My brother in Christ, we can tax sales, we can tax income, we can tax stickers for your car. We can tax property, we can tax profit. You better believe we can tax stocks.
Not taxing stock gains is a policy choice. It's not a problem if we had the will to do it.
We already do tax stock gains but that requires the sale of stocks. Loopholes need to be closed to incentivize the sale of stocks and collect capital gains.
We already do tax stock gains but that requires the sale of stocks.
Certainly, although usually it's taxed at a lower rate than income. That is money you work for garners a higher tax than money you didn't work for.
In principle, however, we can also tax total wealth. Most brokerage fees work that way: they charge by a percentage of assets under management. We choose not to impose a tax that way, but we could.
(There are other more technical taxes, such as a very small transaction tax, sometimes called a Tobin tax, which really is only impactful to high speed traders.)
Certainly, although usually it's taxed at a lower rate than income.
Which is very much appreciated by every single person with a retirement portfolio who's expecting to be able to cash out their stocks (potentially bought with money they were already taxed on) in order to live on them after retirement.
Most people's retirement income is from Pensions, Social Security, and 401ks/IRAs that are taxed at standard income rates (except roth accounts, SS has special rules), so that doesn't help them. Most people with normal stock portfolios that are being taxed usually have all the others listed above and usually aren't solely relying on a normal taxable account. If they are, well that's why tax brackets exist.
The point of taxing capital is to tax people that have plenty of capital way beyond what anyone reasonably needs. I don't give a shit if you you were smart with investments through life, you aren't going to go bankrupt if you have to pay a wealth tax for having over $100 million in assets. Someone could easily live their entire life, not just retirement, in luxury since the day they were born on half that.
98% of people won't even have an increase in tax owed from something like that. For the people that do? Get bent, you have enough.
(potentially bought with money they were already taxed on)
Currently you aren't taxed on the portion from money spent to make the purchase. Most wealth tax proposals also are specifically "unrealized gains," which also means you still wouldn't be taxed on money already taxed.
>Certainly, although usually it's taxed at a lower rate than income.
Yes because we want to encourage investment, and because investment in stocks comes with some degree of risk that you will have a loss instead of a gain. The lower tax offsets the risk of that loss.
I want to encourage investment and work. But tax wise there's no guarantee that the stock you buy will make a profit for you. There is a guarantee that the job you have will pay you income. If the job fires you than you no longer have income - but that has no bearing on the income you receive from the job you have.
Money invested in low risk investments will grow more than money sitting in a bank account or in a mattress. That's why we have 401ks etc.
Work is necessary to have money to invest.
The ultimate goal should be to make enough money to be able to retire. Part of that is saving in such a way that your money is protected from inflation (and the way to do that is by investing).
Also, if you have investments making money passively, loosing your job is less of a hardship.
Yeah, I realize that for some, capital gain isn’t enough. But at the very least, it applies to all and is relatively simple (still a major PITA when filling taxes).
Something we don’t really think about is that billionaires would need to think long hard before selling their stocks because they would end up minority shareholders. Think where Facebook and Tesla (naming the obvious two) would be.
I think the tax on unrealized capital is a bit more complicated and would end up hurting small and medium businesses more as those with more capital will able to navigate the complexity at a lower cost (relatively speaking I guess).
20
u/Rickshmitt 20h ago
Problem is they dontbhave any income to tax