you do realize 401k unrealized still wouldn't be taxed, even still taxing unrealized gains would be an impossible task.
Harris: 25% tax on unrealized gains
- Thread starter Phenomenally Frantastic
- Start date
Thats what republicans say all the time, when Trump says he wants to be a dictator, oh that will never happen, yet you and others dismiss it which tells us about your economic and political sense.
It would never come close to passing. With that said, the fact that Harris would support such a move really hurts her and shows a concerning level of economic ignorance.
The only voters she is placating to are extreme leftists. Anyone left of center would never support this.
The only voters she is placating to are extreme leftists. Anyone left of center would never support this.
Is there a link to her proposal where she spells out this intent? i.e. is there more than just tweets and assumptions to this?
Agreed. ^^
Considering only the politics of this as it relates to Harris' candidacy...why go there? You are trying to win a race via attracting the fairly small slice of moderates/middle of the roaders and you throw price controls and taxes on unrealized gains out there as key parts of your economic ideas. (For those that say that the proposal only hits the very wealthy...yeah, I am sure that if they were successful in getting that established that they would stop there. Taxing the wealthy more sounds great to many...until "they" are considered wealthy too.)
Hello? Are you worried that the far left is going to go for Trump or something? I do acknowledge that there could be a "turnout" factor at play in their calculus. But in an effort to throw a bone to the extreme elements you are going to sling this crap down main street and come out ahead???
Very, very curious strategy here IMO.
Something about when you opponent calls you a socialist maybe don't do a bunch of socialist shit...
You do realize that most 401K's are invested heavily in equity markets, and there will be an indirect effect if there are downward pressures on the markets caused by non-401K investors having to liquidate positions to pay taxes, or shifting their equity market investments to other investments.
You sure do reply to me a lot despite having me on ignore.
If I was getting all worked up about a single broad policy proposal amongst many policy proposals that have been out there for years but never gained any traction, that would make me a complete idiot. Do you know anyone like that?
“There is a *lot* of confusion about the Biden-Harris Admin's "unrealized capital gains tax" proposal. Who endorsed it? Who does it affect? Caveats?
I have studied it in detail and will explain it here thoroughly and *neutrally*. At the end, I'll offer my opinion...
FACTS:
The proposal appears in the document "General Explanations of the Administration’s Fiscal Year 2024 Revenue Proposals" published March 2023. This is an official document reflecting White House & Treasury policy - and *general* requests to Congress for revenue.
But Congress retains tax authority. It's just a proposal. Here it is:
"The proposal would impose a minimum tax of 25 percent on total income, generally inclusive of unrealized capital gains, for all taxpayers with wealth (that is, the difference obtained by subtracting liabilities from assets) greater than $100 million."
Those are the basics. If the IRS determines you are worth at least $100 million, you should pay a minimum tax of 25% on your income, including on your unrealized capital gains. That could be your house going up in value, your stock, etc.
Your annual minimum tax is 25% times your annual income, realized and unrealized.
But there are some key technicalities.
TECHNICALITY 1: The unrealized gains tax payments are treated as a PRE-PAYMENTS on future *realized* gains taxes. So you are not going to pay taxes on the same capital gain twice.*
*TECHNICALITY 1.5: You can get a refund upon realizing the gain if you have "uncredited payments" (unrealized payments that haven't been counted against an actual capital tax) and those uncredited payments exceed what you'd pay in long-term capital gains. This is especially important if you end up selling for a smaller gain than you were "unrealized" taxed for, or if you actually lose money. You aren't paying unrealized on the gain and nothing on the loss. You can get refunded.
TECHNICALITY 2: You don't have to pay it all at once. The first year of minimum tax can be paid in 9 installments. Future years' minimum liability can be paid in 5 installments.
TECHNICALITY 3: if you die, your estate pays the federal death tax and then you get refunded to the extent you "overpaid" unrealized taxes. One thing that has been confused is that this proposal is not *just* applicable at death. It's applicable at all times.
TECHNICALITY 4: if you are "illiquid" i.e. less than 205 of your wealth is in tradable, liquid assets, then you can have only tradable assets count. BUT you have to pay a penalty or "deferral charge" on the gain of of your illiquid assets up to 10%
ANALYSIS/OPINION
HOW WOULD THIS AFFECT SOMEONE LIKE ELON MUSK?
Musk's current net worth (mostly in Tesla public stock, SpaceX private stock, and X private stock) is assessed at $250B. The "unrealized gain" portion of that (on which he hasn't paid taxes) is likely much more than $200B. But we'll be conservative and say $200B.
That would mean a year-one estimated minimum tax would be at least $50 billion, which could be spaced into 9 payments of $5.55 billion and would be credited against future capital gains taxes, and refunded versus future capital losses. But right now he would owe $50 billion that he would never have owed unless he sold ALL OF HIS ASSETS. That's why this policy is extreme.
You could perform this analysis on other billionaires.
My opinion: it is a confiscatory policy. It is extremely unethical, unworkable, and would cause complete chaos even with the technicalities that have been included. But it is specially designed to target mega billionaires with a large percentage of their wealth in publicly-traded stock.
Elon Musk. Warren Buffet. Mark Zuckerberg. Larry Page. For those people, it effectively is the simple 25% confiscation that bureaucrats have been dreaming of forever.
For people in the $100M-$1B range AND ESPECIALLY PEOPLE WHO ARE STILL ACTIVE ENTREPRENEURS it would be a nightmare of bureaucracy and compliance. It would terrify people, and in my opinion - discourage further entrepreneurship because they'll try to steal 25% of your ephemeral gains up-front, rather than when you actually earn the income.
HAS HARRIS ENDORSED THIS POLICY?
1. She's the Vice President of the United States. Joe Biden is the President. It's their administration. Unless she says otherwise, it's safe to assume she's on board.
a. Maybe that doesn't mean she would do it herself as POTUS
2. Semafor reports the Committee for a Responsible Federal Budget as saying: "The campaign specifically told us that they support all of the tax increases on the high earners and corporations that are in the Biden budget"
That's pretty clear. The unrealized tax was a Biden budget proposal. And unless VP Harris specifically says otherwise, I believe we should assume this is her plan, too.
CLOSING NOTE. Biden-Harris Admin says:
"Preferential treatment for unrealized gains disproportionately benefits high-wealth taxpayers and
provides many high-wealth taxpayers with a lower effective tax rate than many low- and middle-
income taxpayers."
There is no "preferential treatment" -- it is REALITY treatment. Gains on paper are not income so they are not treated as income. They say this is unfair. It isn't. Treating unrealized and realized gains both as income is lunacy.”
Semafor reports the Committee for a Responsible Federal Budget as saying: "The campaign specifically told us that they support all of the tax increases on the high earners and corporations that are in the Biden budget"
This is definitive. YES she supports Biden’s confiscation scheme.
Call it Marxist, call it socialist, however you want, it is theft.
This will affect everyone with public securities (401Ks, 403Bs) as the wealthy will be forced to sell public securities to fund this confiscation scheme.
Plan on working 7-10 more years before you retire if Komrade Kamala gets this through.
This is definitive. YES she supports Biden’s confiscation scheme.
Call it Marxist, call it socialist, however you want, it is theft.
This will affect everyone with public securities (401Ks, 403Bs) as the wealthy will be forced to sell public securities to fund this confiscation scheme.
Plan on working 7-10 more years before you retire if Komrade Kamala gets this through.
So tweets and assumptions?
This is just insanity. Actual insanity. This was also supported by Biden at one point. So one is getting taxed on unrealized gains and then getting taxed again when you sell it? Makes zero sense. You would turn the market into a short selling nightmare.
People would think twice about investing and would sell as soon as you got a gain.
People invest in 401k's under the notion that their tax rate will be LESS than what it is now. If you support these policies from Kamala you are also supporting higher tax rates when it comes time to withdraw.
You do realize the value of your 401K and everyone's, would plummet when wealthy investors are forced to sell their stock to pay taxes on unrealized gains, right? That would lower the entire market whether you personally were taxed on unrealized gains or not. Taxing unrealized gains might be one of the most corrupt ideas the left has ever dreamt up, and they have dreamt up some goodies over the years.
Thanks for using all your mental capacity thinking this through........😕🙁😣😖
If that’s what you call:
"The campaign specifically told us that they support all of the tax increases on the high earners and corporations that are in the Biden budget"
Then sure.
so you hide the information in the op because you know it doesn't mean what you said it does. Typical
I'm in favor of a higher top end tax rate on high income individuals, but nothing too crazy. I'm also in favor of a minimum tax rate (see the famous Buffet discussions). The numbers talked about here for cap gains at 44.5% and anything on unrealized gains are terrible ideas (even if limited to those over $100 million). Our tax system is on a cash or realized base. It simply will not support taxing unrealized gains. The reason is that taxing anything unrealized is really dumb. I don't believe taxation is theft. I also am not too scared by this proposal cause there is zero chance it is implemented.
Will never pass. All of congress trades stocks and that would kill their insider trading profits.
You're telling everyone on this board that they are voting for higher tax rates when they withdraw from their 401k's. Where is the proposal that says that your 401k withdrawals will be taxed at a higher rate?
I am pretty sure you were kicked out of grammar class. That's something since it was in special ed.
Actually would probably cause many stocks to go up in value in the short term.
Those with money and companies will just do stock buyouts and take many companies private…no more liquid unrealized gains if you do not own stock.
Long term effect…amount by of investment opportunities for the rest of us will be smaller.
Those with money and companies will just do stock buyouts and take many companies private…no more liquid unrealized gains if you do not own stock.
Long term effect…amount by of investment opportunities for the rest of us will be smaller.
I am unsure but I am not sure I can back this. The tax in unrealized gains in the stock market would likely encourage more real estate investment driving up the prices of homes more.
Real estate investment at least in single family homes should IMO be illegal or at the very least taxed so heavily that no one wants to do it. But until that time, applying a tax that would only apply to stocks and not real estate is probably not a good decision.
Also morally speaking I would argue that one should not be taxed on gains via a wealth tax and have that followed up by a tax on the gains via capital gains tax.
The capital gains tax for sure needs to increase. It needs to at least be considered normal income. Inheritance taxes for the wealthy need to be increased as well. Morally I could make an argument for 100% inheritance taxes. But I am not sure that it is fair to tax capital gains twice.
Real estate investment at least in single family homes should IMO be illegal or at the very least taxed so heavily that no one wants to do it. But until that time, applying a tax that would only apply to stocks and not real estate is probably not a good decision.
Also morally speaking I would argue that one should not be taxed on gains via a wealth tax and have that followed up by a tax on the gains via capital gains tax.
The capital gains tax for sure needs to increase. It needs to at least be considered normal income. Inheritance taxes for the wealthy need to be increased as well. Morally I could make an argument for 100% inheritance taxes. But I am not sure that it is fair to tax capital gains twice.
Such a silly post. Performance fees generally are in place for superior performance above a stated bogey where the manager has skin in the game and benefits a little from doing a good job. They take the place of paying ad-volorem fees and align client and manager interests.
One, how is this in anyway related to the Harris proposal and second and more importantly, how do performance fees negatively impact the entire economy and markets like this proposal would do?
But those guys are preforming a service by managing the funds of their clients.
That is worlds different than the government just reaching into your 401K whenever they want to take out 25% of the gains you made.
You ok with people losing 25% of their gains each year when they may still be 30 years out from retirement?
What an incredibly STUPID idea. This is next level STUPID. Congratulations
What will they go after next? How soon until they go after Roth IRAs and make them taxable?
True. Sure would be an interview or press conference where we could hear from Harris on this.
