You’re mostly right here, except stocks are an asset you can take a loan against with a margin loan or a line of credit. I suggest if you are doing that it SHOULD count as realized gains because you absolutely can use such a loan to buy a house, a car, a yacht, an island in the South Pacific, or an aircraft carrier.
Comment on But how would they be able to live on that?
FiniteBanjo@lemmy.today 2 months ago
I don’t really understand what is being advocated for, here. Are we taking away their stock shares? Because 214.8 Bn is absolutely not the liquid assets of Elon Musk.
You can’t buy a house or car with unrealized gains. Are we going to start taxing everybody’s unrealized gains annually or what is the effective bracket?
Ya’ll gotta be more specific and shit. Let’s just tax realized gains, and any loan collaterals based on the stocks, at exceptionally high rates? That feels like it would be way easier than some vague bullshit that could harm consumers more than billionaires.
dream_weasel@iusearchlinux.fyi 2 months ago
FiniteBanjo@lemmy.today 2 months ago
Okay but if you take out a loan then you need to repay the loan with income which is taxed, so…
It’s already being taxed…
BrianTheeBiscuiteer@lemmy.world 2 months ago
You can repay a loan with money from a different loan. And they only just need enough money to cover the interest. For most of them the repayment doesn’t come until they die and even then they pull as many tricks as possible to make it look like their estate is worth less than it is. Either way the amount of money these guys live off of is a tiny percentage of their entire wealth. 100M loan for a new mansion? That’s not even 0.05% of Elon’s wealth. Even $1 billion is a lot of fucking money. I don’t care how illiquid your wealth is, if it’s over $10B you’re just hoarding it and it’s doing fuck all for the economy.
damnedfurry@lemmy.world 2 months ago
I don’t care how illiquid your wealth is, if it’s over $10B you’re just hoarding it and it’s doing fuck all for the economy.
That wealth is primarily invested in businesses that function within the economy, so “doing fuck all for the economy” is literally a lie, and this act is literally the opposite of “hoarding”.
FiniteBanjo@lemmy.today 2 months ago
Okay but that doesn’t justify taxing all unrealized gains for everyone, does it? Just tax the rich, or add laws against perpetual refinance without income.
Sidenote: If Elon Musk could do such a convoluted scheme then he wouldn’t have sold Billions of Tesla stock a couple of years ago and paid Capital Gains taxes in the billions. I believe with all my heart that Elon is such a POS that he would have absolutely wormed his way out of that sort of requirement if it were so easy.
dream_weasel@iusearchlinux.fyi 2 months ago
Yeah it’s taxed at a much lower rate. Short term capital gains is a real bitch. Long term isn’t so bad unless you’re liquidating a lot… Like enough to buy a house or car or something we are discussing now. Over 450k ish is taxed 20%, but you can get a loan for 3 to 12 percent AND it’s tax deductible lol.
Really, if you aren’t rich with stock you are getting F-ed in the A…
FiniteBanjo@lemmy.today 2 months ago
Sorry I misread your comment before I responded.
FiniteBanjo@lemmy.today 2 months ago
If a hypothetical unrealized gains taxed passed today then there is a chance of poor people getting F-ed in the A, especially people with retirement funds or VYM shares. There is even a chance it hurts the poorer 80% more than the richer 20%.
The 2016 Tax Reform is a great example of that, it got tons of support from poor people and middle class and in the end it fucked them all in the A.
jj4211@lemmy.world 2 months ago
Okay but if you take out a loan then you need to repay the loan with income which is taxed, so…
Part of the problem is there are shell games around the repayment. I thought this could be handled by any use of the stock as collateral should count as a ‘sale’ for tax purposes, and any taxes on those proceeds that would be “double taxed” as folks are so afraid of can be offset by tax credits if the loan is ‘properly’ repaid in a normal way. So if you loan but repay normally, ok, you gave the government a ‘0% loan’, but you are still “fairly” taxed other than that, and the 0% loan is a small price to pay for access to your wealth.
Bjornir@programming.dev 2 months ago
They can do what they already do and use their unrealized gains as collateral for a loan and use that to pay the tax of they don’t want to realize the gains. This is already how they spend their money without realizing gains. I don’t see the issue with them doing the same for taxes as they do for their yachts and private jets.
FiniteBanjo@lemmy.today 2 months ago
You’re late Bjornir, like 5 people in this comment thread have said the same thing.
starman2112@sh.itjust.works 2 months ago
If Elon Musk can immediately liquidity $50 billion to buy a social media website, these parasites can liquefy $5 billion to pay for the roads their services rely on
FiniteBanjo@lemmy.today 2 months ago
Alright but the meme doesn’t say that. The meme just says they have unrealized gains and that we should take them. That’s poorly thought out, the bracket should be clearly defined before we even think about making an unrealized gains tax, because I guarantee you there are some GOP reps who salivate at the idea of taxing grandmothers of their inadequate retirement funds.
Masterblaster420@lemmy.world 2 months ago
read the room dude
FiniteBanjo@lemmy.today 2 months ago
No, I will be semantic and overly technical until the day I die.
bstix@feddit.dk 2 months ago
You can’t buy a house or car with unrealized gains
Yes you absolutely can.
Go to the bank. Show them your balance sheet. Loan money. Pay for stuff.
Got_Bent@lemmy.world 2 months ago
It’s already a thing and has been for quite some time. It’s called mark to market. Most people and companies use it to enjoy unrealized losses, but unrealized gains are in play. It’s not a new concept. It’s just that it’s an election at the individual level rather than a requirement.
AA5B@lemmy.world 2 months ago
We manage not tax things like houses and cars on unrealized gains. Why should stock or art, or anything be different?
FiniteBanjo@lemmy.today 2 months ago
We tax houses with unrealized gains when they sell, also.
UPGRAYEDD@lemmy.world 2 months ago
Umm… when they sell… they are realized?
FiniteBanjo@lemmy.today 2 months ago
Yeah sorry, I ended up giving a low effort nonsense reply to an equally nonsensical reply. Perpetual cycle of stupidity over here.
I meant to say we do tax unrealized gains with property but we also tax capital gains upon realization. The user before me said we “manage not tax things like houses and cars”.
jj4211@lemmy.world 2 months ago
Speaking of that house to buy, I’m getting taxed on my “unrealized gains” in my home value being estimated higher, despite our being where I live and not really primarily intended as an “investment vehicle”.
So if property tax can apply to stuff I’m not using as “money”, then I have a hard time objecting to the same general principle applied to stocks. The same arguments that can be made about stocks can apply to any property tax.
FiniteBanjo@lemmy.today 2 months ago
Are you asking for reform of Real Estate and Property Taxes or are you asking to Tax all unrealized gains?
BTW property taxes are like 0.32%-2.32% and when you sell your home then you have to pay big boy capital gains taxes unless you’ve listed it as your primary residence for more than 3 years.
I think an unrealized gains tax could work if we set the bar high enough that poor people won’t be negatively affected by it.
Obi@sopuli.xyz 2 months ago
I’m the Netherlands we have wealth tax so if you have more than 50k€ in cash/stock you start getting progressively taxed on it.
FiniteBanjo@lemmy.today 2 months ago
I’m assuming pensioning or retirement have some separate system? Because it would be hard to retire on 50k Euro alone. Actually, I assume they don’t have medical costs, so maybe that would be enough…?
jj4211@lemmy.world 2 months ago
I’m saying that we already have the concept of small tax rates against unrealized “gains” for the common folk, so it’s not crazy to think that unrealized gains for the rich folk could be some sort of fair game, on a roughly analogous scale. Mostly the same concerns about unrealized stock value apply to real estate property. The exceptions that I can conceive of would be:
Housing already has the typical property tax priced in. So whatever the effects of the wealth tax would be, it would be novel and thus some sort of adjustment would occur.
Housing has some intrinsic use and is not just a financial vehicle. People want to be in a house and most don’t even want to think of it as an ‘asset’ if they don’t have to. So one’s desire to reside in a primary residence is not dissuaded if you had reason to think you could “earn more” elsewhere. Stock is a more purely speculative financial instrument, so behaviors could be different. If a 3% tax across the board were levied, suddenly the effect is that investment vehicle is handicapped by 3%. So the average S&P return is 10% today, and thus would be effectively 7%, which might trigger some moves. Or if you say ‘3% over 10m’, then you get a shift where relatively less moneyed investors become an advantaged class, which might be interesting.
FiniteBanjo@lemmy.today 2 months ago
The small tax rates against unrealized gains are not only for the common folk, rich people own real estate too. Sometimes up to a dozen homes worth dozens of times more than a small family home each.
The unrealized gains tax on investments would also impact the vast majority of “common folk.”
Indiscriminate taxation will not fix our system. We need to tax the rich, not the rich and the poor equally. If anything we should have a negative income tax on the poor.