zlacker

>>southe+(OP)
I wonder if this is coming up just before the election because of the Harris campaign’s suggested policy of capital gains tax on unrealised gains for people who have over $100m in assets? I think this is a great idea personally given what these people are doing to avoid paying tax including taking out loans against their own share portfolios. Worth thinking about what people are willing to do to not pay billions of dollars worth of taxes.

>>andy_p+ex
I'd much prefer seeing us close up the tax loop holes than create an even more complex system.

Taxing unrealized gains will be extremely complex, and given that they aren't allowing us to deduct unrealized losses its a pretty shitty setup for the taxpayer.

We need to drastically simplify our tax code rather than further increase its complexity.

>>_heimd+Ry
Doesn't this "close" the tax loophole in which holders of tradable assets can take out loans against those assets in perpetuity, never paying taxes on any of it?

>>zelias+kN
I mean, you have to pay the loans back. Which requires income which is taxed. This would only work if you either don't spend any money (which then what is the point of the loan) or if your assets are always going up and increasing in value beyond that of the loan which inevitably will not be the case.

>>nights+LQ
The actual loophole is the step-up basis for inheritance. This allows you to never realize gains, living off loans against them. Then, when you die, your heirs inherit the appeciated assets, and the liabilities. But, their cost basis for the assets is stepped up to the then-current fair value. So, they can sell off assets to pay the loans off, but have no realized gains.

>>pkaedi+h21
But charging taxes on the loan won't really reflect that well. Also, there are limits on inheritance before estate tax kicks in, so folks with 100's of million in assets passed on to their heirs are still paying estate tax, it won't be tax free at that level.

(Edited to correct "inheritance tax" to the technically correct term, "estate tax")