4 ms·

When I reached the entry level wealth and cap gains started to dominate in my income, I realized one thing: there are two types of money, one for the poor (doll

by akomtu 5y ago

When I reached the entry level wealth and cap gains started to dominate in my income, I realized one thing: there are two types of money, one for the poor (dollars) and one for the rich (stocks, assets). The gov keeps deflating dollars and thanks to complicated behind the scenes mechanics, that wealth gets transferred to assets that magically appreciate in value. When a recession hits, the gov evacuates the assets and leaves the dollars to their own devices. The poor can't get off the dollars because they have to spend everything they earn - another intentional arrangement in our economy. Moreover, cap gains aren't taxed. Only when you sell a small bit of them (or better: take a low interest loan), that small bit is taxed at laughable 20%. That's welfare for the rich. There's really no reason why cap gains (all gains, not just realized ones) can't be taxed at a progressive rate, as if it was income.

lotsofpulp 5y ago
> There's really no reason why cap gains (all gains, not just realized ones) can't be taxed at a progressive rate, as if it was income. How would the mechanics of this work? Suppose I had 1 share of publicly traded stock A. Others sell and buy stock A at $x at end of day on Jan 1, 2021, and $x+$10 at end of day on Dec 31, 2021. Am I now potentially forced to sell some of my stock A to pay taxes on unrealized gains? Is this basically property tax, except applied to all securities?
- akomtu 5y ago
  Exactly. A middle class person doesn't cry wolf that he needs to sell a portion of his house to pay the property tax, while the rich do. For example, Bezos owns 10% of Amazon voting shares would pay 0.1% per year in the form of a lien (or a loan) that lets him retain voting rights, but takes the tax when he sells or transfers his wealth (e.g. to heirs). If capital taxes existed, the rich wouldn't be able to lazily sit in the sp500 index, they would have to chase good investments (they'd have to, God forbid, take risks and do some work).

by akomtu 5y ago

lotsofpulp 5y ago

> There's really no reason why cap gains (all gains, not just realized ones) can't be taxed at a progressive rate, as if it was income. How would the mechanics of this work? Suppose I had 1 share of publicly traded stock A. Others sell and buy stock A at $x at end of day on Jan 1, 2021, and $x+$10 at end of day on Dec 31, 2021. Am I now potentially forced to sell some of my stock A to pay taxes on unrealized gains? Is this basically property tax, except applied to all securities?

akomtu 5y ago
Exactly. A middle class person doesn't cry wolf that he needs to sell a portion of his house to pay the property tax, while the rich do. For example, Bezos owns 10% of Amazon voting shares would pay 0.1% per year in the form of a lien (or a loan) that lets him retain voting rights, but takes the tax when he sells or transfers his wealth (e.g. to heirs). If capital taxes existed, the rich wouldn't be able to lazily sit in the sp500 index, they would have to chase good investments (they'd have to, God forbid, take risks and do some work).