Crusader Husker
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I have always found Bernie interesting. Maybe I will write him in for Prez.
The Democrat Utopia
- Thread starter GBR0988
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BigRedBuster
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DevoHusker
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Dr. Strangelove
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I'm not a fan of taxing unrealized capital gains. I don't know why they don't just tax realized capital gains at prevailing income tax rates, with a surcharge on transactions above $1 million (or however much). There are ways to tier capital gains no different than we do income, no reason we shouldn't.
At the same time, taxing unrealized capital gains or a wealth tax isn't unheard of. We currently do it on a widescale basis - we call them property taxes.
Short term cap gains are typically taxed on your income level. Basically what you are asking for is already in place. Long term cap gains are taxed at a lower level.
https://www.fidelity.com/learning-center/smart-money/capital-gains-tax-rates#:~:text=Short-term capital gains taxes,and-long term capital gains.
A short-term capital gain is the profit on the sale of an investment that you've held for a calendar year or less. For example, if you bought a stock on September 15, 2022, and sold that stock on September 3, 2023, any profit from that sale would be considered a short-term capital gain. Short-term capital gains are typically taxed at your federal income tax rate, which is higher than the long-term capital gains tax rate. Short-term capital gains may also be subject to state and local taxes at income rates and not receive potential beneficial treatments like long-term capital gains.
1) what’s the tax rate on your property taxes?
2) you get assessed property taxes whether you are underwater or in the positive
3) Voters decide on a state by state basis how to handle property tax. There is no federal property tax that I am aware of
4) housing is less liquid and fluctuates quite a bit less than more liquid investments like stocks and bonds. A gain at the end of one year could be a loss immediately the next near sometime in January.
5) with property tax, you actually bring up an issue that helps make the case of taxing unrealized gains as pretty awful. Many people are getting priced out of their monthly fixed rate payments because increased property taxes are making them unaffordable.
Crusader Husker
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We just got re-assessed on our Property taxes. Because housing properties are currently sky rocketing, we got nailed.
teachercd
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Crusader Husker
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I wanted to challenge it, but the $$ amount is still lower than what the real estate estimator says. Our neighbor asked $50, 000 over the estimate. They got it, in 3 days!
BigRedBuster
Active member
Here's the difference as I see it.
I buy a house. That value of the house usually doesn't change that much (however, this year is different :facepalm: ). That value is set, and then it's taxed and you can budget for that tax. Everyone knows, for the most part, what their property taxes are going to be the next year. And, again, you can budget for it.
Stock values are very very different. In reality, you have no clue what your stocks are going to be valued at December 31st. So, you can't budget for that tax.
Also, in Nebraska, state property taxes are at 1.61%. LINK It's a relatively very small amount compared to the value of the property. For most people, they can save the money to pay them. If stock is taxed at the level you think it should be, one heck of a lot of people would need to sell assets to pay the tax. I am not for that.
Eventually, the government gets their taxes on stock. No stock is held forever. It's eventually sold. At that point, they get their taxes. And, do i get my taxes back if it drops the next year?
And, let's take our house. We moved in about 20 months ago. During that time, the valuation has increased 60%. (that's not a typo and we haven't done anything to the house). So, you're saying that I should be taxed around 30% for that 60%? That would wipe out many people's savings.
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Dr. Strangelove
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I'm well aware of the difference between long term capital gains tax rates and short term capital gains tax rates. My criticism of Republican politics is that they refuse to look at raising long term capital gains rates for high profit transactions. There are a lot of ways to raise revenue in that space. Fixing our spending problem will have to involve tax increases in certain areas of the economy, and taxing long term capital gains rates for certain profit groups is one of the best ways to do that.
As for property tax rates, I was simply explaining that the idea of a "wealth tax" of 1 or 2% is already happening, via property taxes. I don't think a wealth tax is a good idea - the idea of taxing long term capital gains is better. Just that if the argument is that a wealth tax is unheard of isn't really true, we already do it. But it's a bad idea for all the reasons you mention and then some.
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Dr. Strangelove
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Oh yeah, I completely agree.
I wasn't attempting to argue that a wealth tax is a good idea - you and @Archy1221 provide good points on why it's a bad idea. I think I did a poor job articulating my point which was that a wealth tax isn't a new idea and that a version of it already exists on the middle class in a widescale way.
Fortunately Democrats won't be able to make this a law. I suspect their taking positions that they know are impossible to "concede" them next year in negotiations when a new tax bill will have to be rewritten when most of the TJCA expires next year.
Guy Chamberlin
Active member
This is a legit beef. I also thought John Edwards 26,000 square foot house in North Carolina was ridiculous excess.
Guy Chamberlin
Active member
Taxing unrealized capital gains is bulls#!t.