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> Does that mean someone can be jailed or fined for some past action that was legal at the time? This is about the tax rate - nothing about whats legal or not.

> Does that mean someone can be jailed or fined for some past action that was legal at the time? This is about the tax rate - nothing about whats legal or not. > What does it mean for property rights if the government can arbitrarily alter the system retroactively - could they simply confiscate all previously earned and taxed wealth? Being retroactive does not change how or what it can/will confiscate. If the government decides to confiscate something, it will do that. Retroactively or not does not really mater. > Is a retroactive tax legal? Yes; Changing criminal laws retroactively is not though

throwawaysea 5y ago
> This is about the tax rate - nothing about whats legal or not. I am not sure I understand your point. Taxation is part of our legal system, and is expressed in law. Not paying a tax would be illegal and would result in fines or jail time. Implying that a law can be applied retroactively means that people can be arbitrarily turned from law abiding citizens to criminals. > If the government decides to confiscate something, it will do that. Retroactively or not does not really mater. My point is that a free society needs to have private property rights. If a government can casually alter the law and have it apply retroactively, it means that people don't really have control over anything - such as the transactions they undertake voluntarily between each other - because the conditions of their actions and the consequences of their actions can be altered arbitrarily. Is your point that the government has the power to do this and will find a way to do it? Or that it is allowable and just and desirable?
- jfengel 5y ago
  You don't actually pay these taxes until next year, so it's perfectly legal for them to change the rates. The Congress may not choose to make the taxes retroactive. As you say, it makes people cranky to have their decisions changed out from under them. But they didn't become criminals retroactively; the tax isn't due yet. So yes, it's allowable. Whether it's desirable is up to Congress. (Presidents don't set taxes. They just make budget requests.) If you find this so upsetting, I'm afraid you're in for a rough ride. The government has the power to change lots of stuff after you've made investments. They changed the rules on mortgage tax deductions in 2017. Businesses buy land and then discover that the government won't build a road there. And so on. Hell, the weather throws off your plans. You have a lot less control over your life than you seem to imagine, but it's not apocalyptic. People control lots of stuff, and smart ones plan surpluses for unexpected eventualities. That's easier when you're the sort of person who has capital gains taxes to pay, which is why they raise this tax rather than some other tax.

throwawaysea 5y ago

> This is about the tax rate - nothing about whats legal or not. I am not sure I understand your point. Taxation is part of our legal system, and is expressed in law. Not paying a tax would be illegal and would result in fines or jail time. Implying that a law can be applied retroactively means that people can be arbitrarily turned from law abiding citizens to criminals. > If the government decides to confiscate something, it will do that. Retroactively or not does not really mater. My point is that a free society needs to have private property rights. If a government can casually alter the law and have it apply retroactively, it means that people don't really have control over anything - such as the transactions they undertake voluntarily between each other - because the conditions of their actions and the consequences of their actions can be altered arbitrarily. Is your point that the government has the power to do this and will find a way to do it? Or that it is allowable and just and desirable?

jfengel 5y ago
You don't actually pay these taxes until next year, so it's perfectly legal for them to change the rates. The Congress may not choose to make the taxes retroactive. As you say, it makes people cranky to have their decisions changed out from under them. But they didn't become criminals retroactively; the tax isn't due yet. So yes, it's allowable. Whether it's desirable is up to Congress. (Presidents don't set taxes. They just make budget requests.) If you find this so upsetting, I'm afraid you're in for a rough ride. The government has the power to change lots of stuff after you've made investments. They changed the rules on mortgage tax deductions in 2017. Businesses buy land and then discover that the government won't build a road there. And so on. Hell, the weather throws off your plans. You have a lot less control over your life than you seem to imagine, but it's not apocalyptic. People control lots of stuff, and smart ones plan surpluses for unexpected eventualities. That's easier when you're the sort of person who has capital gains taxes to pay, which is why they raise this tax rather than some other tax.