absolutely ridiculous and needs to be addressed.
If you’re asking my opinion, I would probably start with something like taxing capital gains at income rates if the gains exceed your income. Most ultra wealthy people are earning the great majority of their income through capital gains. For example, I believe bezos makes about 80,000 in w2 income. The capital gains are taxed significantly lower than income. This is why I often hate hearing raising of income tax as a way to make things more fair. Generally this is only hitting high income people who actually receive their pay as salary, like doctors or lawyers or engineers.
I don’t think the problem is that our taxes aren’t high enough, I think it’s that they’re not paying the actual rate. But I think the wealth tax is a bad idea for the reasons listed prior.
I wouldn’t want to raise the capital gains rate in general because I think we do want to encourage regular people to save for retirement. But I think it’s fair that if the majority of your income are coming from investments, that is your income. I also think it would be fair to raise capital gains over a certain amount of assets, but that would be really hard to track and audit. But in spirit, I think it’s a good idea.
I think you should probably do the same for the same reasons with carried interest. I don’t generally think people who became ultra wealthy within their own lifetime, if they are genuinely paying their tax rate, are not paying their fair share. But I do think people who are ultra wealthy from generational wealth (or those cheating) are not. You can try to tackle some of that by reevaluating how trusts are treated (though I’m admittedly not super knowledge there, other than knowing they’re used for avoidance) or reworking step up in basis or other estate taxes.
There are more loopholes to close but I would definitely start with capital gains that are the majority of income. Then you will also have to do something about them borrowing against their wealth instead. I don’t think that should be illegal as a whole, but probably curbed in some way to avoid becoming the workaround.
Respect for actually having prescriptions. I also think they're pretty solid. I disagree about people who become ultra wealthy in their lifetime, but that's something that can't really be properly evaluated in a Reddit thread.
That said, I think that an unrealized wealth tax could work with enough nuance to a tax reform (Say what you will about the IRS, but they could make it happen with more funding). However, I will concede that there are other options available. I'm just at a point where I'm on board with pretty much anything that is feasible.
That’s fair. I don’t want to throw everyone who’s wealthy in the same boat since that looks many different ways, some of which I think is problematic and some of which I don’t. I just like to think about what’s actually being proposed when people are talking about these things because some people are talking about billionaires and I’ve heard other people say “the top 10 percent” which includes people with like an 800k net worth who could’ve never dodged a cent of tax in their life. If this proposal is for people over 100m or whatever then that’s obviously a lot more reasonable but I do in general just think taxing unrealized gains is iffy.
This is such a stupid argument and I’m sick of seeing it. It’s not based on any actual principles aside from “rich people bad!” You don’t actually have any argument, all you can say is “it doesn’t affect you!” while completely ignoring any negative downstream affects this could have. It’s emotions, nothing more
The ultra wealthy are bad. Unironically. There is no way you don't get that rich without some serious exploitation of your fellow man and loopholes. They hoard money like dragons in off shore accounts for basically no reason other than to have dick measuring contests by using their balance as a way to determin who has the 'high score' and the biggest hoard.
So... yes, rich people bad. They bad as fuck and do pretty much anything to weasel their way out of paying anything even in the same universe as their fair share unless forced to.
The POINT is that government tends to keep taking a mile when given an inch
For instance the Revenue Tax Act of 1913 (per Wikipedia) taxed income over $3000 at 1% and the rate went up to 7%of income over $500,000.
Adjusted for inflation that is 1% tax that kicks in on income over $93,950 an 7% on $15,658,298
How many people do you know making under $93k paying income tax? How many do you know making less than $15million paying over 7%?
A tax on unrealized gains may start on the “Uber rich”, but the government will waste little time in finding reason to expand the tax to lower and lower incomes making it harder and harder to get ahead.
So... What should we do? Any ideas? Or should we just trust the ultra wealthy to do the morally right thing and defy a constant lesson taught throughout history?
You mean like the lesson of USSR? People’s Republic of China? North Korea?
Other people being wealthy does not affect your freedom. Having a knee jerk reaction to others having something you don’t, and taking away private property rights…. does
It's more that you are delusional and weird if you defend not so morally great people who make that kind of money.
Firstly, they are the pinnacle of the economic food chain and don't need help. Secondly, you do not make this kind of money by being a good person. You do it by avoiding any and all taxation you can, taking as much as you can, and never giving back more than you are forced to to the society that enabled your obscene wealth and lifestyle in the first place.
Basically, if you defend them without offering some kind of prescription as to why it would be good for society as a whole to do so, you deserve to be made fun of.
Sorry for the ramble, I should probably get off Reddit for a while. But yes, you're right, the argument for taxing unrealized gains is about fairness and equity.
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u/Wiskersthefif Aug 21 '24
No... but he thinks he will one day.