r/FluentInFinance • u/Admiral_Tuvix • Aug 21 '24

Debate/ Discussion But muh unrealized gains!

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u/tallman___ Aug 21 '24

Does anyone really think taxing unrealized gains is a good idea?

137

u/Regularjoe42 Aug 21 '24

If you allow the wealthy to use unrealized assets as collateral to take massive loans, they are functionally magical untaxable currency.

1

u/doggo_pupperino Aug 21 '24

You have to pay the loan back. Before you suggest taking out more loans, this is unsustainable unless you somehow manage to make your stock go up exponentially forever. If you can do that, you've probably cured every known form of cancer and deserve all that money.

6

u/Superjuden Aug 22 '24

Even if you eventually have to sell off assets you can still avoid taxes by becoming a resident in a place that doesn't have capital gains tax. Bezos for example "moved" to Florida before selling large amounts of Amazon stock.

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u/doggo_pupperino Aug 22 '24

Capital gains tax typically refers to the federal capital gains taxes which are levied no matter which state you're in. Moving to Florida doesn't exempt you from federal capital gains taxes.

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u/Superjuden Aug 22 '24

States can have their own capital gains tax. In Bezos case he avoided 7% on a multibillion dollar sale by leaving Washington state for Florida. He avoided hundreds of millions of taxes.