Let’s Talk… Proposed Billionaire Tax!
When hearing someone hawk about a stock that they’ve made a ton of money on, I always ask: “Well, did you sell?” The truth is: you have not realized a gain until you sell for obvious reasons.
The latest proposal in Washington by Treasury Secretary Janet Yellen is to tax unrealized capital gains of billionaires.
Here are a few of the points that make me think this is a bad idea that has no chance of passing in the current congress and is basically a bone thrown by President Biden to appease the far left.
- If someone is taxed on unrealized gains, what happens later on if unrealized gains turn to actual losses? Do they get a refund? My first thought is this is going to be an accounting nightmare.
- If you can be taxed on unrealized gains, can you take the corresponding on unrealized losses?
- How much time and administrative muscle will this cost vs. how much revenue will it bring? Basically, you’re creating a law to go after a few hundred people who have the money to hire really smart people. Is this all for nothing?
Lastly, I do think the tax code needs to be reformed. I just wish people we elect in Washington would spend their time wisely rather than ceremoniously attacking a group with a law that has little chance of passage.
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