Tax on Billionaires’ Unrealized Gains

[RafPinto]

How silly is that?

 

https://www.wsj.com/articles/tax-on-billionaires-unrealized-gains-will-likely-be-in-budget-package-democrats-say-11635096384

[Will B Good]

Not at all silly.....why should rapid gains in capital wealth (almost exclusively the already wealthy) remain totally tax free whilst PAYE (usually poorer working people) pay tax on every penny they earn.

 

If my salary doubles from 40k to 80k I have to pay 45% income tax on the increase, whilst a multi-millionaire's mansion doubles from 500k to a million and they don't pay a penny?

[Fat is a type of crazy]

It's an unusual way to tax but if the result of the tax system as it is, is that billionaires are getting richer and richer and paying no tax, it seems a good outcome.

 

Democrats wanted to increase the marginal rate of tax in the normal way for the rich but  Manchin and Sinema weren't having it.

 

Some point out that the most wealthy pay a fair share of tax but my opinion is that at some point you have benefited so much from American capitalism, and have so much power, that it's not unreasonable to pay a bit more tax.  

 

Capitalism is fair in that the innovative and smart and hard working benefit but from generation to generation, the cards are stacked against the poor children, as compared to the rich. So something that balances the books a bit seems fair. 

 

 

[Jingthing]

It's not the best way to tax, not even close, but as long as we're into U.S. tax policies, the only reason the democrats are trying to do this is that their hands are tied in reversing the absurdly massive trump tax break for the rich that should have never happened in the first place. "Conservatives" whine about deficits when they're out of power, but when they're in power they support such horribly fiscally irresponsible tax breaks for the rich. So they want their cake and eat it too. Sooner or later, somethings gotta give. Now the republicans can demonize the democrats for more scary (to the rich) sounding creative measures, when the perverted truth is they're the side that has (mostly) created this mess.

[phetphet]

Elon Musk and Jeff Bezos will likely move all their money into orbit where the government can't get it. ????

[GeorgeCross]

tax on billionaires unrealised gains..

 

soon to be

 

tax on millionaires unrealised gains..

 

leading to

 

tax on everybodies unrealised gains.

 

you have been warned.. there's a large pension pot and uncle sam wants a piece of it.

[LarrySR]

The wealthy in the USA have been gaming the system for decades.

Go ask your accountant how many of their clients that make $10 million or more pay any taxes. 

 

The Republican farce of "Trickle Down Economics" policy (tax cuts) that hands truckloads of cash to the wealthiest citizens has had zero success.  It's a disaster with 10 of the 11 last recessions coming under Republican administrations. Yet every election, the Republican Party has the hutzpah to roll it out again and again. 

And during the recessions, the rich get even richer by scooping up the discounted equities, then shower Republican lawmakers with $millions in campaign funding.

And the Republican lawmakers fight like hell to protect their benefactors by passing laws, gerrymandering voting districts, voter suppression, exploiting politically advantageous hate by weaponizing religious intolerance, xenophobia, bigotry, extremism and even mocking science & education thru a mass media machine of fake news. 

 

Thru their behavioral science marketing, and a 24/7 steady drip feed of outrage, agitation, hate and fear thru Fox News, Republicans Oligarchs have somehow convinced the blue collar workers to vote for tax cuts for the wealthy, deregulation's for corporations and voting against their own interests....a Democrat platform for higher minimum wage, heath care, education and protecting the environment.

 

Democrats are proposing a sensible tax hike on earnings over $400,000, higher taxes on capital gains above $1,000,000, taxes on billionaires that pay zero...... and astonishingly, "Joe the plumber, Mike the mechanic", Frank the farmer, Paul the painter, and guys like George in the above post that watch Fox vote against it! 

The mind boggles.

 

There are two types of Republican voters. Millionaires and morons. Check your wallet to see what you are.

 

Edited October 29, 2021 by LarrySR

[Jingthing]

12 minutes ago, GeorgeCross said:

tax on billionaires unrealised gains..

 

soon to be

 

tax on millionaires unrealised gains..

 

leading to

 

tax on everybodies unrealised gains.

 

you have been warned.. there's a large pension pot and uncle sam wants a piece of it.

Fear mongering. 

[LarrySR]

3 minutes ago, Jingthing said:

Fear mongering. 

He heard it on Fox.

[piewarmer]

On 10/29/2021 at 5:11 PM, GeorgeCross said:

tax on billionaires unrealised gains..

 

soon to be

 

tax on millionaires unrealised gains..

 

leading to

 

tax on everybodies unrealised gains.

 

you have been warned.. there's a large pension pot and uncle sam wants a piece of it.

Too bad for US citizens, the rich tax will trickle down very quickly

They did this with income tax when it was introduced... Being unemployed with no visible savings is a way to beat it

[Longwood50]

On 10/29/2021 at 4:37 PM, Fat is a type of crazy said:

It's an unusual way to tax but if the result of the tax system as it is, is that billionaires are getting richer and richer and paying no tax, it seems a good outcome.

 

Democrats wanted to increase the marginal rate of tax in the normal way for the rich but  Manchin and Sinema weren't having it.

 

Some point out that the most wealthy pay a fair share of tax but my opinion is that at some point you have benefited so much from American capitalism, and have so much power, that it's not unreasonable to pay a bit more tax.  

I am reminded when I see posts like this of the quote by Joseph Goebbels the Minister of Propaganda for the Nazi's.  He said, tell a lie, make sure it is a big lie, and keep constantly repeating it and people will eventually believe it. 

 

Using figures by the Internal Revenue Service the top 1% of taxpayers pay more than the bottom 90% combined.  So exactly what is "their fair share"  

Have they become wealthy - Yes.  Using just 1 example I am from a midwestern city where a small grocer grew to a chain of now over 300 super centers like Walmart.  That person is a billionaire.   Now is that fair.  Consider, the company employs over 60,000 people directly.  The company stores worth millions pay millions in property taxes that support the municipalities they serve.  The sales tax generated by those stores pays untold millions to the state coffers.  The 60,000 employees pale in comparison to the truckers, food vendors, merchandise vendors, sales people, electricians, plumbers, etc that all provide products and services to this one supermarket chain. 

Would the world be better off if people like this were taxed to the point where they can't expand their businesses and hire more people?  You tax things like cigarettes, alcohol, and gas guzzling cars you want to have less of.  You give tax breaks to things like electric vehicles that you want to encourage more of. 


So what has tax policy done.  It has progressed  to a policy to tax those who are productive and subsidize those who are not.  It has successfully done so to the point that 47% of the tax returns filed in the USA pay ZERO.  That is why it is so disingenuous when the liberals say all the tax cuts go to the wealthy. First, the wealthy pay the bulk of the tax so any cut will benefit them disproportionately.  Secondly how in H do you give a tax cut to 47% of the tax returns that already don't pay anything?  

There seems to be this growing socialist thought process that views "successful" people as somehow the enemy when in fact they are the ones who invent products, provide services, and employ people.  Do they get wealthy doing so - Yes  SO WHAT  Without them would society be really better off if no one had the desire to be a capitalist and invest their money in the hopes of becoming a success?  I am not wealthy but do I have jealousy for the wealthy, no.  I have admiration for them.  I look at the productivity that Bill Gates gave the world and he has been underpaid for the wealth he brought the world. 

Remember those who really want the world as better for everyone wants to make everyone millionaires.  Those that are misguided want to make this "fairer" by having no millionaires.  Be careful what you ask for as it might come true and seeing no reward for their investment and efforts the entrepreneurs just might say, gee taking the chance on running a business just isn't worth the risk.  If I fail, I lose my investment.  If I am a success my reward is that my wealth is confiscated. 




There

https://taxfoundation.org/top-1-percent-pays-more-taxes-bottom-90-percent/

Edited November 6, 2021 by Longwood50

[Fat is a type of crazy]

28 minutes ago, Longwood50 said:

I am reminded when I see posts like this of the quote by Joseph Goebbels the Minister of Propaganda for the Nazi's.  He said, tell a lie, make sure it is a big lie, and keep constantly repeating it and people will eventually believe it. 

 

Using figures by the Internal Revenue Service the top 1% of taxpayers pay more than the bottom 90% combined.  So exactly what is "their fair share"  

Have they become wealthy - Yes.  Using just 1 example I am from a midwestern city where a small grocer grew to a chain of now over 300 super centers like Walmart.  That person is a billionaire.   Now is that fair.  Consider, the company employs over 60,000 people directly.  The company stores worth millions pay millions in property taxes that support the municipalities they serve.  The sales tax generated by those stores pays untold millions to the state coffers.  The 60,000 employees pale in comparison to the truckers, food vendors, merchandise vendors, sales people, electricians, plumbers, etc that all provide products and services to this one supermarket chain. 

Would the world be better off if people like this were taxed to the point where they can't expand their businesses and hire more people?  You tax things like cigarettes, alcohol, and gas guzzling cars you want to have less of.  You give tax breaks to things like electric vehicles that you want to encourage more of. 
So what has tax policy done.  It wishes to tax those who are productive and subsidize those who are not.  It has successfully done so to the point that 47% of the tax returns filed in the USA pay ZERO.  That is why it is so disingenuous when the liberals say all the tax cuts go to the wealthy. First, the wealthy pay the bulk of the tax so any cut will benefit them disproportionately.  Secondly how in H do you give a tax cut to 47% of the tax returns that already don't pay anything?  

There seems to be this growing socialist thought process that views "successful" people as somehow the enemy when in fact they are the ones who invent products, provide services, and employ people.  Do they get wealthy doing so - Yes  SO WHAT  Without them would society be really better off if no one had the desire to be a capitalist and invest their money in the hopes of becoming a success?  I am not wealthy but do I have jealousy for the wealthy, no.  I have admiration for them.  I look at the productivity that Bill Gates gave the world and he has been underpaid for the wealth he brought the world. 

Remember those who really want the world as better for everyone wants to make everyone millionaires.  Those that are misguided want to make this "fairer" by having no millionaires.  Be careful what you ask for as it might come true and seeing no reward for their investment and efforts the entrepreneurs just might say, gee taking the chance on running a business just isn't worth the risk.  If I fail, I lose my investment.  If I am a success my reward is that my wealth is confiscated. 



There

https://taxfoundation.org/top-1-percent-pays-more-taxes-bottom-90-percent/

I actually agree with a lot of what you say. I was a bit of a non-committed lefty and in my 20's I read Ayn Rand and it kind of changed my thinking. Even though I don't agree with a lot of Ayn Rand stuff the concept of a healthy society rewarding effort is a good point.

Where I differ is on two points. I'll start by acknowledging a limited knowledge of US tax compared to Australian tax. You say that the proposal is to tax them to the point they are not rewarded for effort - my understanding is that  the proposed increase the top marginal rate is from the current 37 per cent by a few per cent only and only for those earning more than a few hundred thousand. The corporate rate too would be increased from the Trump rates but still lower than recent historical rates. So I don't believe that is a much of a disincentive.  If Democrats can't get together on that are looking at other options with a similar outcome.  

The second point is just that a strength of America is that there are many seriously wealthy people. There are also many many poor or  struggling. A reason many don't pay tax is they earn such low incomes.

A reason the poor are poor may include lack of effort, ingenuity and intelligence of some. A bigger reason though, in my opinion, is due to a range of generational reasons that keeps the rich rich and the poor poor. 

The rich have ways to minimise tax, not available to the poor, and many individuals and companies can strategise to pay little or no tax. I might recommend a marginal rate for individuals at 40 per cent over say $200,000 or $300,000  per year and a marginal rate around 30 per cent for corporations. Close loopholes.

Bill Gates has given a lot to America and should be an inspirational figurehead even though many republicans seem to think he eats babies. But he has benefited to such a degree that I don't think  him paying 40 per cent with no loopholes is unreasonable. If taxing on wealth rather than income gets a fairer outcome then so be it but I concur that they need to be careful not to go to far. 

Edited November 6, 2021 by Fat is a type of crazy

[tgw]

On 10/29/2021 at 4:12 PM, Will B Good said:

Not at all silly.....why should rapid gains in capital wealth (almost exclusively the already wealthy) remain totally tax free whilst PAYE (usually poorer working people) pay tax on every penny they earn.

 

If my salary doubles from 40k to 80k I have to pay 45% income tax on the increase, whilst a multi-millionaire's mansion doubles from 500k to a million and they don't pay a penny?

it's ok as long as losses also bring tax breaks in equal amounts.

[Will B Good]

2 hours ago, tgw said:

it's ok as long as losses also bring tax breaks in equal amounts.

I'd be filthy rich if I received tax breaks on my losses......555

[Longwood50]

17 hours ago, Fat is a type of crazy said:

I'll start by acknowledging a limited knowledge of US tax compared to Australian tax. You say that the proposal is to tax them to the point they are not rewarded for effort

First as the graph shows the top 1% use to pay only 20% of the total income tax bill while the bottom 90% paid 50%.  The top 1% now pay 40% of the total tax bill and the bottom 90% pay approximately 30%.  So at what point is "it enough" when the top 1% pay 50%, 60% 70%. You can see the creeping socialism where you take from those who produce and give to those who don't. 

As previously mentioned you tax something you want less of and subsidize something you want more of.  Taking from those who produce creates less of them and subsidizing those who live off others gets more of them. 

You say a couple of percent doesn't make a difference.  Consider a lottery with a prize of $10 million, isn't that enough?  How many tickets do you sell.  If you make the prize $100 million, how many tickets do you sell?   The greater the reward the more people who sill strive to obtain it. 

Finally the majority of the wealthy come from business successes.  They certainly don't come from failures.  The more profitable the business is, the more they want to expand.  That is good for the economy, and good for working class people.  Business expands from using retained profits.  The less money they have to expand, the less expansion there is. 

It is like the adage of the cup of water and the pump.  You can drink the water but then the pump will not prime and you don't get more water.   Like it or not, successful people become wealthy from providing something of value.  That should be something encouraged, not discouraged.  The fact that they become wealthy is a "so what"  Would the world be wealthier and the population better off if Bill Gates when he was worth $1 billion had a larger percentage of his wealth confiscated and hence Microsoft didn't expand.   Would the 3 million people who have jobs at Walmart be better off if Sam Walton as the company was successful had his money confiscated and there were only 500 Walmart stores instead of 5,000.  

It would seem far more logical to look for ways to help the bottom 90% improve their skills so they could earn more rather than confiscate the fruits of others labors who are successful just "because they can afford it"  

Look at Thailand where there is this dual pricing for locals and farangs.  They use the pretext  well they can afford it.  The basic tenet of communism is "from each according to their ability, and to each according to their need"  

This idea that somehow the wealthy benefited from what was provided by society in general is ludicrous.  Everyone has the benefit of what society has provided.  The difference is some people use what society has provided to create value and hence become wealthy and others either to lack of ability or lack of initiative do not.  

Edited November 7, 2021 by Longwood50

[Fat is a type of crazy]

2 hours ago, Longwood50 said:

First as the graph shows the top 1% use to pay only 20% of the total income tax bill while the bottom 90% paid 50%.  The top 1% now pay 40% of the total tax bill and the bottom 90% pay approximately 30%.  So at what point is "it enough" when the top 1% pay 50%, 60% 70%. You can see the creeping socialism where you take from those who produce and give to those who don't. 

As previously mentioned you tax something you want less of and subsidize something you want more of.  Taking from those who produce creates less of them and subsidizing those who live off others gets more of them. 

You say a couple of percent doesn't make a difference.  Consider a lottery with a prize of $10 million, isn't that enough?  How many tickets do you sell.  If you make the prize $100 million, how many tickets do you sell?   The greater the reward the more people who sill strive to obtain it. 

Finally the majority of the wealthy come from business successes.  They certainly don't come from failures.  The more profitable the business is, the more they want to expand.  That is good for the economy, and good for working class people.  Business expands from using retained profits.  The less money they have to expand, the less expansion there is. 

It is like the adage of the cup of water and the pump.  You can drink the water but then the pump will not prime and you don't get more water.   Like it or not, successful people become wealthy from providing something of value.  That should be something encouraged, not discouraged.  The fact that they become wealthy is a "so what"  Would the world be wealthier and the population better off if Bill Gates when he was worth $1 billion had a larger percentage of his wealth confiscated and hence Microsoft didn't expand.   Would the 3 million people who have jobs at Walmart be better off if Sam Walton as the company was successful had his money confiscated and there were only 500 Walmart stores instead of 5,000.  

It would seem far more logical to look for ways to help the bottom 90% improve their skills so they could earn more rather than confiscate the fruits of others labors who are successful just "because they can afford it"  

Look at Thailand where there is this dual pricing for locals and farangs.  They use the pretext  well they can afford it.  The basic tenet of communism is "from each according to their ability, and to each according to their need"  

This idea that somehow the wealthy benefited from what was provided by society in general is ludicrous.  Everyone has the benefit of what society has provided.  The difference is some people use what society has provided to create value and hence become wealthy and others either to lack of ability or lack of initiative do not.  

I just ask, at the risk of repeating myself, weather the increase in tax paid by the top 1 per cent is because each new $ earned is taxed at a higher rate than before, or because their wealth has increased so exponentially, compared to the other 99 per cent.

Sometimes I think that people underestimate the wealth that is out there.  Crypto currency can have billions poured into it and at the same time property and the stock market surge. 

The lottery example is in my favour because you have given an example of a 10 fold increase in prize whereas I am suggesting a modest increase. If it was from 37 to 40 the prize might go from $10m down to $9.25 m. Still worth getting. 

There is a risk of business moving off shore but those taxes can pay for better infrastructure and health and education to get those skills that benefit businesses. 

I see Thailand as the epitome of capitalism where the rich are extremely rich and the poor are poor with few opportunities. Sure you can give examples where the poor become rich, well done to them, but in my opinion that does not make up for the state of most peoples opportunities. The support during the pandemic was fairly woeful. 

The United States obviously does something right given its success. Australia though,  in my opinion, has a fairer taxation system that hopefully still doesn't stifle those who wish to work hard.

Edited November 7, 2021 by Fat is a type of crazy