4 ms·
Doesn’t property tax already do this but even more so? Taxing cost basis + gains
by wbj 2y ago
Doesn’t property tax already do this but even more so? Taxing cost basis + gains
- alberth 2y agoThey do, but the financial impact to you is much less. Example - Let's say you bough a home for $100k - Property taxes are 1% of home value In Year 1, you owe $1k in property taxes. Let's say (dramatically) that property values double in Year 2. - Now, you're $100k home is worth $200k So your property taxes in Year 2 are now $2k. ----- With taxing your unrealized gains at the nominal Federal & State income tax bracket. - Your Federal Income tax rate might be 30% (dependent upon your earnings) - Your State Income tax rate might be 10% So you have a combined 40% tax rate on "earnings" Now in that example of your home going from $100k to $200k in Unrealized gains, you'd have to cut a check for $40K! That's huge and most people wouldn't even have that kind of cash to pay.