Bruh. If you want to TaX ThE RiCh you would just raise capital gains, not do something stupid like tax unrealized capital gains. I'm not offered a 401k so best I can do is max a Roth then put the rest away in a taxable brokerage account. If you taxed my unrealized taxable gains I would have to sell assets every year to pay or it or figure out some other way to pull money out of my ass to pay on what I made in my brokerage account that year. This would make the stock marked dive every tax season as people sell assets to pay their taxes. Also, If my taxable assets go from 100,000 to 200,000 one year, and I pay my 15,000$ in taxes on my earnings, then the next year the market dives and my account goes back down to 100,000, is the government going to pay me back? LOL

Thats the craziest idea I've ever heard of.   Guaranteed to destroy all asset values

Based on that quote I dont know why people are trying to spin this.

Shes clearly talking about taxing unrealized capital gains, paper money, money that isn't really even yours. Its bananas.

Quoting my self from the first page sense no one read it.

Also the 10% I used above was for easy math, but then I could see them taxing it normal rates when you cash it, so the 10 % plus the 20% now adds up to 30% total.

I may be confused

Are you arguing capital gains aren't income?

Rumors, Conspiracy theories , spin?!?!?! Did you notice this was Yellen's testominy?  Straight from the whore's Mouth.

Not even a fair comparison. We already have income taxes on wages you haven't earned yet - if you're self-employed, you have to pay estimated income tax at least quarterly, even if you haven't made what you were expecting (or have fluctuations that aren't considered enough or part of a standard seasonal industry to classify for a different estimated schedule). But in that case, at the end of the year - when you file your return for the tax year - it all gets sorted out with the exact numbers.

You can't say that about unrealized gains. Unrealized gains are purely theoretical - it is not certain that you could get market value for the entirety of your investment. That is, it is not necessarily possible for you to actually realize that gain, despite the on-paper valuation saying otherwise. This is clearest for the big-wig types that hold very large positions, in that if they tried to realize their gains by selling their positions, they would not be able to sell all of it at market value before the market value would start tanking in response to their massive sell-off. The stated valuation may say that they had a gain of $X, but if they actually tried to realize it, it would be some amount less than X. And exactly how much less is impossible to determine without actually realizing the gain by selling those shares.

Oh sweet! I’m apparently super rich as I have investments in a taxable account!

Awesome! I’m going to go buy a yacht!

Oh wait, I’m a working joe who does decent and puts money away for my future at a larger rate than my 6k a year Roth allows.

This whole post is dumb and you should feel bad.

I know.... eat the rich right? Just so happens there are tons of people that use taxable accounts because they don’t have access to a 401 or put away too much for them. I should be penalized because I save and invest like a fiend even though I’m not some high income earner. Ya know.... have to make sure people that don’t have self control get some of my money too.

Fuck me for making good decisions right?

It’s not. It’s a capital gain.  Just like a capital loss isn’t negative income.

I agree with you that common sense would say that such rumors of taxing unrealized gains would be political theater on posters part. HOWEVER, as crazy as it sounds, the article itself reveals Yellen HERSELF is floating these ideas. She is discussing it.

If you think Janet Yellen is clueless about the economy, you’re not very smart.

She made more on speaking fees last year than your entire family will in a lifetime. This is about kicking the door closed on everyone else trying to come up with 800 trap doors.


Elite citizens despise us, they think we are stupid, but to their credit, most Americans prove this.

so if they add to our tax liability for unrealized capital gains, will we also get to deduct from our tax liability for unrealized capital losses?

if they add to our tax liability for unrealized capital gains in a given tax year, does that increase our basis in that asset when we finally sell it, thus reducing the realized capital gain upon sale -- and thus reducing the tax liability?

they believe we're all just free-range tax slaves.

An unrealized gain is a gain of $0.

So what rate is she suggesting we tax unrealized gains at?

haha you funny.

Get on truck now.

It is income

It isn't ordinary income

There's a difference

And that you might not ever own.

An oversimplified version, correct me if I'm wrong economists.

I buy stock X for $20/ea. It appreciates to $25 and is there whenever taxes are assessed. I now pay taxes on the $5/ea gain. Next year it takes a dive and I sell at my purchase price. I've made no money on the investment, but still paid capital gains taxes, resulting in a net loss.

Of course not on the losses, you might get a credit for a few years. And HELL no will they reduce the tax later.

see my quote of my self up a few posts

@spartacus2002

Right.

Nvm

I'll tell you why, and ivll make it really easy for your small brain to comprehend:
If I work a job for a week I'm pretty much guaranfuckinteed to get paid for that work unless my boss somehow skips town. But if I take my money and buy a stock with it, am I guaranteed to make any profit on that? No. In fact, I'm at risk of losing ALL OF IT!

Therefore, HIGHER RISK OF LOSS = HIGHER REWARD (LESS TAX).

LOWER RISK OF LOSS (WORKING YOUR JOB, and essentially zero risk of loss) = HIGHER TAX.

And to make it even more obvious, investment money was earned initially at some point in time and taxed at normal income rates already.

Goddamn it's not that hard.

Brainstorm, hear me out. If we are concerned about capital gains taxes being lower than earned income, how about we lower the fucking income tax rates? I'm okay with that. You are also free to contribute however much extra you want to the .gov so that the lives of the impoverished improve. We aren't serfs, we have natural rights. I grew up poor as fuck, my mother waiting around for the rising tide you consider a government check didn't lift her boat or the millions stuck in our inner cities. If only there was more money to redistribute.

Rant over

If they aren't going to adjust the asset's basis each year for unrealized gains or losses, then effectively the owner is getting taxed multiplie times on those gains -- annually on gains, then again upon sale.  The investor is getting doubly taxed.

/thread.

Which they would consider a feature, not a bug.

Your tax basis is adjusted when you pay taxes

You can't always take capital losses, but you can take a $3k net loss and carry the rest forward

The problem is cash flows, people have to pay tax on income they don't have in the bank

Yup, like your not taxed multiple times on your money now.

Think inheritance tax.

It’s fairly easy to make it work for securities that are traded on an open market like stocks or commodities, but how is this going to work with real estate and other less liquid items like artwork or vintage cars or any other asset that people pay capital gains tax on when they sell? Are they going to make you get your items appraised yearly, basically marking to market these items every year for tax purposes?

The replies in this thread are pants on head retarded.  

Read what Yellen said/thinks.

There is no way to spin this.  

I don’t care which “unrealized gains” she wants taxed.

Devastating.  

Middle class wiped out.  

No one will take investing risk.

401k, sure.

and they will go after your house as well.  

Have more equity than mortgage debt?  Tax those "gains".
Or better yet, imputed income:  you would have to pay $2500 a month to rent that house, so that's really just $2500 a month in income because you own it, so we're going to tax it.

think I'm crazy?  I didn't come up with this shit.  It's been tossed around for decades.  Get ready.

I can't help but think of who made mark it to market infamous

This is the logic Enron built their house of cards on

On paper, we'll all be rich, but we won't have a penny to spend

Damn. Didn't even think about real estate.

I don't think it would be based on current mortgage balance (that would be truly retarded) but rather original purchase price.  Still, it would add an enormous amount of tax liability for a lot of people.

This topic really brought ‘em out.

Amazing to see several people voraciously defending the idea.  At least one of which even claims to be “upper middle class” LOL.

How can anyone reach adulthood without developing the ability to calculate secondary effects?

Most adults can’t even figure out that ejaculating inside a vagina generally results in pregnancy.

You pay income tax on income.  You pay investment tax on investments.  Why?  

1) Because we want to encourage people to invest.
   A) it provides companies with capital
   B) it encourages savings.  If you save and in est, you too pay lower investment taxes.

2) investments have an inherent risk.  My portfolio is balanced based on risk/reward evaluation.  Stocks are risky, but the upside potential is worth it.  Raise my investment taxes and I'll just keep my money safe on sidelines

Can you co.prehend that?  Rich people have enough money to retire a few times over.  You don't want them taking their money off the board and deciding safer low yield options are better since the risky stocks aren't worth it anymore.  They will have their cash and live fine.  You will be crushed as you have no investments since they crashed when the money went to cash and you don't have enough cash to retire without investing.

Thats how this works.  Remove the upside and you'll get less investment.

You can't stop rich people from being rich, but you can certainly cause them to say fuck it and take their ball home.

I can see that happening...

They will tax the "gains" but they sire as shit won't give you a credit if you're stocks go down.

Do we get a deduction for “unrealized losses?”

Real estate, 401k, personnel property, roth, life insurance, classic cars, antiques, collectibles, guns, ammo, on and on.  

We have “unrealized gains” everywhere.

wait til they get rid of 1031 exchanges.  Real estate market will shit the bed.

Yes they are. Their outrageous meddling and socialist policies will destroy us. People will go along with whatever plan to reset is put in front of them. They will blame capitalism for it, even though the exact opposite was the cause.


This is all of our faults btw. I include myself in that.

It's more than half way to a property tax on stocks but barely not quite.

Your downside risk is unchanged and your upside is clipped every year/quarter forever, if that can't outrun inflation well that's your problem.

My new saying.

I wouldn’t fuck Yellen with Levine’s cock...

This guy gets it.  And when they catch one thing and sink their teeth into with an audit...well, you're gonna sell everything you have to pay the tax bill.

Rich people will then gobble up you assets for pe noes on the dollar.

I've been saying it for a couple years now, but I finally see how the elite class in socialist countries are created.

People yelling about taxing the rich...OK, raise a business owners personal taxes.  So he gives himself a raise to keep his take home the same.  Guess what, now everyone below him doesn't get a raise.  The rich don't pay taxes, the middle class do.

Didn't the 13A make that illegal?  

I think a lot of people would avoid issues with personal property though, as it's often vehicles that don't appreciate in value.  There are exceptions of course, like classic cars as you mentioned.

And fuck them if they try that scheme. I'm already taxed annually based on the value of my vehicle.

And yet the Elite will somehow manage to come through this with, (surprise), a whole bunch of money, ready to buy all of these highly devalued assets for pennies on the dollar.

First - long term capital gains only exist because those assets are not taxed while they are held, but only when they are sold.  If you start taxing unrealized gains - there is no such thing as a long term gain anymore.  It is all gain from 1 year or less.

Second - assume you are retired on fixed income.  You saved your entire life, and your house is free and clear.  Now say we have 10% inflation.  That means basically your house will be worth about 10% more.  Your only source of income is fixed, and it is what you live on.  How do you pay the tax on the imaginary appreciation of your house?

Or take my ranch.  It has been in the family for 5 generations (maybe 6).  I have no intention of ever selling it, but again - inflation (for at least 120 years) has made it worth a LOT more.  So say Biden stops the Kestone XL pipeline, and sends troups to the ME.  That might cause the price of oil and gas to go up 100%.  It is only temporary.  But the value of my mineral interests will also go up (perhaps only 80%).  If that is the case, I will owe a very large shitload of tax - more than all my other assets than the ranch.  How the blue fuck am I supposed to pull 100's of thousands out of my ass.  Plus in 4 years, we change policy and the value of those assets drops like a rock (like have during the peaceful Trump Presidency).

A vary similar issue happened with employee stock options during the tech boom/bust.  I had friends exercise their options, which caused them to pay gains on the market price over the excise price.  Then the bust happened the next year (before they actually cut the check to the IRS) and the value of their stock could not even cover the tax on the exercise.  Some owed 50k of tax on stock now worth less than 25k.  Even after selling all the stock they had to pull an extra 25k out of their ass.

----
The income tax code while very specific, has some general theories in it.  One is you pay tax when you have the means to do it.  That is why tax on gains only happens during a sale - at that one point of time you have the means to pay the tax.  It is why there is withholding from your paycheck.  It is why you are allowed to do like kind exchanges on some investments (not stocks).  If I exchange a rent house in DC for a rent house in Texas - I don't really have means to pay now (I got no $$ out of the transaction - my rent house has just moved).  Nothing really has happened other than moving to a more friendly location.

Frankly the whole thing is stupid. As is anyone who would support this. A lot would have to change to make this reality.

I have direct experience with this. 475 (f) and Sec. 1236 . Night night.

This is the worst of it all. They will introduce rich vibrancy into every neighborhood but the most privileged political class type areas.

The other move is going to be going after your school districts tax revenue by putting all districts in your state into a fund and then flowing money from the well off communities with good schools into the shit areas with shit schools, the end result being shit education across the board