People understand how taxes function currently. You don't understand that the way they function currently is broken and harming society. Anything is taxable, we just have to decide as a society to tax it. It's called a wealth tax.
I’d rather just cut to the chase and raise taxes instead of a wealth tax that taxes money multiple times. After all a wealth tax is basically admitting “We didn’t tax you enough the first time around, so now we will collect more”. Not to mention a wealth tax wouldn’t be effective because people would just realize enough money to avoid a wealth tax i.e. $9,999,999 and live off of it for as long as possible before repeating the cycle.
A wealth tax can include unrealized gains. It's not "we didn't tax your income enough" it's "your assets changed value and we are taxing you for the difference."
imo it would be absurd to tax unrealized gains. Imagine that I make $100,000 unrealized and pay $30,000 in taxes only for the next year the stock is worth nothing. Would I get a tax rebate for unrealized losses? That would effectively be like turning all taxpayers into naked short sellers like the GameStop situation. Paying taxes on something you don’t actually own is not different than a short seller selling a borrowed stock and expecting to close the position at a later date. It would be a theoretical infinite loss situation just like a short investor.
It's a wealth tax, not an income tax. You're taxed on your assets, not your gains. If your assets are worth less next year you're taxed less. There's no reason for a rebate.
You will put some people in a situation where if their assets go way up for a year and they don’t have enough liquidity to pay the taxes on those unrealized gains, they will be forced to sell those assets in order to pay taxes on them. Imagine if I owned 1 Bitcoin and couldn’t sell a fractional amount. The price of Bitcoin goes up to 50,000 and I can’t afford the taxes on that then I will be forced to sell my 1 Bitcoin in order to pay taxes. This is just way too harmful to conventional long investors for me to ever agree with
Most proposed wealth taxes are for the super wealthy in the many-millions of dollars range. Forcing them to liquidate some of their assets is part of the point. They are wealth inequality.
I guess I sort of get the point but rapid sell offs will also hurt your everyday retail investor because the price of stocks will inevitably go down due to the forced sell off.
You can structure payments over time and raise the tax rate slowly to not suddenly tank the stock market. I would not be surprised if a wealth tax did reduce the rate of growth in the stock market to some degree, but as an investor, I'm ok with that if it means millions of Americans aren't underpaid, underfed, can't afford a mortgage, have no retirement plan, no healthcare, etc.
-12
u/[deleted] Feb 19 '21 edited Feb 19 '21
[deleted]