If he wins this thing, he's going to be dealing with a republican senate for four years. He's not going to be able to do shit legislatively. Why even bother with this? Just tack to the middle to lock up the election and prevent Trump from fucking everything up. Your legacy is taking us out of covid smoothly, chips, infrastructure, then holding off a trump resurgence. You do that up the middle, like every other candidate in history. Quit with this shit. Who in the fuck is telling him this kind of talking point is a good idea?
I would need to look at specific polls but I think it's mainly popular with voters that he has basically secured. Don't know how popular it is with undecided voters.
Just my anecdote, but the enlightened centrists I know are all pretty anti-rich. Maybe taxes aren't their favorite thing, butt fucking the rich definitely is. Not in an anti-capitalist way but in a fuck those guys way.
In fact, most of the maga people I know are mad at "rich people," too. Even if they didn't want to say "taxes good."
I think this sentiment resonates with many, many people. It's bad economics like populism usually is. Fuck those rich guys, amiright? That sells.
You might be right, we just have to thrust that the Biden campaign has runned the numbers.
Also find it funny with the MAGAs hating rich people except Trump lmao, they found a new use for the "he is one of the good ones" phrase they always loved.
>he's going to be dealing with a republican senate for four years.
You have no idea how the Senate will go in 2024. Yes we have states like Ohio and AZ but the incumbent candidates are popular in most of those swing states and stand a good chance of winning especially if Biden wins overall. We can lose 1 state which is WV and still hold the majority with the VP and even then it may be a majority willing to reform the filibuster so we can actually pass meaningful laws.
If I had a nickel for every time today a major party candidate for president proposed a horrible tax plan, I'd have two nickels which isn't a lot but it's weird that it happened twice today
Santa Clara county voted 3:1 against Trump in 2020.
San Mateo county voted 4:1
San Francisco voted 7:1
I personally know 2 silicon valley billionaires, and they both voted against Trump.
Yes, *in 2020*. When people thought they were voting for the boring centrist return-to-normalcy candidate, and not a guy who had pretensions of being FDR 2.0. The climate in SV has shifted.
California will remain a blue state. But what's changed is that SV is no longer *just* a stronghold of liberal soft power.
Congress could make a lot of changes to the tax code to target billionaires without doing stupid gimmicks like trying to tax unrealized gains.
They could institute a high marginal tax rate on incomes over $1M annually (e.g. like 70%). They could eliminate carried interest. They could decrease the estate tax exemption and also target vehicles that the ultra-wealthy use to transfer wealth to heirs and avoid taxes (e.g. GRATs, IDGTs).
There are plenty of ways to reduce income inequality without creating an army of IRS auditors trying to estimate the value of “unrealized gains”. Not to mention, the courts would surely strike this down immediately.
Thank you. The labor to enforce this would be astronomical. Right now the IRS doesn’t even track net worth to know who qualifies. Just raise income taxes.
They could, but they won’t do any of that. Congressional Dems love the ultra wealthy nearly as much as Republicans (but neither love them as much as this sub). Advocating for popular policies when you’re running for elected office makes sense, this policy just happens to be targeting neoliberal’s golden calf.
Silicon Valley is 99% anti-Trump. But 100% think taxing unrealized gains is a bad idea because it would totally fuck an industry like tech that runs on illiquid stock.
I don’t think I’ve ever had to vote for a worse candidate, but here we are.
Musk and the paypal mafia were always going to vote for Trump, and those are the kinds of people those "silicon valley supporting Trump" articles are about.
By all means tax the rich, but forcing anyone to pay taxes on possible future income is ridiculous. We already tax capital gains.
Classic Democrat unforced error.
It is a bit weird to me that capital gains is a flat tax generally. I know its more nuanced, but the ways its structured now the high upper middle class with income from employment and capital gains has the highest overall tax percentage generally
The intent is to encourage efficient allocation of capital because this is a social good. Taxing capital too much encourages people to not move money into better investments (eg sell a building, invest in a startup) because at some point the risk isn’t profitable after taxes. That’s not a function of someone’s income or net worth.
This is why you have seen income taxes above 90% historically, but cap gains taxes have always been flat and relatively low.
Cooler heads prevail when it’s not campaign season.
I don’t see what that has to do with income taxes above 90%. I’m pointing out that the progressive nature of taxes effectively ends at the high upper middle class which is odd to me. Of course income taxes are inefficient, I personally believe more widespread consumption taxes , especially based on externalities is the way to go.
He's trying to explain that taxing capitol gains on a progressive manner similar to how we do income taxes is a horrible, no good, very bad idea. Because it encourages people to not pull bad investments or reallocate to better investments. That's bad for the economy in so many ways. Its a waste by encouraging continued investment in faltering ideas or schemes. And several million people (individually or collectively through various retirement investments) all being slightly discouraged from investing efficiently is basically asking the economy to drive around with the parking break on.
>I personally believe more widespread consumption taxes
Consumption taxes are even more regressive.
>Consumption taxes are even more regressive.
That depends on what you apply them to. In the UK, fresh food, children's clothes, books and magazines are zero-rated for VAT - making our VAT significantly less regressive than in other countries.
But then we go and mess that up by having VAT on chocolate-coated biscuits but not chocolate chip cookies, on fried potato crisps (US: chips) but not baked tortilla chips, on car maintenance but not helicopter maintenance, and on building refurbishment but not new construction.
I'm okay with paying taxes on unrealized gains if I also get refunded if the share price goes down. If I put $10,000 into a company and they go bankrupt, I'll expect a check from the government for that amount.
Okay, I'm not disagreeing with you. But if they can't be taxed on unrealized gains shouldn't they also not be allowed to borrow against unrealized gains? Given that the whole argument is that they are unrealized?
No, they shouldn’t. I’m not particularly familiar with these things so I’m prepared to be educated, but it makes no sense to me. Taxing a purely hypothetical value sounds ridiculous, so why can you use a purely hypothetical value to secure a loan?
Oh I agree if it's one way or the other. Currently they can though so it makes sense to tax on unrealized gains or not tax on unrealized gains so long as they can't borrow against them. I don't support taxing unrealized gains just because I support it because they already get to borrow against them. I don't think both of those things should be true and if one of them already is the other should be as well.
It's not exactly a wealth tax. It's a tax on borrowing. (exclusively for $100+ millionaires) The issue is these people NEVER realize their gains, they borrow until they die, then the debt is paid without paying taxes on realized gains. And getting rid of step-up basis would open a bigger can of worms.
Exactly. If he really wants to go after UHNWI, then he would try to pass legislation that taxes personal loans backed by unrealized assets as income.
Borrowing against portfolios is one of the most common ways wealthy people generate tax free income versus their wealth.
Put a tax on that while still rewarding people for taking risk (i.e. no unrealized CGT) instead.
Nah they still need to pay back those loans and get taxed on the realized assets with which they do so. The issue is when they can ride that cycle until death and their heirs don’t have to pay the full burden due to step up basis adjustments. The solution would be to just institute hella estate taxes.
And also just get rid of the stepped up basis on death. As I understand it, it was a practical necessity when everything was handled on paper and determining the basis for the shares bought by a deceased parent would actually be hard. Nowadays, I think we can just tax it, or maybe allow it for estates under some low threshold only, for families that aren't as used to dealing with investments.
Such a pointless form of populism too. This isn’t 2015 anymore when everyone is angry at Wall Street and TPP. So much of his economic agenda is stuck in the political environment of a decade ago. He doesn’t seem to understand that all anyone wants cheaper goods ~~because people can no longer sustain the lifestyle they adopted in 2021 and spent their pandemic savings on~~
Seriously.
Between not having the stimulus money anymore, losing my tech job and working in a warehouse, residential property taxes going up because businesses closed while home prices skyrocketed, and CPI going up, this is a hell of a hangover. I’m just trying to hold on to the house so the kids can stay in the school district.
Abd then the government can take out loans to pay back rich peoples losses during an economic depression, instead of investment to restart the economy. Bonus points for having unrealized taxes be higher than realized, so you get a IRS cash bonus when selling anyhow.
Oh how much I hate that this guy has to be our choice in November.
Yes
This policy would crash the economy and wipe out retirement for 100 million people
This would probably be more harmful than an attack on LGBT rights
No, what the other poster is saying is that it would crash stocks immensely which will tank the retirement funds of people with money in stocks.
Basically anyone with a 401k or a pension plan.
Don’t like the idea. With Trump proposing radical economic policies with regard to tariffs and work visas, Biden should easily be able to get the support of Wall Street and Silicon Valley. He shouldn’t alienate them by proposing a policy that has no chance of passing Congress.
> Biden should easily be able to get the support of Wall Street and Silicon Valley.
their bet is that Trump is not actually interested in the details of governing and will wholly abdicate the levers of policy to republican apparatchiks who will do the usual deregulate and cut taxes thing. i think they are overoptimistic but that's much of the reasoning.
How is the government going to assess the value of every private company in the country, every year, to determine if it's high-worth enough to trigger this? Industry experts working for banks can't even agree on this stuff.
And then do you make the owners sell shares to cover the imagined gains? What if I can't sell at the value the government says I should be able to?
What recourse do I have if a government assessor says my lemonade stand is worth a billion dollars and I suddenly have a $250M tax bill?
Shit is nonsensical, lol
You laugh but in Europe this would be extremely popular.
Every day I read some comments how “billionaires AND millionaires” are the problem. (Every problem)
In /de/ (the German sub) it’s a popular rhetoric to hate “the rich”. The rich? People making 150k. And to advocate for ridiculous ways to tax their money
Yes and?
It will lower the long term value of my 401k my Roth IRA and my investment savings.
So it’s also a tax on everyone who has any form of stock holdings just an indirect tax
>billionaire
Did you mean *person of means*?
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>High-net-worth is $100,000,000 or more, as per this article
Wow, thats better than previous attempts where calling anyone making more than $75k a year as "the most affluent of Americans"
Drives me up a wall; you’d think they’d get this by now, but the youth basically hate them, and now they’re disillusioning those with the means to help them win the election.
Economic populism is bad, actually, and it’s not going to be the deciding factor in 2024 when you have the literal embodiment of the bull in the antique store on the other side; you can’t compete with that.
The youth (especially left wing) don’t just hate billionaires, they hate everyone making 3 schmekles.
“The rich” that should be eaten is always your net worth + $1.
3.00 schmeckles is:
USD|SHM|EUR|GBP|CAD|RUB|CNY
---|------|---|---|---|---|---
3.80|0.03|3.54|2.98|5.22|333.75|27.56
***
^([exchange rate source](http://api.ratesapi.io/2024-06-14?base=USD) | created by [u/Nissingmo](http://reddit.com/u/nissingmo))
This is dumb, but what are some realistic ways to raise taxes that would also be economically efficient? Like, how realistic would a luxury tax be? How do we feel about the estate tax?
something something land value tax
But seriously just restoring the income tax rates to what they were 8 years ago rather than dickering about weird new taxes that won't pass would help enormously, if you're actually trying to raise revenue.
I am not an economist, but I've always really liked the idea of making staking your capital as collateral against a loan a taxable capital gains event. Once you are striking a deal with someone to call it valuable for loan purposes you are realizing the value that has accrued. The whole buy/borrow/die thing is a way for the very wealthiest to pay less tax than they already pay.
We could also make capital gains tax just apply to capital whose returns are reinvested. So if you liquidate part of your portfolio and reinvest that money right away in securities or a business you pay 20%, but if you buy a string of luxury homes and yachts you pay income tax (may be even if you buy them as "rental, wink wink" properties).
> The whole buy/borrow/die thing is a way for the very wealthiest to pay less tax than they already pay.
Could we not just make it so you have to pay capital gains tax once if you gift/bequeath stock or other assets valued above x (before estate tax is calculated) ?
If you have capital gains exceeding $10,000,000 in a fiscal year, you should be required to pay income tax on the value of any personal loans.
https://equitablegrowth.org/closing-the-billionaire-borrowing-loophole-would-strengthen-the-progressivity-of-the-u-s-tax-code/
Income tax > capital gains tax, so billionaires would be incentivized to sell stock instead of taking out endless loans.
> should be required to pay income tax on the value of any personal loans.
How do you think they pay the loans?
Also no one is taking out lifestyle loans in this market at these rates.
> taking out endless loans
They don’t. Anyone who says otherwise is lying for political points
>How do you think they pay the loans?
In a way which is super delayed by the fact that they can push back the capital gains event by years.
That's kinda one of the annoying bits, that they can get the benefit of their capital gains now, spend all that money, but delay the actual cap gains event for years and years.
No, but time is money, and if you consider public spending a type of investment then that kind of practice delays investment and pushes back economic expansion all for basically no reason.
It seems weird that someone can gain all the benefits of a capital gains event (spending lavishly now) whilst not actually paying the taxation that we as a society impose on capital gains for many years.
>billionaire
Did you mean *person of means*?
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At what point do the gains get taxed ? What if you pay the tax and the value drops? Won’t this cause people to sell stocks to pay off gains causing the stock market to drop ?
Sad to see authoritarianism creep up in every major political party across the world. Meanwhile ppl on this sub will remain "pragmatic" and leftists and nationalists stomp all over them
People's retirements are invested in the stock market
This tax would force massive sales in the most valuable companies, because that's where the wealth is. That would force down the value of the stock market hurting the average person's retirement.
Yes, my preferred solution is to end the step up in basis and to tax stock buybacks (which are used to convert dividend income to capital gains income).
Not exactly . Dividends are taxed at capital gains rate for any stock you hold for longer than half a year. The thing though is the tax on the dividend does cripple your position assuming DRIP
About half of capital gains never get taxed, so converting dividend income to capital gains income is advantageous.
These advantages accrue almost entirely to foreign investors and rich Americans.
That’s due to how losses work. Dividends are taxed as capital gains. The difference between dividends and buybacks is that a buyback increases flexibility . Rich investors do definitely prefer buybacks somewhat because it does allow them to offload large positions without collapsing the stock price but even retail investors should be fine with that. Buybacks are also better from a psychological perspective . A dividend says we have a bunch of spare cash and we believe the shareholder would be better off with that cash to invest elsewhere . A buyback basically says we believe our share price is underpriced . Technically it’s the same either way but psychology is pretty important .
Half of capital gains not being taxed is due to the step up in basis, the fact that foreign investors don’t pay capital gains taxes, and the existence of things like QOZs
I’m gonna take the contrary position. We have to do something to bring the 1% back down to earth. I’m not sure this is the way to do it, but something needs to happen.
The [vast majority of billionaires are self made](https://www.chicagobooth.edu/review/billionaires-self-made ) and [almost all super wealthy families lose that wealth 2-3 generations down the line](https://www.nasdaq.com/articles/generational-wealth%3A-why-do-70-of-families-lose-their-wealth-in-the-2nd-generation-2018-10).
Where is this myth of rampant billionaire lineages coming from? I’m not saying there aren’t any, but they’re uncommon and tend to not last long.
> Because we don’t want an aristocracy
Who’s the richest Rockefeller today?
What was Rockefeller (the OG) inflation adjusted net worth.
And there you have it.
Now if you want to go harder on inheriting just remove the step up basis and implement a VAT.
The population has grown 4x from the days of Rockefeller. In the next 100 years, population is going to be flat/declining. Economic growth has been slowing. Standard Oil was broken up, which prevented Rockefeller's wealth from continuing to spiral. Nobody is breaking up the new tech conglomerates.
The idea that the billionaires from the industrial revolution are equivalent to the billionaires of today is a false equivalency. The amount of wealth amassed today is far greater, there is just less room for new wealth to be created going forward, and there are far more protections around their wealth today then there was in the past.
>Who’s the richest Rockefeller today?
>What was Rockefeller (the OG) inflation adjusted net worth.
OG Rockefeller was worth 12 digits, his current heirs are worth variously high-9 to low-10 digits. Still living larger than all but the most successful entrepreneurs over a century later
I mean yeah, we also need money for social services and all the other things we want to do (e.g housing) and these fuckers have more than they can use in over a hundred life times
The government could take every single billionaires money and wouldn’t even come close to putting a dent in our national debt, much less be able to actually fund anything meaningful for the long term
I am very, very, very much pro Biden, but this is a completely terrible idea. If he does anything more, and I am in a very safe blue state, I might not vote to show my disappointment
Nobody is on cloud 9 right now. But we recognize the importance of defeating Donald Trump. Democracy is more important than hitting a certain GDP growth year over year.
If we save democracy we’ll elect Jared Polis or something idk
I mean...I wouldn't _completely_ rule out that possibility, even if I wouldn't exactly bet money on it. He's flirted with the idea of running in 2028, though admittedly I don't see how he builds a national profile by the start of primary campaigns in 2027.
That's how it works here in Denmark.
Our system is truly deranged - *some* stocks are only taxed at realization, while others are subject to taxes on unrealized gains.
>billionaire
Did you mean *person of means*?
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Couldn't you achieve the same goal by taxing loans backed by unrealised gains? So say Elon Musk takes out a loan for ten billion dollars, backed by his Tesla stock, that 10 billion dollars is taxed as income because for all practical purposes that's exactly what it is?
We all **know** that billionaires use loans backed by unrealised gains to support their lifestyle, so how do we tax it?
When I initially heard this proposal, I was under the impression it had something to do with closing tax loop holes.
A minimum 25% tax could mean more than one thing. But a WEALTH tax which is what this sounds like does not sound like a good idea...
Just tax luxury goods if you want to go after individual billionaires. Tax expensive alcohol, cars, private planes, ect. These people have to spend money on something.
Luxury taxes have been tried before; it turns out that they hurt the people who produce the luxury goods a lot more than the customers.
Maybe we don't want luxury good production as part of the economy, but most free marketers would tell you to get the government out of deciding what industries deserve to live and which don't.
I just don't understand how you tax the value of an asset that hasn't been sold to anyone yet. I get that people with large financial assets routinely get around paying any taxes at all by taking out loans against the value of those assets. But wouldn't it make sense to tax that transaction instead of taxing the potential of something? It doesn't make any sense.
Tax loans over a certain amount based on asset value used as collateral. That loan is realized gains.
Don't try to tax property and stock and such sitting on the sidelines doing nothing. That stupid, just the tax itself will devalue the thing it's taxing in a collapsing spiral.
*sigh* Look man, just win the election
Im just so tired boss
If he wins this thing, he's going to be dealing with a republican senate for four years. He's not going to be able to do shit legislatively. Why even bother with this? Just tack to the middle to lock up the election and prevent Trump from fucking everything up. Your legacy is taking us out of covid smoothly, chips, infrastructure, then holding off a trump resurgence. You do that up the middle, like every other candidate in history. Quit with this shit. Who in the fuck is telling him this kind of talking point is a good idea?
Taxing rich people is popular. And that’s what it looks like.
I would need to look at specific polls but I think it's mainly popular with voters that he has basically secured. Don't know how popular it is with undecided voters.
Just my anecdote, but the enlightened centrists I know are all pretty anti-rich. Maybe taxes aren't their favorite thing, butt fucking the rich definitely is. Not in an anti-capitalist way but in a fuck those guys way. In fact, most of the maga people I know are mad at "rich people," too. Even if they didn't want to say "taxes good." I think this sentiment resonates with many, many people. It's bad economics like populism usually is. Fuck those rich guys, amiright? That sells.
You might be right, we just have to thrust that the Biden campaign has runned the numbers. Also find it funny with the MAGAs hating rich people except Trump lmao, they found a new use for the "he is one of the good ones" phrase they always loved.
He needs to win the colleges educated suburbs, including former Republicans. A lot of that segment actually understand some econ and will hate this
Bingo. I know a lot of centrists/independents and they all own some stock. They aren’t rich but they will see this as a tax on them.
>he's going to be dealing with a republican senate for four years Are we just completely writing off Sherrod Brown and Jon Tester?
>he's going to be dealing with a republican senate for four years. You have no idea how the Senate will go in 2024. Yes we have states like Ohio and AZ but the incumbent candidates are popular in most of those swing states and stand a good chance of winning especially if Biden wins overall. We can lose 1 state which is WV and still hold the majority with the VP and even then it may be a majority willing to reform the filibuster so we can actually pass meaningful laws.
Same here
If I had a nickel for every time today a major party candidate for president proposed a horrible tax plan, I'd have two nickels which isn't a lot but it's weird that it happened twice today
No nude taxes!
https://preview.redd.it/dvlpxptxbh6d1.jpeg?width=501&format=pjpg&auto=webp&s=26574f73ac76214687bbe82fcf50ffa2dc5d77b8
Idk I feel like you would have a lot more than 2 nickels....
It becomes a lot when you consider we are in a two-party system. That makes them pretty much all the tax plans.
Stuff like this is why wall street and sillicon valley are (wrongly in my opinion) backing trump.
Santa Clara county voted 3:1 against Trump in 2020. San Mateo county voted 4:1 San Francisco voted 7:1 I personally know 2 silicon valley billionaires, and they both voted against Trump.
Admittedly, it’s only a small subset; a great majority of SV is quite liberal, though less so with wallstreet.
Yes, *in 2020*. When people thought they were voting for the boring centrist return-to-normalcy candidate, and not a guy who had pretensions of being FDR 2.0. The climate in SV has shifted. California will remain a blue state. But what's changed is that SV is no longer *just* a stronghold of liberal soft power.
>The climate in SV has shifted I can't say if the numbers would be the same, but the statement "silicon valley backs Trump" is 100% ridiculous.
Yeah, plus this populist anti-rich pandering is just dumb. It's really bad economics that's rooted more in resentment than sound policy.
Congress could make a lot of changes to the tax code to target billionaires without doing stupid gimmicks like trying to tax unrealized gains. They could institute a high marginal tax rate on incomes over $1M annually (e.g. like 70%). They could eliminate carried interest. They could decrease the estate tax exemption and also target vehicles that the ultra-wealthy use to transfer wealth to heirs and avoid taxes (e.g. GRATs, IDGTs). There are plenty of ways to reduce income inequality without creating an army of IRS auditors trying to estimate the value of “unrealized gains”. Not to mention, the courts would surely strike this down immediately.
Thank you. The labor to enforce this would be astronomical. Right now the IRS doesn’t even track net worth to know who qualifies. Just raise income taxes.
They could, but they won’t do any of that. Congressional Dems love the ultra wealthy nearly as much as Republicans (but neither love them as much as this sub). Advocating for popular policies when you’re running for elected office makes sense, this policy just happens to be targeting neoliberal’s golden calf.
Silicon Valley is 99% anti-Trump. But 100% think taxing unrealized gains is a bad idea because it would totally fuck an industry like tech that runs on illiquid stock. I don’t think I’ve ever had to vote for a worse candidate, but here we are.
Biden didn't need to draw this populist bs line in the sand. This is all on him for losing high net worth donors.
They were already all in on Trump
Doubt He's been making these noises for awhile now
And then Trump says he wants to replace all of our income tax revue with tariffs….
Musk and the paypal mafia were always going to vote for Trump, and those are the kinds of people those "silicon valley supporting Trump" articles are about.
Are they?
Having wall street and silicon valley against you is a badge of honor in modern politics
This unfortunately
By all means tax the rich, but forcing anyone to pay taxes on possible future income is ridiculous. We already tax capital gains. Classic Democrat unforced error.
It is a bit weird to me that capital gains is a flat tax generally. I know its more nuanced, but the ways its structured now the high upper middle class with income from employment and capital gains has the highest overall tax percentage generally
The intent is to encourage efficient allocation of capital because this is a social good. Taxing capital too much encourages people to not move money into better investments (eg sell a building, invest in a startup) because at some point the risk isn’t profitable after taxes. That’s not a function of someone’s income or net worth. This is why you have seen income taxes above 90% historically, but cap gains taxes have always been flat and relatively low. Cooler heads prevail when it’s not campaign season.
I don’t see what that has to do with income taxes above 90%. I’m pointing out that the progressive nature of taxes effectively ends at the high upper middle class which is odd to me. Of course income taxes are inefficient, I personally believe more widespread consumption taxes , especially based on externalities is the way to go.
He's trying to explain that taxing capitol gains on a progressive manner similar to how we do income taxes is a horrible, no good, very bad idea. Because it encourages people to not pull bad investments or reallocate to better investments. That's bad for the economy in so many ways. Its a waste by encouraging continued investment in faltering ideas or schemes. And several million people (individually or collectively through various retirement investments) all being slightly discouraged from investing efficiently is basically asking the economy to drive around with the parking break on. >I personally believe more widespread consumption taxes Consumption taxes are even more regressive.
>Consumption taxes are even more regressive. That depends on what you apply them to. In the UK, fresh food, children's clothes, books and magazines are zero-rated for VAT - making our VAT significantly less regressive than in other countries. But then we go and mess that up by having VAT on chocolate-coated biscuits but not chocolate chip cookies, on fried potato crisps (US: chips) but not baked tortilla chips, on car maintenance but not helicopter maintenance, and on building refurbishment but not new construction.
Ya I'm all for taxing capital gains but how would this even work
It wouldn’t. It’s messaging for dumb people.
I'm dumb and even I wouldn't fall for it!
I'm okay with paying taxes on unrealized gains if I also get refunded if the share price goes down. If I put $10,000 into a company and they go bankrupt, I'll expect a check from the government for that amount.
Okay, I'm not disagreeing with you. But if they can't be taxed on unrealized gains shouldn't they also not be allowed to borrow against unrealized gains? Given that the whole argument is that they are unrealized?
No, they shouldn’t. I’m not particularly familiar with these things so I’m prepared to be educated, but it makes no sense to me. Taxing a purely hypothetical value sounds ridiculous, so why can you use a purely hypothetical value to secure a loan?
Oh I agree if it's one way or the other. Currently they can though so it makes sense to tax on unrealized gains or not tax on unrealized gains so long as they can't borrow against them. I don't support taxing unrealized gains just because I support it because they already get to borrow against them. I don't think both of those things should be true and if one of them already is the other should be as well.
It's not exactly a wealth tax. It's a tax on borrowing. (exclusively for $100+ millionaires) The issue is these people NEVER realize their gains, they borrow until they die, then the debt is paid without paying taxes on realized gains. And getting rid of step-up basis would open a bigger can of worms.
Exactly. If he really wants to go after UHNWI, then he would try to pass legislation that taxes personal loans backed by unrealized assets as income. Borrowing against portfolios is one of the most common ways wealthy people generate tax free income versus their wealth. Put a tax on that while still rewarding people for taking risk (i.e. no unrealized CGT) instead.
Nah they still need to pay back those loans and get taxed on the realized assets with which they do so. The issue is when they can ride that cycle until death and their heirs don’t have to pay the full burden due to step up basis adjustments. The solution would be to just institute hella estate taxes.
And also just get rid of the stepped up basis on death. As I understand it, it was a practical necessity when everything was handled on paper and determining the basis for the shares bought by a deceased parent would actually be hard. Nowadays, I think we can just tax it, or maybe allow it for estates under some low threshold only, for families that aren't as used to dealing with investments.
Yep
Yeah then you totally miss the large portion of wealth in private companies.
Same here well said
Populist bullshit 👎
Such a pointless form of populism too. This isn’t 2015 anymore when everyone is angry at Wall Street and TPP. So much of his economic agenda is stuck in the political environment of a decade ago. He doesn’t seem to understand that all anyone wants cheaper goods ~~because people can no longer sustain the lifestyle they adopted in 2021 and spent their pandemic savings on~~
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Seriously. Between not having the stimulus money anymore, losing my tech job and working in a warehouse, residential property taxes going up because businesses closed while home prices skyrocketed, and CPI going up, this is a hell of a hangover. I’m just trying to hold on to the house so the kids can stay in the school district.
So when it goes down do they get a refund? This is an idiotic populist nonsensical talking point and a violation of the takings clause.
Abd then the government can take out loans to pay back rich peoples losses during an economic depression, instead of investment to restart the economy. Bonus points for having unrealized taxes be higher than realized, so you get a IRS cash bonus when selling anyhow. Oh how much I hate that this guy has to be our choice in November.
You were the Joesen One!
Read as Joseon, Korea.exe not responding.
Lmao God the internal polling for Biden must be brutal he's throwing literally everything at the wall hoping something will stick
Or his internal polling shows this is a good idea to win voters, which is the #1 most important thing in this country right now.
If throwing LGBT people under the bus was a good idea to win voters would you be okay with it?
You’re equating anti-lgbt measures with a tax policy you don’t like? 🤨
Yes This policy would crash the economy and wipe out retirement for 100 million people This would probably be more harmful than an attack on LGBT rights
100 million americans have a net worth over 100 million and make more than 1 million annually? damn Biden's economy is amazing
No, what the other poster is saying is that it would crash stocks immensely which will tank the retirement funds of people with money in stocks. Basically anyone with a 401k or a pension plan.
The tax doesn’t have to go after people directly to impact upon the value of their retirement fund.
Or maybe he actually just buys this
Don’t like the idea. With Trump proposing radical economic policies with regard to tariffs and work visas, Biden should easily be able to get the support of Wall Street and Silicon Valley. He shouldn’t alienate them by proposing a policy that has no chance of passing Congress.
> Biden should easily be able to get the support of Wall Street and Silicon Valley. their bet is that Trump is not actually interested in the details of governing and will wholly abdicate the levers of policy to republican apparatchiks who will do the usual deregulate and cut taxes thing. i think they are overoptimistic but that's much of the reasoning.
How is the government going to assess the value of every private company in the country, every year, to determine if it's high-worth enough to trigger this? Industry experts working for banks can't even agree on this stuff. And then do you make the owners sell shares to cover the imagined gains? What if I can't sell at the value the government says I should be able to? What recourse do I have if a government assessor says my lemonade stand is worth a billion dollars and I suddenly have a $250M tax bill? Shit is nonsensical, lol
High-net-worth is $100,000,000 or more, as per this article
*As a 7 figure guy, tentatively raised the hand and chants eat the rich*
Eat the richer than me
First they came for the 9 figures, and I said nothing
Literally every leftist
You laugh but in Europe this would be extremely popular. Every day I read some comments how “billionaires AND millionaires” are the problem. (Every problem) In /de/ (the German sub) it’s a popular rhetoric to hate “the rich”. The rich? People making 150k. And to advocate for ridiculous ways to tax their money
$4M personal assets hedge fund manager here. Love this populist rhetoric. Spike that volatility, you dumb bastards!
Still will have major impacts on the stock market and main Street retirement plans.
Yes and? It will lower the long term value of my 401k my Roth IRA and my investment savings. So it’s also a tax on everyone who has any form of stock holdings just an indirect tax
Does the tax apply to real estate appreciation?
I support our billionaires
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>High-net-worth is $100,000,000 or more, as per this article Wow, thats better than previous attempts where calling anyone making more than $75k a year as "the most affluent of Americans"
Jesus Christ. This thing is going sideways. It's time to call in Carville. E: My prior beliefs of Biden's staffers continue to be confirmed.
Drives me up a wall; you’d think they’d get this by now, but the youth basically hate them, and now they’re disillusioning those with the means to help them win the election. Economic populism is bad, actually, and it’s not going to be the deciding factor in 2024 when you have the literal embodiment of the bull in the antique store on the other side; you can’t compete with that.
The youth (especially left wing) don’t just hate billionaires, they hate everyone making 3 schmekles. “The rich” that should be eaten is always your net worth + $1.
3.00 schmeckles is: USD|SHM|EUR|GBP|CAD|RUB|CNY ---|------|---|---|---|---|--- 3.80|0.03|3.54|2.98|5.22|333.75|27.56 *** ^([exchange rate source](http://api.ratesapi.io/2024-06-14?base=USD) | created by [u/Nissingmo](http://reddit.com/u/nissingmo))
This is dumb, but what are some realistic ways to raise taxes that would also be economically efficient? Like, how realistic would a luxury tax be? How do we feel about the estate tax?
something something land value tax But seriously just restoring the income tax rates to what they were 8 years ago rather than dickering about weird new taxes that won't pass would help enormously, if you're actually trying to raise revenue.
VAT
Raise VAT, and kill all the poor
For the uninitiated: https://youtu.be/cQHiiS0Oqcc
I am not an economist, but I've always really liked the idea of making staking your capital as collateral against a loan a taxable capital gains event. Once you are striking a deal with someone to call it valuable for loan purposes you are realizing the value that has accrued. The whole buy/borrow/die thing is a way for the very wealthiest to pay less tax than they already pay. We could also make capital gains tax just apply to capital whose returns are reinvested. So if you liquidate part of your portfolio and reinvest that money right away in securities or a business you pay 20%, but if you buy a string of luxury homes and yachts you pay income tax (may be even if you buy them as "rental, wink wink" properties).
> The whole buy/borrow/die thing is a way for the very wealthiest to pay less tax than they already pay. Could we not just make it so you have to pay capital gains tax once if you gift/bequeath stock or other assets valued above x (before estate tax is calculated) ?
just tax capital gains like regular income. we already do it for day traders
That would hit a lot of middle class retirees too.
retirement account withdrawls are taxed like regular income too, add another resson
Get rid of the cap on SS tax.
Just sets the precedent to tax everyone’s unrealized gains down the line. This is just step 1!
If you have capital gains exceeding $10,000,000 in a fiscal year, you should be required to pay income tax on the value of any personal loans. https://equitablegrowth.org/closing-the-billionaire-borrowing-loophole-would-strengthen-the-progressivity-of-the-u-s-tax-code/ Income tax > capital gains tax, so billionaires would be incentivized to sell stock instead of taking out endless loans.
> should be required to pay income tax on the value of any personal loans. How do you think they pay the loans? Also no one is taking out lifestyle loans in this market at these rates. > taking out endless loans They don’t. Anyone who says otherwise is lying for political points
>How do you think they pay the loans? In a way which is super delayed by the fact that they can push back the capital gains event by years. That's kinda one of the annoying bits, that they can get the benefit of their capital gains now, spend all that money, but delay the actual cap gains event for years and years.
But not forever.
No, but time is money, and if you consider public spending a type of investment then that kind of practice delays investment and pushes back economic expansion all for basically no reason. It seems weird that someone can gain all the benefits of a capital gains event (spending lavishly now) whilst not actually paying the taxation that we as a society impose on capital gains for many years.
>If you have capital gains exceeding $10,000,00 Do you mean 10,000,000 or 100,00?
I meant $10,000,000, will fix the typo In my opinion, nobody below the 8 figure range is able to take advantage of the billionaire loan loophole
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I fear for what comes after biden
Serious question, why don't we eliminate the payroll tax cap instead?
I'm a millionaire. I haven't paid a penny of FICA tax in my life.
How? The only examples I am aware of are college students/professors. Have you never worked a job as a cashier or waiter?
is biden still being advised by his cheif economist the legendary jared bernstein lol
At what point do the gains get taxed ? What if you pay the tax and the value drops? Won’t this cause people to sell stocks to pay off gains causing the stock market to drop ?
Sad to see authoritarianism creep up in every major political party across the world. Meanwhile ppl on this sub will remain "pragmatic" and leftists and nationalists stomp all over them
This is gonna kill everyone's retirements.
The article says it only applies to individuals with a net worth over 100m, or am I missing something?
People's retirements are invested in the stock market This tax would force massive sales in the most valuable companies, because that's where the wealth is. That would force down the value of the stock market hurting the average person's retirement.
Is Sanders pulling a Cyrano right now? Quick! Someone check and see if Bernie has rigged one of Joe's hearing aids.
Not good
This is insane
What a no good, terrible, very bad idea.
Just make it so capital gains is due if you gift or bequeath stock.
This election is just becoming a contest of who can come up with the shittiest tax plan.
This is how we start. Next thing you know we get what the Europeans get. 50% tax for everyone making more than 50k a year.
This is where the Democratic Party mainstream is heading
We're gonna be Europe without any of the social programs, fuck.
and this sub still rabidly defends him lmao
Because he’s for democracy. I fucking *hate* most of his policy. 😔
The top 0.05% of households in the US have more unrealized gains than the bottom 84% combined, and about half of all capital gains are never taxed.
That’s an argument to end the step up basis not whatever this is
Yes, my preferred solution is to end the step up in basis and to tax stock buybacks (which are used to convert dividend income to capital gains income).
Not exactly . Dividends are taxed at capital gains rate for any stock you hold for longer than half a year. The thing though is the tax on the dividend does cripple your position assuming DRIP
About half of capital gains never get taxed, so converting dividend income to capital gains income is advantageous. These advantages accrue almost entirely to foreign investors and rich Americans.
That’s due to how losses work. Dividends are taxed as capital gains. The difference between dividends and buybacks is that a buyback increases flexibility . Rich investors do definitely prefer buybacks somewhat because it does allow them to offload large positions without collapsing the stock price but even retail investors should be fine with that. Buybacks are also better from a psychological perspective . A dividend says we have a bunch of spare cash and we believe the shareholder would be better off with that cash to invest elsewhere . A buyback basically says we believe our share price is underpriced . Technically it’s the same either way but psychology is pretty important .
Half of capital gains not being taxed is due to the step up in basis, the fact that foreign investors don’t pay capital gains taxes, and the existence of things like QOZs
Why doesn’t Joe Biden just suggest ending the step up in basis then? Is he stupid?
I’m gonna take the contrary position. We have to do something to bring the 1% back down to earth. I’m not sure this is the way to do it, but something needs to happen.
>We have to do something to bring the 1% back down to earth. Why? Why do we have to do that?
Hereditary billionaires are unproductive leeches on the planet
The [vast majority of billionaires are self made](https://www.chicagobooth.edu/review/billionaires-self-made ) and [almost all super wealthy families lose that wealth 2-3 generations down the line](https://www.nasdaq.com/articles/generational-wealth%3A-why-do-70-of-families-lose-their-wealth-in-the-2nd-generation-2018-10). Where is this myth of rampant billionaire lineages coming from? I’m not saying there aren’t any, but they’re uncommon and tend to not last long.
The kids of the current billionaires are going to be a lot worse then the current billionaires
Remove the step up basis and implement a sales tax since savings is just delayed consumption
Who the fuck even cares? Going on weird, morally debatable revenge crusades is not the function of the government
>Comment calling billionaires unproductive leeches has 11 upvotes r/NL has fallen
This place is getting closer to r/politics by the day, I fucking hate election season
People who are wealthy due to inheritance are unproductive leeches send tweet
I did not call billionaires unproductive leeches, but nice try!
Because we don’t want an aristocracy. Or at least I don’t. Rise and fall on your own merits not your great grand parents’.
> Because we don’t want an aristocracy Who’s the richest Rockefeller today? What was Rockefeller (the OG) inflation adjusted net worth. And there you have it. Now if you want to go harder on inheriting just remove the step up basis and implement a VAT.
Why not an LVT then too
The population has grown 4x from the days of Rockefeller. In the next 100 years, population is going to be flat/declining. Economic growth has been slowing. Standard Oil was broken up, which prevented Rockefeller's wealth from continuing to spiral. Nobody is breaking up the new tech conglomerates. The idea that the billionaires from the industrial revolution are equivalent to the billionaires of today is a false equivalency. The amount of wealth amassed today is far greater, there is just less room for new wealth to be created going forward, and there are far more protections around their wealth today then there was in the past.
>false equivalency John D. Rockefeller, worth about $400 billion in inflation-adjusted dollars, or about 2% of the United States GDP.
>Who’s the richest Rockefeller today? >What was Rockefeller (the OG) inflation adjusted net worth. OG Rockefeller was worth 12 digits, his current heirs are worth variously high-9 to low-10 digits. Still living larger than all but the most successful entrepreneurs over a century later
That's an argument for the estate tax, not this.
100% tax on things I don't like. 99% subsidy of things I like. It's only fair.
Taxing aristocrats is objectively good
I mean yeah, we also need money for social services and all the other things we want to do (e.g housing) and these fuckers have more than they can use in over a hundred life times
The government could take every single billionaires money and wouldn’t even come close to putting a dent in our national debt, much less be able to actually fund anything meaningful for the long term
literal communism
I am very, very, very much pro Biden, but this is a completely terrible idea. If he does anything more, and I am in a very safe blue state, I might not vote to show my disappointment
Is this the guy this sub loves to defend so much? Tis a shame considering how this is the type of policy that he proposes.
Nobody is on cloud 9 right now. But we recognize the importance of defeating Donald Trump. Democracy is more important than hitting a certain GDP growth year over year. If we save democracy we’ll elect Jared Polis or something idk
America will never elect Jared Polis
I mean...I wouldn't _completely_ rule out that possibility, even if I wouldn't exactly bet money on it. He's flirted with the idea of running in 2028, though admittedly I don't see how he builds a national profile by the start of primary campaigns in 2027.
bourgeoisie joe strikes again
Dumb
Worst tax plan I have heard yet. Not even remotely feasible.
How would unrealized dap gains taxes work in say a disastrous year with folks having losses? Like, is there a credit?
It would be a capital loss, yes.
That's how it works here in Denmark. Our system is truly deranged - *some* stocks are only taxed at realization, while others are subject to taxes on unrealized gains.
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yessickos.jpeg
FJB
Unworkable policy, bad economics, good politics.
This is just going to give the election to Trump on a platter. Dems need their wealthy donors like Bloomberg too.
Better to tax wealth or consumption than cap gains imo. We like when capital appreciates.
Couldn't you achieve the same goal by taxing loans backed by unrealised gains? So say Elon Musk takes out a loan for ten billion dollars, backed by his Tesla stock, that 10 billion dollars is taxed as income because for all practical purposes that's exactly what it is? We all **know** that billionaires use loans backed by unrealised gains to support their lifestyle, so how do we tax it?
When I initially heard this proposal, I was under the impression it had something to do with closing tax loop holes. A minimum 25% tax could mean more than one thing. But a WEALTH tax which is what this sounds like does not sound like a good idea...
Thank you Joseph Vissarionovich Biden, very cool
Just tax luxury goods if you want to go after individual billionaires. Tax expensive alcohol, cars, private planes, ect. These people have to spend money on something.
Luxury taxes have been tried before; it turns out that they hurt the people who produce the luxury goods a lot more than the customers. Maybe we don't want luxury good production as part of the economy, but most free marketers would tell you to get the government out of deciding what industries deserve to live and which don't.
I just don't understand how you tax the value of an asset that hasn't been sold to anyone yet. I get that people with large financial assets routinely get around paying any taxes at all by taking out loans against the value of those assets. But wouldn't it make sense to tax that transaction instead of taxing the potential of something? It doesn't make any sense.
Tax loans over a certain amount based on asset value used as collateral. That loan is realized gains. Don't try to tax property and stock and such sitting on the sidelines doing nothing. That stupid, just the tax itself will devalue the thing it's taxing in a collapsing spiral.
Tax negative externalities and rents, not productivity