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Comment on Borrowing money against their stuff to get more stuff to borrow money...

bridgeenjoyer@sh.itjust.works ⁨3⁩ ⁨weeks⁩ ago

Ancap (ie, right wing) friend sent me this off shitter:

Unrealized gains tax for Gen-Z:

You buy a Pokémon card for $50.

Someone offers you $500 for it. You say no. You love that card. You’re keeping it.

The government says: “Cool, but that card is worth $500 now. You owe us $100 in taxes.” You: “…I didn’t sell it.”

Government: “Don’t care. Pay up.”

You don’t have $100 lying around. So you’re forced to sell the card you love just to pay a tax on money you never received.

Next month? That card drops back to $50.

Your card is gone. Your money is gone. And the government shrugs.

That’s a wealth tax on unrealized gains. They don’t pay you back the tax…

Now picture this.

Your mom calls you crying. She has to sell the house she raised you in. Not because she can’t afford it. She’s lived there 30 years. It’s paid off.

But some website says it’s worth more now and the government says she owes $15,000 she doesn’t have.

So she sells your childhood home. The kitchen where she made you breakfast. The doorframe where she marked your height every birthday.

Gone.

To pay a tax on money that was never real.

Now picture the opposite.

Your dad put everything into his small business. For 20 years he built it from nothing. One year the business is “valued” at $2 million on paper. He owes a massive tax bill. He empties his savings. Sells his truck. Borrows money. Pays it.

Next year the market crashes. His business is worth $200,000.

He lost everything to pay a tax on a number that doesn’t exist anymore.

Does the government give him his money back? No.

Does the government give him his truck back? No.

Does the government care? No.

They sold this idea as “taxing billionaires.” But billionaires have armies of lawyers, offshore accounts, and trusts. They’ll be fine.

You know who won’t be fine? Your mom. Your dad. Your neighbor with a small business. The farmer down the road who’s had the same land for four generations and now has to sell it because dirt got expensive.

You’re not taxing wealth. You’re taxing people for owning things.

It’s like getting a parking ticket for a car you might drive somewhere someday.

They want you to own nothing and be happy. To fund the fraud, waste and abuse of the welfare state they created.

There is enough money. More tax isn’t needed. It’s all a lie. But you’ve been gaslit into believing this is a rich vs poor debate.

I hope you understand what’s at stake.

I pretty much instantly shut that down by saying “THEN MAKE THE FUCKING LAW FORBID THE BILLIONAIRES FROM SIDE STEPPING IT! THAT IS THE PROBLEM! IT IS A RICH VS POOR DEBATE YOU IDIOT!!!”

People are idiots.

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merc@sh.itjust.works ⁨3⁩ ⁨weeks⁩ ago
The ways this is idiotic:

“The government says: “Cool, but that card is worth $500 now. You owe us $100 in taxes.” You: “…I didn’t sell it.””

There is currently no tax on unrealized gains. If there ever were, it wouldn’t be 20%. It would be something tiny like 1-2%. It’s a wealth tax. Wealth taxes are tiny compared to income taxes precisely because they’re taxing something you’re holding and will still have next year if nothing changes.

“Next month? That card drops back to $50.”

Why does it “drop back to $50”? OP said that the $500 value was because someone offered that much for it. Did that person no longer want to buy it? It’s true that sometimes the value of things is fluid, which can make wealth taxes hard. But a 90% drop in value over the course of a month? Let’s be realistic.

“Your mom calls you crying. She has to sell the house she raised you in. Not because she can’t afford it. She’s lived there 30 years. It’s paid off.”

Yes, housing taxes are wealth taxes. Sometimes when the place you lived in appreciates enough, the property taxes go up a lot. So yes, sometimes people do have to move when their properties go up so much they can no longer afford the property taxes. But, when that happens they get to sell the place, and if the property taxes are so much that the person can no longer afford them, that means that the property is worth a fortune. The property tax is often 2% or below. So, if mom owes $15,000 in property taxes, that means her property is worth at least $750,000, probably actually more than $1M. Cha ching! She can buy a nice, smaller place now that she doesn’t need to raise kids, and use the rest to go on some nice vacations.

Yeah, it sucks if you have an emotional attachment to a place you can no longer afford. But, there are plenty of people who can’t afford to buy a house at all, who weren’t even allowed to mark their kids’ heights every birthday because they were renting. Wealth taxes are a way to even things out. Property taxes are a pretty shitty form of wealth taxes because they hit the middle class harder than the ultra rich, but people who don’t own property don’t pay property taxes, which is good.

“Next year the market crashes. His business is worth $200,000.”

Man, this guy can’t catch a break, all his relatives have everything crash 90% in value immediately after having to pay a tax bill they can’t afford, despite wealth taxes being tiny amounts.

In addition, most of the time wealth taxes have a threshold exactly for this kind of reason. If someone owns a $2m business in a place with wealth taxes, they may pay nothing because the first $5m is exempt.

Yes, sometimes wealth taxes are more painful to upper middle class or the moderately rich because they don’t have the armies of lawyers and accountants who can find the best strategy to minimize their taxes. But, the answer isn’t to scrap wealth taxes entirely. It’s to accept that even the moderately wealthy should pay more than people who own almost nothing, and to properly fund the tax authorities and financial crimes divisions of the cops so they can go after the ultra rich when they illegally avoid taxes.
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- knatschus@discuss.tchncs.de ⁨3⁩ ⁨weeks⁩ ago
  If you got 500$ - 100$ in tax for the card and it drops back to 50$, you can just buy it back with 400$ you still have left…
  
  And a wealth tax and inheritance tax usually have a cut before you even have to pay any tax. Got granny’s house worth 500k? No problem. Get a building complex worth millions? Pay your damn taxes. I’m sure the state will accept a payout over time if you can’t afford to pay it at once.
  
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  - merc@sh.itjust.works ⁨3⁩ ⁨weeks⁩ ago
    
    If you got 500$ - 100$ in tax for the card and it drops back to 50$, you can just buy it back with 400$ you still have left…
    
    They’re talking about a wealth tax where you have to pay $100 even though you never sold the card. (But it’s double bullshit because something as small as $500 is never going to face a wealth tax, and $100 (20%) is a way higher tax rate than anybody would pay.
    
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    knatschus@discuss.tchncs.de ⁨3⁩ ⁨weeks⁩ ago
    They said they were forced to sell the card due taxes
    
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greygore@lemmy.world ⁨3⁩ ⁨weeks⁩ ago
The Pokémon card example is ludicrous - aside from the fact that CCG cards are not “wealth”, or the fact that no one would offer $500 for a card that is only worth $50, a single buyer does not make a market or set the value. Stocks, the source of most outrageous wealth, by definition have a market value, and even the most frothy of assets don’t swing 10x in such a short period of time.

The mom calling about selling the childhood home is very real, in fact it already happens! Guess your friend is unfamiliar with property taxes. My home has tripled in value and the government appraised value went up by a smaller amount, and now I pay taxes. When my mortgage is fully paid off, I will still owe the local government taxes every year. All those “tax free” states lean on regressive taxes like sales tax and property taxes to avoid collecting progressive income taxes, so this problem is even worse in those states.

A while back I owned a small business, and because I didn’t pay myself in stock, I had to pay taxes every year based on how much my company profited. My business partner and I would do a distribution every year to pay those taxes. We paid more every year in taxes on our modest business than Tesla paid last year on $5.7B in income. Also, company “worth” for private businesses is based on appreciated assets and cash on hand… a business owner who “lost” 90% of the business value of a two decade old business in a year has much, much bigger problems than unrealized gains taxes.

Middle class people are already paying wealth taxes. Mutual funds are taxed on unrealized gains all the time, albeit at capital gains rates (because we value capital more than labor). Property taxes are paid on the biggest source of wealth most people own. Even poor people are paying annual taxes or fees on their cars.

I agree, your friend is a moron, but I think most people knew that the second they saw “ancap”.

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- hector@lemmy.today ⁨3⁩ ⁨weeks⁩ ago
  Property taxes are regressive, but having state income taxes doesn’t preclude them, the states just spend the extra money. Here some cities have income taxes, the state, and the feds. And counties do property taxes through the township levels. The state will spend every penny they can get their grasping hands on, currently for pet projects of lawmakers and tax breaks and incentives and money spent to improve locations to lure big business to set up here.
  
  While the small business both parties pretend to care about like yourself pay through the nose, that money is taken from us and handed to the richest companies in the world to set up here without paying those same taxes.
  
  It’s all about leverage, and alone we have none. It’s never been more clear we need to organize, on our own forums, around what we agree on, no matter what we disagree on. On existing social media we are simply turned against each other on issues, oh that person from the other side that rejected their party and came over to our side? They once said this and still say that so fuck them they aren’t pure, even as the people making those arguments originally are the biggest pieces of shit in the world.
  
  Social media is rigged, we need our own forums set up to not be rigged, to not be hooked by government and big business, and providing clear rules enforced fairly. Federated sites on general forums allowing people to cooperate publicly and privately as they see fit, and move between social medias on the same account. Where violations can be appealed all the way to a jury trial of members to prevent the rich, government, and moderators perverting it or abusing their power.
  
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Nindelofocho@lemmy.world ⁨3⁩ ⁨weeks⁩ ago
Would making the law kick in after a certain amount of net worth be the answer in that situation?

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- GalacticSushi@lemmy.blahaj.zone ⁨3⁩ ⁨weeks⁩ ago
  It’s almost like we have that exact system in place for income.
  
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  - Zoot@reddthat.com ⁨3⁩ ⁨weeks⁩ ago
    It’s just a shame that it’s completely backwards with those making less money paying a higher % of their money than those with more money.
    
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- damnedfurry@lemmy.world ⁨3⁩ ⁨weeks⁩ ago
  Not likely. First of all, the net worth numbers you see for these ultra-wealthy people are all educated guesses. To actually legally impose anything based on total net worth, you need to actually audit net worth and get a real figure. The resources it would take to do this are very unlikely to yield more tax revenue than they cost, especially because there is so much one can possess whose value is pretty much completely arbitrary (the high-end artwork, etc.).
  
  It’s actually all-but-certain it’d be a net loss of tax revenue. There is a reason that every time such a policy targeting only the wealthiest is put into place (it’s been tried numerous times over the years in a bunch of European countries), it’s gotten rid of soon thereafter, or ‘dialed down’ to be just another ‘mundane’ tax that falls primarily into the lap of the middle class.
  
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  - WoodScientist@lemmy.world ⁨3⁩ ⁨weeks⁩ ago
    
    To actually legally impose anything based on total net worth, you need to actually audit net worth and get a real figure.
    
    So, what’s wrong with that? You have a wealth tax on all wealth over $100 million. If you have wealth anywhere over say, $50 million, you hire an accountant to assess your business’s value. Everyone with that level of wealth already hires accountants. It’s a trivial additional burden. If your wealth is no where near the tax threshold, you don’t need to bother hiring an accountant to get a precise figure.
    
    There is a reason that every time such a policy targeting only the wealthiest is put into place (it’s been tried numerous times over the years in a bunch of European countries)
    
    I’m calling bullshit on this. There are all sorts of taxes that fall heavily or solely on the wealthy. The reason the wealthy don’t all leave is that they don’t actually want to live in places that have low taxes. You can get low taxes in a war-torn hellhole, but most don’t actually want to live like that.
    
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    damnedfurry@lemmy.world ⁨3⁩ ⁨weeks⁩ ago
    
    If you have wealth anywhere over say, $50 million, you hire an accountant to assess your business’s value.
    
    ‘Oh, our accountant says the valuation is just under the threshold for the new tax, what a coincidence!’
    
    It is trivially easy to shift assets around in such a way that having a net worth threshold for a given tax is basically a guarantee that no one will pay it. Many countries have tried this already, and failed. Why repeat their mistakes, instead of learning from them?
    
    We need to remember that people, and especially the ultra-wealthy, are not inert blocks of wood that don’t react to policy changes like these.
    
    I’m calling bullshit on this. There are all sorts of taxes that fall heavily or solely on the wealthy.
    
    Firstly, I said “only the wealthiest”, so don’t already start nudging those goalposts by “calling bullshit” and immediately tweaking it to “heavily or solely”. Secondly, if there are so many, name three.
    
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    NannerBanner@literature.cafe ⁨3⁩ ⁨weeks⁩ ago
    
    So, what’s wrong with that? You have a wealth tax on all wealth over $100 million. If you have wealth anywhere over say, $50 million, you hire an accountant to assess your business’s value. Everyone with that level of wealth already hires accountants. It’s a trivial additional burden. If your wealth is no where near the tax threshold, you don’t need to bother hiring an accountant to get a precise figure.
    
    And I’m going to say, it’s a great means to go after the assholes if they try to claim their assets are worth something different. I think we have a recent case of 34 felonies about that…
    
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  - chuckleslord@lemmy.world ⁨3⁩ ⁨weeks⁩ ago
    Accepting your premise as true, that still doesn’t make the tax valueless. The real value in a wealth tax is breaking up the money from individuals, the revenue is just a bonus. Even if it is all used to pay the accountants, that’s still money that’s now actually moving through the economy rather than zombie wealth sitting in some rich fuck’s paws, doing nothing but contribute to inflation.
    
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    damnedfurry@lemmy.world ⁨3⁩ ⁨weeks⁩ ago
    
    The real value in a wealth tax is breaking up the money from individuals, the revenue is just a bonus.
    
    And the mask comes off, revealing the true motivation. You’d happily waste the taxpayer money that is the poor’s lifeline in many cases, reducing overall tax revenue, because hurting the rich matters more to you than helping the poor.
    
    money that’s now actually moving through the economy zombie wealth sitting in some rich fuck’s paws, doing nothing but contribute to inflation.
    
    Net worth is a valuation, a price tag on something that’s already been transacted on, how could it possibly contribute to inflation? What nonsense.
    
    The ultra-wealthy don’t have Scrooge McDuck vaults full of cash, their wealth consists of investments in businesses that run within the economy.
    
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  - merc@sh.itjust.works ⁨3⁩ ⁨weeks⁩ ago
    Do you consider Switzerland to be a European country. It has had forms of wealth tax for centuries, and the current tax generates roughly 4% of Switzerland’s total revenue. It seems to work just fine there.
    
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    damnedfurry@lemmy.world ⁨3⁩ ⁨weeks⁩ ago
    Switzerland’s wealth taxes, depending on area (there is no country-wide wealth tax) starts at the equivalent of ~$100,000 on average, putting it very squarely in the
    
    ‘dialed down’ to be just another ‘mundane’ tax that falls primarily into the lap of the middle class.
    
    category I mentioned before. That is absolutely not a tax aimed exclusively at the ultra-wealthy.
    
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vane@lemmy.world ⁨3⁩ ⁨weeks⁩ ago
Start taxing 20% from $1B+ and I think 99.999999% of us are fine.

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- fodor@lemmy.zip ⁨3⁩ ⁨weeks⁩ ago
  Historically, taxing the ultra-rich at 90% or 95% has not stopped them from staying rich, and it also helped everyone else get more social services.
  
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  - hector@lemmy.today ⁨3⁩ ⁨weeks⁩ ago
    When the US was at the height of prosperity, when the working class had the highest standard of living, and disposable income, the highest ever in history of any working class hands down, in the 1950s, and until the 1970s when it declined precipitously in the late 70s, obscene incomes were taxed at 90 percent. The first so much was taxed at lower rates, above a certain amount the rest at 90%.
    
    The majority of taxes came from businesses too, 90%, today it’s flipped and 90% is individuals.
    
    Whatever problems existed in those decades, a minimum wage job paid for a family, bought a house, a cheap car, health care, food, incidentals, going out for a burger even. Just one of them. And that is the issue people care most about, having enough money to live with dignity.
    
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    bridgeenjoyer@sh.itjust.works ⁨3⁩ ⁨weeks⁩ ago
    People argue that isnt why America was prosperous. " ACKSHUALLY We were prosperous during that period because we destroyed the other countries ability to produce."
    
    I don’t believe that myself, those idiots are billionaire apologists.
    
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hector@lemmy.today ⁨3⁩ ⁨weeks⁩ ago
A wealth tax wouldn’t apply to normal people below an obscene threshold. And you wouldn’t tax a primary residence at all, as is already the case with our tax code on near every score. You wouldn’t tax a baseball card collection.

But if a person put a bunch of paypal stock into an IRA account, and it turned into 5 billion dollars later, you would find a way to tax most all of that. If bezos’ worth increased by billions, then a portion above an obscene level would be taxed, often exempting the first so much then graduating higher levels, as is customary in taxation here.

You are excusing the super rich from taxes by associating it with hypothetical unfair taxations against normal people for smaller amounts. Which is the same way they got rid of the estate tax, by lying about who paid the estate tax, claiming family farms and small business paid it, when it was only obscenely rich people that paid it.

Now, no one pays it. An heiress just inherited 200 million on her 19th birthday or something, not the entire estate just a piece of it, without paying a dime in tax, thanks to the dishonest arguments mirroring the ones you made on this in the first half of your piece at least.

Bezos paid 600 dollars in 2020, a year his net worth skyrocketed, and where he spent an incredible amount of money he got without getting a paycheck. He paid less in taxes than we do, not just per capita, total. He claimed the child tax credit. When your net worth increases by millions above millions, it needs to be taxed, whether it’s when they borrow against the value of that which is where they now realize much of their income that is tax free now, or whether it’s regardless of it being realized.

If the value they were taxed on an increased price of an asset fell later, they would be able to subtract that back 3 years and forward ten years to offset other taxable income, that’s the way it’s already set up, itself quite unfair as working people get no such consideration to only pay taxes on profits, which would be akin to only paying taxes on wages after paying all of your core bills.

In 1950, the majority of taxes, like 90 percent, came from businesses, now 90 percent is ripped from working people, and the richer they are, the less they pay above a certain threshold, something has to change.

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JasonDJ@lemmy.zip ⁨3⁩ ⁨weeks⁩ ago
The whole reason the right wants to abolish the “welfare state” is to have a pipeline of poor and hungry children to sell as sex slaves.

Change my mind.

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chiliedogg@lemmy.world ⁨3⁩ ⁨weeks⁩ ago
Yeah. My parents moved into the country because their house value got too high and they were being taxed to death because of all the people that moved into my hometown making property values skyrocket.

Then other people started moving into the area, and now the value of their place has skyrocketed, and they’re gonna have to sell again because they’re being taxed to death because other people moved into the area.

There’s this massive movement of retirement people from place to place because every time they move somewhere to reduce their tax burden the values go up again.

I’m 100% for capping the taxable value of land for primary homes based on the value at the time of purchase plus inflation. The whole idea of a homestead is to improve land, and

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- merc@sh.itjust.works ⁨3⁩ ⁨weeks⁩ ago
  “Boo Hoo, my assets keep going up in value so much that I keep having to cash out!”
  
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  - chiliedogg@lemmy.world ⁨3⁩ ⁨weeks⁩ ago
    No. They keep having to move away from their homes and get new loans at higher rates.
    
    They’ve never been able to pay off a home because they keep having to do new mortgages.
    
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    WoodScientist@lemmy.world ⁨3⁩ ⁨weeks⁩ ago
    Your parents just suck at personal finance. They used their home as a piggy bank and raided the equity every time they moved. Either that or they kept buying more expensive properties.
    
    I’m sorry, but your story is just not credible. If they owned a house in the city, and then the value soared, they should have been able to take their windfall, move out to the country, and buy a cheap property in cash. The only way this isn’t true is if they either did a lot of cash-out refinancing, or if when they moved to the countryside, they bought a much larger property.
    
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- ryathal@sh.itjust.works ⁨3⁩ ⁨weeks⁩ ago
  The vast majority of states have some level of control on the increase in property taxes. Generally through a cap on appreciation, cap on tax increase, or both.
  
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