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I'd much prefer seeing us close up the tax loop holes than create an even more complex system. Taxing unrealized gains will be extremely complex, and given tha

I'd much prefer seeing us close up the tax loop holes than create an even more complex system. Taxing unrealized gains will be extremely complex, and given that they aren't allowing us to deduct unrealized losses its a pretty shitty setup for the taxpayer. We need to drastically simplify our tax code rather than further increase its complexity.

appplication 2y ago
Put simply, people in these brackets don’t need more options for tax breaks.
- Terretta 2y ago
  The audience of HN are striving to be "people in these brackets" and far more here have experienced paper gains over $100M then seen it evaporate, than the few that end up at a place they are insensitive to marginal dollars.
  - jajko 2y ago
    No we're not, since we are smart enough to realize what sort of person you would need to be and what it would cost you in one's actual life (TM) to even have a chance to get there. And most folks here are not high functioning sociopaths to start with. Upper middle class its where highest quality of life happens, if one is smart enough to understand how happiness and life fulfillment works, to not die full of hard regrets. You can have meaningful true friendships. Enough to afford whatever is you need or desire to do, not enough to become self-entitled spoiled lazy disconnected from reality piece of shit parent and partner type of folks. No you don't need private jet or mega yacht or 5 mil hypercar for that, that's poor man's idea of what sort of quality wealth brings you in life.
- _heimdall 2y ago
  Putting it even more simply, people don't need tax breaks. If our current system has loop holes it needs to be simplified such that loop holes can't reasonably exist.
  - appplication 2y ago
    It would be nice, but I don’t see why perfect need be the enemy of good
    - nightski 2y ago
      Because complexity isn't good. We already have an insanely complex tax system.
    - _heimdall 2y ago
      In my opinion, we don't need perfect and we aren't comparing to good. A perfect tax code would be impossible, a more simply one would be very doable. We're talking about a campaign proposal here with no legislative draft so its a guessing game, but in my opinion any move similar to taxing unrealized gains will serve only to make it more complex and would not fall under the category of "good" for me.
- Terretta 2y ago
  Just curious, is "a ppp [lication]" an alt for "a[ndy] ppp"? Both arguing the same points at the same time is quite the Baader–Meinhof coincidence. https://en.wikipedia.org/wiki/Frequency_illusion https://en.wikipedia.org/wiki/Frequency_illusion
  - appplication 2y ago
    Perhaps more like the extra y’s in “heyyy”. Botting minor political threads on HN is a bit too afield my energy and motivation.
    - throwway120385 2y ago
      That's exactly what a sentient AI would say to throw us humans off the scent.
  - andy_ppp 2y ago
    Could be… I pretended it’s point to point protocol (https://en.m.wikipedia.org/wiki/Point-to-Point_Protocol https://en.m.wikipedia.org/wiki/Point-to-Point_Protocol), but really I just couldn’t think of a good username that was available here when I signed up… EDIT: I’ve misunderstood your comment, I don’t have any alternative accounts on hacker news!
zelias 2y ago
Doesn't this "close" the tax loophole in which holders of tradable assets can take out loans against those assets in perpetuity, never paying taxes on any of it?
- nightski 2y ago
  I mean, you have to pay the loans back. Which requires income which is taxed. This would only work if you either don't spend any money (which then what is the point of the loan) or if your assets are always going up and increasing in value beyond that of the loan which inevitably will not be the case.
  - fooker 2y ago
    > Which requires income which is taxed And there lies the loophole. These loans are often structured as some kind of business expense that can be paid from pre-tax income. So, ultra rich people get to double dip here. No taxes on selling stocks for money, as there's a loan, plus no taxes on the income for paying it off.
    - nightski 2y ago
      That's not a loophole, it is illegal. You can't deduct personal expenses from a business. I realize the rich do it, but if that is the problem let's go after that. Also if you sell stocks you always pay tax on the capital gains regardless if there is a loan or not.
      - fooker 2y ago
        >You can't deduct personal expenses from a business. I realize the rich do it, but if that is the problem let's go after that. We have gone 'after it' again and again, making the system more and more complex. So much that you can now out-lawyer the IRS if you have enough money. There is no 'personal' expense, everything is somehow a business need. There is no simple solution to this really. Whatever you do to hurt ten billionaires, the ten million small business owners will face the brunt of it. >Also if you sell stocks you always pay tax on the capital gains regardless if there is a loan or not. That is the point, you don't sell stocks that makes you a billionaire. Instead, you find more and more creative ways to leverage that stock for loans, for deals, for power/control, etc etc. Also see cross collaterals where the same asset is used for multiple purposes at the same time!
indoordin0saur 2y ago
Seems like DNC party policies always move in the direction of what improves the job market for lawyers and bureaucrats. More complex legal code, more complex maneuvers to get around it. Tax and finance lawyers for the wealthy are going to see a salary bump if this law passes.
- _heimdall 2y ago
  I don't actually see it as a left/right or DNC/RNC decide. The policies often look different on the surface, but in the US today both sides of either "divide" lean heavily into increasing federal authority and regulation.
  - indoordin0saur 2y ago
    RNC certainly has it's problems with giving powerful and wealthy individuals ways to avoid paying taxes. But when it comes to the litigation economy it is generally DNC causing the offense. RNC, to their credit, will often roll onerous regulation.
rendang 2y ago
I've wondered if it wouldn't be better to shift the tax code to bias companies toward paying dividends, as used to be more universal among profitable firms. Then the shareholders will have the appropriate progressive income tax bracket applied.
- travisb 2y ago
  The reason companies pay in shares and not dividends anymore is _because_ doing paying out profits using a share (buyback) is more tax efficient. Especially for recipients who want to let it ride in the stock market. It doesn't seem like a genie you'll be able to put back into the bottle without reducing the net tax take.
ragnese 2y ago
> Taxing unrealized gains will be extremely complex, and given that they aren't allowing us to deduct unrealized losses its a pretty shitty setup for the taxpayer. I pay taxes on the unrealized gains of my house appreciating in value over the years. I'm not arguing one way or the other about whether various wealth tax ideas are good. But, I don't believe that the concept is as infeasible as some are making it out to be when it's been happening with property taxes for a very long time.
- orangecat 2y ago
  I pay taxes on the unrealized gains of my house appreciating in value over the years. You pay taxes on the assessed value of your house. It doesn't matter what you paid for it, or how much equity you have in it. It's more of a use tax than a capital gains or wealth tax.
  - ragnese 2y ago
    That's a fair point. It's definitely pretty different from an unrealized capital gain because, like you said, it's not about your net gain or loss on the house. But, I'd still say that it's practically similar enough to a wealth tax precisely because it's a tax based only on the current value of the thing that I own. Also, just to add to the above discussion, it's even worse in practice than a tax on unrealized gains because I'll have to pay the same amount of tax every year if my house stays the same value. If it were a tax on the unrealized "gains" of my house, I'd pay $0 if it stayed the same value. And if the value of my house decreases, I'll still have to pay more than $0 in property tax, whereas a capital loss would mean I would pay at most $0. So, I think I still stand by my sentiment that property taxes are more burdensome than a tax on unrealized capital gains.
- VirusNewbie 2y ago
  Property taxes exist because we want to tax externalities like land use. Taxing fake wealth because you own a company and some VC assigns it a valuation is insane. Why should you dilute your ownership share just because of some arbitrary number?
cokeandpepsi 2y ago
[dead]
commandlinefan 2y ago
> aren't allowing us to deduct unrealized losses You can't really deduct realized losses either (annoyingly). You can use them to offset gains in future years, but they're not a deduction.

appplication 2y ago

Put simply, people in these brackets don’t need more options for tax breaks.

Terretta 2y ago
The audience of HN are striving to be "people in these brackets" and far more here have experienced paper gains over $100M then seen it evaporate, than the few that end up at a place they are insensitive to marginal dollars.
- jajko 2y ago
  No we're not, since we are smart enough to realize what sort of person you would need to be and what it would cost you in one's actual life (TM) to even have a chance to get there. And most folks here are not high functioning sociopaths to start with. Upper middle class its where highest quality of life happens, if one is smart enough to understand how happiness and life fulfillment works, to not die full of hard regrets. You can have meaningful true friendships. Enough to afford whatever is you need or desire to do, not enough to become self-entitled spoiled lazy disconnected from reality piece of shit parent and partner type of folks. No you don't need private jet or mega yacht or 5 mil hypercar for that, that's poor man's idea of what sort of quality wealth brings you in life.
_heimdall 2y ago
Putting it even more simply, people don't need tax breaks. If our current system has loop holes it needs to be simplified such that loop holes can't reasonably exist.
- appplication 2y ago
  It would be nice, but I don’t see why perfect need be the enemy of good
  - nightski 2y ago
    Because complexity isn't good. We already have an insanely complex tax system.
  - _heimdall 2y ago
    In my opinion, we don't need perfect and we aren't comparing to good. A perfect tax code would be impossible, a more simply one would be very doable. We're talking about a campaign proposal here with no legislative draft so its a guessing game, but in my opinion any move similar to taxing unrealized gains will serve only to make it more complex and would not fall under the category of "good" for me.
Terretta 2y ago
Just curious, is "a ppp [lication]" an alt for "a[ndy] ppp"? Both arguing the same points at the same time is quite the Baader–Meinhof coincidence. https://en.wikipedia.org/wiki/Frequency_illusion https://en.wikipedia.org/wiki/Frequency_illusion
- appplication 2y ago
  Perhaps more like the extra y’s in “heyyy”. Botting minor political threads on HN is a bit too afield my energy and motivation.
  - throwway120385 2y ago
    That's exactly what a sentient AI would say to throw us humans off the scent.
- andy_ppp 2y ago
  Could be… I pretended it’s point to point protocol (https://en.m.wikipedia.org/wiki/Point-to-Point_Protocol https://en.m.wikipedia.org/wiki/Point-to-Point_Protocol), but really I just couldn’t think of a good username that was available here when I signed up… EDIT: I’ve misunderstood your comment, I don’t have any alternative accounts on hacker news!

zelias 2y ago

Doesn't this "close" the tax loophole in which holders of tradable assets can take out loans against those assets in perpetuity, never paying taxes on any of it?

nightski 2y ago
I mean, you have to pay the loans back. Which requires income which is taxed. This would only work if you either don't spend any money (which then what is the point of the loan) or if your assets are always going up and increasing in value beyond that of the loan which inevitably will not be the case.
- fooker 2y ago
  > Which requires income which is taxed And there lies the loophole. These loans are often structured as some kind of business expense that can be paid from pre-tax income. So, ultra rich people get to double dip here. No taxes on selling stocks for money, as there's a loan, plus no taxes on the income for paying it off.
  - nightski 2y ago
    That's not a loophole, it is illegal. You can't deduct personal expenses from a business. I realize the rich do it, but if that is the problem let's go after that. Also if you sell stocks you always pay tax on the capital gains regardless if there is a loan or not.
    - fooker 2y ago
      >You can't deduct personal expenses from a business. I realize the rich do it, but if that is the problem let's go after that. We have gone 'after it' again and again, making the system more and more complex. So much that you can now out-lawyer the IRS if you have enough money. There is no 'personal' expense, everything is somehow a business need. There is no simple solution to this really. Whatever you do to hurt ten billionaires, the ten million small business owners will face the brunt of it. >Also if you sell stocks you always pay tax on the capital gains regardless if there is a loan or not. That is the point, you don't sell stocks that makes you a billionaire. Instead, you find more and more creative ways to leverage that stock for loans, for deals, for power/control, etc etc. Also see cross collaterals where the same asset is used for multiple purposes at the same time!

indoordin0saur 2y ago

Seems like DNC party policies always move in the direction of what improves the job market for lawyers and bureaucrats. More complex legal code, more complex maneuvers to get around it. Tax and finance lawyers for the wealthy are going to see a salary bump if this law passes.

_heimdall 2y ago
I don't actually see it as a left/right or DNC/RNC decide. The policies often look different on the surface, but in the US today both sides of either "divide" lean heavily into increasing federal authority and regulation.
- indoordin0saur 2y ago
  RNC certainly has it's problems with giving powerful and wealthy individuals ways to avoid paying taxes. But when it comes to the litigation economy it is generally DNC causing the offense. RNC, to their credit, will often roll onerous regulation.

rendang 2y ago

I've wondered if it wouldn't be better to shift the tax code to bias companies toward paying dividends, as used to be more universal among profitable firms. Then the shareholders will have the appropriate progressive income tax bracket applied.

travisb 2y ago
The reason companies pay in shares and not dividends anymore is _because_ doing paying out profits using a share (buyback) is more tax efficient. Especially for recipients who want to let it ride in the stock market. It doesn't seem like a genie you'll be able to put back into the bottle without reducing the net tax take.

ragnese 2y ago

> Taxing unrealized gains will be extremely complex, and given that they aren't allowing us to deduct unrealized losses its a pretty shitty setup for the taxpayer. I pay taxes on the unrealized gains of my house appreciating in value over the years. I'm not arguing one way or the other about whether various wealth tax ideas are good. But, I don't believe that the concept is as infeasible as some are making it out to be when it's been happening with property taxes for a very long time.

orangecat 2y ago
I pay taxes on the unrealized gains of my house appreciating in value over the years. You pay taxes on the assessed value of your house. It doesn't matter what you paid for it, or how much equity you have in it. It's more of a use tax than a capital gains or wealth tax.
- ragnese 2y ago
  That's a fair point. It's definitely pretty different from an unrealized capital gain because, like you said, it's not about your net gain or loss on the house. But, I'd still say that it's practically similar enough to a wealth tax precisely because it's a tax based only on the current value of the thing that I own. Also, just to add to the above discussion, it's even worse in practice than a tax on unrealized gains because I'll have to pay the same amount of tax every year if my house stays the same value. If it were a tax on the unrealized "gains" of my house, I'd pay $0 if it stayed the same value. And if the value of my house decreases, I'll still have to pay more than $0 in property tax, whereas a capital loss would mean I would pay at most $0. So, I think I still stand by my sentiment that property taxes are more burdensome than a tax on unrealized capital gains.
VirusNewbie 2y ago
Property taxes exist because we want to tax externalities like land use. Taxing fake wealth because you own a company and some VC assigns it a valuation is insane. Why should you dilute your ownership share just because of some arbitrary number?

cokeandpepsi 2y ago

[dead]

commandlinefan 2y ago

> aren't allowing us to deduct unrealized losses You can't really deduct realized losses either (annoyingly). You can use them to offset gains in future years, but they're not a deduction.