[Cog]

You don't want anyone to be able to balance capital gains with capital losses? WTF?

You want to do a one-time(or so you say) big hit on rich people. Where have I heard this before? Just about every time I listen to a progressive Democrat. Remember yacht taxes? I do. Nearly destroyed the yacht construction industry.

But fortunately for all of us, the new tax cut bill will have zero to do with taxing what you consider the rich on their capital gains.

https://www.youtube.com/watch?v=VVxYOQS6ggk

[Tanada]

Most of us in the private sector do not have government pensions or pensions of any kind. What we do have for retirement is IRA's and 401K's. Throughout our working lives we have contributed to those vehicles and have ridden out recessions and downturns and hope we have saved enough so we won't be living in cardboard boxes at the end of our lives.

I know a lot of progressives see those trillions in a stock market as only belonging to the super-wealthy and a ready source for government confiscation. The reality for many of us in the middle and upper middle class is that the stocks and bonds are the only thing keeping us from living in a cardboard box.

I think you give them way to much credit for having a narrow focus. The elitist progressives simply want to remove all obstacles to your being completely dependent up[on them for government handouts. Once all non governmental pension options have been stripped from the system, in the name of soaking the rich, everyone who is not of the elitist class will be dependent upon that class for continued support once they are no longer capable of working to support themselves.

You have to look at the big picture. What does eliminating private retirement capability do for the elites? It gives them total control over the retired portion of the society. So long as we maintain the election system total control over the life of the voters means total control over their votes, providing perpetual power and authority to those who are already in control.

[Cog]

The proposal to seize the wealth of others, by the force of government, does not speak of the worthiness of the rich person's character, but speaks volumes about the lack of character of the one proposing it.

[Revi]

The only part I do agree with is the cut to corporate tax rates, maybe to keep corporations here instead of Bermuda or some place. The rest is a reverse Robin Hood action!

[vtsnowedin]

You don't want anyone to be able to balance capital gains with capital losses? WTF?

That is not what I said. I said they should not be able to avoid tax by holding on to their winning stocks and just selling losers. You wouldn't set up a rule that taxes more then the portfolio has actually made in net profits.

You want to do a one-time(or so you say) big hit on rich people. Where have I heard this before? Just about every time I listen to a progressive Democrat. Remember yacht taxes? I do. Nearly destroyed the yacht construction industry.

But fortunately for all of us, the new tax cut bill will have zero to do with taxing what you consider the rich on their capital gains.

https://www.youtube.com/watch?v=VVxYOQS6ggk

No I'm not talking about a one time big hit on current balances or anything like that.

[vtsnowedin]

The proposal to seize the wealth of others, by the force of government, does not speak of the worthiness of the rich person's character, but speaks volumes about the lack of character of the one proposing it.

Expecting the very rich to pay taxes at least at the same percentage as the middle class pays is not "seizing their wealth.
Bernie's and other Democratic proposals are the equivalent of Jacks or better, trips to win progressive progressive

[Outcast_Searcher]

The proposal to seize the wealth of others, by the force of government, does not speak of the worthiness of the rich person's character, but speaks volumes about the lack of character of the one proposing it.

And THAT is why the leftists hate Ayn Rand so much. Because she points out their motivations, their lack of character, and the consequences of living within the economic system they dream of dominating. (Which of course is pretty much as UN-PC as it gets!)

And of course, for the left to admit that would be to lose votes. So they attack the messenger.

[GHung]

The proposal to seize the wealth of others, by the force of government, does not speak of the worthiness of the rich person's character, but speaks volumes about the lack of character of the one proposing it.

And THAT is why the leftists hate Ayn Rand so much. Because she points out their motivations, their lack of character, and the consequences of living within the economic system they dream of dominating. (Which of course is pretty much as UN-PC as it gets!)

And of course, for the left to admit that would be to lose votes. So they attack the messenger.

Fine. What do you brilliant guys propose as an alternative. Provide for your own security? Private military? Build walls and private militias to keep the poor in their place? I could go on.
What's the plan fellas?

[Outcast_Searcher]

The proposal to seize the wealth of others, by the force of government, does not speak of the worthiness of the rich person's character, but speaks volumes about the lack of character of the one proposing it.

Expecting the very rich to pay taxes at least at the same percentage as the middle class pays is not "seizing their wealth.
Bernie's and other Democratic proposals are the equivalent of Jacks or better, trips to win progressive progressive

There is another way to address this issue. It is a compromise (which, I know, neither side of the aisle likes making).

It is already done today for commodities. The idea is that accounts are "settled" at the end of the year, based on the closing prices of the commodity based securities (i.e. contracts, options, etc) for that year.

Then taxes are payed (or not) on net profits or losses on what happened that year. Full stop. Next year, same thing. There is a hybrid of long term and short term gain (or loss) rates used.

Just like with the 1099's now for stock options, stock mutual funds, stocks, etc., the brokers are required to keep the books, do the calculations, and send the taxpayer a tax form that documents this.

So if we just started doing this for stocks, funds, and options, the whole issue would go away.

The main disadvantage would be the loss of the incentive of deferring taxes on long term capital gains, of course.

But OTOH, just like with tax advantages for a house (like mortgage deductions), the question of whether such an advantage should exist is valid, IMO. (Let the complexity of capital decision making rest with the companies who are making stuff and gathering resources).

This would make the whole system simpler, and eliminate the entire issue of what to do with long term deferred capital gains at death. (As today, there would simply be a final year of income taxes, and the date of death would be the final settlement date for the current tax year. Done and done.)

One compromise to getting this done might be not to have estate taxes except for the truly huge "dynasty" families' estates that the far left claims they are really after with estate taxes. If only very large estates (say maybe $20 million or more in 2017 dollars) had an estate tax, then the entire issue of breaking up small businesses would go away as well. In short, only soak the truly rich -- if the honest objection is "unfair" hoarding of wealth in families.

But of course, the left won't agree to that, as their true motivation is to have as high a tax as possible on anyone who is successful, whether reasonable or not. The fact that top 1% pays almost half of US income taxes, the top 20% pay roughly 80%, and the bottom 60% pay about 2% of the income taxes isn't enough for them. At that point, to me, all the crying about how "unfair" the income tax system is loses 99% of its credibility.

So I don't see this debate being resolved in the forseeable future.

[vtsnowedin]

Another thing I don't see in the GOP proposal is deductions for the premiums of the ACA (Obama care) or the deductibles and proscription meds. costs. A middle class family making more then $85,000 a year can be paying above $10,000 a year in premiums and have a $10,000 deductible on top of that.
The premium subsidies phase out at 400% of the poverty level so that family of three making $85K or more is paying full freight. Making ever medical dollar (premiums, deductibles or out of pocket ) tax deductible even for those that don't itemize would save a tax payer at least $2400 a year which is more then the rest of the proposal combined.

[Outcast_Searcher]

Another thing I don't see in the GOP proposal is deductions for the premiums of the ACA (Obama care) or the deductibles and proscription meds. costs. A middle class family making more then $85,000 a year can be paying above $10,000 a year in premiums and have a $10,000 deductible on top of that.
The premium subsidies phase out at 400% of the poverty level so that family of three making $85K or more is paying full freight. Making ever medical dollar (premiums, deductibles or out of pocket ) tax deductible even for those that don't itemize would save a tax payer at least $2400 a year which is more then the rest of the proposal combined.

I don't know about in this case, but one of the principles which GOP medical care proposals has consistently talked about is making ALL valid medical expenses 100% deductible. Why should there be a 10% of AGI exclusion (which was one of the "gifts" of the ACA?) It's not like people want to get sick or need medical insurance.

[Cog]

@Outcast Searcher As I've tried to explain, taxing unrealized capital gains, i.e. stock that appreciated in value over the long term but has not been sold, would create chaos in the markets. Think about it. Every year, ever holder of a stock that has appreciated in value, would be required to sell a portion of the stock to pay the taxes on that unrealized gain. Stock values would plummet when you have all of this stock being sold into the market with very few buyers.

As it stands now, If I buy and sell stocks routinely through the year, I already pay taxes on those realized gains. I will leave 401K's and IRA's(although they are invested in stocks and bonds too) out of this since as we know, you only get taxed on those when you take distributions. I'm talking regular stock trading accounts. Stock price stability and growth in the long term is exactly why people invest in the stock market to begin with. Removing that incentive, by taxing unrealized gains yearly, would create massive problems in the stock market.

[Outcast_Searcher]

@Outcast Searcher As I've tried to explain, taxing unrealized capital gains, i.e. stock that appreciated in value over the long term but has not been sold, would create chaos in the markets. Think about it. Every year, ever holder of a stock that has appreciated in value, would be required to sell a portion of the stock to pay the taxes on that unrealized gain. Stock values would plummet when you have all of this stock being sold into the market with very few buyers.

I respectfully disagree. As long as such a program was put in place with some lead time, so people had time to decide what to do, there is no reason for market chaos.

Also, since as I said, this scheme is ALREADY generally used in the US commodity markets today, and has been for decades -- if this would cause chaos in the stock markets, why doesn't it cause chaos in the commodity markets?

In a reasonable system (which ours often isn't any more, sadly), the prior gains (and losses) would be grandfathered, at least to a large extent. So that would help prevent a large downward wave of selling pressure upon implementation.

Your logic seems to assume all investors have no cash -- only stocks. There's lots of data that shows that's completely wrong. Your logic seems to assume there is no such thing as margin, which could be used in the short term. Again, as long as there wasn't a huge built up pile of gains requiring massive initial selling, then minor selling by some small percentage of holders who "have" to sell to pay taxes each year on gains in winners would be no big deal.

There is huge turnover in the major stock markets every day. My quick perusal via Google estimates that about 1.5 BILLION shares are traded on average each trading day - just on the NYSE. HFT is a thing. There is already tax loss selling every December. The market seems to deal with that overall just fine. One result is likely the "January effect", when stocks tend to bounce back.

I understand the desire to keep this tax preference. EVERYONE with a tax preference doesn't want THEIR particular ox to be gored.

I'm for goring them ALL and having lower tax rates. Feel free to disagree, but I'm not finding your claim that this can't be done at all valid -- as long as all or almost all of the long term gains thus far are grandfathered in at implementation.

[Cog]

The government should not be wedging its way into market decisions on when to buy and sell. That is ripe for abuse and its not THEIR money or capital to begin with. Its literally forcing grandma to eat ALPO because she turned a profit on Wal-Mart stock. Investors take all the upside and downside risk and the government swoops in to the grab the gravy.

No I don't want this particular ox to be gored because there is no reason to gore it. The government already taxes capital gains and dividends.

[Outcast_Searcher]

The government should not be wedging its way into market decisions on when to buy and sell. That is ripe for abuse and its not THEIR money or capital to begin with. Its literally forcing grandma to eat ALPO because she turned a profit on Wal-Mart stock. Investors take all the upside and downside risk and the government swoops in to the grab the gravy.

No I don't want this particular ox to be gored because there is no reason to gore it. The government already taxes capital gains and dividends.

The government would not be forcing anyone to buy or sell anything. Only collecting taxes annually, instead of deferring capital gains and losses for many years or decades.

Speaking of dividends, your argument about grandma having to eat Alpo isn't at all realistic. If she has capital gains, she likely has dividends. On top of her Social Security and Medicare and pensions, and income from any non-stock investments, like cash and bonds.

In the US, if grandma is eating Alpo, it's either because she wants to, or because she has no money for investments like stocks.

Now, is it "literally forcing" grandma to realize some capital gains (and losses) every year? Yes. Just as commodity investors do. Just as people report their salary income, dividend income, interest income, rent and royalty income, etc. etc. every year.

Again, I realize that you (like everyone else with tax benefits, such as home owners) don't want to give up this tax benefit. But the "this will cause severe hardship for investors" isn't going to hold water with anyone who can do a little arithmetic. And certainly not with the huge proportion of people with little or no investment portfolio.

[vtsnowedin]

The government already taxes capital gains and dividends.

Yes they do. But it dose not fallow that they could not tax them under different rules that would be fairer to the rest of the tax payers and still,retain the incentive to invest capital (in the hopes of making a profit) rather then cash it out and squander the profits on yachts and bimbos.

[Outcast_Searcher]

The government already taxes capital gains and dividends.

Yes they do. But it dose not fallow that they could not tax them under different rules that would be fairer to the rest of the tax payers and still,retain the incentive to invest capital (in the hopes of making a profit) rather then cash it out and squander the profits on yachts and bimbos.

Hey! If ugly guys like me didn't have cash for bimbos... Oh. Never mind. They invented internet porn. LOL

[Cog]

There is that word fairness again. Anytime I hear it, I hear a code word for raiding someone's pocket that jingles more than yours does.

But here is yet another objection to this. You can balance out your gains and losses throughout the year but I have no idea what the price of say, GM will be on Dec 31st. If you are going to tax me on the value of that unrealized stock appreciation, what happens if it goes up huge that day? I'm stuck with a huge tax bill. And because of the two day settlement rule, I can't actually do anything about it this fiscal year.

[vtsnowedin]

There is that word fairness again. Anytime I hear it, I hear a code word for raiding someone's pocket that jingles more than yours does.

But here is yet another objection to this. You can balance out your gains and losses throughout the year but I have no idea what the price of say, GM will be on Dec 31st. If you are going to tax me on the value of that unrealized stock appreciation, what happens if it goes up huge that day? I'm stuck with a huge tax bill. And because of the two day settlement rule, I can't actually do anything about it this fiscal year.

You are complaining about a "two day settlement rule" when we are discussing how to change the rules.
I of course would want the "new rules" to be fair and equitable and also promote wise investment in ventures that grow the economy. The debate should be about what is the best rule. Not about why we can't change he old rules.

[Cog]

And I will reiterate, there is no reason to change the tax rules on trading accounts or capital appreciation, just because you see an untapped tax resource. Cut spending. Let's try that first.