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Old 9th June 2021, 07:48 AM   #121
Bob001
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Originally Posted by theprestige View Post
Wealthy investors don't pay income tax in capital gains from their investments. They also don't pay tax on paper wealth until it is actually realized in a sale. This article is essentially outrage bait for twenty-somethings who haven't yet given these matters any serious thought.
What you are describing are specific provisions of the tax code that benefit the wealthy, and that were controversial even when they were established. They can be changed. And it's not just paper wealth if it can be borrowed against, effectively creating the benefits of a sale without actually selling it. There's plenty here to think about.
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Old 9th June 2021, 07:49 AM   #122
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Originally Posted by JoeMorgue View Post
The OP isn't like wrong or anything but is this really news? Hasn't this been a known fact, a known point of contention for many, and a massive social debate for a while now?

We know the controversy over taxes for the rich exists.

You might as well have posted an OP stating that some people are for and some people are opposed to abortion, gun control, the death penalty, gay marriage and acted as it was some truth bomb.
Broadly known, yes. The exact extent and details as pertaining to these particular wealthy individuals, no.

This is an honest to god illegal leak of tax data. Sounds like Propublica is planning on running a series that really digs into the more specific details.

There's absolutely public interest in a story like this.

There's been growing discussion among certain sectors of the political sphere, mostly liberals and progressives, whether the current system that treat unrealized gains as untaxable should be continued.
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Old 9th June 2021, 07:51 AM   #123
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Originally Posted by SuburbanTurkey View Post
Sure, but the point of the piece is to show the extreme outcome of a system that allows unrealized gains to be perpetually deferred.

I'm not sure what you think Propublica is doing wrong here. It isn't trying to pull any tricks on the reader, it explains in detail exactly the difference between income and capital gains.

I suppose many might find it patently regressive that our richest citizens can goes years at a time paying very little to no income tax, so long as they game their income vs capital game streams appropriately.

Is there any good reason why this country should treat capital gains as non-taxable? Why should this wealth be allowed to accumulate tax free while other forms of wealth, like wages, cannot?
The issue I have is the piece isn't asking the questions you just asked, but is poorly trying to raise those questions discreetly. But those questions, when an article actually raises them, has incurred a burden of proof to answer them.

There is a way to do a version of this article that doesn't present these questions and just sticks to the facts
....this article wasn't that.


And the short answer to why not to tax unrealized gains is because their evaluation is speculation. We don't actually know how much Bezos would get for his shares.

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Old 9th June 2021, 07:52 AM   #124
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Originally Posted by BobTheCoward View Post
The issue I have is the piece isn't asking the questions you just asked, but is poorly trying to raise those questions discreetly. But those questions, when an article actually raises them, has incurred a burden of proof to answer them.

There is a way to do a version of this article that doesn't present these questions and just sticks to the facts
....this article wasn't that.
Seems to me Propublica is largely doing a data dump and primary investigation and assuming other journalistic entities will go down the route of editorializing and such. I provided the NYTimes derivative as an example of just this relationship. It's a pretty common scheme when it comes to reporting highly technical topics.
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Old 9th June 2021, 07:53 AM   #125
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Originally Posted by JoeMorgue View Post
The OP isn't like wrong or anything but is this really news? Hasn't this been a known fact, a known point of contention for many, and a massive social debate for a while now?

We know the controversy over taxes for the rich exists.

You might as well have posted an OP stating that some people are for and some people are opposed to abortion, gun control, the death penalty, gay marriage and acted as it was some truth bomb.
What's new is that ProPublica has obtained detailed confidential information about how little tax the wealthiest people in the world pay. Are you really happy paying 25% or more from your job when Warren Buffett and Elon Musk pay much less than one percent of their total income from investments? The facts make a strong argument for Sen. Warren's wealth tax, based on a percentage of total holdings in whatever form they are held.
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Old 9th June 2021, 07:57 AM   #126
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Originally Posted by Bob001 View Post
What's new is that ProPublica has obtained detailed confidential information about how little tax the wealthiest people in the world pay. Are you really happy paying 25% or more from your job when Warren Buffett and Elon Musk pay much less than one percent of their total income from investments? The facts make a strong argument for Sen. Warren's wealth tax, based on a percentage of total holdings in whatever form they are held.
That isn't new. We know what kind of income is taxed and we know stock prices and how their wealth is determined. This article is trying to say taxes are low as a percent of wealth, which we already know from having a basic grasp of tax law.
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Old 9th June 2021, 07:58 AM   #127
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Originally Posted by SuburbanTurkey View Post
Seems to me Propublica is largely doing a data dump and primary investigation and assuming other journalistic entities will go down the route of editorializing and such. I provided the NYTimes derivative as an example of just this relationship. It's a pretty common scheme when it comes to reporting highly technical topics.
I would say they are doing the exact opposite of a data dump, are strongly implying that this is bad, but avoiding saying it is bad to avoid accountability for defending that position.
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Old 9th June 2021, 08:01 AM   #128
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Originally Posted by Bob001 View Post
Are you really happy paying 25% or more from your job when Warren Buffett and Elon Musk pay much less than one percent of their total income from investments?
No but you could have asked me the same question yesterday, a week ago, a month ago, or a year ago and the answer would have been the same because nothing changed and no new information has come out, not really.

Going from "an open secret that everybody knows" to "something there is evidence of" isn't a paradigm shift for me.

Especially in a post-truth world where everyone who cares about this already knew it was true and everyone who thought it was false doesn't care there is evidence for it.
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Old 9th June 2021, 08:02 AM   #129
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Originally Posted by JoeMorgue View Post
No but you could have asked me the same question yesterday, a week ago, a month ago, or a year ago and the answer would have been the same because nothing changed and no new information has come out, not really.

Going from "an open secret that everybody knows" to "something there is evidence of" isn't a paradigm shift for me.
And we did have evidence for it. We have Amazon 10k filings, we have the stock ticker, we have the tax law. We just know for a fact shareholders are not paying taxes on those gains. There isn't even a secret at play.
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Old 9th June 2021, 08:03 AM   #130
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It's always strange that the reaction to such stories often includes the impression that taxing capital gains or other unrealized wealth is somehow inconceivable or novel.

You all are surely aware of property tax. A house you buy decades ago might gain a lot of value, and your property tax rates will reflect that even if you never sell the home. Uncle Sam doesn't give one hoot that your home wealth is unrealized, pay up or liquidate.

What reporting on this routinely shows is that the type of wealth that ordinary people have, like income or homes or vehicles or retirement funds, are often taxed at much higher rates than the types of wealth that are more common among the wealthy and ultra wealthy. Earning money through wages is considered an income stream that should be taxed, but making paper money on the stock market is something that shouldn't be touched for... reasons.

Articles like this simply suggest that perhaps it's time to reassess whether tax policy that overwhelmingly benefits the ultra wealthy should be continued or modified.
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Old 9th June 2021, 08:04 AM   #131
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Originally Posted by SuburbanTurkey View Post
Articles like this simply suggest that perhaps it's time to reassess whether tax policy that overwhelmingly benefits the ultra wealthy should be continued or modified.
But you said it was a data dump. Now they are suggesting something?
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Old 9th June 2021, 08:05 AM   #132
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Originally Posted by BobTheCoward View Post
But you said it was a data dump. Now they are suggesting something?
I linked two articles. Why am I even responding to Bob. This is my fault
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Old 9th June 2021, 08:08 AM   #133
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Question

Originally Posted by SuburbanTurkey View Post
I linked two articles. Why am I even responding to Bob. This is my fault
Yes, and you said, "Articles like this." You didn't say which one. Please clarify.
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Old 9th June 2021, 08:12 AM   #134
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Originally Posted by SuburbanTurkey View Post

What reporting on this routinely shows is that the type of wealth that ordinary people have, like income or homes or vehicles or retirement funds, are often taxed at much higher rates than the types of wealth that are more common among the wealthy and ultra wealthy. Earning money through wages is considered an income stream that should be taxed, but making paper money on the stock market is something that shouldn't be touched for... reasons.
Absolutely agree. It is unacceptable that incomes and property are taxed while unrealized gains are not.
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Old 9th June 2021, 08:21 AM   #135
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Originally Posted by JoeMorgue View Post
....
Especially in a post-truth world where everyone who cares about this already knew it was true and everyone who thought it was false doesn't care there is evidence for it.
As any cop knows, there's a difference between knowing something is true and finding concrete, detailed proof. And I don't think anybody really thinks that the problem of wealth inequality is false. They just think it's how a capitalist economy works. But it doesn't have to.
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Old 9th June 2021, 08:27 AM   #136
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Originally Posted by Bob001 View Post
As any cop knows, there's a difference between knowing something is true and finding concrete, detailed proof.
No.

There used to be a difference when "facts" existed.

There is no difference anymore.
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Old 9th June 2021, 08:39 AM   #137
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Originally Posted by Bob001 View Post
But it is there, and they can use it as collateral for loans
That some other party is willing to lend money and assume risk doesn't mean the thing they feel comfortable risking should be taxable. If someone borrows money and makes financial gains with it, those gains are taxable. If someone pays someone else to borrow money, those gains for the other party are taxable. All the gains from both sides of this transaction are taxed.

Taxing the potential for gains would be double or even triple-taxing a thing if it does actually happen, and taxing something that didn't happen if it doesn't!
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Old 9th June 2021, 09:00 AM   #138
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Originally Posted by Bob001 View Post
As any cop knows, there's a difference between knowing something is true and finding concrete, detailed proof. And I don't think anybody really thinks that the problem of wealth inequality is false. They just think it's how a capitalist economy works. But it doesn't have to.
But the proof was already there without violating a persons private information. Regardless of what they paid on their income taxes it was known it would be very small compared to their increase in net worth.


Personally I think the rich do pay enough taxes.

I hope the Pro publica main earners also reveal their own tax returns.

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Old 9th June 2021, 09:05 AM   #139
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Originally Posted by SuburbanTurkey View Post
It's always strange that the reaction to such stories often includes the impression that taxing capital gains or other unrealized wealth is somehow inconceivable or novel.

You all are surely aware of property tax. A house you buy decades ago might gain a lot of value, and your property tax rates will reflect that even if you never sell the home. Uncle Sam doesn't give one hoot that your home wealth is unrealized, pay up or liquidate.

What reporting on this routinely shows is that the type of wealth that ordinary people have, like income or homes or vehicles or retirement funds, are often taxed at much higher rates than the types of wealth that are more common among the wealthy and ultra wealthy. Earning money through wages is considered an income stream that should be taxed, but making paper money on the stock market is something that shouldn't be touched for... reasons.

Articles like this simply suggest that perhaps it's time to reassess whether tax policy that overwhelmingly benefits the ultra wealthy should be continued or modified.
This is why California passed the famous Proposition 13 in 1978. People, especially those on limited incomes like Social Security after retirement, were in danger of losing their homes because they could not pay their property taxes as the value of their homes skyrocketed but incomes did not. A person could have lived in a home for decades and seen the value of their home triple or even quadruple, but once retired and their income dropped, they could no longer pay those vastly increased property taxes. This law protected that kind of scenario.
Quote:
The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property.

The proposition decreased property taxes by assessing values at their 1976 value and restricted annual increases of assessed value to an inflation factor, not to exceed 2% per year. It prohibits reassessment of a new base year value except in cases of (a) change in ownership, or (b) completion of new construction. These rules apply equally to all real estate, residential and commercial—whether owned by individuals or corporations.
This meant that a person would not see their property taxes increase exorbitantly as long as they owned that home.

Every state should have a Prop. 13.
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Old 9th June 2021, 09:08 AM   #140
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Originally Posted by BobTheCoward View Post
Absolutely agree. It is unacceptable that incomes and property are taxed while unrealized gains are not.
Do you pay tax on inheritance before you inherit it? My mom has some money. She's not dead yet, but one day she will be and then part of that money will come to me. Should I be paying taxes on it now, as unrealized potential?

Or is the reasonable course to tax a thing when it happens, if it happens at all.
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Old 9th June 2021, 09:11 AM   #141
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As for property tax, you're not paying tax on the gain (ie the difference in value over time) you're paying tax on the thing you're owning. You'd still pay tax if the value remained unchanged, and you'd still pay tax if the value dropped. Because property is not an investment in potential growth of a corporation's value, property is an actual physical thing that exists regardless of whether its value goes up or down.

In other words, property isn't "paper wealth", it's actual wealth. So of course it's just to tax differently.
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Old 9th June 2021, 09:12 AM   #142
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The problem is a tax code that nobody fully understands isn't a bug, it's feature.
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Old 9th June 2021, 09:18 AM   #143
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Originally Posted by TragicMonkey View Post
Do you pay tax on inheritance before you inherit it? My mom has some money. She's not dead yet, but one day she will be and then part of that money will come to me. Should I be paying taxes on it now, as unrealized potential?

Or is the reasonable course to tax a thing when it happens, if it happens at all.
There should not be an inheritance tax. Also,maybe the government should be able to claim 100% of that wealth (not as a tax, but just conceptually you can't transfer something after you are dead).
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Old 9th June 2021, 09:18 AM   #144
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Originally Posted by JoeMorgue View Post
The problem is a tax code that nobody fully understands isn't a bug, it's feature.
As far as capital gains go, it's not that complex. The problem of the rich not paying enough could be solved by simplying increasing the amount of tax on capital gains. It doesn't require changing the manner, method, or definition of any existing taxes. Just bump the percentages up.

Although as a progressive policy I'd suggest doing so on a sliding scale looking at the individual's overall wealth, so the less wealthy would be encouraged to invest. The ultra wealthy are not going to stop investing if they end up paying 11% rather than 10.5%.
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Old 9th June 2021, 09:20 AM   #145
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Originally Posted by TragicMonkey View Post
The ultra wealthy are not going to stop investing if they end up paying 11% rather than 10.5%.
Hell at this point some of them straight up will just out of spite, sadly.
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Old 9th June 2021, 09:21 AM   #146
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Originally Posted by BobTheCoward View Post
There should not be an inheritance tax. Also,maybe the government should be able to claim 100% of that wealth (not as a tax, but just conceptually you can't transfer something after you are dead).
Not the actual question. I'm not asking about the justice of an inheritance tax, I'm asking if it ought to be assessed before any inheriting even happens.

How about this one, then: if you wrote a book and sold it and made money on it, you'd pay taxes on that income, correct? Well, if you wrote a book that proves you had the potential to write a book and make that income before, so why weren't you paying taxes on the potential book before you wrote it?

There's some paper and a pen near me right now. I could potentially draw a masterpiece and sell it for millions! Should I be paying taxes on that potential gain now? Or do we wait until I a) learn to draw and b) draw something and c) sell it?
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Old 9th June 2021, 09:23 AM   #147
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Originally Posted by TragicMonkey View Post
Not the actual question. I'm not asking about the justice of an inheritance tax, I'm asking if it ought to be assessed before any inheriting even happens.

How about this one, then: if you wrote a book and sold it and made money on it, you'd pay taxes on that income, correct? Well, if you wrote a book that proves you had the potential to write a book and make that income before, so why weren't you paying taxes on the potential book before you wrote it?

There's some paper and a pen near me right now. I could potentially draw a masterpiece and sell it for millions! Should I be paying taxes on that potential gain now? Or do we wait until I a) learn to draw and b) draw something and c) sell it?
There shouldn't be any income tax.
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Old 9th June 2021, 09:23 AM   #148
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Originally Posted by JoeMorgue View Post
Hell at this point some of them straight up will just out of spite, sadly.
No. It's often said of them, to scare people into not burdening our poor put-upon billionaire class, but they never actually do stop investing. The supermodel is not going to cut her nose off out of spite to punish you for saying she's not as pretty as she could be.
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Old 9th June 2021, 09:24 AM   #149
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Originally Posted by TragicMonkey View Post
As for property tax, you're not paying tax on the gain (ie the difference in value over time) you're paying tax on the thing you're owning. You'd still pay tax if the value remained unchanged, and you'd still pay tax if the value dropped. Because property is not an investment in potential growth of a corporation's value, property is an actual physical thing that exists regardless of whether its value goes up or down.

In other words, property isn't "paper wealth", it's actual wealth. So of course it's just to tax differently.
And that wouldn't work the same way for shares because......?

Shares are in some ways a better candidate in that you never have the problem Stacy alluded to: someone cash poor in an expensive house who has to sell it to pay property tax. With shares you can sell only enough to pay the tax.
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Old 9th June 2021, 09:24 AM   #150
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Originally Posted by BobTheCoward View Post
There shouldn't be any income tax.
Again, you fail to answer the question. Should things that haven't happened yet and may never happen be taxable?
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Old 9th June 2021, 09:26 AM   #151
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Originally Posted by TragicMonkey View Post
Again, you fail to answer the question. Should things that haven't happened yet and may never happen be taxable?
It shouldn't be taxed in the first place.
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Old 9th June 2021, 09:27 AM   #152
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Originally Posted by Guybrush Threepwood View Post
And that wouldn't work the same way for shares because......?

Shares are in some ways a better candidate in that you never have the problem Stacy alluded to: someone cash poor in an expensive house who has to sell it to pay property tax. With shares you can sell only enough to pay the tax.
Because shares aren't physical wealth. You can't go down to the 500 companies on the S&P index and take 1/2398109231627369703957018743198263912th of their stuff because you hold one share of a Vanguard S&P mutual fund. It's paper wealth. If the company goes under you have nothing at all.

The cash-poor homeowner has the house.
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Old 9th June 2021, 09:28 AM   #153
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Originally Posted by BobTheCoward View Post
It shouldn't be taxed in the first place.
Above you stated that "It is unacceptable that incomes and property are taxed while unrealized gains are not. " Do you mean that unrealized gains should be taxed, or should not be taxed?
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Old 9th June 2021, 09:28 AM   #154
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Originally Posted by TragicMonkey View Post
Above you stated that "It is unacceptable that incomes and property are taxed while unrealized gains are not. " Do you mean that unrealized gains should be taxed, or should not be taxed?
Should not be taxed
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Old 9th June 2021, 09:30 AM   #155
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Originally Posted by BobTheCoward View Post
Should not be taxed
I suggest you word your posts more carefully to prevent ambiguity.
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Old 9th June 2021, 09:33 AM   #156
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Originally Posted by TragicMonkey View Post
Because shares aren't physical wealth. You can't go down to the 500 companies on the S&P index and take 1/2398109231627369703957018743198263912th of their stuff because you hold one share of a Vanguard S&P mutual fund. It's paper wealth. If the company goes under you have nothing at all.

The cash-poor homeowner has the house.
No, that's not how you realise money from shares, you use a broker to sell them, and get money that way.
If the company goes under you don't have any paper wealth and don't owe tax on it. Simples.

If a bunch of 'those' people move into your street and your house burns down, you don't have much left there either.
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Old 9th June 2021, 09:36 AM   #157
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Originally Posted by Guybrush Threepwood View Post
No, that's not how you realise money from shares, you use a broker to sell them, and get money that way.
And that's the point at which the taxation occurs. The sale has to occur.

Quote:
If the company goes under you don't have any paper wealth and don't owe tax on it. Simples.
Indeed. But if, as has been suggested in this thread, people should pay taxes on unrealized gains they'd owe taxes for every gain up until the company went under. So you would have been paying taxes all along on something that you got nothing for.

Quote:
If a bunch of 'those' people move into your street and your house burns down, you don't have much left there either.
Which is probably why insurance exists for physical property. I don't believe you can insure invested shares against loss of value.
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Old 9th June 2021, 09:43 AM   #158
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Okay so property taxes.

I bought my house for 165,000 a few years ago.

It's worth (by all estimates) far more now, around 225,000.

What is the "fair" or "right" property tax I should have to pay? X percent of 165k or X percent of 225k?
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Old 9th June 2021, 09:55 AM   #159
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Originally Posted by TragicMonkey View Post
Above you stated that "It is unacceptable that incomes and property are taxed while unrealized gains are not. " Do you mean that unrealized gains should be taxed, or should not be taxed?
Sure, but it's a tax on simply owning something of value, not realizing that value through sale. It is fairly straightforward to likewise tax the owning, and not just the liquidation, of other valuable things like stocks and other capital assets.
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Old 9th June 2021, 09:58 AM   #160
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Originally Posted by TragicMonkey View Post
That some other party is willing to lend money and assume risk doesn't mean the thing they feel comfortable risking should be taxable. If someone borrows money and makes financial gains with it, those gains are taxable. If someone pays someone else to borrow money, those gains for the other party are taxable. All the gains from both sides of this transaction are taxed.

Taxing the potential for gains would be double or even triple-taxing a thing if it does actually happen, and taxing something that didn't happen if it doesn't!
So Jeff Bezos' Amazon stock and Elon Musk's Tesla stock have no value unless they sell them? Do you really wanna make that claim?
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