U.S. billionaires would pay tax on unrealized gains from their assets to help finance President Joe Biden's emerging social-policy and climate-change legislation, according to a proposal unveiled on Wednesday by the top Senate Democrat for tax policy.
Semi-based, shame it will die somewhere in a committee
Hold that thought for a sec, the senate parliamentarian is on the phone
Why don’t they also just raise LTCG tax rates to regular income rates or higher?
There’s no reason for unearned income to be taxed lower than earned income.
They want to use it as a backdoor to get expanded financial reporting requirements, which is the real goal. "Going after billionaires" is a smoke screen for going after people who work for cash under the table. They tried to go straight to it with the $600 bullshit, but that was too aggressive.
Right? Like, the argument for not taxing unrealized gains is actually coherent. I have yet to see a good argument for a lower tax on long-term (asset owned for >1 year) capital gains.
Although it’s not even that coherent. If you think about it, real property is taxed on assessed value (minus exclusions and exemptions) on an annual basis so you could easily make the argument that assets, including securities, can just be taxed on their FMV (average or as of date) and unrealized gains could just be included in annual income. It’s only not normal to think of stocks in the same way as real property because capitalists write the laws and fund think tanks. For them, assets are assets and the more they control the more power they have.
Except that those values are just bullshit until the property is actually sold, hence "unrealized." Individual taxpayers are assessed on cash-basis accounting for a reason!
Hate to break it to you but all of accounting is made up bullshit. All of the market values are nonsense too.
You don’t need to carry water for the wealthy by saying they shouldn’t pay taxes on unrealized gains. Like I said homeowners pay taxes on unrealized gains via property taxes so why not other assets?
My car---without which i can't get to work from the parts of town that i can afford to live---is worth more than when I bought it, thanks to the chip shortage. Why the fuck should I pay cash to the state because of that?
BTW cash-basis is the least fictitious, so yeah.
___By the same token a $50 million Ferrari 250 GTO that’s been in storage for forever also doesn’t pay gains taxes even though it appreciated 300% within a decade. Taxation on gains is only a bandaid to a wider problem.
There could also be a 100% inheritance tax but someone will come out of the woodwork saying “so if I die and have $5 to my name, the state takes it?”
Don’t individualize a structural problem. I am not attacking you I’m attacking the idea that arbitrary things have arbitrary rules that only benefit the wealthy. Any crumbs normal people get is nothing in the grand scheme of things.
This particular rule isn't arbitrary and my individual example is simply one example of the reason why this particular rule exists.
We're discussing income taxes. Taxing "income" that hasn't actually come in yet is bad.
Your approach is correct, raising LTCG/income/corporate taxes is better than this Rube Goldberg machine strategy. The problem is they wouldn't get the votes for it. They don't even have the votes to raise the income or corporate tax to pre-Trump tax cuts levels.
Don’t get me started on corporate taxes that only apply to a taxable income based on essentially Net Income which is Revenues minus Expenses (+/- deductions, credits and carve outs) but Individuals get taxed on what is essentially their gross revenue. I brought this up in a tax class one time and the answer was some circular logic shit.
Like you and I can’t deduct rent or food or transportation or healthcare or interest expenses or utilities without certain high expense and/or low income thresholds but with few exceptions those all reduce taxable incomes for corporations and other entities.
The costs of our social reproduction and the costs of commodity production burden us individually and societally and the surplus flows upward.
Not only will it die, I'm willing to bet his tax will be like a 0.000000000000001% increase.
And then when Trump wins in 2024 it will not only be reversed but reimbursed.
when Trump goes grover gang the rank-and-file libs are going to absolutely lose their minds
It will never pass.
And even if it does, it'll only be a minor increase.
And even if it's a large one, billionaires will use loopholes to fully avoid taxes on it.
And even if they don't, it'll get repealed in a few years by the next president.
The absolutely bizarre thing is that Sinema apparently supports this while opposing hikes on the income or corporate tax? While I do support taxing unrealized capital gains (we basically already do for middle-class homeowners via property taxes), I feel this could be a nightmare to enforce.
How do you determine the capital gains on an original Van Gogh art piece purchased 5 years ago for $100 million? Is it worth more today? Less? I feel a billionaire wealthy enough to purchase an art piece like that is also wealthy enough to pay a tax lawyer to convince the IRS it hasn't appreciated.
Furthermore, does this also mean they'll be issuing tax refunds for unrealized capital losses? If Tesla's stock price cratered and Elon Musk lost $50 billion, is he entitled to a $15 billion tax refund? You'd pretty much have to say yes if you're taxing unrealized gains.
Again - I support this tax proposal, it probably has the votes to pass, and it'll end up being a net win. And it would get past the Senate parliamentarian too, since pretty much any tax proposal would. But this seems like a really weird, clunky solution because Democrats are too cowardly to just undo the Trump tax cuts on the rich.
UPDATE: Manchin's a no, never mind, lmao
You get tax deduction in future I assume. I.e. sell 35% stocks (I’m very optimistic here) to pay taxes, if your wealth craters you get 70 billion deduction for future or whatever the fuck.
With art pieces they can just make them taxable either on reselling or pawning
