The billionaire argument actually sounds reasonable to me – but why is the same reason not applied to me ?
EDIT : Folks are assuming I am saying or insinuating that we should tax unrealized stock gains. No, that is not what i am asking. I am asking why does the "unrealized gains" rationale not apply to my property, after all I did not sell my property, so why am I being taxed on it ?
Why is it fair for billionaires to escape taxes by saying "I did not sell any stocks, so did not make any money to be taxed on" but I am supposed to pay taxes on my property – which I did not sell either ?
byu/sandhutarun ineconomy
Posted by sandhutarun
17 Comments
Property taxes are different than taxes from sales…
Billionaires are skirting income taxes, they aren’t skirting property taxes, sales tax, or other local/state taxes they’re liable for.
However, considering that they’re billionaires, they should absolutely be paying some kind of income tax because that’s considerably more than the other taxes that they pay
First, they absolutely do pay taxes. It’s just that with capital gains tax, you pay when they sell. That means some years they may make a lot of money on paper, but it’s not real money until they sell and at that point they pay taxes.
Regarding property tax, that is a different thing and related to municipal services. Billionaires pay those too.
Good question. Property and stocks are both assets.
Stocks are property which could be subject to property tax but are not.
Cuz property is treated different from stocks and other types of investments. They pay property tax the same way too.
It’s also legal for *you* not to sell stocks.
Bonus trick: if you *happen to invest in stocks*, the first $48,350 in profit can be literally tax free every year so long as the stocks you sell are held long term (over one year and depending on total income)
If you are not investing in stocks, you are hamstringing your future.
Even if all you do is put in $10 a week and leave it there, it eventually adds up. Study how stocks work instead of other hobbies and you’ll retire wealthy.
Billionaires own property too.
The argument for property taxes is that the property owner is benefiting from the services provided by the government where this property is located.
How does owning QQQ or SPY in a brokerage account benefit from roads and hospitals provided by the government?
If you buy a share of stock for $10, and then it goes up to $100, that share is worth $90 more than you pay for it. But you don’t get that money, it’s value of the stock, you have a piece of paper. If you sell it, you have now gained $90 and you have to pay taxes on that gain.
Say you don’t sell it, and over the next month, it’s value crashes to $5 dollars. Now you it’s worth $5 less than you paid for it, but the money in or out of your bank account, is the original $10. If you sell it now, you lose $5.
That is why you don’t pay taxes on prices of the current value of stock, until it’s sold, the valuation is meaningless.
They don’t sell the stocks, they borrow using the stocks as collateral when they want funds.
I’ll give you an example.
Let’s say you own 100 shares of Apple when it was $100/share.
So $100 x 100 = $10,000.
Then from January to June, Apple’s stock hit $150.
So now, you made $150-$100= $50. $50×100 shares = $5,000.
Then by December, Apple stock dropped to $90/share.
So you loss $100-$90=$10. $10×100=$1,000.
At your peak of making $5,000, does it make sense to tax you on $5,000 when you didn’t sell all your 100 shares?
You only get taxed had you sold all shares when Apple was $150/share.
If you sold all shares at a loss, then when you file taxes, you can claim these losses.
On the internet, when you see news of how many billions a person has, especially when their wealth is tied to the stock market, on paper, they’re worth x amount of billions.
When they withdraw/sell their shares is the money they’re really worth and taxable at.
The fire department needs roads to get to your property. They don’t need roads to get to stocks.
You could exchange your property for stocks. That’s something legal you can do.
You can’t tax unrealized gains considering the volatility of the market
Do I think it is ridiculous they can take out massive loans that don’t count as income against their portfolio?? Yes it’s ridiculous
But I still haven’t seen someway around it yet.
The golden rule. Those who have the gold make the rules.
Billionaires will have their real estate held in a trust. The trust will pay the property tax and a legion of accountants will find every way possible to minimise the real cost to the billionaire’s estate.
That is the big advantage of the super rich – the mass of money allows teams of tax optimisers and lobbyists to do their job.
Capital gain and property taxes are completely different.
America.. that’s why. Ask your leader