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Started By
Message
re: Yellen: Treasury will consider taxing unrealized capital gains
Posted on 1/22/21 at 9:51 am to LSURussian
Posted on 1/22/21 at 9:51 am to LSURussian
quote:
I believe it would require a change in tax laws by congress.
However, I am not very confident of that.
For example, I don't know if the IRS code wording can simply be changed (they would say "tweaked") to include unrealized gains to be within the definition of taxable income. In which case it may not require a change in tax law to be passed by congress.
Treasury/IRS can issue regulations (and some of them quite broad) but they can't change tax law (Internal Revenue Code). That has to come from Congress and signed by the President.
IRC 1222 defines gains, as "from the sale or exchange of a capital asset".
Congress would have to amend IRC 1222 in order to allow for unrealized gains - gains that are not from the sale or exchange of a capital asset - to be taxed.
For those people who are wondering about mechanics, I actually don't think congress will ever directly tax unrealized capital gains. It's too complicated.
I do think, it's possible, Congress would try to pass some sort of an individual equity tax. FMV of assets - FMV of related liabilities = individual equity, assign a tax rate on that. Anyone that has ever dealt with franchise taxes for a business, on the state level, it would kind of be like that. Most franchise taxes are based on historical cost, not FMV, but that's not much to change. That's where the concept would come from.
2
Posted on 1/22/21 at 9:59 am to LSUFanHouston
I know everyone is worried about being taxed on the yet unrealized gains on their Exxon shares, but stop and take a second to think about what such a proposal would mean for the American family farmer/timber producer and the future of who controls all of that land from sea to shining sea.
Posted on 1/22/21 at 10:07 am to LSUFanHouston
quote:Something similar has already been done for over 10 years for large banks who have "trading securities" in their bond portfolios.
I actually don't think congress will ever directly tax unrealized capital gains. It's too complicated.
Those banks are required to mark-to-market the value of their bonds eligible for trading (but not for their "hold until maturity" portfolio) and then adjust the bonds' value on their balance sheet via their equity valuation.
The adjustment doesn't affect income but does affect equity levels.
It's not a big leap from that process to requiring the adjustment first show up on the income statement before moving the net result over to the balance sheet.
Posted on 1/22/21 at 11:46 am to LSURussian
quote:
Something similar has already been done for over 10 years for large banks who have "trading securities" in their bond portfolios. Those banks are required to mark-to-market the value of their bonds eligible for trading (but not for their "hold until maturity" portfolio) and then adjust the bonds' value on their balance sheet via their equity valuation. The adjustment doesn't affect income but does affect equity levels. It's not a big leap from that process to requiring the adjustment first show up on the income statement before moving the net result over to the balance sheet.
You're talking about financial accounting reporting standards, not tax law. Not Congress.
This post was edited on 1/22/21 at 11:47 am
Posted on 1/22/21 at 1:06 pm to Jorts R Us
Yeah, so?
I was simply pointing out Houston's "it would be too complicated" comment isn't a prohibitive reason for not doing something if the government wants something.
If the Treasury Department and Congress see trillions of dollars in new tax revenues they can tap, they don't give a crap how complicated it might be to achieve it.
To them, that's someone else's problem...
I was simply pointing out Houston's "it would be too complicated" comment isn't a prohibitive reason for not doing something if the government wants something.
If the Treasury Department and Congress see trillions of dollars in new tax revenues they can tap, they don't give a crap how complicated it might be to achieve it.
To them, that's someone else's problem...
Posted on 1/22/21 at 1:07 pm to LSURussian
Yep - you are guilty for taxes until proven right
Posted on 1/22/21 at 1:16 pm to LSURussian
quote:
Yeah, so?
Struck me as odd that your retort to his opinion that Congress wouldn't go for it was bringing up standards promulgated by a completely different body with completely different objectives.
quote:
If the Treasury Department and Congress see trillions of dollars in new tax revenues they can tap, they don't give a crap how complicated it might be to achieve it.
Big difference between accounting nerds telling other accounting nerds where to book shite on the financials vs tax compliance on an issue that would be difficult and costly to audit. You may not think so, but compliance is a Treasury concern. No point in tax law if you can't effectively audit it and have reasonable compliance.
This post was edited on 1/22/21 at 1:19 pm
Posted on 1/22/21 at 1:16 pm to RebelExpress38
I am not for any additional taxes, PERIOD. With that said, a Federal Sales Tax w/o any loop holes, deductions, etc would work for me.
The thought of additional taxes on assets realized or unrealized is nauseating.
The thought of additional taxes on assets realized or unrealized is nauseating.
Posted on 1/22/21 at 1:24 pm to AncientTiger
quote:
a Federal Sales Tax w/o any loop holes, deductions, etc would work for me
Problem is it doesn't just tax the rich.
I remember as a child being taught that taxes aren't fair, but they are supposed to be as fair as possible. (Meaning if you do not have kids you still pay school tax, etc). Somewhere along the way we have stopped paying attention to the second half of that sentence. People should be rewarded for investing and taking the burden off of social security, not punished for it.
Posted on 1/22/21 at 2:31 pm to LSURussian
quote:
By "back-door" I mean it's a wealth tax without them openly referring to it as a wealth tax.
I knew what you meant. I disagree. They are not hiding the fact that they are openly coming after wealth.
Posted on 1/22/21 at 9:06 pm to RebelExpress38
quote:How about letting people get back to work instead. Such bullshite.
as well as other approaches to boost revenues
Posted on 1/22/21 at 11:13 pm to TimeOutdoors
quote:
People should be rewarded for investing and taking the burden off of social security, not punished for it.
So you support means testing for SS benefits?
Posted on 1/23/21 at 7:49 am to LSUFanHouston
Don’t know if this has been discussed yet, but the only way you should be taxed on unrealized gains is if you are profiting from them, e.g. taking a loan against it
Posted on 1/23/21 at 9:41 am to barry
So would you get a tax credit for unrealized losses?
They are quite literally trying to take money from a pool of money that doesn't yet exist, which is terrifying.
Imagine you have a position that hit a 100% gain over the course of the year. You pay a large tax on it, then it crashes and you end up selling back at even. The Gov't basically took money from you based on money you didn't even make.
But remember you're free.....
They are quite literally trying to take money from a pool of money that doesn't yet exist, which is terrifying.
Imagine you have a position that hit a 100% gain over the course of the year. You pay a large tax on it, then it crashes and you end up selling back at even. The Gov't basically took money from you based on money you didn't even make.
But remember you're free.....
Posted on 1/23/21 at 10:03 am to LSUFanHouston
quote:
So you support means testing for SS benefits?
I certainly do.
no different from the school tax paid by childless people referenced above. SS is not an investment vehicle, the money paid is is not “yours”. It’s a tax just like every other tax
so yes there should be means testing. Over a certain income you don’t get it because you don’t need it. Just like you don’t get a tax refund on public schools you didn’t use or interstates you didn’t drive on
and...just like the “trump bucks” and now “joes bail bonds” that I didn’t get and won’t get because I was deemed to be without injury.
This post was edited on 1/23/21 at 10:06 am
Posted on 1/23/21 at 10:12 am to cgrand
quote:
so yes there should be means testing
You like the government telling people to pay in as they will benefit later in life and then changing the rules to screw them over?
The ol bait and switch?
Broken contract with america?
They are old boomers. They couldnt do any violence?
Posted on 1/23/21 at 10:15 am to cgrand
quote:
I certainly do. no different from the school tax paid by childless people referenced above. SS is not an investment vehicle, the money paid is is not “yours”. It’s a tax just like every other tax
K. Well, forgive those of us that would not like to be taxed any more than we already are, especially when you see waste and programs being abused.
Posted on 1/23/21 at 10:18 am to lsu777
quote:
Maybe, but they are also wanting to regulate it like they do other financial transactions. Plus like rocket said, any gains crom crypto would be up for this tax too.
Like I've said in other threads: physical gold and silver, baws. You don't have to go exclusively into it but anyone not hedging into it as well is somehow still in the "that will never happen" mindset.
If we're still in this shite four years from now and this same administration manages to win again, expect to see the term "negative interest rates" being floated around.
Posted on 1/23/21 at 10:32 am to Jorts R Us
quote:
Well, forgive those of us that would not like to be taxed any more than we already are, especially when you see waste and programs being abused.
dude I would like to be “forgiven” from any number of taxes that I pay and have paid in 35 years of employment
it ain’t happening no matter how much I disagree with how the money was used/wasted/set on fire
If high income citizens have a “right” to SS then I want my fricking stimulus checks
Posted on 1/23/21 at 10:37 am to cgrand
quote:
dude I would like to be “forgiven” from any number of taxes that I pay and have paid in 35 years of employment
Clearly not, if you support means testing SS.
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