The Democrats are proposing a new tax (what else is new?) and are lying about who will pay it. (again) They are claiming that billionaires are using this magic method to avoid paying capital gains taxes. What is the magic method?
They don’t pay capital gains tax until they actually have capital gains to tax.
When you buy an asset and sell it for more than you paid, the difference is called a capital gain. There are two types of capital gains: long term, and short term. A short term capital gain is one where the asset was held for less than a year. Short term gains are taxed the same as income. A long term capital gain is for an asset held longer than a year, and is taxed at a lower rate than is ordinary income.
As anyone who has ever bought and sold anything should know, the value of anything you own will fluctuate with the market. If I own a classic car, say a 1965 Mustang, it could have a “value” that changes from year to year. That value is purely theoretical until I actually sell it. If I look up my car and see the profit I could make on that car, that profit is called an unrealized gain, and it only exists on paper. Once I sell and actually make money on the car, it becomes a realized gain.
What the Democrats want to do, is tax people on the unrealized gains that they have on assets that they own. They claim that people who own assets that have increased in value, but haven’t paid capital gains taxes on, is some kind tax dodge. They are ignoring the fact that an asset may be worth less one year than it was the year before. They are also trying to claim that only billionaires do this.
“No nurse or firefighter or teacher in America can play those games,” said Wyden. “They pay their taxes with every paycheck and are rightfully outraged when they read about the wealthiest few paying so little while they are working hard to make ends meet.”
This is the big lie. My wife bought the house we live in twelve years ago. The purchase price was about half what Zillow says it is worth now. If we were to sell it, the profit would be a capital gain. The democrat proposal would have us pay taxes on that “profit” every year- even if we didn’t sell. The fact that we don’t do that now isn’t some dodge that only billionaires use- every homeowner in America is going to get hit by this proposed tax.
Ben C · September 8, 2021 at 8:18 am
Every single retirement account that holds stocks would get hammered by this crap also.
Screwtape Laughs · September 8, 2021 at 8:39 am
If we could somehow get taxes under the construct of the white male capitalist patriarchy banner.
Aren’t taxes wayciss?!
There is the hidden tax called inflation that is so prevalent at the grocery and gas station even normie can see it now.
SiG · September 8, 2021 at 1:37 pm
These people think the cartoons of Scrooge McDuck diving into pools full of gold coins are a documentary, not a joke.
They will destroy industry, though, when the billionaires (notional, in the day’s prices for their stock holdings) have to be sold to pay taxes, which will crash the stock market for everyone, and the middle class gets our knees broken out from under us. I’m sure they consider that a feature and not a bug. They want to make everyone equal – everyone has nothing.
it's just Boris · September 8, 2021 at 3:36 pm
But those in charge will still have more “nothing” than the rest.
Divemedic · September 8, 2021 at 3:42 pm
Socialism is never for the Socialists.
TexBob · September 8, 2021 at 6:14 pm
We should tax politicians $1,000 per page of legislation they sign into law retroactive to Jan. 2020. They can get a rebate for every page of law they nullify.
Brian_E · September 8, 2021 at 6:25 pm
Any bets that this proposed way of taxing unrealized gains does NOT include any means to write off unrealized losses?
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