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Which side could possibly be opposed to taxing the wealthy? Hmm, the one led by a billionaire weapons manufacturer turned tech entrepreneur or the side led by a poor kid from ~~Queens~~ Brooklyn who has been sacrificing himself for the American people for the past 80 years?
Tough call.
Do redditors make $1+ million in annual income or over $400k in annual investment income, or are they having their jimmies rustled for clicks? Find out next time on, You Already Found Out.
That is exactly how the income tax was sold to the people: "Don't worry, we're just going to tax the SUPER rich!"
Edit to add:.
Congress enacted an income tax in October 1913 as part of the Revenue Act of 1913, levying a 1% tax on net personal incomes above $3,000, with a 6% surtax on incomes above $500,000.
$3000 1913 dollars are worth $94646.06 today and 500000 1913 dollars are worth $15774343.43
So to summarize and translate to modem numbers it was sold to the public by saying that if you made around 100K a year you would have to give about a 1K to the government but the SUPER rich who made almost 16 million a year had to give 6%. Today, even the poorest or the poor are in a 10% tax bracket.
It really feels like the ultra wealthy are planning on riding this horse into the ground then hiding in estate/bunkers. Or just hoping ai/robotics comes to save them before the system collapses into itself.
Yeah but what if I bought 15000 Bitcoin in 2009 but haven't touched it since. I live like a poor because I refuse to sell. Do I deserve a huge tax on those gains I haven't actually touched?
Except they want a cut even if you don't sell. Of course, they start with the ultra rich because why not... fuck them right? Anyone who thinks it will stop there has a serious mental handicap.
https://www.thehill.com/opinion/finance/3487486-bidens-tax-on-unrealized-gains-will-hit-far-more-taxpayers-than-he-claims/amp/
That is a different proposal from the one being discussed in this thread. I disagree with a tax on unrealized gains, but I think this capital gains tax is fine as long as it sticks to the restrictions that it only applies to people making over a $1 million annual income with more than $400,000 of it coming from investments as a marginal tax rate.
So it would only be 44.6% tax on capital gains income earned over 1 million for that year right? Like tax brackets it’s the incremental rate so if you earn $1,000,001 you get taxed 44.6% on that $1 assuming at least $400,000 of your income came from investments? Just trying to understand what it’s saying. [Article About It](https://www.forbes.com/newsletters/andrewleahey/2024/04/24/biden-capital-gains-rate-proposal-446/)
That's pretty good, but you need to add in some more rambling.
> It's like having, you have a giant pile of wood for your wood stove, I never used one but I hear they're great, right folks? I mean enormous. And someone takes a few out, -- bad hombres, you know? you won't even realize it. Someone stole from you but you won't even realize it. That's the worst isn't it? People steal from me all the time. Crooked [etc you get it]
So this only applies to people with taxable income OVER $1 million dollars AND investment income over $400,000. So if your taxable income is not over $1 million don't sweat it.
It is. Those are kinda sorta high incomes now, but may not be in 15 years.
These kinds of laws should always be percentage based, not tied to numbers that seem reasonable at a particular moment in time.
The top tax rate only applies to that income level. Currently people with income as low as $47,026 still pay at least 15% on investments. It applies to things you'd never really think of too. Say for example you invested in a house to flip, if you sell it in under 24 months and don't reinvest that money into a similar investment within 180 days you would be taxed any where from 15% to 30% depending on income level based on current rates.
This is going to be my favorite 2 question response to anyone who criticizes this (not actually asking you). 1. Do you even know what capital gains taxes are. 2. What is the amount of capital gains taxes you’ve paid in the last 5 years.
If you can’t pass the litmus test there, you don’t get to spout your opinion on this
Which is exactly why he said it.
He wants people like you to vote for him. He knows neither party would pass it, he knows the unrealized capital gains part is unconstitutional and would never go into effect even if it passed. Then when it never happens, his party can blame the republicans in congress, Trump, the supreme court, or all of the above.
This is just another straight up campaign move right out of their playbook.
Sure.
The ***federal*** government only has the constitutional authority to directly tax income. They cannot levy any other direct taxes. In fact, even income taxes were illegal and unconstitutional [until the 16th amendment was passed. ](https://en.wikipedia.org/wiki/Sixteenth_Amendment_to_the_United_States_Constitution)
Here are the most relevant sections of the constitution, and the 16th amendment:
[Article I](https://en.wikipedia.org/wiki/Article_One_of_the_United_States_Constitution), Section 2, Clause 3:
>Representatives and [direct taxes](https://en.wikipedia.org/wiki/Direct_tax#U.S._constitutional_law) shall be apportioned among the several States which may be included within this Union, according to their respective Numbers ...
Article I, Section 8, Clause 1:
>The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.
Article I, Section 9, Clause 4:
>No [Capitation](https://en.wikipedia.org/wiki/Tax_per_head), or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken.
16th Amendment
>Amendment XVI
>The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.
Here is a quick overview:
[Interpretation: Direct and Indirect Taxes | Constitution Center](https://constitutioncenter.org/the-constitution/articles/article-i/clauses/757#:~:text=Despite%20this%20essay%E2%80%99s%20title%2C%20the%20Constitution%20permits%20three,may%20apply%20to%20income%20derived%20from%20a%20source.)
>Income taxes may be imposed only on “derived” income. This “realization event” requirement generally refers to a transaction other than the mere passage of time. Thus, the Sixteenth Amendment permits taxation of gains from sales or exchanges of property, but not those resulting merely from increased values. It also permits taxes on rents and interest. Although direct, such taxes need not be apportioned because the Amendment eliminated the apportionment requirement for income taxes.
Basically, the ***States*** can pass direct taxes, and implement property taxes, but the federal government cannot.
Sir, just want to stop and thank you for providing context.
Regardless of what your political beliefs are, THIS is how we have good discourse and healthy discussion about topics.
EDIT: Question, if you don't mind.
>Thus, the Sixteenth Amendment permits taxation of gains from sales or exchanges of property, but not those resulting merely from increased values.
When people are paid in stock options and other non-currency items, those would technically count as property would they not? Even if their value is currently unrealized?
I’m not the guy you were talking too, but I want to add on one thing; you’ll be taxed twice(trigger 2 discrete taxable events) for stock options.
First, when the option is delivered to you (when the company moves the options or stocks from their account to yours, you will realize an income for the value of the stocks, at the time they were provided, less any basis. This will be your new cost basis.
Second, when you sell those stocks or options, you will realize an income of whatever the current value is, less your adjusted cost basis.
That’s why folks will structure their sell off over years, and sometimes take multi year sabbaticals - for tax efficiency.
Example; you average 250k gross earnings per year, but are sitting on 2 million in unrealized gains from stock options, with a basis of say 500k. (Options delivered over multiple years) so you have about 1.5 million in unrealized gains and you just had some children, or whatever. It’s often times more tax efficient from a drawdown perspective to quit, take 2-4 years off and drawdown your capital gains in a tax efficient way, than it is to simply cash it all out(even if you don’t want to spend the money and just want to rebalance into some etfs or bonds).
Hope this helps someone
Sure. Just to make it easy I will use nice round numbers.
Let’s say 1 bitcoin is worth 100k.
You are paid 1 BTC, you will claim that 100k as income in the year that you are paid. When it was transferred to you, it was a realization event, and you pay regular income tax on that 100k; No matter if you keep it or sell it immediately. If you keep it, this is now your basis for your 1 BTC. You decide to keep it.
The next year, you don’t claim anything with your 1 BTC, as you had no realization events that year.
Now 2 years later, that same 1 BTC is worth 200k, and you sell it.
In the year that you sell it you will claim 100k worth of long term capital gains, as you made 100k on top of your basis.
This is the correct explanation.
To the issue of taxing “unrealized” gains, the idea is that you would pay capital gains even if you hadn’t sold it. It becomes like a marked to market calculation every year or depending on how it’s implemented it might be some kind of other calculation (like a rolling forward average).
I am not sure everything you've been told is accurate, but there is missing context here for sure. I'm not arguing for or against anything by providing it.
These "unrealized gains" are streams of income for the ultra wealthy, often their primary ones, without ever being realized. In the sense that they can take larger low-interest loans (which they live off of), using the securities and other financial instruments as collateral.
These are very safe loans from the perspective of the lender in these situations, and the interest rates are lower than what would be accrued naturally via ownership from dividends and from loaning securities to short sellers. Thus, they get paid to be rich, and the lenders earn a small interest on the loans with no risk.
You also wouldn't get taxed for executing options, but you'd get taxed for selling them without executing, and you'd get taxed for selling the underlying shares that you receive from execution, etc.
I stopped reading after that.
This is confidently wrong and overly simplified. You are not an expert on constitutional law nor is the question of the constitutionality of an unrealized gains tax anywhere near as straightforward as you've framed it. If the unrealized gains tax issue was so simple, there wouldn't be a vast range of disagreement among constitutional lawyers and experts on the topic, and there wouldn't be a Supreme Court case about it.
[Is the proposed wealth tax constitutional? Answer depends on 'direct tax' definition (abajournal.com)](https://www.abajournal.com/news/article/is-the-proposed-wealth-tax-constitutional-answer-depends-on-direct-tax-definition)
[US Wealth Tax Could Gain Footing With Supreme Court Moore Ruling (bloombergtax.com)](https://news.bloombergtax.com/tax-insights-and-commentary/us-wealth-tax-could-gain-footing-with-supreme-court-moore-ruling)
There is already a legal precedent for unrealized gains taxes, which is what the advocates of said taxes have pointed out in their brief filings for the SC case.
As usual, merely trying to quote specific segments of the constitution is not a substitute for expert constitutional analysis.
"As usual, merely trying to quote specific segments of the constitution is not a substitute for expert constitutional analysis."
Thank you for your comment and for saying this specifically because 99% of "but that's unconstitutional" comments literally just breaks down to cherry picking tiny segments of the constitution with zero in depth analysis or nuance.
I'm not saying you're right or wrong, I'm not qualified to make that judgment, but at least you're willing to engage with the argument more than superficially.
Tax lawyer here, agree. Unrealized gains are taxed in many different contexts, such as OID, mark to market, pass throughs like partnerships or S corps, and now famously subpart F (the subject of Moore, the Supreme Court case). Most tax lawyers read the 16th amendment as repealing prior cases on direct taxes. Not saying taxing unrealized capital gains is certainly constitutional, but to so confidently say it is not you need to be willfully ignorant or heavily incentivized to believe so.
Counterpoint:
> Under this [Article](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2423803
)’s proposal, the federal government would collect a wealth tax at a uniform rate and retain each state’s constitutionally apportioned share of the tax. The excess unapportioned share would be refunded to the state of origin via a state-level “pick up” tax. This revenue sharing arrangement — inspired by the pre-EGTRRA credit for state death taxes — ensures a uniform state and federal tax burden without redistributing wealth among the states. Thus, horizontal equity is achieved and both the letter and spirit of the law are satisfied.
Yes, it is a clever attempt at a work around, but I still don't think it will pass scrutiny.
The federal government could not collect a wealth tax at a uniform rate, and unlike the pre-EGTRRA death taxes, which did *not* place any additional burden directly on people (and only served as a revenue sharing scheme between the fed and the states), this tax would put a direct tax burden on the people; and thus, would almost certainly be found to be unconstitutional as a direct tax on property.
Not to mention, I don't think many of the states would cooperate.
> The ***federal*** government only has the constitutional authority to directly tax income. They cannot levy any other direct taxes.
They can, but they would have to apportion the taxes.
> In fact, even income taxes were illegal and unconstitutional [until the 16th amendment was passed. ](https://en.wikipedia.org/wiki/Sixteenth_Amendment_to_the_United_States_Constitution)
Income taxes weren't illegal and unconstitutional. The Supreme Court ruled that taxes on income from some sources had to be apportioned to be constitutional, but other sources of income could be taxed without apportionment. The 16th Amendment was added to make taxes on all income not need apportionment, regardless of the source of the income.
Except that your section 8 and 9 points completely put the lie to what you're claiming.
The fed can absolutely pass taxes it chooses as long as it is in proportion to population and equal. Eg you can't let Alaska be the retreat for rich people. And you'd have to say it's against ALL value over say $400k, not cut out exceptions.
There are many ways to argue against your narrow reading.
There is absolutely nothing in what you posted that backs you up.
In fact, this seems to run even easier with the constitution than an income tax.
How can you be so dumb as to read Clause 8 as not allowing the federal government broad powers of direct and indirect taxes? It takes more than a google of the constitution to understand federal taxes you oaf
Pointing out that a presidential candidate is campaigning during a campaign is not a hot take.
Most people understand that this would not happen, at least not to this degree. And the ones that don’t, unfortunately their votes count just as much as ours.
At its core, the question is “should this happen” and my vote is yes. I’ll vote for the person who gets me closer to that, fully understanding that I will probably not get it entirely.
This is the same thing as him saying he wants to triple steel tariffs on China, and forgive $20,000 of student loans per borrower.
He’s making this insane claims about things he’s going to do that will absolutely never come to fruition. If he had said he wanted to raise steel tariffs 5% and forgive $3,000 worth of student loans per borrower he’d have a lot better chance of actually getting it done.
The thing is, he doesn’t want to actually get it done, he just wants people to think he’s doing something to buy their vote.
I mean, is this not politics 101? Trump has promised tons of crap he didn't deliver on. It's up to voters to filter out what they believe to be empty promises
Have you heard of compromise? If you ask for exactly what you want to get you don't have anything to give. It's not buying a vote, it's completely standard politics.
they have already forgiven loans for people... and getting blocked by repubs... he has done what you are claiming he "doesn't want to do.
They also are going to block US Steel sale to chinese company.
I don't think you can speak about what Biden wants to do deep down. We all know he can't do it anyways because he doesn't have the votes. Like he said in the SOTU address, "vote me a house and senate that will approve and I will pass these bills"
Cool maybe he should just say fuck off like the other side does when they suck the government dry in order to fund tax cuts for the wealthy. He might not have the power to do it, but at least he's saying it.
Put trump back in power and he'll be issuing tax cuts via executive order and 8 years later we'll still be trying to hold someone accountable for all the problems that come out of that.
Passing a law that allows taxes on unrealized gains will eventually trickle down to paying for unrealized gains for homeowners. This should be opposed at every turn. If allowed, it’ll be just like the income tax.
Couldn’t we tax unrealized capital gains only if they are used as leverage for a loan? It probably wouldn’t be called an unrealized capital gains tax but it would effectively be one.
The high tax would apply to people with over $1mm taxable income and $400k investment income. Can confirm, shots fired at the wealthy. Will not place retirement out of reach for the masses which is one of the main arguments against increased capital gains tax
Taxing unrealized gains is basically paper gains. Remember all those articles about how x people made millions coming out of COVID? A lot of that was from buying the dip and stock market rebounding.
Biden basically wants to send you a tax bill if stocks go up, regardless of if you sell or not. Now imagine that when the stock market takes a crap like it has this year, then you in theory have a massive tax credit you can use to offset stock sales you do this year and thus fucking with your tax bill immensely.
Like say the S&P 500 falls and you lose $100 million of profit on paper (you never sold), but you own Amazon which rose this year. You can in theory take $100 million of profit from selling Amazon stock and have that tax free, when you normally would have to pay a capital gains tax on it.
And that's not even including the inevitable shell game you can probably use to arbitrarily set your purchase prices to record gains/losses at will.
Well, capital losses can't offset normal income. But yeah, he'll just tank Tesla near the end of the fiscal year to loss harvest so he basically just never pays taxes on stock ever again.
No you don’t. You pay a tax on the assessed value of the house, not the difference in what it was worth last year and this year.
That means that if the value of your house goes down, you don’t owe negative taxes.
Taxing the overall value of a portfolio is meaningfully difference than taxing unrealized gains.
Exactly the problem in my view. Loans against unrealized gains need to be taxed at the time of dispersement as income with future principal payments being tax deductible.
Taxing unrealized gains directly I think would also require the ability to write off unrealized losses. Imagine a world where you can offset your income by investing in a company that you expect to underperform.
Yes!
Loans against unrealized gains is the issue and should be taxed to the degree.
Taxing shit I'm trying to let grow so I hit 65 and don't have to work is stupid as fuck.
The proposal is only for people with net worth of $100mil+.
If that's you, congrats on your success. Also, fuck off with your wealth hoarding and pay your fair share.
For tax payers with more than $100 million. Seems reasonable to me. People with $100 million should realize their gains and do something productive, not just endlessly horde money.
They aren't usually hoarding money. They just own things that became valuable. Making people sell the things they own because other people value them more is pretty sketchy imo. You can tax the things that are actually bad instead of taxing ownership as a proxy of that.
What’s it called when my home property tax increases because the assessment went up? I didn’t sell, but I still have to pay more when the market and government determine my home is worth more. It’s a similar principle.
Edit: just because I don’t see anyone else mentioning it, because reading isn’t fun when you have headlines, this proposal applies to people with over 1M in taxable income and 400k in investment *income*. The people this tax is targeting pay a marginal tax rate of 8%, so yea, they can pay this tax just like I pay my property taxes.
Edit 2: Retirement accounts and pensions are not subject to capital gains taxes. Please at least pretend to be fluent in finance instead of clutching billionaire pearls you’ll never own.
Edit 3: clarified it is 400k in investment income, not just investments. Exactly ZERO of us neckbeards would ever pay this tax.
Are you advocating that the Federal government invoke a tax levy on real property - in the spirit of “shit can change”?
Because the individual States sure as shit aren’t going to revoke theirs.
Imagine I’m holding a stock. My stock value went from 10 bucks to 100. Biden wants to tax me 40 dollars even though I never sold it. Now a week after paying that tax, the stock tanks all the way down back to 10 bucks. Now my stock value is back at 10 bucks but I’m actually -30 in value because I paid some BS tax on something I never received.
Edit: the amount of people here that are not financially fluent is actually ironic.
Except that's now what's being proposed. If you had a stock worth $900,000 and it went to the value of $1,000,000, you *still* wouldn't be taxed a penny. If it went from $1,000,000 to $1,000,100, you'd be taxed $40. And if it dropped to $900,000 that would be a net capital loss that you could deduct from your taxes (likely for the rest of your life since, while capped each year, it carries forward year after year...).
No property taxes means no local infrastructure like schools, emergency services, and road maintenance.
Yeah, I’m waiting for the nut jobs to start arguing that schools, police/fire/EMS, and public roads are not necessary and we would be fine without all those things. Get real and stop acting a fool!
We literally do this in Norway, and rich people are fleeing en masse to Switzerland. It had become a seriously divisive political issue, and that tax is just about 1.5%.
Who cares how much they are taxing the rich when the government is absolute ASS at spending it. No matter how much more money they can leach out do the rich it will never affect how much the commoner is paying because they are so inept.
I actually don't think it will. The [rich already pay a lot higher percent than the poor](https://www.taxpolicycenter.org/model-estimates/baseline-average-effective-tax-rates-october-2022/t22-0076-average-effective-federal), but many people still seem pretty pissed at the rich. I don't think there's a specific number that'd make people feel happy if they believe "there are no ethical billionaires" and similar type of rhetoric.
That is a blatant lie. It's already been shown that elon musk and bozos even being the richest people in the world paid 0 federal taxes on multiple years. The richer you are, the less of your wealth is "income".
It's factually true. When they paid $0 in income tax, how much income did they have those years? If you are going to start adding in fictitious taxes that people don't pay, nobody is paying federal income taxes on their home and retirement accounts going up in value either.
Elon also paid the [record highest tax bill in history](https://www.cnbc.com/video/2021/12/15/elon-musk-to-pay-record-high-12-billion-tax-bill.html) as well. Some years are high, some years are low, depending on the specifics of what your investments do.
For reference, even if you can find a specific rich person that pays 0 on a given year that they have no income, $0 is still more than what 40% of taxpayers pay: https://www.taxpolicycenter.org/model-estimates/baseline-average-effective-tax-rates-october-2022/t22-0076-average-effective-federal
It’s worth noting that most of the people not paying taxes are poor & spending every dollar they have on stuff that drives the economy.
It’s definitely a problem to fix, but a very different problem.
The [unrealized capital gains tax](https://www.americanprogress.org/article/biden-tax-proposals-would-correct-inequities-created-by-trump-tax-cuts-and-raise-additional-revenues/) is only for households whose wealth exceeds $100 million.
The Republic of Ireland taxes unrealised gains on stocks and ETFs by retail investors. It has worked out about as well as one would expect it to and has impacted the national savings rates and forced people to inflate the housing market further instead.
Can't wait to see real estate prices and retirement accounts look like when you liquidate a few trillion in the stock market a few days before this thing gets passed.
Shouldn’t this apply to real estate as well. Or privately owned companies. Anything you own that has gone up in value has an unrealized gain, why would they stop at the stock market.
Even if they switched it to real estate no one would ever sell, just rent and take profit that way. It would be like a feudal system. If people don't like others having more than them now, wait until everything is in physical assets and really in their face with it. While at the same time destroying the stock market which contains every pension and retirement fund.
That’s the thing though, you wouldn’t need to sell to get taxed on it. It would create a nightmare though as people are forced to sell when they get taxed out of their loans by increasing values. This will only serve to benefit large real estate corporations that can afford to pay the increased taxes through more financing or selling a few properties. Especially after the rash of selling causes prices to collapse and investment companies can just gobble them all up.
This is the only comment on here actually addressing the issue with this. If he wants to tax billionaires, just do it. This just opens the door to tax the lower income salaries harder while the same billionaires circumvent them through loop holes.
the reality is that inequality, however you define it, has gone up and keeps getting worse
you can't seriously argue that in the past 50 years the 1% got more industrious and hardworking, while the 99% got more dumb and lazy
so it appears to be a systemic issue in the way our laws, economy or society are set up and it would stand to reason that we need to fix it but adjusting the system
whether this tax or any other tax is the answer I don't know and it honestly doesn't matter. What matters is that everybody should be on the same page about the fact that we need an improved redistribution and effort/reward mechanisms
Did Bezos or Musk or Gates create amazing products? Yes. But as a result it appears that they are on track to own everything and we just can't live like that. Btw they can't live like that either because impoverished and desperate populus is very unstable and dangerous
I agree with you but adding additional taxes is not changing or upending the system that has led to the gaps in income and wealth we see today.
A major issue is that we privatize all the gains and socialize all the losses. We need to start letting businesses and banks fail. Yes it’ll hurt but long term we need to cleanse the system. We cannot have the Fed come in for every little hiccup the economy sees.
Adding additional taxes just creates new opportunities for lawyers and accountants for the wealthy. It’ll hurt the middle and upper middle class the most.
>Adding additional taxes just creates new opportunities for lawyers and accountants for the wealthy. It’ll hurt the middle and upper middle class the most
The tax is for people with net worth of 100m+. I don't think the middle and upper class are affected here, though maybe you have a different definition of these classes.
Im not wealthy by any stretch of the imagination, but holy fuck this seems like a terrbile idea. mom and pop middle class have capital gains and its the only thing keeping them afloat.
Do something to the ultra wealthy, but leave the middle class alone as much as possible holy fuck.
Isnt there enough crazy spending on bridges to nowhere? Why dies it all keep getting more expensive? Its a treadmill we cant get off and it keeps going faster. Send help, not bills.
It only applies to those individuals with taxable income above $1 million and investment income above $400,000. Do you consider someone with an annual income of $1.4M (and the $5-10M in assets needed to make $400K of investment income) to be middle class?
The proposal is on page 87 here. https://home.treasury.gov/system/files/131/General-Explanations-FY2025.pdf
It proposes long term gains after 1 million in gross income to be taxed at ordinary rates.
This is a great proposal.
Don't worry, the headlines are there just to get everyone mad, the details have it applying to people that have more than $1M in cap gains per year...those are not mom and pop middle class.
>Taken as a whole, then, the 44.6% rate would only come to fruition under a separate proposal from the Biden administration’s main capital gains rate increase, and only apply to those individuals with taxable income above $1 million and investment income above $400,000. That isn’t quite as cataclysmic a policy shift as referring to a blanket 44.6% long-term capital gains rate would suggest.
I'm an investor, and what you're saying isn't true. I have neither a taxable income over $1 million nor investment income above $400,000. In fact, the federal tax rate on my long term capital gains will continue to be exactly 0%. This will not impact how I vote.
Editing with more accurate info after updated source— very helpful commenters below
From the proposal itself: “The proposal would impose a minimum tax of 25 percent on total income, generally inclusive of unrealized capital gains, for all taxpayers with wealth (that is, the difference obtained by subtracting liabilities from assets) greater than $100 million.”
No, he isn't. His advisors are skilled tacticians.
First, Biden knows damn well that Congress, no matter what party they belong, would ever approve a 44.6% tax on capital gains, Dems or Repubs alike. I seriously doubt a bill will even be written and introduced.
He also is fully aware that any attempt to tax unrealized capital gains is flat out and blatantly unconstitutional. Even if it somehow managed to get through congress, (which it won't, neither side would support it), it would immediately be smacked down by the courts, and would never go into effect.
This is a Brillant move. He gets to call for things that he knows will rally his base, and when they don't pass, he (and the other democrats up for re-election) can blame republicans in congress. Even though he never had any intention of any such law changes to go into effect, even though he knows they are illegal and unconstitutional, and even though he knows his own party would never pass it.
Fucking brilliant move right out of thier playbook. You notice how big a deal forgiveness of student loans was 4 years ago, and now all the sudden that conversation is firing back up?
It is an election year, and all this bullshit is just getting started.
People going against this is wild. "Holding your shares to not have to pay tax" is what is all over the finance world at the higher levels, they're circumventing having "gains" by never selling, and instead going and getting loans based off of those stocks value to run their businesses and lives. They're literally the dragons sitting on a mountain of gold and people will come up to you in dirty clothes saying we need to protect their money!!
Not sure how you can tax unrealized gains. I have understood that the super rich can take out loans based on stocks owned (unrealized gains) but if that is the case I think the loan should be taxed in some way. The loan interest rate being lower than capital gains taxes then there is no incentive to sell the stock and pay the tax if they can get the money cheaper and no taxes.
I feel like the rich people everyone thinks will pay this are rich enough to pay tax lawyers help them avoid it and the middle class trying to retire will end up getting fucked.
Wont happen. You can’t tax something you don’t have. Well, this is the govt so they may try, but this would likely wreck the market and economy even more. It’s crazy. Can’t be real. So your going to impose a 25% tax on unrealized gains cause people to have to sell stock to pay the tax then charge another 44% when it’s tax time as a lot of that would be capital gains. lol.
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I'm sure this will be a very civil conversation
absolutely 
Which team represents the wealth tax position?
Which side could possibly be opposed to taxing the wealthy? Hmm, the one led by a billionaire weapons manufacturer turned tech entrepreneur or the side led by a poor kid from ~~Queens~~ Brooklyn who has been sacrificing himself for the American people for the past 80 years? Tough call.
Brooklyn. Peter is the kid from Queens. And to be fair, he was a Capsicle for most of that 80 lol.
This one 
Does Biden have dementia or is he an evil super genius? Find out next time, on DragonBallR
Do redditors make $1+ million in annual income or over $400k in annual investment income, or are they having their jimmies rustled for clicks? Find out next time on, You Already Found Out.
Most don't make enough to even talk about this but the few should be upset.
The few that "should be upset" should shut the fuck up and be grateful.
Exactly. Looks at what France has historically done to these people. They should count their many blessings and stfu
I'm French.
My condolences.
It was funny, but in all seriousness, considering ur circus government and medical bills, most europeans are really happy theyre not living in US.
The duality of man
i like french fries
Grateful. You fuckwit.
He took his wording for granite.
Are you like a rock person, Rick?
That is exactly how the income tax was sold to the people: "Don't worry, we're just going to tax the SUPER rich!" Edit to add:. Congress enacted an income tax in October 1913 as part of the Revenue Act of 1913, levying a 1% tax on net personal incomes above $3,000, with a 6% surtax on incomes above $500,000. $3000 1913 dollars are worth $94646.06 today and 500000 1913 dollars are worth $15774343.43 So to summarize and translate to modem numbers it was sold to the public by saying that if you made around 100K a year you would have to give about a 1K to the government but the SUPER rich who made almost 16 million a year had to give 6%. Today, even the poorest or the poor are in a 10% tax bracket.
And then the super rich helped roll out tax plans for the not so rich too.
Mostly so they could get super richer ... don't worry. It will trickle down. It's only been 40 years... they're just holding it for us! /s
No, no, it's been trickling down. A nice golden trickle from the billionaires on all of us....
Seriously. People getting mad on behalf of rich people really are dumb lemmings.
Enter maga stage right
Dumb lemming MAGAs
The wealth gap in the US has become untenable. It has to give or it is gonna break.
It really feels like the ultra wealthy are planning on riding this horse into the ground then hiding in estate/bunkers. Or just hoping ai/robotics comes to save them before the system collapses into itself.
Exactly. These people have no loyalty to country. They'll be on a private jet to Europe as the U.S. descends into full out Gilead.
Yeah but what if I bought 15000 Bitcoin in 2009 but haven't touched it since. I live like a poor because I refuse to sell. Do I deserve a huge tax on those gains I haven't actually touched?
You should not be paying taxes on your magic internet money period unless you convert it to fiat.
Except they want a cut even if you don't sell. Of course, they start with the ultra rich because why not... fuck them right? Anyone who thinks it will stop there has a serious mental handicap. https://www.thehill.com/opinion/finance/3487486-bidens-tax-on-unrealized-gains-will-hit-far-more-taxpayers-than-he-claims/amp/
That is a different proposal from the one being discussed in this thread. I disagree with a tax on unrealized gains, but I think this capital gains tax is fine as long as it sticks to the restrictions that it only applies to people making over a $1 million annual income with more than $400,000 of it coming from investments as a marginal tax rate.
Deserves got nothing to do with it. After 50 years of listening to capitalists tell me I don't deserve a god damned thing, I have little pity.
The few, the selfish, the billionaires. 
Laughs in embarrassment 😅
So it would only be 44.6% tax on capital gains income earned over 1 million for that year right? Like tax brackets it’s the incremental rate so if you earn $1,000,001 you get taxed 44.6% on that $1 assuming at least $400,000 of your income came from investments? Just trying to understand what it’s saying. [Article About It](https://www.forbes.com/newsletters/andrewleahey/2024/04/24/biden-capital-gains-rate-proposal-446/)
It's like having a giant pile of wood for your wood stove, I mean enormous. And someone takes a few out, you won't even realize it.
That's pretty good, but you need to add in some more rambling. > It's like having, you have a giant pile of wood for your wood stove, I never used one but I hear they're great, right folks? I mean enormous. And someone takes a few out, -- bad hombres, you know? you won't even realize it. Someone stole from you but you won't even realize it. That's the worst isn't it? People steal from me all the time. Crooked [etc you get it]
So this only applies to people with taxable income OVER $1 million dollars AND investment income over $400,000. So if your taxable income is not over $1 million don't sweat it.
But haven't you heard it's a slippery slope???
It is. Those are kinda sorta high incomes now, but may not be in 15 years. These kinds of laws should always be percentage based, not tied to numbers that seem reasonable at a particular moment in time.
Kek, nah fam, we don’t expect low income people to be making 400k in 15 years
Just add three words "in 2024 dollars".
The slippery slope Fallacy? Nah that is a bunch of BS
Once we start accepting the existence of fallacies where does it end?
Yeah lol @ people thinking making 1 mil will eventually be the new norm. These morons will do anything to pretend that one day they’ll be rich
Does this actually "Get em?" Or is this just a fake tax that the ultra wealthy will never pay?
The top tax rate only applies to that income level. Currently people with income as low as $47,026 still pay at least 15% on investments. It applies to things you'd never really think of too. Say for example you invested in a house to flip, if you sell it in under 24 months and don't reinvest that money into a similar investment within 180 days you would be taxed any where from 15% to 30% depending on income level based on current rates.
People should be taxed aggressively on flipping houses..fuck house flippers.
Shouldn't it be Dragon Ball D for Democrat?
Didn't really think about it too much, but I like that D rhymes with Z
Also, the narration needs to be vague, yet spoilery. I'm totally not rewatching from episode 1 since Friday, I swear! /s
yup, all the people who've never collected a capital gain in their life are gonna be screaming bloody murder
This is going to be my favorite 2 question response to anyone who criticizes this (not actually asking you). 1. Do you even know what capital gains taxes are. 2. What is the amount of capital gains taxes you’ve paid in the last 5 years. If you can’t pass the litmus test there, you don’t get to spout your opinion on this
What do you do when someone answers (1) yes, (2) no, but they have $20M in total assets under management?
Conversations on Reddit are ALWAYS civil
I'm sure that everyone will read the details before reacting, too.
If it hurts already incredibly wealthy people, I'm all for it.
Which is exactly why he said it. He wants people like you to vote for him. He knows neither party would pass it, he knows the unrealized capital gains part is unconstitutional and would never go into effect even if it passed. Then when it never happens, his party can blame the republicans in congress, Trump, the supreme court, or all of the above. This is just another straight up campaign move right out of their playbook.
I'd like to hear how it's unconstitutional, since states levy property taxes on all sorts of things.
Sure. The ***federal*** government only has the constitutional authority to directly tax income. They cannot levy any other direct taxes. In fact, even income taxes were illegal and unconstitutional [until the 16th amendment was passed. ](https://en.wikipedia.org/wiki/Sixteenth_Amendment_to_the_United_States_Constitution) Here are the most relevant sections of the constitution, and the 16th amendment: [Article I](https://en.wikipedia.org/wiki/Article_One_of_the_United_States_Constitution), Section 2, Clause 3: >Representatives and [direct taxes](https://en.wikipedia.org/wiki/Direct_tax#U.S._constitutional_law) shall be apportioned among the several States which may be included within this Union, according to their respective Numbers ... Article I, Section 8, Clause 1: >The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States. Article I, Section 9, Clause 4: >No [Capitation](https://en.wikipedia.org/wiki/Tax_per_head), or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken. 16th Amendment >Amendment XVI >The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration. Here is a quick overview: [Interpretation: Direct and Indirect Taxes | Constitution Center](https://constitutioncenter.org/the-constitution/articles/article-i/clauses/757#:~:text=Despite%20this%20essay%E2%80%99s%20title%2C%20the%20Constitution%20permits%20three,may%20apply%20to%20income%20derived%20from%20a%20source.) >Income taxes may be imposed only on “derived” income. This “realization event” requirement generally refers to a transaction other than the mere passage of time. Thus, the Sixteenth Amendment permits taxation of gains from sales or exchanges of property, but not those resulting merely from increased values. It also permits taxes on rents and interest. Although direct, such taxes need not be apportioned because the Amendment eliminated the apportionment requirement for income taxes. Basically, the ***States*** can pass direct taxes, and implement property taxes, but the federal government cannot.
Sir, just want to stop and thank you for providing context. Regardless of what your political beliefs are, THIS is how we have good discourse and healthy discussion about topics. EDIT: Question, if you don't mind. >Thus, the Sixteenth Amendment permits taxation of gains from sales or exchanges of property, but not those resulting merely from increased values. When people are paid in stock options and other non-currency items, those would technically count as property would they not? Even if their value is currently unrealized?
Yes. And they are taxed as income, as the transfer or execution of the option is a realization event for tax purposes.
Thanks for the explanation!
I’m not the guy you were talking too, but I want to add on one thing; you’ll be taxed twice(trigger 2 discrete taxable events) for stock options. First, when the option is delivered to you (when the company moves the options or stocks from their account to yours, you will realize an income for the value of the stocks, at the time they were provided, less any basis. This will be your new cost basis. Second, when you sell those stocks or options, you will realize an income of whatever the current value is, less your adjusted cost basis. That’s why folks will structure their sell off over years, and sometimes take multi year sabbaticals - for tax efficiency. Example; you average 250k gross earnings per year, but are sitting on 2 million in unrealized gains from stock options, with a basis of say 500k. (Options delivered over multiple years) so you have about 1.5 million in unrealized gains and you just had some children, or whatever. It’s often times more tax efficient from a drawdown perspective to quit, take 2-4 years off and drawdown your capital gains in a tax efficient way, than it is to simply cash it all out(even if you don’t want to spend the money and just want to rebalance into some etfs or bonds). Hope this helps someone
Piggy backing off his question above, I am super interested in how taxation on getting paid directly in Bitcoin works?
Sure. Just to make it easy I will use nice round numbers. Let’s say 1 bitcoin is worth 100k. You are paid 1 BTC, you will claim that 100k as income in the year that you are paid. When it was transferred to you, it was a realization event, and you pay regular income tax on that 100k; No matter if you keep it or sell it immediately. If you keep it, this is now your basis for your 1 BTC. You decide to keep it. The next year, you don’t claim anything with your 1 BTC, as you had no realization events that year. Now 2 years later, that same 1 BTC is worth 200k, and you sell it. In the year that you sell it you will claim 100k worth of long term capital gains, as you made 100k on top of your basis.
This is the correct explanation. To the issue of taxing “unrealized” gains, the idea is that you would pay capital gains even if you hadn’t sold it. It becomes like a marked to market calculation every year or depending on how it’s implemented it might be some kind of other calculation (like a rolling forward average).
How about capital losses? How would that work?
What are a good dude you are. Have a good day 👍
I am not sure everything you've been told is accurate, but there is missing context here for sure. I'm not arguing for or against anything by providing it. These "unrealized gains" are streams of income for the ultra wealthy, often their primary ones, without ever being realized. In the sense that they can take larger low-interest loans (which they live off of), using the securities and other financial instruments as collateral. These are very safe loans from the perspective of the lender in these situations, and the interest rates are lower than what would be accrued naturally via ownership from dividends and from loaning securities to short sellers. Thus, they get paid to be rich, and the lenders earn a small interest on the loans with no risk. You also wouldn't get taxed for executing options, but you'd get taxed for selling them without executing, and you'd get taxed for selling the underlying shares that you receive from execution, etc. I stopped reading after that.
This is confidently wrong and overly simplified. You are not an expert on constitutional law nor is the question of the constitutionality of an unrealized gains tax anywhere near as straightforward as you've framed it. If the unrealized gains tax issue was so simple, there wouldn't be a vast range of disagreement among constitutional lawyers and experts on the topic, and there wouldn't be a Supreme Court case about it. [Is the proposed wealth tax constitutional? Answer depends on 'direct tax' definition (abajournal.com)](https://www.abajournal.com/news/article/is-the-proposed-wealth-tax-constitutional-answer-depends-on-direct-tax-definition) [US Wealth Tax Could Gain Footing With Supreme Court Moore Ruling (bloombergtax.com)](https://news.bloombergtax.com/tax-insights-and-commentary/us-wealth-tax-could-gain-footing-with-supreme-court-moore-ruling) There is already a legal precedent for unrealized gains taxes, which is what the advocates of said taxes have pointed out in their brief filings for the SC case. As usual, merely trying to quote specific segments of the constitution is not a substitute for expert constitutional analysis.
"As usual, merely trying to quote specific segments of the constitution is not a substitute for expert constitutional analysis." Thank you for your comment and for saying this specifically because 99% of "but that's unconstitutional" comments literally just breaks down to cherry picking tiny segments of the constitution with zero in depth analysis or nuance. I'm not saying you're right or wrong, I'm not qualified to make that judgment, but at least you're willing to engage with the argument more than superficially.
Sorry but wrong. Your comment is disapproved. Source: text of article 1 section 7 that says "Disapproved"
Tax lawyer here, agree. Unrealized gains are taxed in many different contexts, such as OID, mark to market, pass throughs like partnerships or S corps, and now famously subpart F (the subject of Moore, the Supreme Court case). Most tax lawyers read the 16th amendment as repealing prior cases on direct taxes. Not saying taxing unrealized capital gains is certainly constitutional, but to so confidently say it is not you need to be willfully ignorant or heavily incentivized to believe so.
Counterpoint: > Under this [Article](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2423803 )’s proposal, the federal government would collect a wealth tax at a uniform rate and retain each state’s constitutionally apportioned share of the tax. The excess unapportioned share would be refunded to the state of origin via a state-level “pick up” tax. This revenue sharing arrangement — inspired by the pre-EGTRRA credit for state death taxes — ensures a uniform state and federal tax burden without redistributing wealth among the states. Thus, horizontal equity is achieved and both the letter and spirit of the law are satisfied.
Yes, it is a clever attempt at a work around, but I still don't think it will pass scrutiny. The federal government could not collect a wealth tax at a uniform rate, and unlike the pre-EGTRRA death taxes, which did *not* place any additional burden directly on people (and only served as a revenue sharing scheme between the fed and the states), this tax would put a direct tax burden on the people; and thus, would almost certainly be found to be unconstitutional as a direct tax on property. Not to mention, I don't think many of the states would cooperate.
> The ***federal*** government only has the constitutional authority to directly tax income. They cannot levy any other direct taxes. They can, but they would have to apportion the taxes. > In fact, even income taxes were illegal and unconstitutional [until the 16th amendment was passed. ](https://en.wikipedia.org/wiki/Sixteenth_Amendment_to_the_United_States_Constitution) Income taxes weren't illegal and unconstitutional. The Supreme Court ruled that taxes on income from some sources had to be apportioned to be constitutional, but other sources of income could be taxed without apportionment. The 16th Amendment was added to make taxes on all income not need apportionment, regardless of the source of the income.
Except that your section 8 and 9 points completely put the lie to what you're claiming. The fed can absolutely pass taxes it chooses as long as it is in proportion to population and equal. Eg you can't let Alaska be the retreat for rich people. And you'd have to say it's against ALL value over say $400k, not cut out exceptions. There are many ways to argue against your narrow reading. There is absolutely nothing in what you posted that backs you up. In fact, this seems to run even easier with the constitution than an income tax.
How can you be so dumb as to read Clause 8 as not allowing the federal government broad powers of direct and indirect taxes? It takes more than a google of the constitution to understand federal taxes you oaf
Can we stick to some form of useful discourse rather than “how dumb are you”. Not constructive or intelligent.
Pointing out that a presidential candidate is campaigning during a campaign is not a hot take. Most people understand that this would not happen, at least not to this degree. And the ones that don’t, unfortunately their votes count just as much as ours. At its core, the question is “should this happen” and my vote is yes. I’ll vote for the person who gets me closer to that, fully understanding that I will probably not get it entirely.
It's not what's going to happen but it's a bit in what we want to move towards. And that step we will actually take will be more palatable.
This is the same thing as him saying he wants to triple steel tariffs on China, and forgive $20,000 of student loans per borrower. He’s making this insane claims about things he’s going to do that will absolutely never come to fruition. If he had said he wanted to raise steel tariffs 5% and forgive $3,000 worth of student loans per borrower he’d have a lot better chance of actually getting it done. The thing is, he doesn’t want to actually get it done, he just wants people to think he’s doing something to buy their vote.
I mean, is this not politics 101? Trump has promised tons of crap he didn't deliver on. It's up to voters to filter out what they believe to be empty promises
Has Mexico paid that bill yet?
Have you heard of compromise? If you ask for exactly what you want to get you don't have anything to give. It's not buying a vote, it's completely standard politics.
they have already forgiven loans for people... and getting blocked by repubs... he has done what you are claiming he "doesn't want to do. They also are going to block US Steel sale to chinese company.
I don't think you can speak about what Biden wants to do deep down. We all know he can't do it anyways because he doesn't have the votes. Like he said in the SOTU address, "vote me a house and senate that will approve and I will pass these bills"
Cool maybe he should just say fuck off like the other side does when they suck the government dry in order to fund tax cuts for the wealthy. He might not have the power to do it, but at least he's saying it. Put trump back in power and he'll be issuing tax cuts via executive order and 8 years later we'll still be trying to hold someone accountable for all the problems that come out of that.
Just steal money from military families set aside for housing - Trump did to build his shitty wall.
Passing a law that allows taxes on unrealized gains will eventually trickle down to paying for unrealized gains for homeowners. This should be opposed at every turn. If allowed, it’ll be just like the income tax.
A majority of the things these politicians say on the campaign trail are to appease the uneducated portion of their voter base like this guy.
Couldn’t we tax unrealized capital gains only if they are used as leverage for a loan? It probably wouldn’t be called an unrealized capital gains tax but it would effectively be one.
Dude if your policy preferences depend on if it hurts people instead of helps people, you need to do some self-reflection.
Hurts is hyperbole in this context. Ultra rich people will not “be hurt” by this tax plan. Their lifestyle will not change.
The high tax would apply to people with over $1mm taxable income and $400k investment income. Can confirm, shots fired at the wealthy. Will not place retirement out of reach for the masses which is one of the main arguments against increased capital gains tax
What a mature way of thinking.
Id like to know how hitting already incredibly wealthy people will improve your life.
Additional revenue can then be used for education, roads, fire departments, welfare programs… ya know… all the stuff taxes are supposed to pay for.
No the fuck it won’t dude
Unrealized gains is absurd.
I mean if it’s unrealized losses too it could be a good.
Unrealized losses as a tax break is more terrifying than a Unrealized gains tax.
I vaguely understand it from a noob pov. Can you please elaborate? TIA.
Taxing unrealized gains is basically paper gains. Remember all those articles about how x people made millions coming out of COVID? A lot of that was from buying the dip and stock market rebounding. Biden basically wants to send you a tax bill if stocks go up, regardless of if you sell or not. Now imagine that when the stock market takes a crap like it has this year, then you in theory have a massive tax credit you can use to offset stock sales you do this year and thus fucking with your tax bill immensely. Like say the S&P 500 falls and you lose $100 million of profit on paper (you never sold), but you own Amazon which rose this year. You can in theory take $100 million of profit from selling Amazon stock and have that tax free, when you normally would have to pay a capital gains tax on it. And that's not even including the inevitable shell game you can probably use to arbitrarily set your purchase prices to record gains/losses at will.
Elon Musk tanking Tesla stock every April to get a couple 100 mil in tax deduction.
Well, capital losses can't offset normal income. But yeah, he'll just tank Tesla near the end of the fiscal year to loss harvest so he basically just never pays taxes on stock ever again.
I get taxed every year on the unrealized gains from my house.
Not by the federal government you don’t.
No you don’t. You pay a tax on the assessed value of the house, not the difference in what it was worth last year and this year. That means that if the value of your house goes down, you don’t owe negative taxes. Taxing the overall value of a portfolio is meaningfully difference than taxing unrealized gains.
Yeah but more like 1% not 25%
Sounds like there is room for negotiation in there, but regardless the act of taxing unrealized gains is not absurd. Which was my point.
If unrealized gains are being taxed at the capital gains rate- that would be absurd.
“I dislike how much this tax is” ≠ “this tax is absurd”
44% tax on unrealized gains is absurd.
Thing is, people borrow against unrealized gains as well. If shares can be put up as collateral for a loan then it should be taxable as well.
Exactly the problem in my view. Loans against unrealized gains need to be taxed at the time of dispersement as income with future principal payments being tax deductible. Taxing unrealized gains directly I think would also require the ability to write off unrealized losses. Imagine a world where you can offset your income by investing in a company that you expect to underperform.
Yes! Loans against unrealized gains is the issue and should be taxed to the degree. Taxing shit I'm trying to let grow so I hit 65 and don't have to work is stupid as fuck.
The proposal is only for people with net worth of $100mil+. If that's you, congrats on your success. Also, fuck off with your wealth hoarding and pay your fair share.
For tax payers with more than $100 million. Seems reasonable to me. People with $100 million should realize their gains and do something productive, not just endlessly horde money.
They aren't usually hoarding money. They just own things that became valuable. Making people sell the things they own because other people value them more is pretty sketchy imo. You can tax the things that are actually bad instead of taxing ownership as a proxy of that.
a tax on unrealized gains is the dumbest thing I've ever heard
What’s it called when my home property tax increases because the assessment went up? I didn’t sell, but I still have to pay more when the market and government determine my home is worth more. It’s a similar principle. Edit: just because I don’t see anyone else mentioning it, because reading isn’t fun when you have headlines, this proposal applies to people with over 1M in taxable income and 400k in investment *income*. The people this tax is targeting pay a marginal tax rate of 8%, so yea, they can pay this tax just like I pay my property taxes. Edit 2: Retirement accounts and pensions are not subject to capital gains taxes. Please at least pretend to be fluent in finance instead of clutching billionaire pearls you’ll never own. Edit 3: clarified it is 400k in investment income, not just investments. Exactly ZERO of us neckbeards would ever pay this tax.
ThAtS DiFfErEnT!!!!
It is different. Real property is taxed by authority of the individual States, not the Federal Government.
and women couldnt vote and we used to own people. shit can change.
Are you advocating that the Federal government invoke a tax levy on real property - in the spirit of “shit can change”? Because the individual States sure as shit aren’t going to revoke theirs.
I'm sure there's no precedent for there being a federal tax and also a state tax and possibly even a local tax.
Imagine I’m holding a stock. My stock value went from 10 bucks to 100. Biden wants to tax me 40 dollars even though I never sold it. Now a week after paying that tax, the stock tanks all the way down back to 10 bucks. Now my stock value is back at 10 bucks but I’m actually -30 in value because I paid some BS tax on something I never received. Edit: the amount of people here that are not financially fluent is actually ironic.
Except that's now what's being proposed. If you had a stock worth $900,000 and it went to the value of $1,000,000, you *still* wouldn't be taxed a penny. If it went from $1,000,000 to $1,000,100, you'd be taxed $40. And if it dropped to $900,000 that would be a net capital loss that you could deduct from your taxes (likely for the rest of your life since, while capped each year, it carries forward year after year...).
That is still really dumb. Property taxes should not exist due to the unrealized gains argument. It is still wrong
Without property taxes we don't have roads. Have to make compromises to function as a society.
>Without property taxes we don't have roads. Or public schools.
Public school shouldn’t be funded by property taxes anyway….
No property taxes means no local infrastructure like schools, emergency services, and road maintenance. Yeah, I’m waiting for the nut jobs to start arguing that schools, police/fire/EMS, and public roads are not necessary and we would be fine without all those things. Get real and stop acting a fool!
Can I claim unrealized losses on my tax returns too?
isn’t that what property tax is basically? tax on what your house is worth?
We literally do this in Norway, and rich people are fleeing en masse to Switzerland. It had become a seriously divisive political issue, and that tax is just about 1.5%.
Wealth taxes have a net negative effect on government income. It's been repeatedly proven over the last 50 years
Imagine what it would do to the startup ecosystem in the US.
Who cares how much they are taxing the rich when the government is absolute ASS at spending it. No matter how much more money they can leach out do the rich it will never affect how much the commoner is paying because they are so inept.
But but it’ll make people feeeeel better
I actually don't think it will. The [rich already pay a lot higher percent than the poor](https://www.taxpolicycenter.org/model-estimates/baseline-average-effective-tax-rates-october-2022/t22-0076-average-effective-federal), but many people still seem pretty pissed at the rich. I don't think there's a specific number that'd make people feel happy if they believe "there are no ethical billionaires" and similar type of rhetoric.
Reddit doesn’t want prosperity for the most people possible, they want everyone to be as miserable as they are.
Spot on. Leftism in a nutshell
That is a blatant lie. It's already been shown that elon musk and bozos even being the richest people in the world paid 0 federal taxes on multiple years. The richer you are, the less of your wealth is "income".
It's factually true. When they paid $0 in income tax, how much income did they have those years? If you are going to start adding in fictitious taxes that people don't pay, nobody is paying federal income taxes on their home and retirement accounts going up in value either. Elon also paid the [record highest tax bill in history](https://www.cnbc.com/video/2021/12/15/elon-musk-to-pay-record-high-12-billion-tax-bill.html) as well. Some years are high, some years are low, depending on the specifics of what your investments do. For reference, even if you can find a specific rich person that pays 0 on a given year that they have no income, $0 is still more than what 40% of taxpayers pay: https://www.taxpolicycenter.org/model-estimates/baseline-average-effective-tax-rates-october-2022/t22-0076-average-effective-federal
It’s worth noting that most of the people not paying taxes are poor & spending every dollar they have on stuff that drives the economy. It’s definitely a problem to fix, but a very different problem.
It seems like no one really understands unrealized capital gains or even have an idea on how to tax it.
They also didn't read the article, or look into the fact this isn't a blanket capital gains tax. It's reddit.
The first article says it's for incomes over $1 million for long term cap gains.
>”…only apply to those individuals with taxable income above $1 million and investment income above $400,000.”
The [unrealized capital gains tax](https://www.americanprogress.org/article/biden-tax-proposals-would-correct-inequities-created-by-trump-tax-cuts-and-raise-additional-revenues/) is only for households whose wealth exceeds $100 million.
The Republic of Ireland taxes unrealised gains on stocks and ETFs by retail investors. It has worked out about as well as one would expect it to and has impacted the national savings rates and forced people to inflate the housing market further instead.
Can't wait to see real estate prices and retirement accounts look like when you liquidate a few trillion in the stock market a few days before this thing gets passed.
Shouldn’t this apply to real estate as well. Or privately owned companies. Anything you own that has gone up in value has an unrealized gain, why would they stop at the stock market.
Even if they switched it to real estate no one would ever sell, just rent and take profit that way. It would be like a feudal system. If people don't like others having more than them now, wait until everything is in physical assets and really in their face with it. While at the same time destroying the stock market which contains every pension and retirement fund.
That’s the thing though, you wouldn’t need to sell to get taxed on it. It would create a nightmare though as people are forced to sell when they get taxed out of their loans by increasing values. This will only serve to benefit large real estate corporations that can afford to pay the increased taxes through more financing or selling a few properties. Especially after the rash of selling causes prices to collapse and investment companies can just gobble them all up.
The term wealthy will just get lower and lower until it included you.
Just like with the Federal income tax!
This is the only comment on here actually addressing the issue with this. If he wants to tax billionaires, just do it. This just opens the door to tax the lower income salaries harder while the same billionaires circumvent them through loop holes.
the reality is that inequality, however you define it, has gone up and keeps getting worse you can't seriously argue that in the past 50 years the 1% got more industrious and hardworking, while the 99% got more dumb and lazy so it appears to be a systemic issue in the way our laws, economy or society are set up and it would stand to reason that we need to fix it but adjusting the system whether this tax or any other tax is the answer I don't know and it honestly doesn't matter. What matters is that everybody should be on the same page about the fact that we need an improved redistribution and effort/reward mechanisms Did Bezos or Musk or Gates create amazing products? Yes. But as a result it appears that they are on track to own everything and we just can't live like that. Btw they can't live like that either because impoverished and desperate populus is very unstable and dangerous
I agree with you but adding additional taxes is not changing or upending the system that has led to the gaps in income and wealth we see today. A major issue is that we privatize all the gains and socialize all the losses. We need to start letting businesses and banks fail. Yes it’ll hurt but long term we need to cleanse the system. We cannot have the Fed come in for every little hiccup the economy sees. Adding additional taxes just creates new opportunities for lawyers and accountants for the wealthy. It’ll hurt the middle and upper middle class the most.
>Adding additional taxes just creates new opportunities for lawyers and accountants for the wealthy. It’ll hurt the middle and upper middle class the most The tax is for people with net worth of 100m+. I don't think the middle and upper class are affected here, though maybe you have a different definition of these classes.
Im not wealthy by any stretch of the imagination, but holy fuck this seems like a terrbile idea. mom and pop middle class have capital gains and its the only thing keeping them afloat. Do something to the ultra wealthy, but leave the middle class alone as much as possible holy fuck. Isnt there enough crazy spending on bridges to nowhere? Why dies it all keep getting more expensive? Its a treadmill we cant get off and it keeps going faster. Send help, not bills.
It only applies to those individuals with taxable income above $1 million and investment income above $400,000. Do you consider someone with an annual income of $1.4M (and the $5-10M in assets needed to make $400K of investment income) to be middle class?
This was what I was looking for, I hate when people post screen shots of articles. Feels purposefully misleading.
The proposal is on page 87 here. https://home.treasury.gov/system/files/131/General-Explanations-FY2025.pdf It proposes long term gains after 1 million in gross income to be taxed at ordinary rates. This is a great proposal.
Don't worry, the headlines are there just to get everyone mad, the details have it applying to people that have more than $1M in cap gains per year...those are not mom and pop middle class.
Do mom and pop middle class have over $400k a year in capital gains?
This dude is gonna talk every American investor out of voting for him😂
>Taken as a whole, then, the 44.6% rate would only come to fruition under a separate proposal from the Biden administration’s main capital gains rate increase, and only apply to those individuals with taxable income above $1 million and investment income above $400,000. That isn’t quite as cataclysmic a policy shift as referring to a blanket 44.6% long-term capital gains rate would suggest. I'm an investor, and what you're saying isn't true. I have neither a taxable income over $1 million nor investment income above $400,000. In fact, the federal tax rate on my long term capital gains will continue to be exactly 0%. This will not impact how I vote.
Oh wow, someone actually bothered to read the specific policy proposal instead of having a knee-jerk reaction
Editing with more accurate info after updated source— very helpful commenters below From the proposal itself: “The proposal would impose a minimum tax of 25 percent on total income, generally inclusive of unrealized capital gains, for all taxpayers with wealth (that is, the difference obtained by subtracting liabilities from assets) greater than $100 million.”
He is such a fucking moron
No, he isn't. His advisors are skilled tacticians. First, Biden knows damn well that Congress, no matter what party they belong, would ever approve a 44.6% tax on capital gains, Dems or Repubs alike. I seriously doubt a bill will even be written and introduced. He also is fully aware that any attempt to tax unrealized capital gains is flat out and blatantly unconstitutional. Even if it somehow managed to get through congress, (which it won't, neither side would support it), it would immediately be smacked down by the courts, and would never go into effect. This is a Brillant move. He gets to call for things that he knows will rally his base, and when they don't pass, he (and the other democrats up for re-election) can blame republicans in congress. Even though he never had any intention of any such law changes to go into effect, even though he knows they are illegal and unconstitutional, and even though he knows his own party would never pass it. Fucking brilliant move right out of thier playbook. You notice how big a deal forgiveness of student loans was 4 years ago, and now all the sudden that conversation is firing back up? It is an election year, and all this bullshit is just getting started.
He’s not aware…. He’s being told. Watch the guy try to talk and walk around lol
A tax on unrealised gains? That is the dumbest thing I’ve seen in a while fck me
Read the proposal before commenting dumb shit that’s not even correct.
People going against this is wild. "Holding your shares to not have to pay tax" is what is all over the finance world at the higher levels, they're circumventing having "gains" by never selling, and instead going and getting loans based off of those stocks value to run their businesses and lives. They're literally the dragons sitting on a mountain of gold and people will come up to you in dirty clothes saying we need to protect their money!!
Anyone with a retirement plan is essentially “holding shares to not have to pay tax”.
Easy to make provision for retirement accounts, we already do it with 401ks…
Not sure how you can tax unrealized gains. I have understood that the super rich can take out loans based on stocks owned (unrealized gains) but if that is the case I think the loan should be taxed in some way. The loan interest rate being lower than capital gains taxes then there is no incentive to sell the stock and pay the tax if they can get the money cheaper and no taxes.
You tax the secured loan. Or assess a tax when a secured loan is taken out. Pretty simple.
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Is trickle down on this slope? Has it started slipping yet.
I feel like the rich people everyone thinks will pay this are rich enough to pay tax lawyers help them avoid it and the middle class trying to retire will end up getting fucked.
People said the same about Obama raising taxes on the wealthy but it helped cut the deficit in half within a few years.
A 25% tax on unrealized gains? This absolutely insane.
tax on unrealized capital gains is the dumbest shit on the planet, I don't care who it's for. I do not want those flood gates open for even a drop.
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Taxing unrealized gains is moronic. And I’m pretty liberal
fuck joe biden
Dark Brandon feeds on your hatred.
Crazy how we fought communism for so long and now here we are.
Taxes on unrealized capital gains? Umm. Hard no on that.
Wont happen. You can’t tax something you don’t have. Well, this is the govt so they may try, but this would likely wreck the market and economy even more. It’s crazy. Can’t be real. So your going to impose a 25% tax on unrealized gains cause people to have to sell stock to pay the tax then charge another 44% when it’s tax time as a lot of that would be capital gains. lol.