Posted on 08/21/2024 3:12:59 AM PDT by Kid Shelleen
In President Joe Biden’s proposal in the Fiscal Year 2025 Budget of the United States Government, and more specifically in the General Explanations of the Administration’s FY 2025 Revenue Proposals, the Biden administration has proposed a slate of bold shifts in tax policy that could redefine high income tax planning and investment strategies.
Among the most striking initiatives in the FY2025 Budget Proposal is a set of proposals taxing unrealized gains—a concept ---SNIP-- . A shift in tax policy towards tapping revenue streams in unrealized gains is almost certainly on the horizon-
(Excerpt) Read more at forbes.com ...
“It will be double taxation - you will pay a tax on the unrealized gain, and when you sell some of the asset to pay the tax you will pay a capital gains tax on that as well.”
Oh, my. I honestly thought that I was way ahead of the curve on evil thoughts. I can barely make your taillights.
Even more to the point, if they tax your unrealized gain one year and then your investments tank the next year, do they REFUND the tax you paid? (we all know the answer to that)
I could see a ratchet where your investments are up one year and they tax you, then they are down the next and you get nothing. Then they go back up in Year 3 and tax you again. Year 4 they go back down and you get nothing. Rinse and repeat. You pay and pay and pay and pay and never accumulate any wealth.
It's a tax hike on the retirement money that you (hopefully) and I have invested in our entire lives. You thought that money would accrue before taxes? You thought that was a tax-free Roth? Sucker.
It's the Democrat neomarxists showing their hands : "You don't need that money to build a second home in Florida. WE need that money for the illegal invasion and to make sure you can't insure that second home."
This is where Vance could be put to some use rather than getting in social media beefs with Goobernor Brassiere.
It is very easy to do a wealth tax at the federal level to satisfy the per capita direct tax requirement of the Constitution:
Mississippi monthly tax rate .25%
California monthly tax rate .07%
Mississippi monthly tax rebate .182%
California monthly tax rebate .0%
The rich have accountants.
The middle class would simply go along with financial firm defaults to overpay for safety and personally claim back yearly.
Mississippi monthly tax rate 3%
California monthly tax rate .85%
Mississippi monthly tax rebate 2.16%
California monthly tax rebate .0%
It would take about 30 months to get 25%.
“Yes, we can.”
Another way is to have companies like Amazon and Alphabet issue new shares to pay the tax and to compensate lower wealth individuals for share dilution.
There is no domestic safety from Communist governments.
You do get a year end balance statement on your investment accounts and retirement accounts. Easy number to get.
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Remember, investments don’t alway increase in value. So will the government return your tax dollars in bad years when your investments loses money? When will you be reimbursed for those tax dollars?
It takes individuals hard work to get wealth.
It takes governmental employees several thousand keystrokes to get wealth.
Retire if you can.
Spend down your assets insomuch as you can.
Taxing unrealized gains is confiscatory because most people would have to divest the property in order to pay the federal tax on the property. That would effectively be the government taking the property and keeping the tax portion of its sold value, leaving the former owner with the loss of property but keeping its net value in cash.
In the case of shares of stock, the shareholder may not be ready to sell those shares because they are part of a long-term diversified portfolio of stocks and bonds, and selling shares to pay for the tax unbalances the overall portfolio.
What about homes (real estate) that appreciate in value? Will the homeowner be forced to sell the home in order to pay the tax on the unrealized appreciation on the home?
What about undeveloped land in remote areas that suddenly become popular as development finally reaches out that far? If the land rapidly appreciates because housing or industry or luxury resorts are finally being planned, is the owner of the dormant land going to have to pay a tax on the unrealized appreciation on that land? Will the tax be so high as to force the owner of the land to sell it in order to pay the tax?
This is why I see this as an illegal 5th amendment takings of private property.
-PJ
Florida used to have an intangibles (stocks, CDs, bonds) tax - .1% annually on the first $20,000, .2% annually on the amount above $20,000. It dated from 1931.
One would have to use an S&P stock guide to get the stock values.
Jeb Bush got rid of it.
I think Pennsylvania still has an intangibles tax.
“Taxing unrealized gains is confiscatory because most people would have to divest the property in order to pay the federal tax on the property.”
Borrowing on margin up to 50% of stock value is still possible I believe.
Remember, investments don’t alway increase in value. So will the government return your tax dollars in bad years when your investments loses money? When will you be reimbursed for those tax dollars?
I am not arguing it is a good idea, just that it would easy for them to implement.
That's not a reflection on you or your point, it's my ignorance on the subject matter that's keeping me from understanding your point, so I can't comment on it.
-PJ
“Will the homeowner be forced to sell the home in order to pay the tax on the unrealized appreciation on the home?”
The Greenwich Crony Capitalist HELOC Mortgage Company has a solution.
The purpose of borrowing on margin is primarily to be able to gain leverage.
It fell out of favor circa 1929.
When I was younger the margin rate was about 9%. I never felt I could reliably earn more than 9% a year by buying stock, so I never borrowed on margin.
So the asset owner is not just deprived of a portion of the asset's value, but they are now committed to a cash outflow for years in the form of interest payments on a loan to pay the tax?
What happens next year when there is another bump in unrealized gains? Does the owner have to take out a second mortgage, or a third mortgage, just to keep up with the taxes on unrealized gains?
Am I understanding your point properly?
-PJ
THE CHOICE COULD NOT BE ANY CLEARER:
There’s a widening Harris-Trump policy gap on tax. Social media claim Harris backs President Biden’s plan for a 44.6% capital gains tax and a 25% tax on unrealized capital gains for those with more than $100m in assets. That would theoretically narrow the fiscal deficit and act against dangerous inequality; practically it may risk a mass sale of US assets and the move of capital and the rich outside it.
Of course, that this tax hike was already raised by Biden yet didn’t pass speaks to the president proposing and Congress disposing: that means those guessing the presidential electoral outcome also need to guess the Senate and House outcomes. Meanwhile, Trump favors lower taxes.
There’s also a Harris-Trump gap on trade. The former may keep existing Biden tariffs and add to them strategically. The latter wants a 20% universal tariff and up to 100% on China.
“Will the tax be so high as to force the owner of the land to sell it in order to pay the tax?”
25% tax
+
income tax on construction wages + builder profits
impact fees
recording taxes
annual property tax
+
brand new Section 8 rental rate apartments for Obama voters
brand new affordable units for ‘essential’ public employees
“tariff”
I would have the motor vehicle trade be balanced internationally.
$100 billion US->Mexico
$100 billion Mexico->US
The financial balancing would primarily take place within companies.
Ford
$10 billion (large engines, transmissions, EV batteries) US->Mexico
$10 billion (auto parts, wiring harnesses) Mexico->US
“Does the owner have to take out a second mortgage, or a third mortgage, just to keep up with the taxes on unrealized gains?”
There will be crony capitalist companies that will attend to all the details as described in the FINANCIAL AGREEMENT prepared for you.
Simply sign where indicated.
It’s no more complicated than a Home Equity Line of Credit.
The only difference is the equity taken out gets deposited in a US Treasury account rather than an account of yours.
I can't decide by your posts to me.
-PJ
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