This tax, like many pieces of legislation, will open the door to taxing the "common" man (those of us just getting by) in the end.

For example...you buy a house and it appreciates (that difference between market value and your purchase price) thus becoming a gain. You did nothing but now you are going to pay out the a$$.

Many here already know this so I apologize in advance if I offend someone---small private businesses are the backbone of this economy and so are the multi-million / billonaires that start companies that employ some of us schmucks. So what affects the big money will eventually trickle down to us commoners.

Just my $0.02.

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Guess what. That was the proposal BEFORE the billionaire tax proposal. A title of an Opinion piece was "Pity the billionaire, so sensitive and oppressed". My feelings exactly.

Nobody has even touched on one of the most immoral aspects of capital gains taxes. Often, capital gains are the result of the devaluation of the currency, a government created phenomenon. Governments are the largest debtors on the planet. They have a vested interest in devaluing their currency in an effort to lesson the impact of their debt.

So, a significant portion of your gain is not the intrinsic gain of an asset's value. It is the result of the fall of the currency's value in which that asset is denominated. Let's say you own a second home, or piece of property. In twenty years, it doubles in value. Great, but the value of the currency has been halved (or worse) in the same period. Your gain is only 50% in real terms, but the government will tax you on the whole book gain. Say the capital gain tax rate is 24%, a number that the democrats would like for long-term gain. In my former example, your real gain would be nearly zero.

A hypothetical example-
Purchase of property, purchased in 1998 (1998 dollars): $100,000
Value of 100,000 1998 dollars in 2021: 168,288 (using www.in2013dollars.com)
Value of property in 2021: 230,000 (assuming doubling every two decades, historical average)
Real gain in adjusted dollars: 61,712
Taxable gain: 130,000
Taxes due if Democrats get their 24% cap gain rate: 31,200
Your real gain after taxes: 30,512
Your annualized gain on adjusted dollars: 1.56%

Yep, a big whopping 1.5% is really going to make somebody want to invest. It's simply immoral for the government to tax a gain caused by inflation. A 1.5% return doesn't even factor in the cost of a property's upkeep. You've probably lost money.

The only reason real estate works for me is because I have tenants who carry the cost of the leveraged capital, but the return isn't as great as it seems, and the Democrats are trying to remove the few incentives that remain for rental investors, such as the 1031 exchange. Morons. It's already a marginal investment for how much work is involved, and now that the government can arbitrarily create a rent strike, it's now very risky. It's odd that the government wants to disincentivize landlords at a time of housing shortage. Makes no sense, but I digress, so I'll just leave it here.

They're just pandering to the wealth envy crowd.

quote:

Originally posted by dave7378:
Low hanging fruit and a bad idea. Taxing "unrealized gains" is unfair. Will the taxed be able to write off "unrealized losses"?

Of course not. They can't steal it unless it is bona fide theft, the only thing those fucking lefties know how to do.

re: " Not sure what the solution should be, but taxing unrealized gains on an annual basis will be a freaking mess."

about 1995 the fed.gov had managed to about kill the Oregon timber industry. Local school districts in timber counties had worked out a tax the logging/wood products predictably and it worked well for about 80 years. When the timber went bust, school administrative districts were left homeless & hungrier each year. They were trying to replace an actual working system.

A neighbor had bought a small 20 acre stand of immature fir trees with decades till industry standard harvest metrics ie:"how big will these get within the normal crop rotation perimeters" before replanting is expected.

His plan was going to spec out a few houses in choice lots and keep the rest in future production status.

The country started sending him "unrealized profits tax" due THIS year and each succeeding year into the 20+ year harvest horizon. The sequential bites added up to more than the sandwich was worth at future predicted harvest.

Financially untenable position for sure.

I was witness to the first timber harvester I had ever seen outside of the logging show.

The 20+ acres was not flat, but from slight to steep slopes, well covered with immature species, most fir. Knee level trunk diameters were 18" or less. Typically a thinning crew might show up, take a week to pull out the least productive samples, & open up the stand for larger growth spurts.

This single operator tracked unit pulled off the flat bed, began a the lower property end, and began harvesting. It's arm would grasp the tree, cut a near ground level, rotate to horizontal, run the trunk a set distance and clip each bit to length. It could load those onto it's own bed in any given length, before dumping them in a pile. Between Breakfast & lunch, a huge part of the 20 acres was clear cut.

By quitting time, the operator had filled about 50 logging trucks.

So next tax year, there was NO 'unrealized profit".

Long story, sorry. Local business adaptation to the fed.state.gov tax consortium.

Looks like Joe Manchin saved our asses and the Dems won’t get to kill the goose that lays the golden eggs just yet:


Billionaire Tax Dead After Manchin Opposition

Who'd have thought a Democrat would be saving us from this (however temporarily)? But I'll take my salvation where I can get it.

It's easy for people to say, "Oh, this won't affect me, just the billionaires." Wrong. They'll soon find out it still isn't nearly enough to fund their pipe dreams. Next will be peoples' retirement accounts and pensions, followed by small savers, if this were to get a foothold.

Given the power of Manchin, in this case, very good, it makes me wonder what if we had a third party with even just a few seats in the House and Senate. Think of the power they would wield. A big part of the reason I voted for Perot back in the 90s (too bad he was a loon). Oh well...

quote:

Looks like Joe Manchin saved our asses and the Dems won’t get to kill the goose that lays the golden eggs just yet:

^^^^^^^^^^^^^^
Looks like he saved billionaires. He said everybody should pay for this. Unless you are poverty stricken I think that means you. I do not like paying for something I do not support. I received no stimulus checks, no loans from the government or any other handouts. Socialism pure socialism. We will have to see the final result.

These Democrats never learn do they? Whenever they get back into power they just go crazy and go too far and then create a backlash, it happens every time. They just cannot be happy with incrementally trying to get their way they just want to push it all through in one big fell swoop and it always bites them in the ass, thank God.

It’s like they just cannot help themselves!

It would be better if they just stopped with the spending, rather than trying to obscure the cost by pretending there are class-enemies who can foot the entire bill.

quote:

Originally posted by sigcrazy7:
Let's say you own a second home, or piece of property. In twenty years, it doubles in value. Great, but the value of the currency has been halved (or worse) in the same period. Your gain is only 50% in real terms

Uhhh, it's worse than that...

If your house doubles (2x) in value, but the currency value is halved (1/2), your 'real' gain is ZERO!

2x*1/2 = 2x/2 = 1x....Just Sayin'

Money will go where it is treated best! Taxing wealthy incentivizes them to find other places where it is treated better. That capital leaves along with the jobs it creates. Socialists believe the government creates jobs and they are wrong. There will come a time, much like in Atlas Shrugged that the productive and wealthy will leave. We inch closer to a decision for this country to go one way or the other. Whether that becomes violent remains to be seen.

quote:

Originally posted by PASig:
These Democrats never learn do they? Whenever they get back into power they just go crazy and go too far and then create a backlash, it happens every time. They just cannot be happy with incrementally trying to get their way they just want to push it all through in one big fell swoop and it always bites them in the ass, thank God.

It’s like they just cannot help themselves!

They probably are confident that the have all the pieces in place to steal all future elections no matter what, so they're going whole hog with their commie agenda.

quote:

Originally posted by joel9507:
It would be better if they just stopped with the spending, rather than trying to obscure the cost by pretending there are class-enemies who can foot the entire bill.

And what happens when (not if) the economy stagnates or, God forbid, contracts. You know the spending won’t stop so we now have even more unfunded obligations at a time when we really can’t afford them.

The national debt proves that there is no amount of money our government can’t spend, and that’s the real problem.

quote:

Originally posted by Batty67:
Given the power of Manchin, in this case, very good, it makes me wonder what if we had a third party with even just a few seats in the House and Senate. Think of the power they would wield. A big part of the reason I voted for Perot back in the 90s (too bad he was a loon). Oh well...

C'mon - we know you voted for him because of the really cool flip-charts and graphs.

So, is the tax assessed every year? If so, someone (banks, investment firms etc) will need a mechanism to track and report gains, hopefully netting out the previous year's reported gains. And what happens if you must pay taxes on gains that are subsequently obliterated by a fall in the assets value. Stocks for example. Then what happens if you must pay tax on unrealized gains and then you do sell the asset at a book value gain? Taxed again as income?

Far too many questions. This will be a disaster and screw up our entire economy, which at this point, is already very unstable.

quote:

Originally posted by NavyGuy:
So, is the tax assessed every year? If so, someone (banks, investment firms etc) will need a mechanism to track and report gains, hopefully netting out the previous year's reported gains. And what happens if you must pay taxes on gains that are subsequently obliterated by a fall in the assets value. Stocks for example. Then what happens if you must pay tax on unrealized gains and then you do sell the asset at a book value gain? Taxed again as income?

Far too many questions. This will be a disaster and screw up our entire economy, which at this point, is already very unstable.

It’s already DOA, I posted about this a few replies ahead of yours.

Yep. Replaced with a handful of distasteful proposals such as greatly expanding the IRS. I still cannot figure if I am stuck with an additional 3.8 Medicare surtax on my pass through income in addition to the 3.5 percent I already pay. At least the proposal is dead to rework the RMD tables to vastly increase the amount which must be withdrawn. I swear these guys in Congress are adept at picking the pockets of taxpayers.