Jezcoe
21
Looks like it would be a progressive tax on the top holders of stocks.
It could be something worth looking into.
1 Like
Snow96
22
Thing is, your taxing money that doesnât exist in a personâs pocket. Example. Today you get taxed on your stock holdings. The âvalueâ of them is 8 million dollars. Next week, something terrible happens and the stock drop and are now valued at 3 million dollars. Whatâs the true value of the stocks? is it 8 million? Is it 3 million? What if they get taxed and try and sell some â 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?
Jezcoe
23
Donât 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.
1 Like
Snow96
24
Now on the flip side, if you have an unrealized loss â can you claim that against your other income?
Jezcoe
25
Donât know.
It is in the proposal phase.
WCD9973
26
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.
Jezcoe
27
How would you feel about a progressive unearned income tax?
1 Like
WCD9973
28
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 canât go buy a house or a car with Microsoft stock. He has to sell it first.
2 Likes
WCD9973
29
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.
Jezcoe
31
Great. It would be easier to tax those companies then.
1 Like
Jezcoe
32
I apologize. I donât 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 donât understand why my labor is taxed at a higher rate than my wealth.
Seems to me that it should be the opposite.
1 Like
WCD9973
33
Ahhh. I see.
No. I actually donât. Your wealth isnât 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) wonât need any government programs long term which helps everyone.
1 Like
Jezcoe
34

WCD9973:
Ahhh. I see.
No. I actually donât. Your wealth isnât 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) wonât need any government programs long term which helps everyone.
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 letâs 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.
Guntsu
35
No, this wont matter in the context of 401kâs and IRAâs which is what most of the average joeâs have their money in as they are tax deferred investments.
WCD9973
36
But think about thatâŚ
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 50âs 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 thatâs not what we want.
DougBH
37
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.
Jezcoe
38

WCD9973:
But think about thatâŚ
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 50âs 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 thatâs not what we want.
Making $120,000 in dividend payments off of a few Hundred Thousand in the Market? I donât think that that is really possible⌠but okay⌠raise the number. I said I wasnât 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.
DougBH
39

gooddad409:
What i have left in stock iâm going to sell and put in some sort of cash account instead.
Or just put it in the bank. Darned if iâm going to pay them a cent in this new tax proposal.
At 67 and retired thereâs no need for me to be risking anything by investing anyway.
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.
DougBH
40
I thought this was a discussion about Yellenâs personal beliefs. Has there been any indication that the administration would consider this? I would be (unpleasantly) surprised if it got very far.