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Oh, you mean like the property tax I pay on my unrealized house value? I don't get that tax back if I end up selling my house for half what it was taxed for la

Oh, you mean like the property tax I pay on my unrealized house value? I don't get that tax back if I end up selling my house for half what it was taxed for last year. But I can appeal the evaluation for this year.

lovecg 4y ago
We don’t have to be absolutist about it. Houses are not nearly as volatile as stock, so evaluating and taxing them as wealth is pretty feasible.
- stevenjgarner 4y ago
  > Houses are not nearly as volatile as stock I know six million American households who lost their homes to foreclosure in 2008 that might disagree with that one.
  - midasuni 4y ago
    Prices dropped 15% from the peak to the trough. The S&P is down 20% in the last 3 months.
- Johnny555 4y ago
  I live in a "hot" real estate market, my house has appreciated nearly 50% in 2 years. It's entirely possible that it will depreciate 20% or more over the next year.
  - deleted 4y ago
    [deleted]
stevenjgarner 4y ago
Depending on the jurisdiction, property taxes are usually a function of the property valuation. So at least if the property value goes down, theoretically so do your annual property taxes. The problem with a theoretical wealth tax, is that when the asset value goes down, too late you've already paid your wealth tax.
- elbigbad 4y ago
  Your point seems a little orthogonal. If I pay tax on X value in year 1, value goes up and now I pay X*1.1 in year 2, then back to X in year 3 because the home value lowers again, I don’t get a refund for the extra 10% paid in year 2 despite the fact that I never realized any value in the fact that my home appreciated for a year.
  - stevenjgarner 4y ago
    So in 2020 I inherit $16k and decide to buy 1 BTC for $16,082 on Nov 12, 2020. Later that day the wealth tax department is created and levies a 20% tax on all unrealized appreciated assets. Your reporting day is on the anniversary of the original asset purchase. So a year later (Nov 12, 21) Bitcoin is at $64,400. My accumulated unrealized appreciation is $48,318. I file my wealth tax return and have to borrow the $9,663.60 to pay my wealth tax. Bear in mind, I still own my 1 BTC. Have not sold it. Have not enjoyed these promising riches. Six months later BTC is $40k and sliding down in price. By Nov 12, 2022, at the end of the 12 month reporting cycle, let's say BTC collapses all the way to $5k. I sell my 1 BTC for the $5k, and now own nothing but I am "happy" to only still owe $4,663.60 on my wealth tax loan.
    - Johnny555 4y ago
      Sounds a lot like the AMT situation for stock options where people pay taxes on the paper value of the stock when exercised, even if they don't (or even can) sell it -- the IRS can provide a way to recover taxes paid on unrealized gain if you sell the asset at a loss from where it was taxed. But I'd recommend selling enough of your BTC to pay taxes so you're not underwater if it goes down in value.
      - __pache__ 4y ago
        howabout no silly wealth taxes? I don't get it. why do we need to keep growing gov't and adding more and more rules/programs/etc.? Certainly we don't need to keep spending more and more, cut it off and some point and stop growing it for some period..
_uy6i 4y ago
Property taxes are a bad idea too.
- quickthrower2 4y ago
  Not if people living in 'reasonable' properties are not taxed much at all. If a family lives in a 100sqm house, probably should be nothing additional. If they live in 2000sqm mansion, they probably can afford a decent sized tax. Of course size is not the only factor, which makes it complicated. Land or property value is probably a good proxy. If you house is >$1M it probably means you are wealthy. Now you get one of two things in each individual case: Either people downsizing (good, frees up property for other people) or people paying tax (good for society).
  - 14u2c 4y ago
    The problem with this logic is that real estate values are out of control. In my city not uncommon to see stories of families who have owned a home for generation or more being forced to sell it because the value of the land went from $200k to $800k in 10 years and is now taxed as such.
    - quickthrower2 4y ago
      Then make it price adjusted for that to some extent. Use medians. And being forced to sell to some degree is by design. One elderly lady hogging the land that could house 100 apartment dwellings in the middle of a city for example. “Owning Land” is a human construct. And it would be no worse than compulsory purchases by government for infrastructure. Or someone leasing where the landlord wants more rent so they get kicked out.
      - _uy6i 4y ago
        Lol I’ll just be taking your bike or equity/stock, don’t like it, ugh you’re so naive, “ownership is just a human construct”
    - okasaki 4y ago

lovecg 4y ago

We don’t have to be absolutist about it. Houses are not nearly as volatile as stock, so evaluating and taxing them as wealth is pretty feasible.

stevenjgarner 4y ago
> Houses are not nearly as volatile as stock I know six million American households who lost their homes to foreclosure in 2008 that might disagree with that one.
- midasuni 4y ago
  Prices dropped 15% from the peak to the trough. The S&P is down 20% in the last 3 months.
Johnny555 4y ago
I live in a "hot" real estate market, my house has appreciated nearly 50% in 2 years. It's entirely possible that it will depreciate 20% or more over the next year.
- deleted 4y ago
  [deleted]

stevenjgarner 4y ago

Depending on the jurisdiction, property taxes are usually a function of the property valuation. So at least if the property value goes down, theoretically so do your annual property taxes. The problem with a theoretical wealth tax, is that when the asset value goes down, too late you've already paid your wealth tax.

elbigbad 4y ago
Your point seems a little orthogonal. If I pay tax on X value in year 1, value goes up and now I pay X*1.1 in year 2, then back to X in year 3 because the home value lowers again, I don’t get a refund for the extra 10% paid in year 2 despite the fact that I never realized any value in the fact that my home appreciated for a year.
- stevenjgarner 4y ago
  So in 2020 I inherit $16k and decide to buy 1 BTC for $16,082 on Nov 12, 2020. Later that day the wealth tax department is created and levies a 20% tax on all unrealized appreciated assets. Your reporting day is on the anniversary of the original asset purchase. So a year later (Nov 12, 21) Bitcoin is at $64,400. My accumulated unrealized appreciation is $48,318. I file my wealth tax return and have to borrow the $9,663.60 to pay my wealth tax. Bear in mind, I still own my 1 BTC. Have not sold it. Have not enjoyed these promising riches. Six months later BTC is $40k and sliding down in price. By Nov 12, 2022, at the end of the 12 month reporting cycle, let's say BTC collapses all the way to $5k. I sell my 1 BTC for the $5k, and now own nothing but I am "happy" to only still owe $4,663.60 on my wealth tax loan.
  - Johnny555 4y ago
    Sounds a lot like the AMT situation for stock options where people pay taxes on the paper value of the stock when exercised, even if they don't (or even can) sell it -- the IRS can provide a way to recover taxes paid on unrealized gain if you sell the asset at a loss from where it was taxed. But I'd recommend selling enough of your BTC to pay taxes so you're not underwater if it goes down in value.
    - __pache__ 4y ago
      howabout no silly wealth taxes? I don't get it. why do we need to keep growing gov't and adding more and more rules/programs/etc.? Certainly we don't need to keep spending more and more, cut it off and some point and stop growing it for some period..

_uy6i 4y ago

Property taxes are a bad idea too.

quickthrower2 4y ago
Not if people living in 'reasonable' properties are not taxed much at all. If a family lives in a 100sqm house, probably should be nothing additional. If they live in 2000sqm mansion, they probably can afford a decent sized tax. Of course size is not the only factor, which makes it complicated. Land or property value is probably a good proxy. If you house is >$1M it probably means you are wealthy. Now you get one of two things in each individual case: Either people downsizing (good, frees up property for other people) or people paying tax (good for society).
- 14u2c 4y ago
  The problem with this logic is that real estate values are out of control. In my city not uncommon to see stories of families who have owned a home for generation or more being forced to sell it because the value of the land went from $200k to $800k in 10 years and is now taxed as such.
  - quickthrower2 4y ago
    Then make it price adjusted for that to some extent. Use medians. And being forced to sell to some degree is by design. One elderly lady hogging the land that could house 100 apartment dwellings in the middle of a city for example. “Owning Land” is a human construct. And it would be no worse than compulsory purchases by government for infrastructure. Or someone leasing where the landlord wants more rent so they get kicked out.
    - _uy6i 4y ago
      Lol I’ll just be taking your bike or equity/stock, don’t like it, ugh you’re so naive, “ownership is just a human construct”
  - okasaki 4y ago