Looks like it would be a progressive tax on the top holders of stocks.

It could be something worth looking into.

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Thing is, your taxing money that doesn’t exist in a person’s pocket. Example. Today you get taxed on your stock holdings. The “value” of them is 8 million dollars. Next week, something terrible happens and the stock drop and are now valued at 3 million dollars. What’s the true value of the stocks? is it 8 million? Is it 3 million? What if they get taxed and try and sell some – and the sales price puts the value at 2.5 million? Does the person get a refund once they have the money in their pocket and we know the true at the time of sale value?

Don’t know.

It is in the proposal phase

Could be a good way to disperse the majority ownership of stocks away from the top 10%.

They own like 80% of the stock market and probably more now after the pandemic soooooo… yeah… not that interested in fighting for their interests.

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Now on the flip side, if you have an unrealized loss – can you claim that against your other income?

Don’t know.

It is in the proposal phase.

I do NOT support it. BUT - It has been done.

You get property taxed based on the value of your house. NOT the value you own nor the value you bought it at, but the value of the house. If the market collapses, you pay less property tax next year -but no refund.

But again -i am against it.

How would you feel about a progressive unearned income tax?

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Im still against it. To me, this is not income. Until they cash out the stocks -its just numbers on a paper -not real wealth. Bill Gates can’t go buy a house or a car with Microsoft stock. He has to sell it first.

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BTW -I have NO doubt -None -that if this happen, the top 10% would figure a way to keep stock prices LOW where they have major holdings until they are ready to cash it out, then inflate it. You would be living in a pump and dump world.

Or it pushes more money into private companies and more companies to go private or simply not go public.

Great. It would be easier to tax those companies then.

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I apologize. I don’t think that I was clear.

I have supported a progressive tax on capital gains on unearned income (income from dividends and such) for quite a while.

I don’t understand why my labor is taxed at a higher rate than my wealth.

Seems to me that it should be the opposite.

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Ahhh. I see.

No. I actually don’t. Your wealth isn’t being taxed at a lower rate. Your investment is.

And only long term investment is. If you day trade, you are paying normal income rates. The goal is to encourage people to invest long term. So the Government (who really has limited powers to make people do that) offers a lower tax rate for money you invest but leave in there.

The more people invest long term, the more likely they (and employees of the busniess they invest in) won’t need any government programs long term which helps everyone.

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I get all of that.

Which is why I suggest a progressive tax rate on unearned income.

This would leave the middle class dividend earners at the current or even lower rate and tax any unearned income of let’s say over (and this number is super random so I am not married to it) $120,000 at a higher rate and so forth and so on.

No, this wont matter in the context of 401k’s and IRA’s which is what most of the average joe’s have their money in as they are tax deferred investments.

But think about that…
Middle class who make 120,000 could be saving consitently for retirement and have a few hundard thousands in the market (not in a 401k) that they sent a life time investing and savings for retirement.

So while they may be a married couple making $120,000 (or $150,000 or whatever) combined they might have 900,000 saved. If they are in their late 50’s this is very possible. .

So because you are taxing unearned income, even at a progressive rate, now they are getting taxed on that 900k?

Even worse, they are getting taxed it EVERY year when that was their retirement nest egg??

By the time the retire, if the market takes a dip along the way, they may have been better sticking their savings under the mattress and that’s not what we want.

We are near the historic top of the market now. So if we enter a period of downturn for, say, 5 years, is the treasury going to give up trillions of dollars in revenue?
Or does it just work one way?

I question the Constitutionality of such a tax. We are allowed an income tax. The change in value of an asset is not income unless it is sold.

And personally, I have about 20 stocks. Every year I have to calculate the change in value over the last year? That is ridiculous. If the stock goes up it is only of value to me if a) I sell it or b) I receive dividend income from it. When either of those events occur, the government taxes. This could force a sale just to pay for holding an asset.

Making $120,000 in dividend payments off of a few Hundred Thousand in the Market? I don’t think that that is really possible… but okay… raise the number. I said I wasn’t married to it.

Remember I am talking about unearned income… not earned income.

I would actually like to see the taxes on labor go down and a progressive tax on investment be put into place.

Financing would switch from equity to bonds. Not sure what effect this would have long term. I would much rather pay taxes on interest income than spend days calculating and recalculating change in asset values.

I thought this was a discussion about Yellen’s personal beliefs. Has there been any indication that the administration would consider this? I would be (unpleasantly) surprised if it got very far.