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TL;DR: unrealised capital gains aren’t income, so they’re not subject to income tax. Also this article is 100% stupid. There’s a lot of proposals about wealth

by tomp 5y ago

TL;DR: unrealised capital gains aren’t income, so they’re not subject to income tax. Also this article is 100% stupid. There’s a lot of proposals about wealth taxes, which have their problems, but apparently the author of this article expects capital owners to be taxed in income as a share of the growth of the value of their assets... should they get money back when/if the markets crash? This is a completely unrealistic proposal.

thaumasiotes 5y ago
> the author of this article expects capital owners to be taxed in income as a share of the growth of the value of their assets... should they get money back when/if the markets crash? Sure, and people paying inheritance taxes should get their money back when they produce new heirs.
- itake 5y ago
  They need to get rid of the step up basis.
blablabla123 5y ago
The issue is quite complicated. I think a common denominator is to have a single tax that gets taxed once, which is pretty much how it works in Germany but I guess similarly in most OECD countries. (At the same time there are calls for a tax per transaction like the Tobin tax.) But what happens is that "traditionally" business owners buy things effectively tax-free (or at 50% less taxes) through their companies that they use at home. I think this is now even widened towards self-employed or even just more or less regular remote employees who work for a company in a different country. Practically all companies that I recently talked to that do remote in a different country would require me to found a separate company. As mentioned elsewhere, if you are in a higher income segment (to be realistic even a medium one suffices) you have access to a proportionally much wider range of tax discounts. > should they get money back when/if the markets crash? This is a completely unrealistic proposal. Still it hits a nerve. If you happen to be one of the upper 0.1% you are likely to have (not very profitable) assets like real estate that survive practically any market crash. For most people it makes no sense at all to invest in such assets unless you want to go ultra low risk and accept even loosing money over time while prevent a total loss - even without the tax. In fact in London many completely overpriced real estate objects are known to not be inhabited and bought by very wealthy people that just want to secure their money. Unfortunately this practice drives prices up even more and damages the market.

by tomp 5y ago

thaumasiotes 5y ago

> the author of this article expects capital owners to be taxed in income as a share of the growth of the value of their assets... should they get money back when/if the markets crash? Sure, and people paying inheritance taxes should get their money back when they produce new heirs.

itake 5y ago
They need to get rid of the step up basis.

blablabla123 5y ago

The issue is quite complicated. I think a common denominator is to have a single tax that gets taxed once, which is pretty much how it works in Germany but I guess similarly in most OECD countries. (At the same time there are calls for a tax per transaction like the Tobin tax.) But what happens is that "traditionally" business owners buy things effectively tax-free (or at 50% less taxes) through their companies that they use at home. I think this is now even widened towards self-employed or even just more or less regular remote employees who work for a company in a different country. Practically all companies that I recently talked to that do remote in a different country would require me to found a separate company. As mentioned elsewhere, if you are in a higher income segment (to be realistic even a medium one suffices) you have access to a proportionally much wider range of tax discounts. > should they get money back when/if the markets crash? This is a completely unrealistic proposal. Still it hits a nerve. If you happen to be one of the upper 0.1% you are likely to have (not very profitable) assets like real estate that survive practically any market crash. For most people it makes no sense at all to invest in such assets unless you want to go ultra low risk and accept even loosing money over time while prevent a total loss - even without the tax. In fact in London many completely overpriced real estate objects are known to not be inhabited and bought by very wealthy people that just want to secure their money. Unfortunately this practice drives prices up even more and damages the market.