5 ms·

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 d

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..
      - Johnny555 4y ago
        why do we need to keep growing gov't and adding more and more rules/programs/etc.? Here's one good reason -- decades of underinvestment in infrastructure. The top tax bracket in the 1950's when the Interstate highway system was funded was 90% - now it's 37% and even that is mostly avoided by the most wealthy. https://www.cfr.org/backgrounder/state-us-infrastructure https://www.cfr.org/backgrounder/state-us-infrastructure Another reason is the impending climate disaster -- former arable land will become unfarmable, many coastal areas will become uninhabitable or need expensive flood control, etc. This is going to cause huge costs and will almost certainly require government assistance. And carbon reduction will also be expensive.
        stevenjgarner 4y ago
        But our tax base is greater now than it was then. And don't even get a trucker started on explaining how many taxes they have to pay. Could it be that corporate lobbyists successfully promoted their questionable projects like the Vietnam war, the Iraq War, etc, etc, to spend our infrastructure budget instead on making defense contractors wealthy? Perhaps too we can stop irrigating desert and grow things like almonds (and actual food) in places like Iowa (with the most class 1 farm land in the US), instead of Iowa growing animal fodder and ethanol. Most of these "crises" are self-inflicted crises in management.
        tcmart14 4y ago
        For sure, projects like war and the military industrial complex don't help. But while the tax base has grown larger, infrastructure has also grown larger. There are many many more miles of road to maintain, many more miles of cable, many more bridges. Also back then, when this infrastructure was built, they were not hit with maintenance cost. The bridge over there, then it was brand new and would be fine for 10 years with maybe just a quick inspection. Now that bridge has 50 years of rust built up on. But not only that bridge, so does that one and that one and that one. Now our infrastructure has some age and it has a cost to maintain it that was not present decades ago. And some of that rust is because previous generations just kicked the can down the road. Frankly, I am 28 with two kids and I don't want to kick the can down the road for them deal with. A really interesting read on the rust and cost is the book "Rust: the longest war." It outlines how quickly costs escalate over time when something as simple as Rust is not dealt with and it left to build up.
  - actually_a_dog 4y ago
    Too bad, so sad. You should have invested in something that has actual fundamentals instead.
Johnny555 4y ago
Isn't that the same? If my house is worth $1M in 2022, I pay tax on that $1M of value. If it goes down in value to $500K in 2023 (and is reassessed), I'd pay tax on $500K value in 2023. If I own $1B of AMZN in 2022, I'd pay wealth tax on my $1B holdings in 2022, if the market tanks and AMZN is worth $50M in 2023, then I'd pay the wealth tax on $50M in 2023. Just as with property taxes, a wealth tax is generally annual based on current assets.
- Aeolun 4y ago
  It feels weird I’d have to pay anyone just for owning something. Besides, how would you price private companies? Are those just going to be free?
  - stevenjgarner 4y ago
    Oh crap you've discovered the loop-hole into which the billionaires are going to disappear! They are going to get massive loans to take their companies private and never have to pay that stinking wealth tax again. No more audited financial statements either. But the interest on their loans will be income tax deductible.
  - UncleMeat 4y ago
    It only feels weird because there is a concerted effort to make you feel that way. It is absolutely identical to property taxes on homes, but that doesn't make people feel icky in the same manner.
    - kurisufag 4y ago
      > but that doesn't make people feel icky in the same manner. speak for yourself! a property tax makes sense in theory: you're contributing to the entity that ensures your land is safe in the first place, but basing it on valuations instead of something like flat rates based on sqft is preposterous. I'd go so far as to say that the degree to which the knowledge of such a tax affects your decisions relating to the property is enough to constitute a violation of natural property rights.
kelp 4y ago
I'm actually in this situation on my property taxes. In San Francisco there is a 2.5 month window to appeal your property tax assessment. I did that for 2020, and was successful (the hearing was like a year+ later) and they gave me a refund. I failed to do it for 2021, because I was under the mistaken assumption that they'd they'd also adjust my 2021 assessment after my appeal. They didn't. I guess that's on me? I just sold that property for a loss and 15% less than my tax assessment, and I'm well past the appeal period for 2021/2022 sales tax year. So I think I'm out of luck. I just over-paid by 15%.
- stevenjgarner 4y ago
  Thank goodness you did not buy that property for cents on the dollar 30 years ago and now have to also pay a fictitious wealth tax on the property when it was at the peak of its "value". Count your blessings.
- stevenjgarner 4y ago
  I thought things are capped in California, that Under Proposition 13, the annual real estate tax on a parcel of property is limited to 1% of its assessed value. This "assessed value" may be increased only by a maximum of 2% per year until, and unless, the property has a change of ownership? No such joy in Texas (yet).
  - pyuser583 4y ago
    That’s probably one of the reasons real estate prices are so high.
    - cwalv 4y ago
      It's definitely One of the reasons. I've compared some real estate prices in some low-cost areas to relatively high-cost areas, and found that once factoring in property tax, the actual cost was close to the same.
      - pyuser583 4y ago
pyuser583 4y ago
The problem with a wealth tax is that it’s easy for wealthy people to move. We tax real estate because it can’t be moved out of the jurisdiction.

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..
    - Johnny555 4y ago
      why do we need to keep growing gov't and adding more and more rules/programs/etc.? Here's one good reason -- decades of underinvestment in infrastructure. The top tax bracket in the 1950's when the Interstate highway system was funded was 90% - now it's 37% and even that is mostly avoided by the most wealthy. https://www.cfr.org/backgrounder/state-us-infrastructure https://www.cfr.org/backgrounder/state-us-infrastructure Another reason is the impending climate disaster -- former arable land will become unfarmable, many coastal areas will become uninhabitable or need expensive flood control, etc. This is going to cause huge costs and will almost certainly require government assistance. And carbon reduction will also be expensive.
      - stevenjgarner 4y ago
        But our tax base is greater now than it was then. And don't even get a trucker started on explaining how many taxes they have to pay. Could it be that corporate lobbyists successfully promoted their questionable projects like the Vietnam war, the Iraq War, etc, etc, to spend our infrastructure budget instead on making defense contractors wealthy? Perhaps too we can stop irrigating desert and grow things like almonds (and actual food) in places like Iowa (with the most class 1 farm land in the US), instead of Iowa growing animal fodder and ethanol. Most of these "crises" are self-inflicted crises in management.
        tcmart14 4y ago
        For sure, projects like war and the military industrial complex don't help. But while the tax base has grown larger, infrastructure has also grown larger. There are many many more miles of road to maintain, many more miles of cable, many more bridges. Also back then, when this infrastructure was built, they were not hit with maintenance cost. The bridge over there, then it was brand new and would be fine for 10 years with maybe just a quick inspection. Now that bridge has 50 years of rust built up on. But not only that bridge, so does that one and that one and that one. Now our infrastructure has some age and it has a cost to maintain it that was not present decades ago. And some of that rust is because previous generations just kicked the can down the road. Frankly, I am 28 with two kids and I don't want to kick the can down the road for them deal with. A really interesting read on the rust and cost is the book "Rust: the longest war." It outlines how quickly costs escalate over time when something as simple as Rust is not dealt with and it left to build up.
- actually_a_dog 4y ago
  Too bad, so sad. You should have invested in something that has actual fundamentals instead.

Johnny555 4y ago

Isn't that the same? If my house is worth $1M in 2022, I pay tax on that $1M of value. If it goes down in value to $500K in 2023 (and is reassessed), I'd pay tax on $500K value in 2023. If I own $1B of AMZN in 2022, I'd pay wealth tax on my $1B holdings in 2022, if the market tanks and AMZN is worth $50M in 2023, then I'd pay the wealth tax on $50M in 2023. Just as with property taxes, a wealth tax is generally annual based on current assets.

Aeolun 4y ago
It feels weird I’d have to pay anyone just for owning something. Besides, how would you price private companies? Are those just going to be free?
- stevenjgarner 4y ago
  Oh crap you've discovered the loop-hole into which the billionaires are going to disappear! They are going to get massive loans to take their companies private and never have to pay that stinking wealth tax again. No more audited financial statements either. But the interest on their loans will be income tax deductible.
- UncleMeat 4y ago
  It only feels weird because there is a concerted effort to make you feel that way. It is absolutely identical to property taxes on homes, but that doesn't make people feel icky in the same manner.
  - kurisufag 4y ago
    > but that doesn't make people feel icky in the same manner. speak for yourself! a property tax makes sense in theory: you're contributing to the entity that ensures your land is safe in the first place, but basing it on valuations instead of something like flat rates based on sqft is preposterous. I'd go so far as to say that the degree to which the knowledge of such a tax affects your decisions relating to the property is enough to constitute a violation of natural property rights.

kelp 4y ago

I'm actually in this situation on my property taxes. In San Francisco there is a 2.5 month window to appeal your property tax assessment. I did that for 2020, and was successful (the hearing was like a year+ later) and they gave me a refund. I failed to do it for 2021, because I was under the mistaken assumption that they'd they'd also adjust my 2021 assessment after my appeal. They didn't. I guess that's on me? I just sold that property for a loss and 15% less than my tax assessment, and I'm well past the appeal period for 2021/2022 sales tax year. So I think I'm out of luck. I just over-paid by 15%.

stevenjgarner 4y ago
Thank goodness you did not buy that property for cents on the dollar 30 years ago and now have to also pay a fictitious wealth tax on the property when it was at the peak of its "value". Count your blessings.
stevenjgarner 4y ago
I thought things are capped in California, that Under Proposition 13, the annual real estate tax on a parcel of property is limited to 1% of its assessed value. This "assessed value" may be increased only by a maximum of 2% per year until, and unless, the property has a change of ownership? No such joy in Texas (yet).
- pyuser583 4y ago
  That’s probably one of the reasons real estate prices are so high.
  - cwalv 4y ago
    It's definitely One of the reasons. I've compared some real estate prices in some low-cost areas to relatively high-cost areas, and found that once factoring in property tax, the actual cost was close to the same.
    - pyuser583 4y ago

pyuser583 4y ago

The problem with a wealth tax is that it’s easy for wealthy people to move. We tax real estate because it can’t be moved out of the jurisdiction.