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>It is next to impossible to hide the fact that someone owns something like real estate Real estate can already be taxed via property taxes. Unrealized gains i

>It is next to impossible to hide the fact that someone owns something like real estate Real estate can already be taxed via property taxes. Unrealized gains in securities can't be taxed the same way as their value is much more volatile, with potentially large daily swings. Texas makes up for the lack of income taxes with relatively high property taxes. >In addition to real estate I might consider other property such as bank accounts, at least above a certain threshold. Interest from savings accounts is already taxed. The wealthy don't hoard their wealth in bank accounts though.

paddez 2y ago
Unrealized gains can be taxed - for example, Ireland has a Deemed Disposal tax on ETF investments, where after 8 years, any gains are considered to have been realized and tax is due (even if no sale has taken place)
- TeaBrain 2y ago
  Deemed disposal subject ETFs can be taxed under an eight year exit tax scheme, but this can be avoided by simply investing in US domiciled ETFs or individual stocks.
danenania 2y ago
While it doesn't make sense to tax unrealized gains, they could be taxed if they are used as the basis for a loan. Loans on unrealized gains are one of the main ways the wealthy are able to live lavishly while paying very low effective tax rates. It seems fair that you shouldn't be able to have it both ways—if you are getting any financial benefit from an asset, including a loan, there's a pretty strong argument that you yourself are "realizing" that value.
- TeaBrain 2y ago
  The property or goods purchased with a loan are subject to tax.
  - danenania 2y ago
    Sure, but everyone pays those taxes. If we are talking about inequality and the wealthy having ways to get out of (or better said, drastically reduce/defer) taxes that everyone else has to pay—i.e. income tax—I think loans on unrealized assets is probably the first thing to look at.
    - TeaBrain 2y ago
      Banks are also taxed on the interest from the loans. Loans backed by assets are not just free untaxed money as you seem to think they are. If an entity is unable make the payment on a bank loan, then they would be subject to having their collateral seized, and the bank would then eventually sell the assets, which would be subject to capital gains. I think it would be more realistic to heavily tax inheritance and re-evaluate trust based loopholes.
      - danenania 2y ago
        > Loans backed by assets are not just free untaxed money as you seem to think they are. I mean, you’re clearly moving the goalposts here. We’re talking about tax on unrealized gains for the wealthy, not sales tax, property tax, or taxes on the bank. If you’re able to keep taking out new loans to pay off the old loans until you die, with an appreciating “unrealized” asset as collateral, then yes all that money is effectively tax free if we’re talking about income tax and capital gains.
        jb3689 2y ago
        I believe the previous poster was arguing that taxation still exists at a macro level, i.e. money is sucked out of the economy. It doesn’t matter so much who paid the taxes. The wealthy pay the interest.
  - jb3689 2y ago
    Part of me wonders if doubling down on taxing transactions (which tariffs is categorically) can thus work. It seems like an elegant way to avoid having to deal with wealth vs income.
UncleMeat 2y ago
I really don't see why "equity is volatile" is some insurmountable problem. We see the same exact "problem" show up with day trading, where it is possible to accumulate a lot of taxable gains and end up with less than you owe if you don't sock away the money to pay for taxes at the time of locking in the gains. If an equity is valued at $X on some date when we lock in the value for a wealth tax or a tax on unrealized gains then sell enough of your equities on that date to pay for the tax and store that in a zero-risk asset. This can easily be done automatically.
titusjohnson 2y ago
Just ban loans against ephemeral assets. Loans must always be backed by concrete things. No funny money.

paddez 2y ago

Unrealized gains can be taxed - for example, Ireland has a Deemed Disposal tax on ETF investments, where after 8 years, any gains are considered to have been realized and tax is due (even if no sale has taken place)

TeaBrain 2y ago
Deemed disposal subject ETFs can be taxed under an eight year exit tax scheme, but this can be avoided by simply investing in US domiciled ETFs or individual stocks.

danenania 2y ago

While it doesn't make sense to tax unrealized gains, they could be taxed if they are used as the basis for a loan. Loans on unrealized gains are one of the main ways the wealthy are able to live lavishly while paying very low effective tax rates. It seems fair that you shouldn't be able to have it both ways—if you are getting any financial benefit from an asset, including a loan, there's a pretty strong argument that you yourself are "realizing" that value.

TeaBrain 2y ago
The property or goods purchased with a loan are subject to tax.
- danenania 2y ago
  Sure, but everyone pays those taxes. If we are talking about inequality and the wealthy having ways to get out of (or better said, drastically reduce/defer) taxes that everyone else has to pay—i.e. income tax—I think loans on unrealized assets is probably the first thing to look at.
  - TeaBrain 2y ago
    Banks are also taxed on the interest from the loans. Loans backed by assets are not just free untaxed money as you seem to think they are. If an entity is unable make the payment on a bank loan, then they would be subject to having their collateral seized, and the bank would then eventually sell the assets, which would be subject to capital gains. I think it would be more realistic to heavily tax inheritance and re-evaluate trust based loopholes.
    - danenania 2y ago
      > Loans backed by assets are not just free untaxed money as you seem to think they are. I mean, you’re clearly moving the goalposts here. We’re talking about tax on unrealized gains for the wealthy, not sales tax, property tax, or taxes on the bank. If you’re able to keep taking out new loans to pay off the old loans until you die, with an appreciating “unrealized” asset as collateral, then yes all that money is effectively tax free if we’re talking about income tax and capital gains.
      - jb3689 2y ago
        I believe the previous poster was arguing that taxation still exists at a macro level, i.e. money is sucked out of the economy. It doesn’t matter so much who paid the taxes. The wealthy pay the interest.
- jb3689 2y ago
  Part of me wonders if doubling down on taxing transactions (which tariffs is categorically) can thus work. It seems like an elegant way to avoid having to deal with wealth vs income.

UncleMeat 2y ago

I really don't see why "equity is volatile" is some insurmountable problem. We see the same exact "problem" show up with day trading, where it is possible to accumulate a lot of taxable gains and end up with less than you owe if you don't sock away the money to pay for taxes at the time of locking in the gains. If an equity is valued at $X on some date when we lock in the value for a wealth tax or a tax on unrealized gains then sell enough of your equities on that date to pay for the tax and store that in a zero-risk asset. This can easily be done automatically.

titusjohnson 2y ago

Just ban loans against ephemeral assets. Loans must always be backed by concrete things. No funny money.