A fair tax would be to require capital gains be paid each year just like income tax and at the same rate.

[Individual]

With a country divided into extreme political camps, refusing to acknowledge what is correct, honest, workable or practical in the other camp we will continue heading toward the accumulation of wealth in the hands of only the wealthy. We either change our taxation policy to sustain and grow the middle class and give low wage workers the opportunity to move into the middle class or we revert to something like the late Victorian era where the middle class was tiny and most jobs were centered on catering to inherited wealth. it was this type of political economy that eventually ended Englands power.

A Cuba like revolution is not possible in the US but a gradual loss of power and importance such as England's is quite possible. A strong, numerous, well educated middle class is an essential ingredient of a strong country. China is waiting in the wings to take our place.We wait to make changes at our peril.

I agree, we Americans are deeply divided to the benefit of the political parties.
Have you some correct, honest, workable, and practical change to our taxation policy that a majority of us might acknowledge as worth pursuing in discussion?
IMO, what is suggested by this thread is dead in the water.

 

[bave]

Wealth: assets - liabilities.

What are your assets worth?

How much is that Pollock on the wall worth? How much is that real estate portfolio worth? These are not easy answers.

 

[bave]

Statement: the top one percent pay almost 40% of the federal income tax and all the death tax

Response: https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States

You are going to respond to a complex economics and policy question with an article from.... wikipedia?

 

[jimbo]

Who is to say what I do with my income? Keep your investments but pay your taxes on the gains as they accrue. The vast majority of capital gains are never taxed.

Until the property is sold, there is no capital gain.

 

[reflechissez]

What are your assets worth?

How much is that Pollock on the wall worth? How much is that real estate portfolio worth? These are not easy answers.

Somehow, banks, insurance companies, etc. seem to come up with something.

 

[craig]

Until the property is sold, there is no capital gain.

• #334

Fishking said:
Capital gains is obtained at point of sale, not yearly. The money does not exist to tax until that point. Your thread doesn't make sense.

That is a legal fiction used by the current tax law to trigger a taxing event . That event can be modified or changed. Assets have an appreciated value that exists at any point in time.

• #355

Fishking said:
No, it's not a legal fiction. You apparently don't know what you're talking about and should delete your thread.

The fiction is that the current asset value is not the appreciated value until sold. A legal fiction is something that does not actually exist but is defined in law for a purpose such as triggering a taxing event.

 

[bave]

Somehow, banks, insurance companies, etc. seem to come up with something.

Ok, let's pretend we did this.

Imagine going to San Jose and telling all the retirees who bought houses in the 70's that their $30k house from back then is now worth $2MM and they now have a capital gain of ~$1.97MM and the taxes will be $700M. What now?

 

[ataraxia]

Ok, let's pretend we did this.

Imagine going to San Jose and telling all the retirees who bought houses in the 70's that their $30k house from back then is now worth $2MM and they now have a capital gain of ~$1.97MM and the taxes will be $700M. What now?

That would only be due if they sold the house- in which case: what’s the problem?

 

[bave]

That would only be due if they sold the house- in which case: what’s the problem?

Which is precisely the case for all these billionaires and their stock portfolios. All I am saying is that if we are going to start taxing unrealized gains it needs to be across the board for everyone and those ramifications will be significant.

 

[craig]

Which is precisely the case for all these billionaires and their stock portfolios. All I am saying is that if we are going to start taxing unrealized gains it needs to be across the board for everyone and those ramifications will be significant.

The change would be phased in. The first year will exempt 1 million dollars of assets and apply a very very small flat tax on all asset appreciation above that. Then the basis of all assets reset (stepped up) to current value. This will be a significant windfall for holders of wealth. The next year an increased flat rate is applied to capital appreciation over the tax year and the basis resets. The rate is adjusted over succeeding years to provide tax revenue to replace income tax revenue as those rates eventually go to zero.

 

[craig]

The change would be phased in. The first year will exempt 1 million dollars of assets and apply a very very small flat tax on all asset appreciation above that. Then the basis of all assets reset (stepped up) to current value. This will be a significant windfall for holders of wealth. The next year an increased flat rate is applied to capital appreciation over the tax year and the basis resets. The rate is adjusted over succeeding years to provide tax revenue to replace income tax revenue as those rates eventually go to zero.

 

[bave]

The change would be phased in. The first year will exempt 1 million dollars of assets and apply a very very small flat tax on all asset appreciation above that. Then the basis of all assets reset (stepped up) to current value. This will be a significant windfall for holders of wealth. The next year an increased flat rate is applied to capital appreciation over the tax year and the basis resets. The rate is adjusted over succeeding years to provide tax revenue to replace income tax revenue as those rates eventually go to zero.

Ohhhh, so you only want to hit the "really rich" with your new tax.

Thank god the constitution doesn't let you do this sort of thing.

 

[craig]

Ohhhh, so you only want to hit the "really rich" with your new tax.

Thank god the constitution doesn't let you do this sort of thing.

As I have said repeatedly the goal is to reduce extreme generational wealth which is dangerous and increase the size of the middle class which provides stability and is good for our country.

 

[jaeger19]

That's why I used the word "unrealized." The "true value" of an IRA is determined every day at the market close.

So what day do you pick to establish its true value for tax purposes? think about that for more than a minute.

 

[jaeger19]

Wealth: assets - liabilities.

And on what day do you establish the "value" of assets like property..a house..a car..a painting..on any given day they could be assets or liabilities..
Again think on that for more than a minute.

 

[jaeger19]

That would only be due if they sold the house- in which case: what’s the problem?

Not according to the poster..according to the poster..the retirees would have to cough up the tax on their houses appreciation each and every year..

 

[jaeger19]

Somehow, banks, insurance companies, etc. seem to come up with something.

Yep..and often that something is very wrong... I give you the housing crisis..
" drop mic"...

 

[bave]

Yep..and often that something is very wrong... I give you the housing crisis..
" drop mic"...

Are you suggesting Mark-to-Market is flawed?

Now imagine if government cronies were in charge of it. lol.

 

[jaeger19]

I am not going to continue to spoon feed ignorant parrots. This data is widely and easily available and it is available from federal agencies. Do a modicum of homework and look it up yourself.



Uh, no, not by any metric. Look at the big three spending lines at the federal level. Defense, Healthcare, and SS. None of those are tilted to wealth, in fact 2 or 3 are tilted away from wealth. You could make a theoretical argument for infrastructure usage, I guess, but that's a reach and it is a tiny sliver of government services.



Let's look at this for a moment. Cuba went after the wealthy, the wealthy took their money and left. How'd that work out for the rest of Cuba? Or any country that has gone down this road before. When you start skinning the rich in the name of populous ideals you end up hurting the nation as a whole. As I have told you many times before, look at why France, Sweden, Denmark, and Britain all unwound their "soak the rich" policies. Here's a hint, because it wasn't working at raising more money but it was working for crushing the poor and middle class. Oops.



The problem with that is that you are ignoring the condition of the middle/lower class. If you look at the Gilded Age, or France of the 18th/19th century, you will notice that the lower and middle classes were literally in an existential crisis. Poor people were literally starving to death. Compare that to today and you are trying to draw the same conclusion at a time when the real median household income has been continuously trending upwards for ~40 years since they began tracking it, home ownership is well above the 40 year average, and discretionary income is rising.

But you don't like actual facts and statistics, do you?



Good lord, just look at the statistics. Police budgets are poured into policing violent/crime ridden areas. Why? To protect that community, the policing goes where the violence/crime is, which is almost perfectly correlated with income.

You think the military protects rich people more than poor people? I would wager the poor person doesn't want to get droned as much as the rich person doesn't want to get droned.

Actually social security..Healthcare are tilted toward the wealthy. Not only do they use it at the same rates...they wealthy benefit from the spending as the wealthy own the healthcare industry..not poor people. The same with social security..they benefit equally from. Getting social security..but the wealthy benefit from all those dollars going into their bank accounts when a poor person uses their ss money to buy the goods and services that rich people own.
The wealthy benefit far more from our military. Their businesses depend on the security for trade our military provides ..
The guy living in the trailer house couldn't care less about the strait of hormuz..
But the wealthy? Different story.

As far as policing? The policing in those communities isn't for protection of the residents...it's for protection of the wealthy by policing the people in those areas.

 

[craig]

And on what day do you establish the "value" of assets like property..a house..a car..a painting..on any given day they could be assets or liabilities..
Again think on that for more than a minute.

How is an estate valued for taxation now? This would be the same process with a similar exclusion but easier since the basis of most assets are current yearly and recorded. Very difficult to evade or commit fraud. I would think that those affected by this tax already have financial resources generating yearly net worth statements with the data required.

 

[craig]

Their businesses depend on the security for trade our military provides ..
The guy living in the trailer house couldn't care less about the strait of hormuz..
But the wealthy? Different story.

And the vast majority who serve are not wealthy.

 

[craig]

As far as policing? The policing in those communities isn't for protection of the residents...it's for protection of the wealthy by policing the people in those areas.

The resources required to protect someone and their property is directly proportional to their wealth.

 

[reflechissez]

Ok, let's pretend we did this.

Imagine going to San Jose and telling all the retirees who bought houses in the 70's that their $30k house from back then is now worth $2MM and they now have a capital gain of ~$1.97MM and the taxes will be $700M. What now?

You're having a conversation that I'm not having. I was specifically responding to your assertion that valuations could not be determined. Focus!

 

[reflechissez]

So what day do you pick to establish its true value for tax purposes? think about that for more than a minute.

So what day do you pick to establish its true value for tax purposes? think about that for more than a minute.

Oh,....let's say....December 31.

 

[reflechissez]

And on what day do you establish the "value" of assets like property..a house..a car..a painting..on any given day they could be assets or liabilities..
Again think on that for more than a minute.

December 31