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2021-10-28 Government Corruption
Why Democrats' Scheme to Tax Unrealized Capital Gains Should Terrify You
[American Thinker] Our current secretary of the Treasury, Janet Yellen, is busy trying to find a way to tax wealth without calling it taxing wealth. She has eyes on taxing unrealized capital gains. What this means simply is taxing people for money they have not earned or received. That's it in a nutshell. That definition should leave even those who have never had a course in accounting or finance shaken.

Not only is Janet Yellen considering this, but the Democrat party is on board as well. Democrats claim that it is needed in order to pay for their agenda. You know — the one that President Biden says pays for itself. The idea of taxing you for the income you have not made is also a policy speaker of the House Nancy Pelosi proposes. Apparently, there is some confusion here.

Looking at this from my point of view, I recalled a picture of Casey Stengel, nicknamed "the ol' Professor," when he was the manager of the New York Mets in 1962 — a team considered the worst team to ever play in the major leagues. He had his hat off and scratched his head with the caption: "Can't anybody here play this game?"

Think about how absurd this idea is. Imagine if an Internal Revenue Agent showed up at your house and said, we decided that you have to pay tax on the money you never earned. Aside from how insane that sounds on the surface, one need only ask: "If I didn't receive or earn that money, with what do you expect me to pay the tax?" That, in a nutshell, is the entire problem.

This is not the first time the government and corporate officers have made this insane mistake. Our "smartest guys in the room" types keep proving they are anything but. There are more than enough lessons from history that show for a fact how ridiculous this idea is.

I recall a lesson from my professor in Intermediate Accounting. He described a time when corporate executives told accountants they were doing their jobs wrong. One of the examples he gave was that management would tell the accountants we have assets — our buildings, for example — that are worth more than what you are showing on our balance sheet. The accountants told them, that is because we adhere to the historical cost principle of accounting. That principle is related to the conservative principle of accounting — which, incidentally, has nothing to do with a political viewpoint.

The professor went on to explain by asking the class: if you increase the value of an asset on the balance sheet by debiting that asset, where does the offsetting credit go? This is based on the double-entry system of accounting. There is only one place it could go: retained earnings. You could first put it in a temporary income account, but it will, at the end of the accounting period, end up in retained earnings.

First they destroyed bank savings deposit interest. Now they are going after your only remaining source of savings, home equity. It really is their money. They printed it right ?
Posted by Besoeker 2021-10-28 01:51|| || Front Page|| [11134 views ]  Top

#1 Stocks go up: Ol' Yellen grabs your gains.
Stocks go down*: you can't write off your losses.

Heads they win, tails we lose.

#FJY

*as they inevitably will soon, when this absurdly over leveraged, retail moron-fueled latest of our serial asset bubbles pops
Posted by Merrick Ferret 2021-10-28 07:15||   2021-10-28 07:15|| Front Page Top

#2 So knowing how 'interpretations' by bureaucrats work, the market value of your house will be 'unrealized capital gains'.
Posted by Procopius2k 2021-10-28 07:18||   2021-10-28 07:18|| Front Page Top

#3 /\ Your homeowner capital gains taxes can be paid in monthly installments. Or it can deferred until your death (with accrued interest) and paid in one lump sum.

Many will choose the convenient Social Security or 401K dividend offset.
Posted by Besoeker 2021-10-28 07:30||   2021-10-28 07:30|| Front Page Top

#4 Just be careful of what the definition of wealthy becomes
Under Slick Willy Clinton you were wealthy if your household income was more than $150,000 and hey wanted to tax homeowners for rent potential

Same idea

Trust me they will put in a loophole to protect the truly wealthy and crush homeowners
Posted by Sock Puppet of Doom  2021-10-28 07:49||   2021-10-28 07:49|| Front Page Top

#5 
REMEMBER THE FLAT TAX PLAN?


Putting an end to all the Federal Hidden Taxes on top of the Income Tax.

Pass a Constitutional amendment that:
Establishes a National Flat Tax, applied to ALL purchased items except food and medical related care and med's.

A Tax that treats and taxes everyone equally, including Illegals and the wealthy.

Eliminate the Federal Income Tax, which is bloated with loop holes and gaps for higher income certain special people and groups.

Limits future congressional spending to the previously years collected revenues, MINUS 10% to pay off the Nation Debt. Except in case of National Disaster or US Declared War caused by being attacked by another nation.

Once the National debt is paid off, then the 10% is paid into an emergency fund in case of National Disaster or Declared War until it reaches 2 times the average tax revenue collected over the last 5 years adjusted for officially declared inflation or deflation each year.

Forbidding Congress from borrowing against, or being used in any way or manner in less of a National Disaster or Declared War.
Posted by NN2N1 2021-10-28 07:53||   2021-10-28 07:53|| Front Page Top

#6 Nuke Washington DC.
Posted by Croque Fliting8030 2021-10-28 09:15||   2021-10-28 09:15|| Front Page Top

#7 ...its the only way to be sure.
Posted by Procopius2k 2021-10-28 09:59||   2021-10-28 09:59|| Front Page Top

#8 With all the government overreach and the IRS being used against enemies the flat tax is sounding better and better.
Posted by rjschwarz 2021-10-28 10:42||   2021-10-28 10:42|| Front Page Top

#9 If you move away from actual gains based on the price a buyer was in fact willing to pay for your shares of stock, you're into the realm of opinion, and all manner of complications ensue. Janet Yellen thinks that a share of Amazon is worth $X? OK, Janet, go ahead and place the order for your account. And that's just for publicly traded companies.
Posted by Matt 2021-10-28 10:45||   2021-10-28 10:45|| Front Page Top

#10 Be careful of how they define 'unrealized gains'. If your retirement account (IRA, 401K) has 'unrealized gains' will you be taxed on that now? (as well as later when you actually draw it?)
Posted by CrazyFool 2021-10-28 10:49||   2021-10-28 10:49|| Front Page Top

#11 ..it's the government, embrace the power of 'and'
Posted by Procopius2k 2021-10-28 10:57||   2021-10-28 10:57|| Front Page Top

#12 Billionaire Alibaba founder Jack Ma is seen stepping off superyacht in Spain on first foreign trip after criticising Beijing's financial regulators a year ago - as he falls from China's richest man to fifth after losing £20BILLION
Posted by Skidmark 2021-10-28 11:54||   2021-10-28 11:54|| Front Page Top

#13 This economic illiterate and socialist ideologue was once chair of the fed, which explains everything you need to know about quantitative easing and our upcoming financial collapse.
Posted by Regular joe 2021-10-28 12:09||   2021-10-28 12:09|| Front Page Top

#14 When they confiscated rich people's property I said nothing because I'm not rich...
Posted by Slats Ulerert8448 2021-10-28 13:22||   2021-10-28 13:22|| Front Page Top

#15 In plain english if you have 1000 dollars of stock and it suddenly goes up to 5000 and then back down to 1000 you owe tax on 4000 you never got. You also can't claim a loss. Or if you could rent your house for 1500 dollars a month but don't you could owe tax on that 1500 a month you never got.
Posted by Deacon Blues 2021-10-28 14:03||   2021-10-28 14:03|| Front Page Top

#16 It is no different than the fricking governor of the Peoples Republic of Illinois raising my home appraisal by %33 and leaving property tax mil rate the same. That's a tax on unrealized capital gains.
Posted by 3dc 2021-10-28 14:19||   2021-10-28 14:19|| Front Page Top

#17 /\ Property taxes in Illinois have been out of control for decades. You don't own. You don't rent to own. You just rent from the local municipalities. A modest newer home in Washington, IL (bedroom community of Peoria) in the $350k price range can cost you $1000 per month in property taxes.
Posted by Besoeker 2021-10-28 14:26||   2021-10-28 14:26|| Front Page Top

#18 But.. but... Uncle Plugz told me the 5 trillion dollar Christmas package wouldn't cost a penny.

Paid for. In full.

And Uncle Plugz is so soothing and reasonable. A unifier, not a divider.
Posted by Merrick Ferret 2021-10-28 14:51||   2021-10-28 14:51|| Front Page Top

#19 news reports indicate that Biden/Pelosi/Schumer have abandoned the unrealized cap gain tax

for now

Any honest reading of the constitution would result in a finding that this was unconstitutional. Of course with enough D lackeys on the SCOPUS that won't be an issue.
Posted by Lord Garth 2021-10-28 15:01||   2021-10-28 15:01|| Front Page Top

#20 They have been considering this concept since at least the late 2000's (when I first heard of it, anyway).

This is the first time that it has been actually widely reported, though.

They'll crawl back in their hole on this until such time that the unrealized CAP gains tax will seem the less onerous of several money-grabbing schemes being promoted at the time.

Like government takeover of 401K/Roth/IRA (etc.) programs.
Posted by Mullah Richard 2021-10-28 15:21||   2021-10-28 15:21|| Front Page Top

#21 as I noted yesterday, there should be a reasonable limit on the raising the cost basis of upon death, say $10M

and a similar limit on the use of 1031 roll over investment

and a much lower limit, say $50k on carried
interest

these would be fairer, not impossible to administer and also raise most $ from the >$M/yr folk
Posted by Lord Garth 2021-10-28 16:09||   2021-10-28 16:09|| Front Page Top

#22 ^ You're being rational again.
Correct that tendency, peasant
Posted by Merrick Ferret 2021-10-28 16:41||   2021-10-28 16:41|| Front Page Top

#23 Elon Musk tweets he has better plans for his money that Dems want to take
Posted by Skidmark 2021-10-28 18:01||   2021-10-28 18:01|| Front Page Top

#24 #20 - the unrealized CAP gains tax will seem the less onerous of several money-grabbing schemes being promoted at the time.

Like my granddaughter's Christmas wish list - a billion dollars*, a million dollars*, or a horse. Makes her seem so reasonable! Just give her the horse! (She's 12, going on 17.)

*Dollar values exaggerated for clarity.
Posted by Bobby 2021-10-28 18:36||   2021-10-28 18:36|| Front Page Top

#25 Given Bidenflation those prices for a horse might be close
Posted by Frank G 2021-10-28 20:49||   2021-10-28 20:49|| Front Page Top

05:28 Whiskey Mike
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