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Taxing Unrealized Gains Would Obliterate The U.S. Economy
Taxing Unrealized Gains Would Obliterate The U.S. Economy
The reasoning is so simple, a fifth grader could understand it – which is probably why the Biden administration doesn’t.
Having used up all of the rest of the batshit, insane, counterintuitive economic dirty tricks left in the “we’ll literally do anything but cut spending” bag, the Biden administration is pushing what could be the most destructive idea for our country since prohibition: taxing unrealized gains.
As part of its budget proposal for the 2025 fiscal year, the Biden administration is trying to raise an addition $4.3 trillion over 10 years in the worst way possible: imposing a minimum tax equal to 25 percent of a taxpayer’s taxable income and unrealized capital gains less the sum of their regular tax, for taxpayers with wealth over $100 million.
Putting aside the fact that this high-risk idea only amounts to a pittance, $430 billion per year (25% of which we just sent to foreign nations over the weekend in one fell swoop of a pen and it’s only April), the introduction of taxing unrealized gains could be one of the worst slippery slopes we ever dare to roll our country’s economy down.
I mean, shit, we could save $1 trillion just by not sending $100 billion a year to other nations for starters. But I digress. For an outline of exactly what an unrealized gains tax is, here’s the American Institute on Economic Research:
A tax on unrealized capital gains means that individuals are penalized for owning appreciating assets, regardless of whether they have realized any actual income from selling them.
If you purchased a stock for $100 this year, for example, and it increased to $110 next year, you would pay the assigned tax rate on the $10 capital gain. You didn’t sell the asset, so you don’t realize the $10 appreciation, but must pay the tax regardless.
…click on the above link to read the rest of the article…
How Politicians Are Creating the Worst Economic Crash in History
Politicians have totally and completely misunderstood the trends within the global economy and as a result, they are actually creating one of the worst economic debacles in history. I have explained several times that the bulk of investment capital is tied up in two primary sectors – (1) government bonds and (2) real estate. Because of income taxes, real estate has offered a way to make money in capital gains without having to pay income taxes.
Money has looked to park in real estate around the world for many various different reasons as in Italy it was the escape from inheritance taxes as well as banks or in Vancouver to gain a foothold for residency fleeing Hong Kong. In Australia, there was the Super Annuation Fund which allowed people to use retirement funds for real estate. In New Zealand, the new government wanted to declare foreign investment just illegal and in Australia, they made it a criminal act for a foreigner to own property and not inform the government they were foreigners. Over in London, they imposed taxes on property which created a crash.
People spend more when they believe that they have big profits in their home. The recession of 2007-2010 was so bad recording the worst of all declines since the Great Depression all BECAUSE it undermined the real estate values. People then spent less because they viewed their home declined in value. As taxes have been rising and the average home value collapsed, the velocity of money kept declining. Especially as real estate values declined and interest on savings accounts vanished hurting the elderly who saved money for retirement and discovered their savings were producing less income, the velocity of money just plummeted. The velocity of money began to turn up finally in the USA ONLYwhen interest rates began to rise.
…click on the above link to read the rest of the article…
