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Old 18th June 2021, 04:59 AM   #241
Craig4
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Originally Posted by Beelzebuddy View Post
The details still matter if you want genuine change. Ask Occupy Wall Street how far "come on we all know it's a problem" will get you on its own.
But lots of people had the details of how the super rich were doing it already. Based on the number of expert talking heads who have explained this story, Politico could have run it any time they wanted to. They could have built a straw man super rich guy and walked everyone through how they avoided taxes. without all the personal data.
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Old 18th June 2021, 05:47 AM   #242
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Originally Posted by Craig4 View Post
But lots of people had the details of how the super rich were doing it already. Based on the number of expert talking heads who have explained this story, Politico could have run it any time they wanted to. They could have built a straw man super rich guy and walked everyone through how they avoided taxes. without all the personal data.
It wouldn't have been real. Hypotheticals don't make change, no matter how many experts you line up to confirm them. No one needed George Floyd's death to realize cops could be racist, lying thugs, but it took that footage of cops nonchalantly murdering him on camera to cause a significant change in public opinion.

The details matter.
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Old 18th June 2021, 06:12 AM   #243
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Originally Posted by Beelzebuddy View Post
It wouldn't have been real. Hypotheticals don't make change, no matter how many experts you line up to confirm them. No one needed George Floyd's death to realize cops could be racist, lying thugs, but it took that footage of cops nonchalantly murdering him on camera to cause a significant change in public opinion.

The details matter.
And then people draw exactly the wrong conclusions from those details. The lesson of all this isn't "investing is evil and should be stopped because some ultrarich jerks are getting away with things", the lesson is "investing should be more available to ordinary people while refining the tax code yet further to capture more that is currently being evaded". The country as a whole would be much, much, much better off if we had a middle class with more investing going on rather than squeezing a few more percents of tax off the top of the very tiptop tier.

But the American ethos is to punish the wicked rather than reward the good, even if that makes everything worse than it would have been to do nothing at all.

In the meantime, while people are deciding if they'd really prefer to be poor themselves than allow a rich snob to have 245.2 billion dollars rather than 245.1 billion dollars, we could just nudge the capital gains tax rate up a notch. That's billions of dollars in increased tax takings right there, and would require no major changes to the mechanisms of law or investment.
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Old 18th June 2021, 06:17 AM   #244
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Originally Posted by TragicMonkey View Post
[poor shaming snipped] ... we could just nudge the capital gains tax rate up a notch. That's billions of dollars in increased tax takings right there, and would require no major changes to the mechanisms of law or investment.
We're still talking about the article that covers how the ultra-rich are explicitly evading capital gains tax, right? Set it to whatever you want, it won't make a difference.

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Old 18th June 2021, 06:20 AM   #245
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Originally Posted by TragicMonkey View Post
The lesson of all this isn't "investing is evil and should be stopped because some ultrarich jerks are getting away with things", the lesson is "investing should be more available to ordinary people while refining the tax code yet further to capture more that is currently being evaded".
Well yeah but just look at how everyone reacted to Reddit's "Stonks" shenanigans.
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Old 18th June 2021, 06:28 AM   #246
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Originally Posted by TragicMonkey View Post
And then people draw exactly the wrong conclusions from those details. The lesson of all this isn't "investing is evil and should be stopped because some ultrarich jerks are getting away with things", the lesson is "investing should be more available to ordinary people while refining the tax code yet further to capture more that is currently being evaded". The country as a whole would be much, much, much better off if we had a middle class with more investing going on rather than squeezing a few more percents of tax off the top of the very tiptop tier.

But the American ethos is to punish the wicked rather than reward the good, even if that makes everything worse than it would have been to do nothing at all.

In the meantime, while people are deciding if they'd really prefer to be poor themselves than allow a rich snob to have 245.2 billion dollars rather than 245.1 billion dollars, we could just nudge the capital gains tax rate up a notch. That's billions of dollars in increased tax takings right there, and would require no major changes to the mechanisms of law or investment.
I don't see how investing is meaningfully available to classes of people who don't have spare wealth laying around to invest. Poor and working class people have immediate needs that require the use of wealth and can't lock it away waiting for a capital return. This seems like an unavoidable lack of access unless there is a pretty significant infusion of cash to raise their wealth.

Even then, investing always benefits the wealthiest the most because they have the most excess wealth laying around not being used to invest. Taxing capital gains is intrinsically a "progressive tax" because it hits the wealthiest the hardest and has little to no impact on the less wealthy.

It would be pretty easy to exempt modest investments or retirement funds up to a certain value while more heavily taxing capital gains generally.
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Old 18th June 2021, 07:25 AM   #247
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Originally Posted by SuburbanTurkey View Post
I don't see how investing is meaningfully available to classes of people who don't have spare wealth laying around to invest. Poor and working class people have immediate needs that require the use of wealth and can't lock it away waiting for a capital return. This seems like an unavoidable lack of access unless there is a pretty significant infusion of cash to raise their wealth.
Which is probably why I said "middle class" specifically. Poverty is a separate problem; I don't feel I need to have a solution to the problem of poverty before I'm permitted to venture opinions on capital gains taxes.

Quote:
Even then, investing always benefits the wealthiest the most because they have the most excess wealth laying around not being used to invest. Taxing capital gains is intrinsically a "progressive tax" because it hits the wealthiest the hardest and has little to no impact on the less wealthy.
eta: misread that. Yes, it's progressive. That's not a problem for me.

Quote:
It would be pretty easy to exempt modest investments or retirement funds up to a certain value while more heavily taxing capital gains generally.
Modest investments and retirement funds are capital gains (unless they lose money, of course). "Capital gains" is what every investor makes, not just the rich ones. I think what you mean is having tiers of capital gains taxes, determined by the investor's overall wealth. So Anita Doth would pay 10% of her capital gain on her billion dollars of investments, and I would pay 5% on the twelve bucks I made off mine.
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Old 18th June 2021, 08:12 AM   #248
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Originally Posted by TragicMonkey View Post
.....
Modest investments and retirement funds are capital gains (unless they lose money, of course). "Capital gains" is what every investor makes, not just the rich ones. I think what you mean is having tiers of capital gains taxes, determined by the investor's overall wealth. So Anita Doth would pay 10% of her capital gain on her billion dollars of investments, and I would pay 5% on the twelve bucks I made off mine.
No, actually. Why should long-term (held more than a year) capital gains be tax-privileged? Why shouldn't they be taxed as ordinary income, as short-term gains are, maybe with an inflation adjustment?
https://www.irs.gov/taxtopics/tc409
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Old 18th June 2021, 08:24 AM   #249
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Originally Posted by Bob001 View Post
No, actually. Why should long-term (held more than a year) capital gains be tax-privileged? Why shouldn't they be taxed as ordinary income, as short-term gains are, maybe with an inflation adjustment?
https://www.irs.gov/taxtopics/tc409
Because it's meant to encourage long-term investment rather than short-term. Short-term is gambling in a risky fashion. Long-term is sensible and prudent. Very few people should be doing short-term investing at all. Almost everyone should (in a perfect world they'd have the means to do so) invest long-term.

I wouldn't be adverse to taxing long-term capital gains as ordinary income, although I think it would be a benefit to society to tax it a little less to encourage investment. I think short-term capital gains should be taxed more than long-term, to promote sensible behavior rather than risky speculation. In fact, I'd be fine with taxing short-term capital gains more than ordinary income.
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Old 18th June 2021, 11:14 AM   #250
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Originally Posted by TragicMonkey View Post
Because it's meant to encourage long-term investment rather than short-term. Short-term is gambling in a risky fashion. Long-term is sensible and prudent. Very few people should be doing short-term investing at all. Almost everyone should (in a perfect world they'd have the means to do so) invest long-term.
....
Maybe. But how much less should the rate be? The top long-term capital gains rate is 20%, and that's only for incomes higher than $441,000. And the investor benefits from untaxed compound growth for as long as he holds the asset, which might be decades.The top income tax rate is 37%, generally payable as the income is earned. Can such a wide disparity be justified?

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Old 18th June 2021, 11:23 AM   #251
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Originally Posted by Bob001 View Post
Maybe. But how much less should the rate be? The top long-term capital gains rate is 20%, and that's only for incomes higher than $441,000. And the investor benefits from untaxed compound growth for as long as he holds the asset, which might be decades.The top income tax rate is 37%, generally payable as the income is earned. Can such a wide disparity be justified?
Apparently not. So adjust it upward. NBD, yo.

And once again, there's no benefit to the growth until they sell. (No, I don't care about third party transactions like loans. If you want to stop lending, stop lending.) People leaving their money in investments where it is being used by other people is a net benefit to society, it's certainly not something to be angry about. If they stuck it under their mattress nobody would gain anything.
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Old 18th June 2021, 11:56 AM   #252
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Originally Posted by TragicMonkey View Post
Apparently not. So adjust it upward. NBD, yo.

And once again, there's no benefit to the growth until they sell. (No, I don't care about third party transactions like loans. If you want to stop lending, stop lending.) People leaving their money in investments where it is being used by other people is a net benefit to society, it's certainly not something to be angry about. If they stuck it under their mattress nobody would gain anything.
But borrowing against assets -- and usually deducting the interest -- is a major factor. You may not care about it, but people with money do. And the money is never stuffed in a mattress. If the investor sells an asset, somebody else buys it; even if he puts it in CDs, that money is available to be loaned. What does it matter to the society whether Warren Buffett owns $90 billion in stock, or whether that stock is owned by thousands, maybe millions, of others? For the society, it's a wash.
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Old 18th June 2021, 12:15 PM   #253
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Originally Posted by Bob001 View Post
But borrowing against assets -- and usually deducting the interest -- is a major factor. You may not care about it, but people with money do. And the money is never stuffed in a mattress. If the investor sells an asset, somebody else buys it; even if he puts it in CDs, that money is available to be loaned. What does it matter to the society whether Warren Buffett owns $90 billion in stock, or whether that stock is owned by thousands, maybe millions, of others? For the society, it's a wash.
So why not take money from the rich and give it to the poor? Wouldn't it be a wash?
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Old 18th June 2021, 12:24 PM   #254
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Originally Posted by Bob001 View Post
But borrowing against assets -- and usually deducting the interest -- is a major factor. You may not care about it, but people with money do.
Some people stab other people with knives. This is possible because knives are sold. Is the solution to stabbing to ban knives? Target the problem you want to solve, not something else that for most people does not lead to the problem.

eta: to clarify, if you think such loans are a problem, you ought to be urging the removal of loan interest deductions. I'd suggest allowing such deductions only when the loan is nonfrivolous-- i.e. for a principal dwelling, or a principal vehicle, or a legitimate business.

Quote:
And the money is never stuffed in a mattress. If the investor sells an asset, somebody else buys it; even if he puts it in CDs, that money is available to be loaned. What does it matter to the society whether Warren Buffett owns $90 billion in stock, or whether that stock is owned by thousands, maybe millions, of others? For the society, it's a wash.
Except the society is made up of people, and the more of them that are getting gains from investing the better it is for society overall. If everyone earned a thousand a year in investment that would be more beneficial to the whole society than if one person earns all that same amount of money. Even if the total amount taxed on that sum is the same either way.

Are you really so focused on punishing the rich that you can't see the point of all this is to spread the wealth, not to destroy it? We want the middle class and lower classes to move up, not the upper class to move down while everyone else stays the same.
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Old 18th June 2021, 03:15 PM   #255
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Originally Posted by TragicMonkey View Post
.....
Are you really so focused on punishing the rich that you can't see the point of all this is to spread the wealth, not to destroy it? We want the middle class and lower classes to move up, not the upper class to move down while everyone else stays the same.

You seem to be arguing with yourself. The society's resources are vast, but they are not infinite. The rich accumulate and expand their wealth in part by benefiting from tax breaks that are not available to the rest of us. (Read the Disney heiress's account above.) A successful doctor or lawyer who earns $500 grand pays a 37% tax rate; an investor who sells a $million of stock pays 20% at most. A teacher or firefighter who earns $75 grand pays around 20% income tax; capital gains tax on the same amount would be zero. Warren Buffett has famously said his secretary pays a higher tax rate than he does. And there is extensive evidence that the rich are skilled at evading the taxes that they actually owe. Treating all income -- capital gains and inheritances particularly -- the same and enforcing the laws effectively would go a long way to increasing the money available to support the lower and middle-classes: universal health care, free or cheap college or trade school, aid to low-income families with children, subsidized home loans, etc., etc. It's not "punishing the rich" to ask them to live by the same rules as the rest of us. That's how you "spread the wealth."

Note that the marginal income tax rate when Reagan took office was 70%, and capital gains and inheritance tax rates were considerably higher. One commentator observed that the nation seems to have decided early in the Reagan administration that America's biggest problem was that rich people didn't have enough money. Where we are now is not where we have always been, or where we have to be.

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Old 18th June 2021, 06:36 PM   #256
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Originally Posted by Bob001 View Post
You seem to be arguing with yourself. The society's resources are vast, but they are not infinite. The rich accumulate and expand their wealth in part by benefiting from tax breaks that are not available to the rest of us. (Read the Disney heiress's account above.) A successful doctor or lawyer who earns $500 grand pays a 37% tax rate; an investor who sells a $million of stock pays 20% at most. A teacher or firefighter who earns $75 grand pays around 20% income tax; capital gains tax on the same amount would be zero. Warren Buffett has famously said his secretary pays a higher tax rate than he does. And there is extensive evidence that the rich are skilled at evading the taxes that they actually owe. Treating all income -- capital gains and inheritances particularly -- the same and enforcing the laws effectively would go a long way to increasing the money available to support the lower and middle-classes: universal health care, free or cheap college or trade school, aid to low-income families with children, subsidized home loans, etc., etc. It's not "punishing the rich" to ask them to live by the same rules as the rest of us. That's how you "spread the wealth."
But I'm not arguing against any of that (although I certainly wouldn't express it in such a hysterical fashion). The only thing I've been saying is that capital gains are certainly not inherently wrong, and they certainly shouldn't be taxed so highly as to make them impossible or discourage people from investing. Raise the rate, raise the rate as high as regular income, sure. The capital gains taxes are paid by anyone who makes capital gains--you don't have to be rich to have any capital gains. The rich merely are more likely to have them, and bigger ones, because they have more money. When it comes to capital gains the rules are the same for everyone: whether you have a billion dollars invested or a hundred, you don't get taxed on money you haven't actually got yet (if ever). How on earth you can frame "not being taxed on stuff you don't have" as being injustice I cannot understand.

I doubt you're paying taxes on the income from the lottery winnings you may make in the future. Why not? By not paying those taxes aren't you another wealthy person evading taxes through a loophole?

Quote:
Note that the marginal income tax rate when Reagan took office was 70%, and capital gains and inheritance tax rates were considerably higher. One commentator observed that the nation seems to have decided early in the Reagan administration that America's biggest problem was that rich people didn't have enough money. Where we are now is not where we have always been, or where we have to be.
None of that has anything to do with what I've said about capital gains taxes.
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Old 18th June 2021, 07:05 PM   #257
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Originally Posted by TragicMonkey View Post
But I'm not arguing against any of that (although I certainly wouldn't express it in such a hysterical fashion). The only thing I've been saying is that capital gains are certainly not inherently wrong, and they certainly shouldn't be taxed so highly as to make them impossible or discourage people from investing.
.....
I never said capital gains are wrong. I've never heard anybody say anything like that. I certainly hope my little investments go up. I'm just proposing, as many others have, that capital gains should be taxed as ordinary income. I don't think I get your point.
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Old 18th June 2021, 07:23 PM   #258
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Originally Posted by Bob001 View Post
I never said capital gains are wrong. I've never heard anybody say anything like that. I certainly hope my little investments go up. I'm just proposing, as many others have, that capital gains should be taxed as ordinary income. I don't think I get your point.
Okay, then, we are in agreement. There is nothing inherently wrong with making capital gains. The amount at which they should be taxed should perhaps be adjusted.
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Old 18th June 2021, 08:28 PM   #259
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Yeah, you pound that strawman! It knows what it did!

Since you keep coming back to it,
Originally Posted by TragicMonkey View Post
How would you tax unrealized gains?
Don't bother, tax wealth. If your combined tax burden (income, capital gains, etc) comes out to less than 2% of your worth (minus a couple of million dollars to exclude mom and pop), you pay that instead. It's less than inflation so your wealth will still be ballooning, you'll just be giving a little bit back. Just as my house has a property tax attached to it to pay for community services, so too should abstract wealth need to pay for the government bailouts and wars and subsidies we've found necessary to keep the wheels of capitalism turning.

Amazing how often that invisible hand has its palm out.
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Old 18th June 2021, 10:51 PM   #260
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I came across Radical Markets by Eric Posner and Glen Weyl (https://www.goodreads.com/en/book/sh...adical-markets)
in an interview Weyl gave.
He has an interesting solution on how to tax real estate: have a fixed tax rate, but let the owner decide what the value of the property is by her-/himself.
The caveat is that the owner has to sell the property at that value if someone offers to buy.
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Old 18th June 2021, 11:02 PM   #261
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Originally Posted by The Great Zaganza View Post
I came across Radical Markets by Eric Posner and Glen Weyl (https://www.goodreads.com/en/book/sh...adical-markets)
in an interview Weyl gave.
He has an interesting solution on how to tax real estate: have a fixed tax rate, but let the owner decide what the value of the property is by her-/himself.
The caveat is that the owner has to sell the property at that value if someone offers to buy.
That's a little along the lines of proposals to tax corporations on the profits they declare in the annual reports, which are almost invariably higher than they declare on their tax returns.
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Old 18th June 2021, 11:07 PM   #262
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Originally Posted by Beelzebuddy View Post
Since you keep coming back to it,


Don't bother, tax wealth. If your combined tax burden (income, capital gains, etc) comes out to less than 2% of your worth (minus a couple of million dollars to exclude mom and pop), you pay that instead. It's less than inflation so your wealth will still be ballooning, you'll just be giving a little bit back. Just as my house has a property tax attached to it to pay for community services, so too should abstract wealth need to pay for the government bailouts and wars and subsidies we've found necessary to keep the wheels of capitalism turning.

Amazing how often that invisible hand has its palm out.
If you want to tax "abstract wealth" in the form of investments held but not sold, you are in fact wanting to tax unrealized capital gains.
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Old 19th June 2021, 05:42 AM   #263
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Originally Posted by TragicMonkey View Post
If you want to tax "abstract wealth" in the form of investments held but not sold, you are in fact wanting to tax unrealized capital gains.
Yes. You asked how one would.
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Old 19th June 2021, 06:45 AM   #264
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Originally Posted by Bob001 View Post
I never said capital gains are wrong. I've never heard anybody say anything like that. I certainly hope my little investments go up. I'm just proposing, as many others have, that capital gains should be taxed as ordinary income. I don't think I get your point.
You can't tax capital gains until you sell the asset. Or are you suggesting that people should liquidate assets to meet an otherwise imaginary tax bill? (A loss making proposition if I ever heard one).

Even when the asset is sold it is difficult to judge the value of the asset when it was purchased. If it was purchased 50 years ago you would be taxed almost entirely on inflation.
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Old 19th June 2021, 07:00 AM   #265
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of course you can and should tax asset gains, even if not realized.
A portfolio or estate that has increased in value can be used to guarantee a loan which would then have a lower interest rate. This means that, even un-liquidated, assets can generate cash wealth.
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Old 19th June 2021, 07:15 AM   #266
Beelzebuddy
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Originally Posted by The Great Zaganza View Post
of course you can and should tax asset gains, even if not realized.
A portfolio or estate that has increased in value can be used to guarantee a loan which would then have a lower interest rate. This means that, even un-liquidated, assets can generate cash wealth.
That's preposterous! The rich can't possibly be expected to know how rich they are at any given moment. It's not like there's entire magazines devoted solely to rich people waving their net worth around.

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Old 19th June 2021, 08:17 AM   #267
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Originally Posted by psionl0 View Post
You can't tax capital gains until you sell the asset. Or are you suggesting that people should liquidate assets to meet an otherwise imaginary tax bill? (A loss making proposition if I ever heard one).

The proposal is that long-term capital gains should be taxed on sale or transfer (including by inheritance), as they are now, but at regular income tax rates, without special breaks.

Originally Posted by psionl0 View Post
Even when the asset is sold it is difficult to judge the value of the asset when it was purchased. If it was purchased 50 years ago you would be taxed almost entirely on inflation.
So what? That's the gain, and you've benefited from 50 years of growth without taxation. And there certainly are ways to assess the value of an asset bought decades ago.

A wealth tax on total assets would capture a lot of unrealized capital gains. It used to be typical for a money manager to take an annual fee of two percent of assets off the top (and 20% of the growth: "2 and 20"). A two percent wealth tax on the largest fortunes would not be especially onerous or unreasonable.

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Old 19th June 2021, 09:21 AM   #268
TragicMonkey
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Originally Posted by The Great Zaganza View Post
of course you can and should tax asset gains, even if not realized.
A portfolio or estate that has increased in value can be used to guarantee a loan which would then have a lower interest rate. This means that, even un-liquidated, assets can generate cash wealth.
If you don't like people getting loans on held investments, you can outlaw the practice. Or simply disallow them to deduct interest on such loans, which would render them unfeasible. Target the actual thing you want to stop, not the thing that's being abused. You don't try to stop human trafficking by killing all the humans, do you?

And suppose for an instant this desire to tax unrealized gains comes to pass. How would it be done? I bought some shares of a mutual fund on Tuesday morning. An hour later, their value was up. Two hours later, their value was down. A day later, down. A day after that, up. If we're counting unrealized gains as real, then I gained some money, lost some money, lost some more money, gained some money. Do I total up all the gains and subtract all the losses from each point of measure? Is my capital gain the difference between my starting point and the highest point? The difference between my starting point and the most recently measured point? The difference between my highest point and my lowest point? Share prices can be tracked continuously. Every second they change in value.

Depending on which two points you decide to choose for the calculation, I could write off massive losses that I never actually incurred, pay taxes on huge gains I never actually get, break even despite making millions, make millions despite claiming huge losses. Capital gains are taxed when realized for a very practical reason: it's only then that they've actually happened, and only then can you determine whether you made money, lost money, or broke even. Only then do you have a starting figure and a final figure. Everything between is just potential.
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Old 19th June 2021, 09:31 AM   #269
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Why do you think it's such an insurmountable problem? Use the RMS of the valuation over the taxation period if they bother to track it over time, or peak valuation if they don't. Up to them.

Yes, that means if the stock market miraculously collapses the day before they have to pay they're on the hook for a bigger bill as a % of their worth, but wealth doesn't swing THAT much. The only rich people I know of whose net worth swings that wildly are Donald Trump and Bitcoin speculators, and I don't particularly care what happens to either of them.

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Old 19th June 2021, 09:36 AM   #270
The Great Zaganza
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Originally Posted by TragicMonkey View Post
If you don't like people getting loans on held investments, you can outlaw the practice. Or simply disallow them to deduct interest on such loans, which would render them unfeasible. Target the actual thing you want to stop, not the thing that's being abused. You don't try to stop human trafficking by killing all the humans, do you?

And suppose for an instant this desire to tax unrealized gains comes to pass. How would it be done? I bought some shares of a mutual fund on Tuesday morning. An hour later, their value was up. Two hours later, their value was down. A day later, down. A day after that, up. If we're counting unrealized gains as real, then I gained some money, lost some money, lost some more money, gained some money. Do I total up all the gains and subtract all the losses from each point of measure? Is my capital gain the difference between my starting point and the highest point? The difference between my starting point and the most recently measured point? The difference between my highest point and my lowest point? Share prices can be tracked continuously. Every second they change in value.

Depending on which two points you decide to choose for the calculation, I could write off massive losses that I never actually incurred, pay taxes on huge gains I never actually get, break even despite making millions, make millions despite claiming huge losses. Capital gains are taxed when realized for a very practical reason: it's only then that they've actually happened, and only then can you determine whether you made money, lost money, or broke even. Only then do you have a starting figure and a final figure. Everything between is just potential.
sorry, but your human trafficking example is stupendously bad.

and the solution is, of course, to tax wealth, not profit, as it has been done for all time since governments started taxing their population. It is a freak abnormality of the US tax system not to do this as a matter of course.
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Old 19th June 2021, 09:37 AM   #271
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Originally Posted by Beelzebuddy View Post
The only rich people I know of whose net worth swings that wildly are Donald Trump and Bitcoin speculators, and I don't particularly care what happens to either of them.
Unless you manage to finely tune your tax code changes to only target the people you hate, you're going to catch everyone else. This wouldn't actually hurt the super-rich because they alone would have enough money to not be unduly affected. What taxing unrealized capital gains would do is drive ordinary people out of the market. If investing money is going to cost me more than just sticking it under my mattress then why would I invest? I can't afford to gamble that I wouldn't end up losing out by paying taxes on gains I don't ever see.

The only people left in the market would be those very ultra-rich and speculators you want to stop.
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Old 19th June 2021, 09:43 AM   #272
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Originally Posted by TragicMonkey View Post
Unless you manage to finely tune your tax code changes to only target the people you hate, you're going to catch everyone else. This wouldn't actually hurt the super-rich because they alone would have enough money to not be unduly affected. What taxing unrealized capital gains would do is drive ordinary people out of the market. If investing money is going to cost me more than just sticking it under my mattress then why would I invest? I can't afford to gamble that I wouldn't end up losing out by paying taxes on gains I don't ever see.

The only people left in the market would be those very ultra-rich and speculators you want to stop.
If you want to pick nits in the implementation, it would help to actually read what I write. I've addressed this, I don't need to do it again.
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Old 19th June 2021, 09:44 AM   #273
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Originally Posted by The Great Zaganza View Post
sorry, but your human trafficking example is stupendously bad.

and the solution is, of course, to tax wealth, not profit, as it has been done for all time since governments started taxing their population. It is a freak abnormality of the US tax system not to do this as a matter of course.
I have no problem with taxing wealth provided the wealth is actually real. Unrealized gains are not real yet. They're potential. Until that potential is fulfilled their value is not known, and without a known value they cannot be taxed.
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Old 19th June 2021, 09:48 AM   #274
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Originally Posted by Beelzebuddy View Post
If you want to pick nits in the implementation, it would help to actually read what I write. I've addressed this, I don't need to do it again.
You said

Quote:
Don't bother, tax wealth. If your combined tax burden (income, capital gains, etc) comes out to less than 2% of your worth (minus a couple of million dollars to exclude mom and pop), you pay that instead.
didn't you? I took it to mean you're wanting to tax income + capital gains and then if that sum is less than 2% of "your wealth" (assessed at what point in time?) then you "pay that instead", with "that" being a 2% tax that includes taxing unrealized capital gains. Is that what you meant to say? If not, then what is "that" if it's not taxing unrealized capital gains?

Your reply seemed to be contradictory in that you said "don't bother" ie don't tax unrealized capital gains then said to instead tax "wealth" that includes everything already taxed plus unrealized capital gains.
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Old 19th June 2021, 09:49 AM   #275
The Great Zaganza
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Originally Posted by TragicMonkey View Post
I have no problem with taxing wealth provided the wealth is actually real. Unrealized gains are not real yet. They're potential. Until that potential is fulfilled their value is not known, and without a known value they cannot be taxed.
the wealth that is generating the profit is real, and would be taxed.
Investing in assets that cannot be easily partially liquidated to pay taxes should not be incentivized by making them de-facto tax exempt.

A simple solution to deal with tradeable assets would be for a State Wealth Fund to offer to buy your assets at current value, thus avoiding the problem of loss due to quick liquidation on the open market.
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Old 19th June 2021, 09:54 AM   #276
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Originally Posted by TragicMonkey View Post
You said

didn't you? I took it to mean you're wanting to tax income + capital gains and then if that sum is less than 2% of "your wealth" (assessed at what point in time?) then you "pay that instead", with "that" being a 2% tax that includes taxing unrealized capital gains. Is that what you meant to say? If not, then what is "that" if it's not taxing unrealized capital gains?

Your reply seemed to be contradictory in that you said "don't bother" ie don't tax unrealized capital gains then said to instead tax "wealth" that includes everything already taxed plus unrealized capital gains.
Don't bother computing gains, tax the total value.

But you seem to have missed, again, my mention of a cutoff of a couple of million $ to exclude the investors you're worried about discouraging. Although, I'm not sure that would even be necessary given that it would only kick in if 2% of your worth is more than your standard tax burden. I pay much more than 2% of my net worth in taxes already, so I wouldn't qualify despite having investments of my own.

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Old 19th June 2021, 09:56 AM   #277
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Originally Posted by The Great Zaganza View Post
the wealth that is generating the profit is real, and would be taxed.
You mean the initial money put into the investment? That was already taxed when it was income. Investments are purchases, you don't get to use untaxed money for them (except for IRAs and 401ks, which is why there are tight and rather low limits on how much you can put into them every year).

Quote:
Investing in assets that cannot be easily partially liquidated to pay taxes should not be incentivized by making them de-facto tax exempt.
Liquidation has nothing to do with valuation. The problem with unrealized capital gains is the latter. If I bought A for 10,000 dollars and it went up to 40,000 dollars then down to 10,000 dollars did I make 30,000 dollars, lose 30,000 dollars, or break even at zero? Depending on which point in time you decide to assed the value of my wealth for taxation it could be any one of those three answers. Since I actually made no money at all if I sold at the last point, I will have lost money to taxes even if I broke even on the investment. Investment is now much more of a gamble. The result: the middle class can no longer afford to invest. What's that going to do to Social Security, when millions more are going to need it for their sole source of retirement income?
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Old 19th June 2021, 09:59 AM   #278
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Originally Posted by TragicMonkey View Post
Liquidation has nothing to do with valuation. The problem with unrealized capital gains is the latter. If I bought A for 10,000 dollars and it went up to 40,000 dollars then down to 10,000 dollars did I make 30,000 dollars, lose 30,000 dollars, or break even at zero? Depending on which point in time you decide to assed the value of my wealth for taxation it could be any one of those three answers. Since I actually made no money at all if I sold at the last point, I will have lost money to taxes even if I broke even on the investment. Investment is now much more of a gamble. The result: the middle class can no longer afford to invest. What's that going to do to Social Security, when millions more are going to need it for their sole source of retirement income?
You wouldn't owe anything because you're already paying more than $800 in taxes.

But let's do millions of dollars instead. You'd owe $800k on your $10M investment. You can afford it.

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Old 19th June 2021, 10:00 AM   #279
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Originally Posted by TragicMonkey View Post
I don't understand why the wealthy can't just enjoy being wealthy.
I found Abigail Disney's piece in The Atlantic to be helpful in understanding this.
https://www.theatlantic.com/ideas/ar...ca-tax/619212/
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Old 19th June 2021, 10:00 AM   #280
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Originally Posted by Beelzebuddy View Post
Don't bother computing gains, tax the total value.
See my later post. When you assess the value matters.

Quote:
But you seem to have missed, again, my mention of a cutoff of a couple of million $ to exclude the investors you're worried about discouraging. Although, I'm not sure that would even be necessary given that it would only kick in if 2% of your worth is more than your standard tax burden. I pay much more than 2% of my net worth in taxes already, so I wouldn't qualify despite having investments of my own.
I can't see instituting a maximum cap on market return as a good thing.
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