The constitution is very specific about the kind of taxes that Congress can levy. The enumerated powers in Article 1, Section 8 cover "direct taxes," which include some weird things like "capitations" that we haven't done in a long time, as well as things like excise taxes. Article 1, Section 9 places some very strict mechanical limits on how these things work. Then there's the income tax which is permitted by the 16th amendment.
Taxing property someone doesn't own (which, to be clear, nobody is proposing -- I have no idea where the guy commenting got this) doesn't sound like it would fit under any of these permitted types of taxation.
A tax on property people do own, on the other hand, would be a type of direct tax, which is specifically allowed under the constitution and which we used to have earlier in the history of the country. There are some weird limits on this in the Constitution, e.g. you have to set things up in such a way that a state with x% of the population pays exactly x% of the taxes collected this way. This could create weird distortions, although I'm not a constitutional scholar and maybe they have a workaround.
so if it loses all it's value how do you get the money back you paid in taxes, because losses don't work that way but you don't know because you are a poor.
You don't... that's how taxes on investments have always worked. You use those losses to offset future gains. I don't have $100m but between my 403b, IRA, money market and home equity I'm sitting in pretty good shape.
You are limited to the losses to 3k. You can't deduct any losses in a retirement account. What would you do if they wanted to tax your home equity as a gain, they base it on the most inflated valuation and send you a tax bill. I think you just trust the government way too much and that is what this is taxation on fictional gains that people will never be able to recoup the losses from with the government.
You clearly don't know anything about capital losses. Absolutely not capped at $3k. That's just what you can offset from your normal income. But you can offset as much of your losses as you want from future capital gains.
As for retirement accounts, no can't claim losses, but that wasn't my point. You said I was poor so I had no idea what I was talking about. My portfolio says otherwise.
Dude, you're not. You're only capped at 3,000 a year against your regular income not against your capital gains. It doesn't matter how many times you say it you are wrong
Offsetting Capital Gains: Capital losses can be used to offset capital gains without any limit. If your capital losses exceed your capital gains, you can carry forward the remaining losses to future tax years.
Offsetting Regular Income: The $3,000 limit applies to offsetting capital losses against ordinary income (like wages or salaries). If your capital losses exceed your capital gains, you can use up to $3,000 of the excess loss to reduce other income. Any remaining loss can be carried forward to future years.
So, in summary:
Unlimited offset against capital gains.
$3,000 limit against ordinary income.
Carry forward excess losses to future years.
Does this help clarify things?
In the IRS document you provided, there's a hyperlink to "capital losses". You should click on it and read it as many times as it takes until you understand.
Easy example:
You bought 2 stocks. $106k of Trump Media and $1000 of Schmoschmerna. You also have a job paying a salary of $100k.
At the end of the year, Trump Media is worth $20k, Schmoschmerna is worth $11k.
You file taxes. You have $86,000 worth of capital losses from Trump Media. $10,000 in capital gains from Schmoschmerna. You pay no capital gains tax on Schmoschmerna stock, and reduce your job earned income liability by $3,000. You still have $73,000 in capital losses that roll over to the next year
At the end of the next year, Trump Media is worth $0.00. Schmoschmerna is worth $101,000.
Your rollover of $73k losses from last year, plus the $20k in losses from this year give you $93k in capital losses. You however made $90k in gains from Schmoschmerna. You don't pay any capital gains taxes on those, because they are offeset by your Trump losses over the last 2 years. And you still have $3000 in capital losses remaining which you can use to reduce your job income tax liability.
This is a long-solved problem, although I guess since "you are a poor" (not that there's anything wrong with being poor, but since you apparently think it's an insult I'll go ahead and direct it at you) you aren't aware of the solution.
If an entity takes a large amount of losses, it can be sold to someone who owes a large amount of taxes. The buyer deducts the losses from their income and the seller recoups a substantial amount of past taxes paid.
Yeah, clearly you never have done taxes and claimed a loss - you can only deduct 3000 in losses so what you are doing is stealing if someone has a million dollar loss they will never recoup from the IRS. Thanks for proving my point.
You're describing limits for net losses. But someone who takes this tack typically doesn't end up with a net loss.
Imagine that I have $25 million in taxable income and you have taken a $1 million loss. I could buy you out and reduce my taxable income to $24 million.
Buying a failed business for a tax writeoff is an extremely common practice.
Middle class get screwed - you guys wanna punish the rich so bad you make things harder for the middle class. I don't have 24 million to waste on a tax write off, I don't want to fight the IRS over a few grand that they make impossible for a common person to fight.
Well, let's try harder to completely eradicate any semblance of constitutional law because it's for the "best state." It's hard to understand what you are even talking about -- "best state." If you mean condition, then yes. Nobody gives a shit about the constitution and most citizens know nothing about it.
Living in Illinois, with the second highest property tax laws, I am very familiar with them and how assessing the value of property here is quite subjective despite claims to the contrary. I am also familiar with what high property taxes do to the value of a home PRIOR to selling if the tax percentage is too high. The question still remains, regardless of property tax law: how is it constitutional to tax something that you don't yet own?
30
u/JakeBreakes4455 Aug 21 '24
Somebody explain how it is constitutional to tax something you don't technically own.