Fellow blogger Mr. Garabaldi, writing at My Daily Kona, warns of the real dangers of so-called "unrealized tax gains". We're seeing this pop up in almost every progressive, left-wing-oriented government and political party. They want to tax you on any gain in value of any property you own, whether or not you've cashed in that value by selling it.
You buy a Pokémon card for $50.
Someone offers you $500 for it. You say no. You love that card. You're keeping it.
The government says: "Cool, but that card is worth $500 now. You owe us $100 in taxes."
You: "…I didn't sell it."
Government: "Don't care. Pay up."
You don't have $100 lying around. So you're forced to sell the card you love just to pay a tax on money you never received.
Next month? That card drops back to $50.
Your card is gone. Your money is gone. And the government shrugs.
That's a wealth tax on unrealized gains. They don't pay you back the tax...
There's more at the link, including more examples. Recommended reading.
What this is, of course, is an all-out drive to reduce or even eliminate private property, by forcing us to rent what we use, or rely on government to provide it, because it's no longer affordable to buy it. It's a growing movement, particularly in Europe, but also in progressive-left states in the USA like California. Essentially, it embodies the World Economic Forum's oft-repeated mantra that "You'll own nothing and be happy". Personally, I can't think of many things that would make me more unhappy than that!
Peter
2 comments:
This concept will lead to outright insurrection and civil war.
I also think a related concept is the valuations local governments put on real estate (i.e., your home) for property tax purposes. They tell you what they want it to be worth, and then set the tax rates to collect what they want. Florida's move to eliminate property taxes is brilliant.
Problem with the example is that the card is sold before the card dropped back down rather than after. I know its a quote but that should be fixed or it makes no sense.
The Unrealized Gain tax proposal in California is actually worse, as it considers the voting rights. A non-voting share would be taxed at the base rate, and a voting share would have its taxed increased by the ratio of voting to non-voting. It is theoretically possible to owe more than the shares are worth.
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