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> And it's not like these people accidentally stumbled into a 100% tax break. The 100% tax break is for QSBS specifically, but it seems like you're saying all

> And it's not like these people accidentally stumbled into a 100% tax break. The 100% tax break is for QSBS specifically, but it seems like you're saying all capital gains should be taxed annually rather than at realization, including regular retail investors, people who own houses, etc. > If they're legitimately long term investments then "sudden unexpected" taxes shouldn't be a problem. Sometimes people make financial plans based on what they believe their assets to be worth, e.g. deciding when to retire. Certainly people shouldn't be making big life decisions based on short-term gains but doing so based on long-term gains created over decades seem entirely reasonable. Finding out that those long-term gains are now worth 5% less (because the tax rate went up 5%) could be frustrating.

lmm 5y ago
> The 100% tax break is for QSBS specifically, but it seems like you're saying all capital gains should be taxed annually rather than at realization, including regular retail investors, people who own houses, etc. You're right, what I said was pretty sloppy. IMO taxing annually is fairest. But also, if you're an ordinary decent investor, then there shouldn't be much difference between either treatment. If the difference between "realising" your gains annually vs all at once makes a difference for you, it's because you're doing some swimming-with-the-sharks shenanigans (such as claiming a 100% tax break somehow). IMO it's right for the government to be as aggressive as legally possible when closing tax loopholes, because the people exploiting them will be as aggressive as legally possible (as is their right). I think anyone who retired or bought a house based on the expected profits from their tax-avoidance scheme deserves what they get - sure, it sucks to find out your savings are suddenly worth 5% less than you thought, but if that 5% was because you weren't paying your fair share of taxes, well, tough cookies.
- kentonv 5y ago
  > If the difference between "realising" your gains annually vs all at once makes a difference for you, it's because you're doing some swimming-with-the-sharks shenanigans (such as claiming a 100% tax break somehow). Again, how would you handle illiquid assets? It's hard to pay taxes when you can't actually sell a portion of the thing that's being taxed. What, exactly, do you want someone with a house that has appreciated to do? What about someone who worked for an early-stage startup, received some stock that they aren't able to sell yet, but whose 409(a) price has gone up? > I think anyone who retired or bought a house based on the expected profits from their tax-avoidance scheme deserves what they get - sure, it sucks to find out your savings are suddenly worth 5% less than you thought, but if that 5% was because you weren't paying your fair share of taxes, well, tough cookies. Bizarre take. You think everyone who invests and has capital gains did it specifically for the purpose of avoiding taxes?
  - lmm 5y ago
    > What, exactly, do you want someone with a house that has appreciated to do? Pay taxes based on the housing appraisals that we already require for property tax purposes? > What about someone who worked for an early-stage startup, received some stock that they aren't able to sell yet, but whose 409(a) price has gone up? Use the secondary market price (at least as a floor), or pay taxes in-kind with the stock. > Bizarre take. You think everyone who invests and has capital gains did it specifically for the purpose of avoiding taxes? I think it's an either-or situation. Either you saved a bunch of taxes - which means you probably did it deliberately - or you didn't, in which case you're not going to mind much if your tax treatment changes.

lmm 5y ago

> The 100% tax break is for QSBS specifically, but it seems like you're saying all capital gains should be taxed annually rather than at realization, including regular retail investors, people who own houses, etc. You're right, what I said was pretty sloppy. IMO taxing annually is fairest. But also, if you're an ordinary decent investor, then there shouldn't be much difference between either treatment. If the difference between "realising" your gains annually vs all at once makes a difference for you, it's because you're doing some swimming-with-the-sharks shenanigans (such as claiming a 100% tax break somehow). IMO it's right for the government to be as aggressive as legally possible when closing tax loopholes, because the people exploiting them will be as aggressive as legally possible (as is their right). I think anyone who retired or bought a house based on the expected profits from their tax-avoidance scheme deserves what they get - sure, it sucks to find out your savings are suddenly worth 5% less than you thought, but if that 5% was because you weren't paying your fair share of taxes, well, tough cookies.

kentonv 5y ago
> If the difference between "realising" your gains annually vs all at once makes a difference for you, it's because you're doing some swimming-with-the-sharks shenanigans (such as claiming a 100% tax break somehow). Again, how would you handle illiquid assets? It's hard to pay taxes when you can't actually sell a portion of the thing that's being taxed. What, exactly, do you want someone with a house that has appreciated to do? What about someone who worked for an early-stage startup, received some stock that they aren't able to sell yet, but whose 409(a) price has gone up? > I think anyone who retired or bought a house based on the expected profits from their tax-avoidance scheme deserves what they get - sure, it sucks to find out your savings are suddenly worth 5% less than you thought, but if that 5% was because you weren't paying your fair share of taxes, well, tough cookies. Bizarre take. You think everyone who invests and has capital gains did it specifically for the purpose of avoiding taxes?
- lmm 5y ago
  > What, exactly, do you want someone with a house that has appreciated to do? Pay taxes based on the housing appraisals that we already require for property tax purposes? > What about someone who worked for an early-stage startup, received some stock that they aren't able to sell yet, but whose 409(a) price has gone up? Use the secondary market price (at least as a floor), or pay taxes in-kind with the stock. > Bizarre take. You think everyone who invests and has capital gains did it specifically for the purpose of avoiding taxes? I think it's an either-or situation. Either you saved a bunch of taxes - which means you probably did it deliberately - or you didn't, in which case you're not going to mind much if your tax treatment changes.