Let's play the rich get everything. The rules are the rich get everything. participation is mandatory.

I think a law stating you can't borrow against unrealized gains would be sensible.

You can keep your unrealized gains forever, live of your dividends for all i care, and pay no tax. But realizing them, either through selling or borrowing against, triggers a taxation.

I think the real solution is not to lend on fake money. Tax or no tax, it wasn't taxes that caused the market crash in 2008.

I don't agree with unrealized gains taxes in general, but the instant they are used as collateral, or if value in any way is extracted from them (even loan value), they become realized gains, and should be taxed.

You're "free" to die in a cardboard box under a freeway

Actually... They made that illegal. You're free to rot in prison for being homeless, though!

The top 10% own 67% of the wealth in the U.S.

The tax rate during the New Deal (which corresponded with the largest jump in GDP and middle class growth) on people earning $200k and over (now would be like earning $2.5 million/year) was 95%.

During the 50's through the early 80's, that tax on the wealthiest was at 70%.

Now it's at 37%, less than half of what it was during the best years of growth our country ever experienced.

This Unrealized gains tax would only impact people worth more than $100 million who do not pay at least a 25% tax rate on their income.

Additionally, you'd only pay taxes on unrealized capital gains if at least 80% of your wealth is in tradeable assets (i.e., not shares of private startups or real estate). One caveat is that there would be a deferred tax of up to 10% on unrealized capital gains upon exit.

In short, it would not apply to most startup founders or investors, but would impact top hedge fund managers.

They can afford it. TAX THEM.

That's how the rich get richer. They never gamble with their own money. They gamble with other people's money, secured (hah) by their assets.

Yes a minority of us peons who are privileged enough to own property or lots of stocks can play-act like they're rich by taking out reverse mortgages or doing options trading, but it's nothing like what the actual rich can get away with.

So how does taxing unrealized gains work. If I purchase stock X at a specific price. If the stock goes up and I now am holding 150% of my original value. Let's say it hovers there for 3 more years. After 3 years it tanks and is now worth only 50% of my original purchases. Are people suggesting that I pay taxes on the unrealized gain of 50%, even though I end up selling at loss and have realized negative value. Doesn't that mean I am being taxed on losing money? How does that make sense?

I wouldn't be a huge fan of taxing unrealized gains if we hadn't been cutting taxes for the rich for 50 years. How else are we ever going to recover from that? These guys COULD have done the right thing and supported sensible taxation policies, but they didn't, so fuck 'em. At this point it's either this or the guillotine.

What's crazy is to calculate the average US income the census folks of the US government exclude billionaires because it would skew reality so much that people would call bullshit on the average with billionaires in the mix.

so they get to be excluded from the "average wage per family" calculations made and distributed by the government.

Ugh. It would be so much simpler to...

... Remember those memes about what you could build with a single pandemic stimulus check? From home depot?

By pay check is unrealized gains. I still have bills to pay. Stop taxing me.

TBH I'm not even considered middle class where I live but I have Unrealized Gains in the form of $VYM and Bitcoin.

I think we should tax loans where stocks are used as Collateral, or set a high bar for Unrealized Gains Tax.

But that means rich people will be slightly less rich. That will never happen.

I know the 12 year olds will be upset but this is dumb.

Unrealized gains may never be realized. If they ever are, they may be worth less at that point than the tax you paid. It is like taxing everybody on income at the beginning of the year and then telling them tough luck if they get fired and never get that income.

Also, borrowing in assets does not make you wealthier. How much tax should we charge people when they get a mortgage ( not when they sell, when they first borrow ). I mean, somebody just gave you hundreds of thousands of dollars. Why shouldn’t you have to pay tax on that? ( according to the OP at least ).

Anyway, I will stop there. We are not going to get back at the rich by saying a bunch of stupid things. If you don’t like generational wealth, fine. Have an estate tax. If you don’t like windfall wealth, fine. Have a super high progressive tax rate. I have no problem limiting extreme wealth ( it won’t hurt me ). But “tax people I don’t like on things that make no sense” just tells people you cannot think well and are not into math.

Ummm I didn't know they could be used as collateral. I'll have to research that. It doesn't sound right to me for the same reason they definitely should NOT be taxed. How does that even work? You buy stocks and you hold them, then, what the government taxes you every year until there ARE no gains. Or perhaps the stock plummeted and you have a loss, but it's ok, you lost money on the investment AND to the government. Until you sell an investment you haven't made any money on it and it should NOT be taxed. If you have a 401k this would affect you too, not just rich people.

So with a 401k loan, which is kind of this, you are limited to borrowing against it by like only up to 50% of its face value due to factors such as market volatility. And then all payments made to that loan are with alreaey taxed income, so you aren't securing money in any way that dodges taxation.

Also using shareholdings is no different from using a house or property as collateral... property equity has unrealized value until it is sold too. One might argue you pay property taxes on that equity, but ideally, the company behind the stocks you own pays property taxes for its ownings annually, so that's still happening. So the real problem is large companies dodging taxes due to exploiting broken tax code loopholes.

Would they be able to use unrealized losses and just end up paying less in taxes than they do now?

Yea this is a bad idea. All this will do is force small investors-think people that have made maybe a million dollars in their life and are retiring at 70-to pay taxes they don’t have cash to pay.

I only make enough money to keep my family in this house and warm over the winter. But I am worth 10 billion dollars and would like a 10million dollar 💵💰 loan and forgiveness as I venture into this unknown business deal. Sounds good? Shake on it?

I am sure if net worth was based strictly on taxed earnings, most rich people would get in line to get their money taxed so that they can boast about it in their yacht owners club meetings

Unrealized gains are the 200 push-ups Im going to do at the gym tomorrow, probably?

I've got a guillotine they can put to good use.

If the rich and the poor are fighting, no one can protect the Republic. The founding fathers intended no income tax and for corporations to pay the entire bill. It's time that became a reality.

How is "collateral in major purchases" and "secure billions in loans" supposed to be any different?

Can't have unrealized gains in a system that doesn't have stocks. Abolish the stock market.

It would be funny if it wasn't so sad.

What if the government finds out about the science experiment in the back of my fridge??? Somethings brewing back there and I'm telling you it's going to be valuable.

They shouldn't be taxed because they're just that, unrealized. They may be worth next to nothing one day. If you use them as collateral, you're still on the hook for the value you originally took out the loan for, regardless of the loss of the investment.

Serious question - who here is in favor of taxing unrealized gains and has more than $20k in personal investments? (Outside of retirement/401k or other tax advantaged accounts)

You keep using that word, but I am not sure that you know what it means.

Ah, the game of life! Where the rules are always stacked in favor of the rich. Seems like no matter how hard we play, they always come out on top. Count me in, though—I guess we have no choice! AMERICANAPPAREL

Yup, but I don't see how taking away everyone's rights is going to help that situation. That's the way it is. People seem to think only ultra rich people have unrealized gains. I'm sorry, b but it makes no sense to tax an unknown number.

Sure that perfectly works because salaries are so high, I don't need any other form of income at all. I'll just forego any other investments because some rich guy might use them. Seriously, this is your solution? You do know it's THAT rich guy that sets your salary, right?

Taxes on unrealized stock gains are fine as long as I can get my money back from the government when the stock market goes down.

Property tax is already an unrealized gain tax.

The URSS should have won the Cold War. There, I said it. Now downvote me.