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
17 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.
Florida has NOT eliminated the tax. HB791 addresses local Ad Valorem taxes but increases State sales tax by 50% (6% to 9%). It also noes not address non Ad Valorem taxes such as fire, electric, etc which are predicted to raise significantly. The bill also includes a 5% fee when you sell your house.
They already do this on property tax. My taxes have tripled in the 35 years I have owned my home. If you use Escrow it is somewhat isolated. but that is the only reason your house payment will ever change. That and insurance but that is somewhat less of a burden.
This is scary stuff. And the real target is the middle class because that is where the money is in the USA. They want an excuse to loot our 401Ks and our IRAs.
So you sold the card for $500; the government wants $100 of that, you now have $400 in your pocket. The card drops back in value to $50. You buy it back at that price. You now own the card, which you wanted to keep in the first place, AND you have $350 in your pocket. Doesn't sound bad to me.
The guy who bought it from you for $500 is sure pissed, but you are not.
This tax IS coming. Count on it. The ruling class can never get enough money to waste. So any means to increase that flow of money is and will always be fair game.
lose the stuff in a retroactive boating accident or equal ... then move to someplace where the taxes are not
all government is coercion but it depends on your compliance.
It's ALWAYS about getting in our pockets for more of our money, especially in blue states... grrrr...
your ira will never make a dime if they do this...you would be better off pulling it out take the tax hit and hide it under you pillow...
what if you sell something else to get the $100 and then the value drops back down.
You own a farm your grandfather paid $100,000 for in 1939. your family has improved it over the years adding buildings, irrigation etcetera. your kids love farming and you want to pass it on to them. A government appraiser comes by and assess your farm at $2,000,000 baed on what a mall developer paid for a similar plot last year. You owe $1,000,000 to the fed, $500,000 to the state. plus a "Millionaires Tax." You sell you family farm to to a farming corporation for the best you can get $1,500,000 (if you're lucky), regardless you still owe $1,500,000 plus based on the (inflated) value assessed previously. You've lost your family farm, you are left with nothing, Six months later, the corporation you sold to sells the farm to a housing developer for $2,000,000 moves the proceeds off-shore and the officers disappear. The husk of the farming corporation declares bankruptcy, the former farm is turned into "affordable" housing and the developer gets a tax break.
Invest in functional metals like brass, lead & copper.
OK, in this example THE CARD WASN’T SOLD, but the taxes were demanded and collected. Capisce now?
"This concept will lead to outright insurrection and civil war."
Abso-freaking-lutely.
When it begins, there will be no shortage of people volunteering to deal with the #!@& who are doing this to us.
Several comments :)
first not only will they collect the 100 dollars tax but when you sell the card to pay that tax they will tax the 500 dollar sales price. :) never tax once when you can tax twice.
Property taxes...
127 dollars a year in 1998 on a 52,000 dollar 1100 sq-ft house out in county. Today 400 dollars a year. almost 400% increase.. I know it is a pittance compared to most places but still irks me.
to Anonymous -
Please read the information-
"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."
Capisce now?
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