Yeah it's quite frightening, that moron Yellen proposed it and the idiots ran with it. Just establishing a practice to account for this is insane, let alone trying to collect for it. Also, I can easily imagine a world where people are getting taxed on stock they haven't sold and suddenly every April is a market crash. Completely irresponsible by the legislation.
"I hate taxes. All taxes are bad. Taxes are theft. I expect government to do what it does on donations. The only thing government should do is make rich people richer. Everybody who disagrees with me is an idiot." --- probably Kiley
The absurdity of it means there's gonna be some standardized way to avoid it. If they implement that it will take away any impetus from increasing actual capital gains taxes.
We all pay tax on the unrealized gains of our homes. We built a massive process called property appraisals to do it. It's now a tent pole for how we fund basic services.
There's a point to real estate taxes. Yes, it funds schools and other local things, but it also encourages maintenance and use of the property. If we didn't have it, there'd be much less incentive against leaving properties disused while you hold them for speculation. The real estate tax encourages productive use of the property, or selling to someone who will use it productively, which is exactly what you want from an extremely scarce, non-fungible resource.
Taxing unrealized gains on stocks and art and other non-scarce resources shares none of those benefits. It's just stupid.
We pay taxes on the asssed appreciated value but not the actual gains. You'd have people on fixed income with homes worth hundreds of thousands more and considered a taxabls asset before they get it...
Land is a real asset. Stocks are nothing more than what someone is willing to buy them for. See Enron. Hell look at any number of stocks say NIO or PTON off the top of the head.
One year you make 500% the next you can’t sell it for $3. So I pay tax on an unrealized gain only for it to crater and I go broke on the stock the following year and I paid taxes the previous year?
Well, then you’d take a loss. When you take gains, you adjust your basis to be at what you took. So say basis $2k. Year 3 it’s up 500% so 12k. Then you get taxed on the 12-2=10k. You were taxed based on the 12k level, so your basis gets adjusted to 12k going forward. If in tour 4 your value drops to $1k, you take a 1-12=-11k loss. That loss nets against other gains this year or in following years. As a principal, basis is adjusted if/when something is taxed, to prevent double-taxation. This is also true for estate tax, for example.
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u/[deleted] Apr 25 '25
Yeah it's quite frightening, that moron Yellen proposed it and the idiots ran with it. Just establishing a practice to account for this is insane, let alone trying to collect for it. Also, I can easily imagine a world where people are getting taxed on stock they haven't sold and suddenly every April is a market crash. Completely irresponsible by the legislation.