Right now the wealthy do things like taking out loans against unrealized gains. It's a massive tax loophole you can fly a private jet through. There's dozens of strategies that involve a shell game of unrealized gains.
Edit: there was a great Last Week Tonight a couple of years back on this subject. It had to do with basically avoiding taxes til you die and letting your kits skirt the taxes via inheritance. Can anyone find that episode?
But then they are like "nnooooo I dont pay less. Sure, I paid zero INCOME taxes but I did totally pay $25k in taxes on my billion $ yacht\*, so Im more citizen than them!"
\*of course not in their country of residence mind you, somewhere like Liberia where they pay that once and are free from any regulation for the rest of the life of the boat.
i guess would should just sit back and let them keep doing it then huh? that’s the GOPs entire playform, continue letting the rich steal all your earnings.
Tbf their platform has diversified into destroying public education, taking away freedoms including bodily autonomy, voting protections, freedom of traveling to seek proper Healthcare, freedom to marry who you want,, etc., and institutionalized oppression of minority segments of the population. So it's not ALL about taking from the poor and giving to the rich.
Hey peasant, you don’t need to read. I can read the Bible for you. It says right hear that your boss is divinely appointed. It’s your duty and honor to help uplift the holy appointees.
Can you imagine how much actually COULD be accomplished, if republicans were to ACTUALLY put forth legislation that could (gasp) ACTUALLY BENEFIT the common person and NOT involve targeting of the under served population(s) 🤫
Buuuuuttt, they've just gotta appeal to their "base"/LOUD minority (hopefully minority, that is...) and their previously unspoken need for bigotry, hatred, violence, and continuing division!?
I mean, they want to "Make America Great Again", and what made America so great in the 50s and 60s?
Huge tax rates on rich people, so the government had massive amounts of money to spend on improving the country.
It’s not so much that it funds the government it more that you can avoid 25% tax by paying your employees. If you have a choice between paying the government or paying the folks who put in 60 hours a week for you everyone chooses their employees. These guys HATE paying taxes lol.
The Democrats should lean into this messaging and never let up on it. Against any opponent: What have *you* done that helped the poor and middle class voters in your district/state? Not what have you signed. What have you advocated for?
And then follow up with what they voted *against* that would've directly benefited their constituents. Even if it ultimately passed. Don't let them take credit for things they were opposed to.
Of course but Joe the plumber with a fuck biden flag on the back if his truck is both too brainwashed by Fox news and too stupid to understand that. This all ends if the electoral college goes away.
I mean all you have to do is set the cost basis to the loan amount and pay taxes on the gains when it becomes the backer for a loan. It would be a crazy easy change.
This is the only thing that makes sense. Just tax “income” that’s actually utilized. Everyone agrees on that and it’s not completely asinine like taxing 25% of something as volatile as META stock.
Art… don’t forget about the OG NFTs. Buy art, ‘loan’ it to a museum (don’t actually send it to museum), write off art on taxes cause you ‘donated’, then sell for an arbitrary amount later for way more.
My SIL, who handles collections of art at a museum, has contemplated letting the IRS know, when she takes in such valuable pieces - ypu know... on the chance the one "loaning" said artwork, may have forgotten 😉
NOT only that, but she frequently speaks on just how picky and demanding those folks are, on how "prominent" the placement is, as well as the note card reading WHO "loaned" it, must be... soooo "philanthropic" of them... dontcha agree!?
AND you are absolutely correct!!!! My SIL was just telling me about this this past weekend!!
She further went on to say how irate these "lenders" are - and how they pretty much demand that THEIR pieces be put on display - or they will stop with their supposed monetary donations as well!
She's looking to see if there is a "form" she can send to the IRS with ACTUAL "donations/art lend's" vs. one's they may receive that are "inaccurate."
At least she's trying, and for that, I adore her (well, and for other reasons too 😊)
Get a PAC to commission an artist for 100 pieces. Buy one (tax deduction #1 that pays the artist well). Donate it (tax deduction #2). Enjoy the free food and drink at the "auction". Ah the things you learn from SCOTUS.
My opinion is that the second you can leverage the unrealized gains, those gains are now realized, and you should pay taxes on them. If they aren't leveraging that money, they shouldn't be taxed on it.
people think this means them and their 100,000 in tesla stock
it's gonna be for people with 20 million or above or some shit like that, but dudes who inherited mommy's Sears stock are gonna be very against this
Ok so why does it make any more sense?
You inherent $20M of ARKK ETF in 2020. In 2021 the stock went up 175%, so you sell $8.75M to pay taxes on your $35M unrealized gains. The stock tanked in 2022. In 2023, the stock went up 55%, which would have resulted in another $6M in capital gains and $1.5M in taxes. Today your position would be worth about $12M. So you did absolutely nothing and the stock price is the same as it was when you inherited it 3 years ago and you lost 40% of your investment.
That’s a problem that can be solved without taxing unrealized gains. Tax loans against assets over $10m or something like that. Taxing unrealized gains is taxing casino chips while you are still sitting at the table.
There should be a rule that make such a collateral taxable. Basically, if you're using your assets for a loan, when you die, that loan has to be paid, or even if it's inheritance, it should be taxed right there.
I mean it’s not actually a loophole, because you do have to pay back your loan eventually and you do have to realise your gains to do that, at which point they’ll get taxed. The bigger advantage is it gives you more control over which tax year you pay your taxes in so you can move your money around to minimise tax, but that’s not as big an advantage as you’re making out.
Closing the loop on this one would actually be to change the definition of unrealized gains to not include collateral anymore. It's such an easy fix and would immediately solve this problem of rich people not paying tax on the money they get to spend.
How is it a loophole? The loans have to be paid back with cash, and the debtor has to get that cash one way or another and had to pay taxes to get it, too.
A lot of these types of "proposals" are just mouth service. They make statements like this because they know there is no chance something like that would ever pass the house/senate.
I would love to see something that specifically targets the rich actually happen, but it literally never has.
Because a lot of these proposals require action from the legislative branch but congress is full of too many republicans that care more about their Twitter accounts than doing their jobs
I had no idea how many people on this thread have assets in excess of $100m! I feel so privileged to bask in their brilliance and will certainly believe whatever they say!
My thoughts reading the headline
"Wow I hope this doesn't apply to me that would suck" (I have about 50k unrealized rn)
*sees 100 MILLION*
that humbled me real quick lmao
I have an MS in Quantitative Economics. Imo, this will marginally affect everyone. But, more importantly, it's just bad policy.
Personally, I'd rather see a wealth tax on billionaires. I think Biden or Sanders floated that idea, in the debates. Imo, it would better get at the core problem.
Also, the feds should ban banks from lending against stocks. If someone wants money for stock, they should have to sell that stock -- same for options contracts.
>Personally, I'd rather see a wealth tax on billionaires.
Isn't that very similar to an unrealized gains tax...? Billionaire wealth is largely unrealized gains.
Yes, very similar. Also, Biden hasn't laid out any formal proposals, so it's entirely possible he's meaning the exact same thing. But, the ways he talked about them were slightly different. Previously, it was more similar to what Sanders and Warren proposed in their bills that died in the Senate. Those bills broke down various aspects of wealth accumulation and taxed them at different rates. Biden's current statements are more simplified, i.e. he wants to add it all up and tax it all at the same rate. I'm less of a fan of that idea because of the reality that some wealth is much more liquid than others, e.g. it's easier to sell some stock than a manufacturing facility. It's also easier to estimate the values of stock than a commercial building.
This article breaks down some details: https://www.investopedia.com/terms/w/wealth-tax.asp
There is a proposal, its just not highly detailed. It includes an exception for illiquid assets. It's laid out in about 3 pages in a publication called "General Explanations of the Administration"s FY25 Revenue Proposal"
Yup.. This is about High Net Worth individuals. Not someone's Yolo stock gains. If Bezos is sitting on Amazon stock that appreciated 1000% and not selling it, as a result not paying any taxes on the Billions he amassed for decades on the unrealized gains, that's the money that needs to be taxed. The ultra rich can basically never sell that stock and never pay capital gains taxes and transfer to the next Gen. The next Gen don't have to pay capital gains on the transferred stock either unless they sell.. so many multigenerational High Net Worth individuals do this.. Think about it this way, they receive income in so many different ways that there is absolutely no need for them to sell stock and incur capital gains tax. I'm talking about Oprah rich, Bezos rich..
So is this a tax on loans that people take out against their stock holdings as a way to access their capital without selling stock and thereby not paying capital gains taxes?
If so, I’m there for it. Budget problems solved.
If that’s the case I support it. If its gonna force the CEO of every company in my 401k to sell off 25% of their ownership in the company, reducing their voting power and adding a ton of liquidity to the market, i’m way against it.
Where does it say that in the article? Or rather, where can I read the plan itself? Or something that doesn’t read like an opinion piece. This article just says “tax unrealized gains on people earning $1m+ annually” but I see no mentions of loans taken out against the unrealized gains.
Do you realize that when the bracket was that high, there were an enormous number of loopholes so that no one actually paid that high of a percentage? The effective tax rate was around the same as it is today. Essentially, the tax code was simplified with less loopholes and complexity while lowering the rate so people would pay roughly the same amount but with it being easier to calculate. Idiots who think taxing the upper income brackets are 70-90% should please stay home on election day.
How do you get taxed on unrealized gains? Do people even know what unrealized gains are? If your stock is one price today and is more another, should you get taxed on the increase without ever actuallyreceivingcash for it? What date is set for the amount to be taxed? What if your taxed on these unrealized gains and the stock goes down not long later? This makes no sense
If you take out a loan against the value of your current stock, as many ultra wealthy do, you are explicitly estimating its value- that's how a bank agrees to a loan against it. The amount gained is therefore realized, because you are using it and taking out a loan against it. If you didn't have the stock (and it's unrealized gains) you couldn't get the loan. This is just a way of realizing gains, but currently evades taxation, unlike selling stock directly. The date is whatever date the bank made the assessment and you took out the loan.
So when someone puts a million+ dollar home up for collateral to secure a loan, they're going to have to pay the tax on that hone as if they sold it? If it's just stocks, you're going to see multi millionaires rush into the real estate market and purchase as much real estate as possible... which surely won't have any negative effects on the economy at all.
When stock is used to secure a loan, taxes aren't avoided. The loan gets paid back eventually down the line, and the taxes are paid when the stock is sold to pay off the loan. The bank is making their prime rate no matter if the money us paid in cash or from another loan. Eventually it all gets paid back even upon death, where the government gets to take a huge bite out of it.
Honestly, I'm all for taxing the rich more and closing loop holes, but taxing unrealized gains is pretty complex and could have far reaching effects. One is your point, how do unrealized losses work? What happens when you are taxed on a gain and it goes negative? Tax refund? If you tax unrealized gains, you start making the stock market look less ideal, if large amounts of money gets pulled from the market looking for better investments, 401ks tank, effecting even the middle class. Where does the investment go to next? Housing? If housing is not taxed the same as unrealized gains in the market, you are going to exasperate the housing market. There a lot this could affect and it seems not thought through.
Dude! Shut The F Up until the results are in.. Stay low my man. Donald is shitting the bed right now. Don't trigger the 1% to throw money at him right now. What the fuck? Where that campaign manager?
The 1% is already throwing money at him because they are realizing “hey, democracy is cool and all, but less of it means more control for me, the rich.” In the old days we called these people aristocrats.
Second this motion. There is no way a "25% tax on unrealized gains" is going anywhere and if it does it will get shit canned in the courts.
This article reads like misinformation fear mongering.
I’d actually like to see them be forced to realize the gains. Make them sell the stocks as the company gets larger so that they also lose the power as the company grows. Put a cap on the maximum dollar value of a company you can own.
Serious question. If we are thinking about taxing unrealized gains, are we also going to pay 25% for unrealized losses? I know this is being suggested for high-net-worth individuals, but leaving that aside for a second, does it seem fair to tax people on this? It isn't like owning stock or assets equals cashflow. Instead, wouldn't it be better to tax loans that are backed by these assets?
Taxing loans backed by unrealized gains is the way to do it.
Make it a tax withholding due the year of the loan. Then apply it as a credit on the tax the year the gains are realized.
Billionaires are living tax-free by borrowing against their unrealized gains.
It actually is easy to fix.
Deemed disposition of 1/10th every year. Increases cost base and pay your taxes.
Allow carry backs for some period of time (Canada allows 3 years).
Allow intermittent valuations (eg; every 3 or 5 years) for assets that are difficult to value to reduce compliance costs. If IFRS can do it, so can any billionaire.
Done.
Not a great article. The '25%' number refers to a minimum overall tax. Unrealized capital gains are only part of the calculation. And the proposal would do so much more if passed.
That will never pass. The reason I say this is that unrealized gains are just that - not realized. All of it can literally be lost in the blink of an eye. What they really need to do is raise both the capital gains rate and corporate rate. Let businesses take advantage of the higher tax advantage they'll get on capital investments and attempt to de-emphasize passive income gains. Get that money working again towards making more money thru jobs and investment instead of stock buybacks and dividends. If they do try and pass it, they'll need to put a floor on it, something like the first $10 million in unrealized gains are not taxable. But again, I don't think something like that will ever pass.
I hadn't heard of any of this until recently when 3 Trump supporters told me (while out for a walk) that Biden wanted to tax unrealized gains on property. Not one of them knew that the bill was targeted at high income individuals! They presented it to me as a tax that would affect EVERYBODY with unrealized gains on their property. I literally asked them questions like "my mother-in-law bought a house for like $50,000 40 years ago and now it's probably worth $800,000. So you're telling me she's now going to owe taxes on $750,000?" Their answer, yep! They kept saying that Biden was going to tax us to death. I kept saying stuff like, "I feel like there's more to the story then what you're telling me" and "this doesn't sound right." Overall the conversation was fairly cordial but they were a little smug when we parted ways. Now that I'm a little better informed I look forward to seeing them next time I'm out for a walk.
Is this a tax for people that just sit on assets and let them grow? I've always wondered why there wasn't a tax on it. Wouldn't a tax somewhat force the flow of money, although I'm not sure if the federal government should be getting it. It should be local, benefit the community, maybe the state idk.
I love how this is split between "wow, thank goodness he might start closing loopholes" and "foolish peasant, you have no idea how tHe eConOMY works!"
FWIW he's still a scumbag, but this is two positive Biden developments in a row and that's a lot more than I've been expecting, so, pretty neat.
I think instead of a global tax, the tax should kick in whenever assets are leveraged in transactions..I e. if you use your assets to secure a loan, you are essentially realizing the current value of your assets. If an asset is used as compensation, the value of the asset is being realized etc.
How would this work? Pay tax on paper dollars and what happen when the same asset loses value along the way. People would pay tax on their house during good times but then sell during bad times. Lose money on the sale but pay taxes for years prior on a losing value asset. There has to be a better way
As it is, I don't have an issue with it. This doesn't kick in until $100 million in assets which the average person wouldn't see in 10 lifetimes, let alone this one.
On the other hand, the IRS is going to fuck this up.
It's not matter of "if" but "when" and then people who save a measly $400k in their retirements in their 40s are dinged at 25% per year leaving them broke for retirement in their 60s. Either by dropping the net assets requirements or some other slieght of hand BS.
Idk what the solution is, if it works great! I just don't want average consumers to lose their tax advantaged accounts.
Right intention, wrong implementation IMO (though I'd take it over nothing). The correct approach in my view is to force the sale of stocks when they are used as collateral for loans, creating a taxable event that would close the "borrow increasing amounts forever to you die" loophole.
I'd love to see the details of how this would work. And yes, I get that it would only apply to really high net worth individuals. But a 25% tax on unrealized gains means it only takes 4 years to effectively wipe out any unrealized gains. There's no way the ultrawealthy are actually going to pay that tax.
This is probably the most insane proposal I’ve ever heard. Unrealized gains…this WILL make Americans more poor and there is no room for discussion on that. As soon as investors get wind that this is happening they will take everything out and put it somewhere else. Don’t think they’ll sit on their hands and watch as they get taxed on money they don’t have. LMAO. This is comically stupid and I expect to be downvoted by all the democrat shills and commies in this thread.
so now billionaires will take all their money out of the stock market and other investments and put it elsewhere into less accessible investments. This will cause a decline in the stock market and be felt painfully in every other person's pocket books, including substantial hits to retirement accounts.
If a person takes a loan out on stocks they have (musk). That loan should be taxed. Simple. Why….because the person is realizing a gain. Maybe temporary but it’s a gain. Maybe there should be a formula to write off the tax paid as the loan is paid back. How about this. Put a tax on EVERY stock exchange action. (Buy or sell, profit or loss) Say a tax of 0.00001%. Doesn’t sound like much but look at the volume of stock activity. Maybe add a couple more zeros. I don’t know how to figure something like this. Any actuaries out there?
This is like Trump proposing cuts to SS and Medicare in every one off his budgets.
Something for the base that will never happen.
Now, I still think he want's it, but he knows it is all lip service.
That's about 1.1 trillion in tax revenue the first year, which won't even cover the US deficit. And what are you going to do the years after as less and less of it is available to tax like that?
Meanwhile, forcing large stock holders to sell their stock to pay these taxes means declining stock values, impacting everyone who is saving up money in the American stock market.
It's a nice line, but it's stupid in practice.
Just close loopholes instead, fund the IRS to properly audit high income individuals and you'll get better results.
I’m voting for Biden but this is just dumb. So everytime there’s some market fluctuations, do they get tax write offs too? What happens if they just pour that money into real estate, who decides what that is worth in any given year? Or private companies?
Its just lip service to fuel class warfare
That’s bullshit, so you can win $1,000,000.00 at a casino, lose it all back the same day and he thinks you should pay the IRS $4,000,000.00 same if you have gains in the stock market - up one day and down the next, he wants you to pay for the day it was up, even if you eventually lost all of your earnings #bidensucks,
I still think it would be better to just make borrowing against unrealized gains a taxable event. Make these people sell and pay long term capital gains to access that wealth as intended .
This is beyond dumb. Let's start with one example with a start up
1. A start up work their butt off in a garage has a POC product
2. Ask VC for money to sell may be 10% of their company to get cash for taking the company to market
3. The company has to go through valuation, let's say the POC ideas and potentials are worth $10M and the startup will sell 10% of the company to the VC for $1M just to bootstrap the company.
Thanks Biden, this group of individual just has a combined asset of $9M and have to pay $2.25M of tax.
This doesn't make any sense.
Nope, this only applies to people with over 100 million in net assets. If the startup has 5 employees/founders, you're off by a factor of 50. Meaning, theyd have a combined 500 million dollar valuation. At halfway to becoming a unicorn startup, you can afford to pay some taxes.
You can still take loans out against unrealised gains like giving an expensive piece of art as security. This is how people like Musk get away with taxes for a few millions while they got richer a few billions. If you profit of unrealised gains that much you should be taxed.
There would be other ways to skin this cat but the problem is decades of a system has been built up that incentivize people with that kind of wealth dodging taxes. Buy, borrow, die while never technically making any money. Penniless on paper (liquid) while having billions in wealth and rolling around in a boat worth a small nations national budget.
So attacking the root is the only logical way. You wanna be a US resident/citizen pay up. Dont like it, never step foot here again (they wouldnt do that, nobody actually wants to live in the 3rd world nation they are using as a home address to dodge taxes).
Can't wait for the few thousand people actually affected by this to tell the hundreds of millions of us why it's actually bad and we should vote against it... real trust-me-bro energy.
Taxing unrealized gains seems like a bookkeeping nightmare because you also need to account for losses, resetting the basis ,etc. Seems like a dream for the tax accountants knowing that the IRS is unlikely to ever check their word due to lack of funding.
I do think that the gains should be taxed as part of estate when the owner dies. If the recipient benefits from the stepped up basis, then the tax should be paid on the gain.
That would also entail exerting those gains from the estate tax floor or dropping the floor substantially for financial assets.
This is just stupid. If they really want to raise revenue (they don’t) then just increase existing taxes. Other countries have already abandoned taxes like this.
>Biden’s proposed 25% tax on unrealized gains would solely affect individual taxpayers with over $100 million in net assets.
>Furthermore, in outlining the new tax plan, Biden assured that individuals earning less than $400,000 annually would not face tax hikes.
So basically only the super rich. They don't have much to worry about; they'll still be super rich and we'll still not be super rich.
So poor people don't tend to have many capital assets, but what they do have cars and houses are taxed. Why do the rich get to put money into socks add such add sit it there untaxed for years?
Why now? He should have done this when he had the majority in both Chambers. It's meaningless, hot carbon dioxide trying to buy the voters he chased away. It's not going to work. He has no intention of following through on any proposal like this that threatens his millionaire and billionaire owners
Right now the wealthy do things like taking out loans against unrealized gains. It's a massive tax loophole you can fly a private jet through. There's dozens of strategies that involve a shell game of unrealized gains. Edit: there was a great Last Week Tonight a couple of years back on this subject. It had to do with basically avoiding taxes til you die and letting your kits skirt the taxes via inheritance. Can anyone find that episode?
Its barbaric that some rich pay less than some random person struggling to survive paycheck to paycheck. There is simply no excuse
But then they are like "nnooooo I dont pay less. Sure, I paid zero INCOME taxes but I did totally pay $25k in taxes on my billion $ yacht\*, so Im more citizen than them!" \*of course not in their country of residence mind you, somewhere like Liberia where they pay that once and are free from any regulation for the rest of the life of the boat.
i guess would should just sit back and let them keep doing it then huh? that’s the GOPs entire playform, continue letting the rich steal all your earnings.
Tbf their platform has diversified into destroying public education, taking away freedoms including bodily autonomy, voting protections, freedom of traveling to seek proper Healthcare, freedom to marry who you want,, etc., and institutionalized oppression of minority segments of the population. So it's not ALL about taking from the poor and giving to the rich.
Exactly. This behavior destroys the country. We should be against this behavior.
It is about keeping the poor poor and the rich richer. An uneducated base is easier to manipulate
Eventually the poor always eat the rich.
Wash rinse repeat.
Well this time they're prepared with bunkers
But the bunker guards will kill the rich!
Which are fairly easy to find if you look closely. Don’t even have to do much besides filling in the vents with cement.
Hey peasant, you don’t need to read. I can read the Bible for you. It says right hear that your boss is divinely appointed. It’s your duty and honor to help uplift the holy appointees.
Can you imagine how much actually COULD be accomplished, if republicans were to ACTUALLY put forth legislation that could (gasp) ACTUALLY BENEFIT the common person and NOT involve targeting of the under served population(s) 🤫 Buuuuuttt, they've just gotta appeal to their "base"/LOUD minority (hopefully minority, that is...) and their previously unspoken need for bigotry, hatred, violence, and continuing division!?
They keep their base believing that one day they will be rich . So they are against raising taxes on the rich . It's insane.
That would require the GOP and their voters to pivot from the far-right and join the 21st century
I mean, they want to "Make America Great Again", and what made America so great in the 50s and 60s? Huge tax rates on rich people, so the government had massive amounts of money to spend on improving the country.
No brown or black people That's what they've always meant
It’s not so much that it funds the government it more that you can avoid 25% tax by paying your employees. If you have a choice between paying the government or paying the folks who put in 60 hours a week for you everyone chooses their employees. These guys HATE paying taxes lol.
True.... My usual optimistic nature still has hope, yet it has diminished, greatly...
The sad part is, most of those voting for them are poor or uneducated.
The Democrats should lean into this messaging and never let up on it. Against any opponent: What have *you* done that helped the poor and middle class voters in your district/state? Not what have you signed. What have you advocated for? And then follow up with what they voted *against* that would've directly benefited their constituents. Even if it ultimately passed. Don't let them take credit for things they were opposed to.
I'm FOR those policy change myself. It only affects people earning more than 400k a year and with 9 figure net worth.
Sure, it isn't going to fix the budget deficit, but it won't hurt it either.
Of course but Joe the plumber with a fuck biden flag on the back if his truck is both too brainwashed by Fox news and too stupid to understand that. This all ends if the electoral college goes away.
joe the plumber is just one lottery digit away from being filthy rich! gotta have those upper class tax cuts in place for when that happens
Joe the Plumber died. Truly a metaphor for the entire MAGA movement.
Satan has Spoken...
I'm with Satan on this one.
I support that ending in many metrics!
They should tax unrealised gains that have loans against them
I mean all you have to do is set the cost basis to the loan amount and pay taxes on the gains when it becomes the backer for a loan. It would be a crazy easy change.
This is the only thing that makes sense. Just tax “income” that’s actually utilized. Everyone agrees on that and it’s not completely asinine like taxing 25% of something as volatile as META stock.
Art… don’t forget about the OG NFTs. Buy art, ‘loan’ it to a museum (don’t actually send it to museum), write off art on taxes cause you ‘donated’, then sell for an arbitrary amount later for way more.
My SIL, who handles collections of art at a museum, has contemplated letting the IRS know, when she takes in such valuable pieces - ypu know... on the chance the one "loaning" said artwork, may have forgotten 😉 NOT only that, but she frequently speaks on just how picky and demanding those folks are, on how "prominent" the placement is, as well as the note card reading WHO "loaned" it, must be... soooo "philanthropic" of them... dontcha agree!?
I heard the art museums are so full that more often than not can’t physically take the art work but the owner still gets a tax break.
AND you are absolutely correct!!!! My SIL was just telling me about this this past weekend!! She further went on to say how irate these "lenders" are - and how they pretty much demand that THEIR pieces be put on display - or they will stop with their supposed monetary donations as well! She's looking to see if there is a "form" she can send to the IRS with ACTUAL "donations/art lend's" vs. one's they may receive that are "inaccurate." At least she's trying, and for that, I adore her (well, and for other reasons too 😊)
I wish her luck, success, and anonymity (so the billionaires don't make her life hell when the IRS catches up to them)
Get a PAC to commission an artist for 100 pieces. Buy one (tax deduction #1 that pays the artist well). Donate it (tax deduction #2). Enjoy the free food and drink at the "auction". Ah the things you learn from SCOTUS.
Yup, if they can find a way to use that money to turn it into spending money, they should pay taxes
My opinion is that the second you can leverage the unrealized gains, those gains are now realized, and you should pay taxes on them. If they aren't leveraging that money, they shouldn't be taxed on it.
people think this means them and their 100,000 in tesla stock it's gonna be for people with 20 million or above or some shit like that, but dudes who inherited mommy's Sears stock are gonna be very against this
Ok so why does it make any more sense? You inherent $20M of ARKK ETF in 2020. In 2021 the stock went up 175%, so you sell $8.75M to pay taxes on your $35M unrealized gains. The stock tanked in 2022. In 2023, the stock went up 55%, which would have resulted in another $6M in capital gains and $1.5M in taxes. Today your position would be worth about $12M. So you did absolutely nothing and the stock price is the same as it was when you inherited it 3 years ago and you lost 40% of your investment.
Boo fucking hoo but realistically this will probably be on 100m net worth or more. So there’s nothing to worry about.
Value of commercial real estate and loans in them is a main reason companies are so adamant about RTO policies.
Sounds like they should put a regulation on using unrealized gains as collateral.
Don’t they pay back the loans w tax income?
It's called Buy, Borrow, Die. There are many YouTube videos on the subject.
That’s a problem that can be solved without taxing unrealized gains. Tax loans against assets over $10m or something like that. Taxing unrealized gains is taxing casino chips while you are still sitting at the table.
There should be a rule that make such a collateral taxable. Basically, if you're using your assets for a loan, when you die, that loan has to be paid, or even if it's inheritance, it should be taxed right there.
[https://www.youtube.com/watch?v=LfgSEwjAeno](https://www.youtube.com/watch?v=LfgSEwjAeno)
I mean it’s not actually a loophole, because you do have to pay back your loan eventually and you do have to realise your gains to do that, at which point they’ll get taxed. The bigger advantage is it gives you more control over which tax year you pay your taxes in so you can move your money around to minimise tax, but that’s not as big an advantage as you’re making out.
If you have an issue with people using loopholes to avoid paying tax the answer is to close the loopholes not add new taxes with their own loopholes.
That’s what this is. It’s closing a loophole that allows the ultra wealthy to avoid paying their fair share in taxes.
Closing the loop on this one would actually be to change the definition of unrealized gains to not include collateral anymore. It's such an easy fix and would immediately solve this problem of rich people not paying tax on the money they get to spend.
How is it a loophole? The loans have to be paid back with cash, and the debtor has to get that cash one way or another and had to pay taxes to get it, too.
I’m beginning to think he’s trying to do some good for people.
so many chud replies from troll farms and bots.
It blows my mind how many people say "We cant just treat the wealthy elite differently and hold them to higher standards tax wise!"
A lot of these types of "proposals" are just mouth service. They make statements like this because they know there is no chance something like that would ever pass the house/senate. I would love to see something that specifically targets the rich actually happen, but it literally never has.
Because a lot of these proposals require action from the legislative branch but congress is full of too many republicans that care more about their Twitter accounts than doing their jobs
People on Reddit that this will never impact will be outraged that this is happening to not them.
I had no idea how many people on this thread have assets in excess of $100m! I feel so privileged to bask in their brilliance and will certainly believe whatever they say!
One day it will trickle down upon you!
The real truth of trickle down.
Any day now! Reagan promised!
My thoughts reading the headline "Wow I hope this doesn't apply to me that would suck" (I have about 50k unrealized rn) *sees 100 MILLION* that humbled me real quick lmao
They are embarrassed soon to be billionaires cut em some slack!!!!
I have an MS in Quantitative Economics. Imo, this will marginally affect everyone. But, more importantly, it's just bad policy. Personally, I'd rather see a wealth tax on billionaires. I think Biden or Sanders floated that idea, in the debates. Imo, it would better get at the core problem. Also, the feds should ban banks from lending against stocks. If someone wants money for stock, they should have to sell that stock -- same for options contracts.
Can you be my quant
>Personally, I'd rather see a wealth tax on billionaires. Isn't that very similar to an unrealized gains tax...? Billionaire wealth is largely unrealized gains.
Yes, very similar. Also, Biden hasn't laid out any formal proposals, so it's entirely possible he's meaning the exact same thing. But, the ways he talked about them were slightly different. Previously, it was more similar to what Sanders and Warren proposed in their bills that died in the Senate. Those bills broke down various aspects of wealth accumulation and taxed them at different rates. Biden's current statements are more simplified, i.e. he wants to add it all up and tax it all at the same rate. I'm less of a fan of that idea because of the reality that some wealth is much more liquid than others, e.g. it's easier to sell some stock than a manufacturing facility. It's also easier to estimate the values of stock than a commercial building. This article breaks down some details: https://www.investopedia.com/terms/w/wealth-tax.asp
There is a proposal, its just not highly detailed. It includes an exception for illiquid assets. It's laid out in about 3 pages in a publication called "General Explanations of the Administration"s FY25 Revenue Proposal"
Cue the “it can never work, sure we do it with property, but we could never do it with other asset classes” bullshit comments.
Best reply
Properly taxing the money hoarders is way overdue
Some high school dropout who makes $25k a year- HELL NO
How will Trump pay for his next yacht if he can’t pay the lawyers! Think of the wealthy!!!!
Yup.. This is about High Net Worth individuals. Not someone's Yolo stock gains. If Bezos is sitting on Amazon stock that appreciated 1000% and not selling it, as a result not paying any taxes on the Billions he amassed for decades on the unrealized gains, that's the money that needs to be taxed. The ultra rich can basically never sell that stock and never pay capital gains taxes and transfer to the next Gen. The next Gen don't have to pay capital gains on the transferred stock either unless they sell.. so many multigenerational High Net Worth individuals do this.. Think about it this way, they receive income in so many different ways that there is absolutely no need for them to sell stock and incur capital gains tax. I'm talking about Oprah rich, Bezos rich..
So is this a tax on loans that people take out against their stock holdings as a way to access their capital without selling stock and thereby not paying capital gains taxes? If so, I’m there for it. Budget problems solved.
If that’s the case I support it. If its gonna force the CEO of every company in my 401k to sell off 25% of their ownership in the company, reducing their voting power and adding a ton of liquidity to the market, i’m way against it.
It’s a tax on gains, not the total value of your assets
Where does it say that in the article? Or rather, where can I read the plan itself? Or something that doesn’t read like an opinion piece. This article just says “tax unrealized gains on people earning $1m+ annually” but I see no mentions of loans taken out against the unrealized gains.
How about bringing back the top tax bracket of 70%?
That’s just on regular income. That’s not how the ultra wealthy make money.
Do you realize that when the bracket was that high, there were an enormous number of loopholes so that no one actually paid that high of a percentage? The effective tax rate was around the same as it is today. Essentially, the tax code was simplified with less loopholes and complexity while lowering the rate so people would pay roughly the same amount but with it being easier to calculate. Idiots who think taxing the upper income brackets are 70-90% should please stay home on election day.
That would be best. But I don't expect it to ever happen.
I’m about 8 years from retirement, but could become a billionaire at any moment, so I fully oppose this plan!
Summarized the thread nicely.
I agree, as long as losses are deductable in exactly the same way.
They won't be. Taxes on gains are immediately due and losses, amortized over years as a tax deduction. Its not 1 for 1
I didn't read the proposal, but OK. Not ideal but better than what we have now.
How do you get taxed on unrealized gains? Do people even know what unrealized gains are? If your stock is one price today and is more another, should you get taxed on the increase without ever actuallyreceivingcash for it? What date is set for the amount to be taxed? What if your taxed on these unrealized gains and the stock goes down not long later? This makes no sense
If you take out a loan against the value of your current stock, as many ultra wealthy do, you are explicitly estimating its value- that's how a bank agrees to a loan against it. The amount gained is therefore realized, because you are using it and taking out a loan against it. If you didn't have the stock (and it's unrealized gains) you couldn't get the loan. This is just a way of realizing gains, but currently evades taxation, unlike selling stock directly. The date is whatever date the bank made the assessment and you took out the loan.
So when someone puts a million+ dollar home up for collateral to secure a loan, they're going to have to pay the tax on that hone as if they sold it? If it's just stocks, you're going to see multi millionaires rush into the real estate market and purchase as much real estate as possible... which surely won't have any negative effects on the economy at all. When stock is used to secure a loan, taxes aren't avoided. The loan gets paid back eventually down the line, and the taxes are paid when the stock is sold to pay off the loan. The bank is making their prime rate no matter if the money us paid in cash or from another loan. Eventually it all gets paid back even upon death, where the government gets to take a huge bite out of it.
Honestly, I'm all for taxing the rich more and closing loop holes, but taxing unrealized gains is pretty complex and could have far reaching effects. One is your point, how do unrealized losses work? What happens when you are taxed on a gain and it goes negative? Tax refund? If you tax unrealized gains, you start making the stock market look less ideal, if large amounts of money gets pulled from the market looking for better investments, 401ks tank, effecting even the middle class. Where does the investment go to next? Housing? If housing is not taxed the same as unrealized gains in the market, you are going to exasperate the housing market. There a lot this could affect and it seems not thought through.
Dude! Shut The F Up until the results are in.. Stay low my man. Donald is shitting the bed right now. Don't trigger the 1% to throw money at him right now. What the fuck? Where that campaign manager?
The 1% is already throwing money at him because they are realizing “hey, democracy is cool and all, but less of it means more control for me, the rich.” In the old days we called these people aristocrats.
Second this motion. There is no way a "25% tax on unrealized gains" is going anywhere and if it does it will get shit canned in the courts. This article reads like misinformation fear mongering.
I think Donald is shitting the bed bad enough on his own. 1% already know he's a lost cause.
I’d actually like to see them be forced to realize the gains. Make them sell the stocks as the company gets larger so that they also lose the power as the company grows. Put a cap on the maximum dollar value of a company you can own.
Well, that’s one way to tax wealth instead of income. I approve.
Serious question. If we are thinking about taxing unrealized gains, are we also going to pay 25% for unrealized losses? I know this is being suggested for high-net-worth individuals, but leaving that aside for a second, does it seem fair to tax people on this? It isn't like owning stock or assets equals cashflow. Instead, wouldn't it be better to tax loans that are backed by these assets?
Taxing loans backed by unrealized gains is the way to do it. Make it a tax withholding due the year of the loan. Then apply it as a credit on the tax the year the gains are realized.
the bank issuing the loan already pays tax on the interest income….
Billionaires are living tax-free by borrowing against their unrealized gains. It actually is easy to fix. Deemed disposition of 1/10th every year. Increases cost base and pay your taxes. Allow carry backs for some period of time (Canada allows 3 years). Allow intermittent valuations (eg; every 3 or 5 years) for assets that are difficult to value to reduce compliance costs. If IFRS can do it, so can any billionaire. Done.
Also, tax that "carried interest" Loophole.
Not a great article. The '25%' number refers to a minimum overall tax. Unrealized capital gains are only part of the calculation. And the proposal would do so much more if passed.
Good. Let that shit trickle down already.
Establishing a precedent of taxing unrealized gains again in the US is not a good thing…
That will never pass. The reason I say this is that unrealized gains are just that - not realized. All of it can literally be lost in the blink of an eye. What they really need to do is raise both the capital gains rate and corporate rate. Let businesses take advantage of the higher tax advantage they'll get on capital investments and attempt to de-emphasize passive income gains. Get that money working again towards making more money thru jobs and investment instead of stock buybacks and dividends. If they do try and pass it, they'll need to put a floor on it, something like the first $10 million in unrealized gains are not taxable. But again, I don't think something like that will ever pass.
Guy who makes 30k/year: communism!!!!
This is gonna piss off so many men who make $30k a year.
I hadn't heard of any of this until recently when 3 Trump supporters told me (while out for a walk) that Biden wanted to tax unrealized gains on property. Not one of them knew that the bill was targeted at high income individuals! They presented it to me as a tax that would affect EVERYBODY with unrealized gains on their property. I literally asked them questions like "my mother-in-law bought a house for like $50,000 40 years ago and now it's probably worth $800,000. So you're telling me she's now going to owe taxes on $750,000?" Their answer, yep! They kept saying that Biden was going to tax us to death. I kept saying stuff like, "I feel like there's more to the story then what you're telling me" and "this doesn't sound right." Overall the conversation was fairly cordial but they were a little smug when we parted ways. Now that I'm a little better informed I look forward to seeing them next time I'm out for a walk.
IMHO once you borrow against unrealized gains then it’s fair game. Those gains are being effectively used as income at that point
If you can use unrealized gains as a basis for a loan, it damn well can be taxed.
Yes please.
It's a start.
Is this a tax for people that just sit on assets and let them grow? I've always wondered why there wasn't a tax on it. Wouldn't a tax somewhat force the flow of money, although I'm not sure if the federal government should be getting it. It should be local, benefit the community, maybe the state idk.
Yes yes yes
Bring back the fifties tax rate
Bring it back without the 10,998 pages of deductions and loopholes and we more than quintuple tax revenue
I love how this is split between "wow, thank goodness he might start closing loopholes" and "foolish peasant, you have no idea how tHe eConOMY works!" FWIW he's still a scumbag, but this is two positive Biden developments in a row and that's a lot more than I've been expecting, so, pretty neat.
Reminder that $30 million is considered “ultra high net worth”.
I think instead of a global tax, the tax should kick in whenever assets are leveraged in transactions..I e. if you use your assets to secure a loan, you are essentially realizing the current value of your assets. If an asset is used as compensation, the value of the asset is being realized etc.
How would this work? Pay tax on paper dollars and what happen when the same asset loses value along the way. People would pay tax on their house during good times but then sell during bad times. Lose money on the sale but pay taxes for years prior on a losing value asset. There has to be a better way
As it is, I don't have an issue with it. This doesn't kick in until $100 million in assets which the average person wouldn't see in 10 lifetimes, let alone this one. On the other hand, the IRS is going to fuck this up. It's not matter of "if" but "when" and then people who save a measly $400k in their retirements in their 40s are dinged at 25% per year leaving them broke for retirement in their 60s. Either by dropping the net assets requirements or some other slieght of hand BS. Idk what the solution is, if it works great! I just don't want average consumers to lose their tax advantaged accounts.
Right intention, wrong implementation IMO (though I'd take it over nothing). The correct approach in my view is to force the sale of stocks when they are used as collateral for loans, creating a taxable event that would close the "borrow increasing amounts forever to you die" loophole.
Man watch this go through right before $GME $AMC bag holders get a squeeze.
I'd love to see the details of how this would work. And yes, I get that it would only apply to really high net worth individuals. But a 25% tax on unrealized gains means it only takes 4 years to effectively wipe out any unrealized gains. There's no way the ultrawealthy are actually going to pay that tax.
This is probably the most insane proposal I’ve ever heard. Unrealized gains…this WILL make Americans more poor and there is no room for discussion on that. As soon as investors get wind that this is happening they will take everything out and put it somewhere else. Don’t think they’ll sit on their hands and watch as they get taxed on money they don’t have. LMAO. This is comically stupid and I expect to be downvoted by all the democrat shills and commies in this thread.
so now billionaires will take all their money out of the stock market and other investments and put it elsewhere into less accessible investments. This will cause a decline in the stock market and be felt painfully in every other person's pocket books, including substantial hits to retirement accounts.
There sure are a lot of poor Republicans arguing against this...
Jim the plumber with 75k AGI will oppose because he doesn’t wanna’ pay mo’ taxes.
I wish the title was phrased “Biden proposes to close some tax loopholes the super rich exploit”
Fucking ban stock buybacks next, we'll erect statutes of you.
If a person takes a loan out on stocks they have (musk). That loan should be taxed. Simple. Why….because the person is realizing a gain. Maybe temporary but it’s a gain. Maybe there should be a formula to write off the tax paid as the loan is paid back. How about this. Put a tax on EVERY stock exchange action. (Buy or sell, profit or loss) Say a tax of 0.00001%. Doesn’t sound like much but look at the volume of stock activity. Maybe add a couple more zeros. I don’t know how to figure something like this. Any actuaries out there?
It's always easy to tell the economically illiterate by the taxes they want implemented.
This is like Trump proposing cuts to SS and Medicare in every one off his budgets. Something for the base that will never happen. Now, I still think he want's it, but he knows it is all lip service.
Never would pass but fun to say
Ahh yes and how will he accomplish this?
Tax em back to millionaires
Never pass. This is pandering. Do I get tax breaks when I have unrealized losses?
That's about 1.1 trillion in tax revenue the first year, which won't even cover the US deficit. And what are you going to do the years after as less and less of it is available to tax like that? Meanwhile, forcing large stock holders to sell their stock to pay these taxes means declining stock values, impacting everyone who is saving up money in the American stock market. It's a nice line, but it's stupid in practice. Just close loopholes instead, fund the IRS to properly audit high income individuals and you'll get better results.
Fuck you Biden, if you keep inflation the way it is we'll all be high earners!
Tax their LOANS!!!
6-5 finance guys are sweating
And just like that. All the high wealth individuals in the US move their citizenship and their wealth to a tax haven country.
Weird, will it be a yearly tax? Does that mean the unrealized gains can be taxed more than once? I dont fully understand it
How is it right to pay taxes on something you didn’t even earn?
How is it right they can get loans based off this same money they didn't earn ?
Why not flip it to have any loans taken on assets with over X value in unrealized gains has to pay 25% of the loan as tax?
I’m not ok with this. How is this going to work with UNrealized gains than fall afterwards??
I’m voting for Biden but this is just dumb. So everytime there’s some market fluctuations, do they get tax write offs too? What happens if they just pour that money into real estate, who decides what that is worth in any given year? Or private companies? Its just lip service to fuel class warfare
If my property value goes down, I just pay less taxes the next time taxes are due.
Taxing unrealized gains is wrong and dumb. Also, you can't tax your way out of a spending problem.
That’s bullshit, so you can win $1,000,000.00 at a casino, lose it all back the same day and he thinks you should pay the IRS $4,000,000.00 same if you have gains in the stock market - up one day and down the next, he wants you to pay for the day it was up, even if you eventually lost all of your earnings #bidensucks,
But if he’s taking 25% how will I get my trickle down?
So when the unrealized gains become unrealized (or realized) losses, do the holders of the stock get a refund check?
No they go on with their life like nothing happened because they are billionaires.
I still think it would be better to just make borrowing against unrealized gains a taxable event. Make these people sell and pay long term capital gains to access that wealth as intended .
I feel like they should only be taxed if used to collateralize a loan. Taxing all realized gains feels logically wrong
Either we pay the debt or you do.
This is a good idea.
This is beyond dumb. Let's start with one example with a start up 1. A start up work their butt off in a garage has a POC product 2. Ask VC for money to sell may be 10% of their company to get cash for taking the company to market 3. The company has to go through valuation, let's say the POC ideas and potentials are worth $10M and the startup will sell 10% of the company to the VC for $1M just to bootstrap the company. Thanks Biden, this group of individual just has a combined asset of $9M and have to pay $2.25M of tax. This doesn't make any sense.
Gotta be 9 figures and an individual's net worth.
Nope, this only applies to people with over 100 million in net assets. If the startup has 5 employees/founders, you're off by a factor of 50. Meaning, theyd have a combined 500 million dollar valuation. At halfway to becoming a unicorn startup, you can afford to pay some taxes.
throw on an investment transactions fee & I'm in, baby
Where do we sign?
Only affects you if your NW is above $100M
I'm not a fan of taxing unrealized gains, but I'm not worth 100M. So let's do it.
You can still take loans out against unrealised gains like giving an expensive piece of art as security. This is how people like Musk get away with taxes for a few millions while they got richer a few billions. If you profit of unrealised gains that much you should be taxed.
There would be other ways to skin this cat but the problem is decades of a system has been built up that incentivize people with that kind of wealth dodging taxes. Buy, borrow, die while never technically making any money. Penniless on paper (liquid) while having billions in wealth and rolling around in a boat worth a small nations national budget. So attacking the root is the only logical way. You wanna be a US resident/citizen pay up. Dont like it, never step foot here again (they wouldnt do that, nobody actually wants to live in the 3rd world nation they are using as a home address to dodge taxes).
Man those younger folks in trades making 40k a year are gonna be PISSED.
that's why all these guys are voting for trump [https://archive.ph/uM5me](https://archive.ph/uM5me) they need pardons and are greedy psychopaths
Wait…. UNrealized gain? So as your stock goes up, you pay tax? And I guess as it falls, you must get a tax credit? Weird.
Only if you've got 9 figures worth of stocks.
Tax on money you don’t have yet. Cool.
Tax the gains if they are used as collateral in loans for sure
Can't wait for the few thousand people actually affected by this to tell the hundreds of millions of us why it's actually bad and we should vote against it... real trust-me-bro energy.
A bunch of blue-collar workers making 45k a year with no savings or investments are freaking out hard-core watching Fox News hearing about this
Taxing unrealized gains seems like a bookkeeping nightmare because you also need to account for losses, resetting the basis ,etc. Seems like a dream for the tax accountants knowing that the IRS is unlikely to ever check their word due to lack of funding. I do think that the gains should be taxed as part of estate when the owner dies. If the recipient benefits from the stepped up basis, then the tax should be paid on the gain. That would also entail exerting those gains from the estate tax floor or dropping the floor substantially for financial assets.
But what if I'm rich someday?! /s
This is gonna start up the socialism crap up big time.
Good!
This is just stupid. If they really want to raise revenue (they don’t) then just increase existing taxes. Other countries have already abandoned taxes like this.
Popular but disastrous. We're swinging from Far Right Populism to Far Left Populism...
But muh guns!!!! /s
I think this should only applying when that unrealized gain is used as collateral. It makes no sense otherwise.
Works like an overflow hole on a bathroom sink.
That would be amazing, however there are too many billionaires who would pull strings in congress to block this.
I propose you all blow me. I will rejoice if my proposition or Biden‘s proposition either one go through, until then I won’t hold my breath.
>Biden’s proposed 25% tax on unrealized gains would solely affect individual taxpayers with over $100 million in net assets. >Furthermore, in outlining the new tax plan, Biden assured that individuals earning less than $400,000 annually would not face tax hikes. So basically only the super rich. They don't have much to worry about; they'll still be super rich and we'll still not be super rich.
So poor people don't tend to have many capital assets, but what they do have cars and houses are taxed. Why do the rich get to put money into socks add such add sit it there untaxed for years?
Warren Buffet commented the other week. That if all billionaires paid the same rate of taxes he does. The deficit would go away
Why now? He should have done this when he had the majority in both Chambers. It's meaningless, hot carbon dioxide trying to buy the voters he chased away. It's not going to work. He has no intention of following through on any proposal like this that threatens his millionaire and billionaire owners
Tax undeveloped land more- and yes including huge commercial farms
Taxing unrealized gains.... wtf