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FormerLurker
Follower ○○○

TAXING UNREALIZED CAP GAINS?

I heard from 2 different sources on the financial news that Elizabeth Warren has proposed the idea of TAXING capital gains as another way to pay for her 33+ $TRILLION proposals. This is NOT a political post (take it any way you wish, however); it is a post concerning INVESTING/PLANNING/SAVING our hard fought for earnings! I have no idea of how this could be implemented and even our feckless legislators may consider this ' A BRIDGE TOO FAR'. I understand that the London bookmakers have her as the winner of the DEM Primary....I ask, SINCERELY, how could anyone on these forums EVER vote for a person who will propose/do anything as disruptive & crazy as this?? Please, if you do not feel this way, let me and others know. Who knows, perhaps her idea has merit!? Frankly, the government--and that includes both sides of the isle--has become so anxious to sponge off of investors & savors that NO UNJUST/CRAZY IDEA that may be floated is immune from being knocked down or regarded as 'out of hand'....PS: just look at the Senate's RESA ACT that demands IRA beneficiaries liquidate all inherited funds in 5 years!

12 Replies
Bazinga
Participant ○

Re: TAXING UNREALIZED CAP GAINS?

Logistically, how would this work? If I had a stock with $10K of unrealized capital GAIN at the end of year X, I would be taxed on that GAIN in year X. Now at the end of year Y, the same stock shares (unsold) might be a $10K capital LOSS. Would that LOSS be credited against other taxes due in year Y?

It all sounds like a silly plan to me. Next thing you will hear is the same concept being applied to real-estate, lol.

Intruder
Participant ○○○

Re: TAXING UNREALIZED CAP GAINS?

Taxing wealth is a direct tax under the constitution article I, section 9  which must be apportioned among the states. each states share will be assessed equally among the states residents per capita.

Dont see a wealth tax ever happening any more than Warrens $60T Medicare for all plan or breaking up big tech companies.

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yogibearbull
Valued Contributor

Re: TAXING UNREALIZED CAP GAINS?

Implementation won't be an issue. Professional traders pay taxes on gains [or writeoff losses] that are unrealized. Companies flow their unrealized portfolios gains/losses in their earnings. 

Real question is whether this would ever be approved for individual/retail investors.

This is like security transactions tax - the mechanism for it does exist but would it be ever approved?

YBB
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Intruder
Participant ○○○

Re: TAXING UNREALIZED CAP GAINS?


@yogibearbull wrote:

Implementation won't be an issue. Professional traders pay taxes on gains [or writeoff losses] that are unrealized. Companies flow their unrealized portfolios gains/losses in their earnings. 

Real question is whether this would ever be approved for individual/retail investors.

This is like security transactions tax - the mechanism for it does exist but would it be ever approved?


Yogi

implementation would be a nightmare for many type of of assets such as RE, art, privately held corps, businesses, which are not valued on a regular basis . Tax planners would find loop holes to reduce asset values. Most EU countries that enacted wealth taxes have eliminated them because they are unworkable.

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Howaya
Explorer ○

Re: TAXING UNREALIZED CAP GAINS?

"Tax planners would find loop holes to reduce asset values" This already takes place. I gather Trump is exceptionally good at it.
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Intruder
Participant ○○○

Re: TAXING UNREALIZED CAP GAINS?


@Howaya wrote:
"Tax planners would find loop holes to reduce asset values" This already takes place. I gather Trump is exceptionally good at it.

Yes he recently changed his residency from NY to FL which has no income or estate tax. Gov. Cuomo has been complaining very loudly that NY has lost tax revenue due to high net worth taxpayers moving to lower tax states such as FL and NC because of the loss of the salt deduction.

In 2015 hedge fund manager David Tepper who has a net worth of $10B moved from NJ to FL to eliminate nj estate and income tax. In 2016 NJ income tax collections declined by $100M because of the loss of income tax collected from Tepper which resulted in a reduction of state financial aid to some NJ school districts. In 2017 Tepper purchased the Carolina panthers NFL team.

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PatMorgan
Explorer ○

Re: TAXING UNREALIZED CAP GAINS?

I'm confused by the opening post.  It contains: "This is NOT a political post" and later contains: "I ask, SINCERELY, how could anyone on these forums EVER vote for a person who will propose/do anything as disruptive & crazy as this??".  The latter statement definitely makes it a political post.

As to how it can be implemented, it would not be difficult to implement for covered securities for which, starting a few years ago, brokerages have been responsible for reporting realized gains.  As at least one other post has mentioned, implementing it would be difficult for other types of assets.

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Intruder
Participant ○○○

Re: TAXING UNREALIZED CAP GAINS?


@PatMorgan wrote:

I'm confused by the opening post.  It contains: "This is NOT a political post" and later contains: "I ask, SINCERELY, how could anyone on these forums EVER vote for a person who will propose/do anything as disruptive & crazy as this??".  The latter statement definitely makes it a political post.

As to how it can be implemented, it would not be difficult to implement for covered securities for which, starting a few years ago, brokerages have been responsible for reporting realized gains.  As at least one other post has mentioned, implementing it would be difficult for other types of assets.


According to WSJ total worth of all US wealth was over $100T in 2018 of which $32T was homes which unlike stocks valued at 33T+ are not marked to market.

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Lakeside7
Explorer ○○○

Re: TAXING UNREALIZED CAP GAINS?


@Howaya wrote:
"Tax planners would find loop holes to reduce asset values" This already takes place. I gather Trump is exceptionally good at it.

This is the kind of puerile comment that corrodes the value of discussion boards. All sentient and sensible people respond to tax incentives and disincentives.

And, as long as you brought up tax behavior, readers will recall that the current Democrat governor of Illinois, a billionaire of the Pritzker family, infamously removed all the toilets in his mansion so as to evade property tax, and they will recall how Democrat John Kerry infamously docked his boat in Rhode Island to avoid the much higher tax in Mass, the very state he represented, and they will also recall how Obama had a hard time finding prospective Democrat candidates for his 2009 cabinet because so many candidates (like former Democrat Senator Daschle, who at one time co-wrote tax laws) turned out to have been tax cheats (and, after tax-cheat fatigue in the public, was able to get Geithner, a confirmed tax cheat, with great irony installed as head of the IRS).  This kind of snark, once again, damages the value and the viability of his discussion forum, valuable to me and so many others.

Gary1952
Contributor ○○

Re: TAXING UNREALIZED CAP GAINS?

Most likely she will take away the 15% CG rate and put it at the income rate. Or redefine CG as 2 or 3 year holding time. Taxing an unrealized gain is ridiculous.

FormerLurker
Follower ○○○

Re: TAXING UNREALIZED CAP GAINS?

@pat Morgan--

How VERY VERY interesting---You comment on the 'political' nature of my initial post but you--(and others)--do not comment on the disgraceful putting forth of this idea of a woman & 'movement' that wishes to find/explore EVERY POSSIBLE WAY to take money from savers & investors for their inane programs.....I submit, Sir, that in your commentary & your obvious sensitivity to the question which you assiduously avoid addressing, it is you who are showing your political bent vis -a -vie the subject matter ----comments about President Trump's actions which will not take money from you & yours but NOT A WORD so far about 'would anyone who actively invests such as people on these forums, VOTE for any loon who would propose this and why/how could you. and do tell your rational so that others of us may sleep well at night with the dream that all is well'?? DID I NOT MENTION THE SENATE ACTIONS IN A NEGATIVE LIGHT WHICH IS CONTROLLED BY THE OPPOSITE PARTY?  It is you who gives a 'political' response'...DO THE 'STEPFORD WIVES' STILL LIVE AMONG US?.

Me thinks that people are too frightened or INDOCTRINATED and that YES, they would vote for such a person or are too politically correct that they find the question discomforting re their leanings & sensitivities. I DON't care if the loon who is exploring this is from the 'MARTIAN COLONY' party or whatever, but apparently, others do!

Apparently, there are some who smile & nod while bloodsuckers have their hand out for their money! Respond in any way you wish,but I shall not engage with those who either avoid the question posed because their political leanings will color their response and/or forbid them to address it & the import of what could be at stake....

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Community Manager RyanM Community Manager
Community Manager

Re: TAXING UNREALIZED CAP GAINS?

This topic is now locked. Community guidelines state not to post content of a political nature. Anyone can see how this discussion could derail. 

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