Jokes on you, I cost taxes. I work with the F-I mean the CIA, that’s who I work for, writing educational propaganda on Lemmy World. I’m a “crackhead,” which is different than a “pothead,” which is a festival cop. I do counterintelligence, obviously, as it is important to know what the surveillance state does, watching places where I frequent, which is here, on the Lemmy World work reform community, where I write educational propaganda, obviously. Wasn’t this about taxes? Surveillance state, y’know? I don’t even know what I do, but I cost taxes as a whole.
WTH? That reads like the first kind of LLM, the random sentence generator with a small database of words.
No it reads like someone who stares at goats wrote it, being as naturally counterintelligent as I be n are, but you got that cultural reference, yea?
Here lemme give you a guided reading quiz to help facilitate your education, cuz that’s what I’m about, education:
Question 1: Who do I work for?
A) Some agency that starts with the letter F
B) The CIA
C) The Illuminati, that decentralized autonomous organization of secret police described in the New Testament at an eighth grade reading level
D) Some unnamed organization that stares at goats
E) All of the above
Question 2: What is my job?
A) Cop
B) Counterintelligence
C) Education (our best crime deterrent)
D) Professional goat-starer
E) All of the above
Question 3: What is a one “Donald Trump?”
A) President of the United States
B) A pedophile, by normative definition of the word
C) A cop
D) A distraction
E) All of the above
Question 4: What do you live in and are a part of?
A) A police state
B) A decentralized autonomous organization (society)
C) The Empire of the Sacred Heart
D) A topological matrix
E) All of the above
Question 5: In 2000-7000 of your own words, which is what I write everyday, tell me what you think of feet.
Fun!
Wtf are you saying
Well, I said it as clearly as I could
It wouldn’t be so bad if you couldn’t use the unrealized gains. But people can have a bunch of stock, get an untaxed loan, and have access to money without the tax burden. We should fix that.
Also property tax should probably be progressive
Yeah, we should fix that, but it’s still pretty bad because it incentivizes investments in stocks (an inherently speculative asset that destabilizes the world) over bonds (a contractually defined asset that more effectively resists speculation and destabilization). Sure, they’re both financial assets, so there’s a certain amount of nonsense built in, but I’d much prefer a society filled with people who invest in bonds and incentivized to demand financial regulation.
Also, we should treat stocks like dividends and tax them at the same rate. You get money every month from dividends and you choose whether you want to re-invest it or not. You’re effectively auto-re-investing with stocks, so it’s not meaningfully different. You should have to pay on the yearly difference in value, and if that means you have to sell some to pay the tax then you should just get over it.
What happens when my socks value decreases 30% one month? Do I get a tax refund?
What happens to the property taxes you paid when your property value tanks? Do you get a tax refund then? No? Then no.
Ah, yes. It’s the old “one injustice makes a new one okay” argument. Hate much?
Got some bad socks there brother
Lol! Ya got me! Yeah, autocorrect is a bitch, and I failed to verify the text. Socks = stocks. (And it tried to change it to sticks that time).
It depends on the details of the implementation. There are many possible solutions.
If we change it so the rule is like “if you use stock as collateral to get a loan, that is income and taxed as such” then no. You might just default on your loan, but that’s kind of on you and the bank for using a volatile asset as collateral.
I appreciate that you took the question seriously and offered a useful response.
What happens when someone fails to pay back their bond? Do I get a tax refund?
You should have to pay on the yearly difference in value, and if that means you have to sell some to pay the tax then you should just get over it.
There’s a much better way.
Don’t tax the dollar value of the shares. Tax the shares themselves. Don’t demand the liquidation of the shares to pay the dollar value of the tax. Instead, just tax the shares themselves: confiscate the same percentage of the shares held, then have the IRS liquidate the confiscated shares slowly over time.
We can exempt $10 million from the portfolio of any natural person, then tax proportionately from every issue in that portfolio. No exemptions for artificial, corporate entities.
Basically, stocks, bonds, real estate, and other financial assets (the “ownership of the means of production”) should only be valuable to the working classes.
Tax the shares themselves.
Hmm, you’d have to dramatically decrease the tax rate for it to be worth investing at all. My investments make ~5%/yr if taxed on the shares rather than the change in value 5%-3% for tax-3% for inflation = -1% per year. That’d literally destroy all financial assets, the entire finance sector, every university and research institute endowment, and the concept of retirement. So, let’s assume you did reduce the rate: 5%*3%= 0.15% or $150 tax per $100k invested or 1.5mil/bil. Honestly, this rate I’m fine with as it’s functionally equivalent to taxing the increase.
The issue is you’re still incentivizing people to put money into higher returning investments rather than investing in more stable and assets, like bonds. I think your intent was to make investing in stocks “fair” but something that unstable should come with costly risks. It’s not something sensible people should be investing into. We don’t want the government bailing out the stock market at the cost of everything else every five years. People need to be deterred and those markets need to face consequences.
We can exempt $10 million from the portfolio of any natural person
Unless you’re lowering the tax rate as I suggested, you’d have to add a lot of exceptions to not destroy most of the world’s established institutions, and those exceptions would be used as loop holes. I think it’s unwise to add exceptions at all. People should just get over paying taxes. It’s literally the foundation of money having value (the demand for money).
you’d have to dramatically decrease the tax rate
This is a wealth tax, not an income tax. We don’t currently have a wealth tax to decrease; we would be establishing a new one. I would propose 1% per year.
My investments
Are you a natural person? Is your portfolio less than $10,000,000 in value?
If you answered “yes” to both questions, nothing changes for you. This only applies to corporate entities and ultra-high-net-worth individuals.
The issue is you’re still incentivizing people to put money into higher returning investments rather than investing in more stable and assets, like bonds.
The only reason that higher returning investments are a problem is because they are used as a vehicle to drive wealth to the (ultra-)wealthy. When the wealthy are charged a high premium for these investments, that reason stops being a reason.
Unless you’re lowering the tax rate as I suggested, you’d have to add a lot of exceptions to not destroy most of the world’s established institutions
The established institutions in question are the ones creating the systemic problems. I see no compelling reason to maintain the institutions responsible. I see no compelling need for “a lot of exceptions”. Destroy them. To minimize disruption, we could phase it in over time. Perhaps starting with a $1 billion portfolio exemption and decreasing it to $10 million over the course of a decade.
This would have the ultra-wealthy converting their financial assets to tangible assets; they would be buying up personal property (produced by workers) hand over fist, while the working class would be buying up those liquidated shares from the IRS at a similar rate. Ownership interest in these companies would be rapidly conveyed away from the Problem Class to the Working Class.
This is a wealth tax, not an income tax. We don’t currently have a wealth tax to decrease; we would be establishing a new one. I would propose 1% per year.
We don’t need to call it something new. We already have property tax. It’s an average of 1.1% around the United States.
Stocks are property.
Real Estate property taxes are assessed at the county/parish level, and apply only to land and improvements on that land. Securities would not be considered “real property”. They are generally considered intangible personal property, which is not currently taxed. Further, the tax I am describing would be assessed at the federal level.
We certainly do need a way of distinguishing between existing real estate taxes and the proposed securities tax, even if the rates for the two taxes are identical.
Parent comment refers to “dramatically decreasing the tax rate”, but does not describe what tax rate they are decreasing. Parent comment crunches some numbers in which they assume a 3% tax rate, not a 1.1% tax rate comparable to real property taxes you describe.
They did not indicate what tax rate they meant when they said it would need to be decreased. They certainly aren’t referring to a real property tax rate when they suggest a decrease. I believe they were referring to either Federal Income Tax or Federal Capital Gains tax, which are approximately 25 to 50 times higher than the tax I was considering. Given the considerable discrepancy between what I meant and what they heard, I felt it important to indicate that this tax would be entirely separate from the existing taxes, and that it would be enacted for an entirely separate purpose.
I didn’t (initially) define a proposed securities tax rate, but I did provided context for calculating one:
"stocks, bonds, real estate, and other financial assets (the “ownership of the means of production”) should only be valuable to the working classes
I would tax those securities held by corporate interests and the obscenely rich at a rate equal to or greater than their expected return on investment, so that the benefits of securities ownership convey primarily to working class investors. From Parent Comment’s ROI (5%) and inflation (3%) numbers, the context I provided would allow for at most a 2% securities tax rate.
The securities tax rate I had in mind was 1%.
Securities would not be considered “real property”.
I’m not interested in what billionaires would consider “real property”.
Stocks are property.
I see no compelling reason to maintain the institutions
Okay, so you’re not serious about change to your supposedly better system.
What?
You’re advocating for maintaining status quo “institutions”. I’m advocating improvement. You’re advocating regression. I’m advocating progress.
Your criticism here makes your stance seem wildly inconsistent.
I think you need to explain what you mean by “institutions” when you suggest that I will be destroying them.
The “institutions” I believe will be destroyed by a securities tax are overtly harmful and should be destroyed. Can you provide me an example of a beneficial “institution” that would not survive?
No, I can’t “prove” to you that a “beneficial” institution would not survive because if I name an institution that I think is beneficial, like universities or research institutes, you’ll either argue it’s not beneficial or argue that it would survive via some other mechanism. Either way, it’d miss the point that there are in fact institutions that do good in the world that are built on the current systems and need some means of transitioning or surviving your radical change. You’re clearly uninterested in those arguments, which basically means no decent people (i.e. people who are intent on minimizing harm) are going to be interested in working with you.
Honestly, I don’t even really want to write this comment because I’m struggling not to assume you’re just some angry kid. Like maybe you’re someone who broadly agrees with me but just hasn’t worked through the practical math of whole percentile wealth taxes on institutions or who doesn’t yet appreciate that endowments effectively serve as a decentralized wealth re-distribution for public good causes. We’re probably both positively inclined towards notions of wealth limits and income limits for individuals, but we clearly have very different views on how institutions and organizations should function. I don’t really want to engage in an argument about that with someone who seems perfectly willing to see everything burnt to the ground in the name of “progress”.
Do you know how you make progress? You gain a deep understanding of how things work and then you tweak, modify, and twist bits and pieces – this doesn’t result in marginal effects either because these modifications aren’t just cumulative but synergistic and ultimately transformative. Institutions like academia have real problems, no doubt, but a few simple rules could dramatically improve them: limiting the ratio of administrators to other employees to combat administrative bloat, incentivizing use and teaching of FOSS to prevent corporate software entrenchment, addition of lotteries to application processes mitigate alumni advantages. There are lots of ideas that won’t destroy every humanities department or every independent scientific research institute in the country by making endowments nonviable.
Removed by mod
Tax unrealized gains
“Oh, but that’s not real money, they’d have to sell their assets to get the cash to pay those taxes, thus diminishing the value of the assets.”
Oh, so the value of the assets is over valued then? So them taking out loans with those assets as the collateral is fundamentally allowing them to take out more money from the financial system than they are realistically due? Damn, tax their fucking loans against their assets as well.
“NOOO! That’s not fair! Then they’re paying a higher tax rate than specified by the law!”
Crazy how that works, crazy how tax rates actually payed can be different from those specified in the laws. Hey did you know that Warren Buffet pays effectively a lower tax rate than his laundry lady, being stated as unjust by himself. Crazy how right now people working for wages get taxed way more than people working for asset valuations.
This was an interesting point I hadn’t thought of before, so I wanted an alternate perspective since a Twitter meme is a little one sided, think of it what you will:
Property taxes are ancient — they predate modern stock markets by centuries. Land was the dominant form of wealth, and crucially, you can’t hide a house from the assessor. Real estate is immobile, visible, and tied to a specific jurisdiction. Stocks are the opposite: mobile across borders, easy to hold through trusts or shell entities, and private holdings are genuinely hard to value year-over-year.
The other piece is who’s collecting and why. Property taxes are local — they fund schools, fire, roads, the stuff that directly makes your property more valuable. There’s a clean “benefit” logic: the city paves your street, your house is worth more, you pay for it. A share of Apple isn’t enhanced by Seattle paving anything, so there’s no equivalent local nexus.
Stocks also already get taxed, just at different moments rather than annually: capital gains when you sell, dividends when paid, corporate income tax on the underlying company, estate tax at death. The argument against an annual wealth-style tax is partly that the system already takes its cut, just not on a recurring basis.
A few countries (Norway, Switzerland, Spain) do tax financial wealth annually, but most that tried it abandoned it — capital flight and valuation headaches. In the US there’s also a constitutional wrinkle: the federal government can’t easily levy direct taxes on wealth without apportionment among states, which is why Warren/Sanders-style wealth tax proposals have to be carefully structured to survive a court challenge.
For most of our history, real estate was wealth. You needed property to grow crops, mine resources, build a factory, or do any kind of venture that would make money. It’s only in the 20th century that we really start having a significant amount of wealth in stock markets that couldn’t be directly traced to a physical asset. The robber barons figured that was a good excuse to stop taxing their wealth.
The system should take more of a cut, if that’s the argument we are going with.
Also? A new realization event should be defined: collateralization. When you take out loans against the value of your stock/bond/whatever holdings, you are realizing gains from those assets - you wouldn’t have gotten the line of credit otherwise.
People argue that this would prevent homeowners for taking equity lines of credit for improvements but that’s easily remedied by the collateral not being a real asset.
Stocks also already get taxed, just at different moments rather than annually: capital gains when you sell, dividends when paid, corporate income tax on the underlying company, estate tax at death. The argument against an annual wealth-style tax is partly that the system already takes its cut, just not on a recurring basis.
Yeah, that’s sort of the whole point of the post. If I buy a stock for $1 today and still it for $10 tomorrow, I pay taxes on the gains tomorrow.
If I buy it for $10 today and sell it for $1 tomorrow, I claim it as a loss.
If I buy a house for $100k yesterday, I’m paying taxes on $400k property today, and $900k tomorrow. Even if tomorrow I sell it for $200k.
Also of interest: Taxes aren’t paid on stock buybacks which is why they became popular.
Because that used to be illegal so there was no need to tax it
They’re not taxed because they used to be illegal and they shouldn’t ever be taxed because they should be made illegal again.
The same way prospect (futures) markets should be illegal, as well as options. The rich apparently couldn’t make enough with regular stocks so they had to build gambling into it, and then inside trade to make sure they won.
Burn it down.
Should probably do both for when they inevitably become legal again.
Property taxes are local — they fund schools,
Funding schools by highly localized tax isn’t universal. The US adopted it to make sure less affluent areas have worse schools. I believe the UK does similar things, but they also want marked differences between public and private school alumnus.
but most that tried it abandoned it — capital flight and valuation headaches.
And most importantly: relentless lobbying by the wealthy to get rid of those taxes.
The main issue is that, once you have enough value in stock, you can take loans out against it, thus extracting the value of the stock without actually having to sell the stock.
Twitter screenshot meme slactivism aside, it’s because private land is a limited resource. The more you keep for yourself, the more you pay (generally).
Plus, property tax is one of the only taxes that really hits wealthy people hard.
In California the property taxes are such that it punishes people that didn’t buy a house 30 years ago. The apartment I rent pays property taxes on a valuation of ~$250k. This property just went for sale at $1.2 million. Whoever buys it now will pay property taxes on a $1.2 million valuation, while right now due to how the law is structured, the current owner pays taxes on $250k.
It’s just a big fuck you by the system. The tax law was modified because they saw that if they kept increasing the tax proportionally with the market value of the home, soon a bunch people would lose their homes because wages are stagnant and home prices are rocketing. So they passed this cap that helps current homeowners.
I don’t know if there is a reasonable tax under these conditions where home speculation and investment-mindset inflates home prices while wages are stagnant and inflation is a bustling.
the complication comes from th tax lawyers getting loopholes and diaphanous exemptions implanted in the code
This definitely won’t be popular, hope you stick with me to the end, but real estate is collateral that holds its value quite well most of the time, and is insured by the homeowner.
Stocks don’t have that. Companies with large valuations can liquidate overnight.
Does that mean it’s all a bad idea? No, but it just is different than the frame provided. They are different assets.
Taxing rich people in new ways can be a good thing. Taxing unrealized gains gets complicated, but can be done. But also comparing it to property tax is problematic for a lot of reasons. There are much better arguments, so I think we should stick with those. This one has too many easy attack angles with valid points, even if the main point of “rich people get out of taxes more than normies” is completely true.
They’re right: it is pretty complicated to tax the rich using the current tax code. And there’s a very good reason for that: they made sure it’s as complicated as possible.
How about removing property tax for sake of consistency?
I think the idea that taxing the rich is difficult or our tax code is too complicated feeds into the narrative around the problem being too hard to solve. I think the reality is more straightforward:
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Bring back the previous top tax bracket of 39% that Republicans did away with. That will bring in a significant revenue.
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Raise or add the top brackets on the capital gains taxes.
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Add a new top tax bracket of you want to raise more revenue, e.g. 46% above X millions.
When you look at reports by the congressional budget office or independent budget groups, most of the other proposals are noise in the grand scheme of things. Even the buy, borrow, die strategy that gets a lot of airtime (because it rightfully violates most people’s sense of fair play) only really accounts for something like 2% of the funds used by the ultra wealthy.
Most of the things like wealth taxes would require more complex legislation and be treated by the courts, certainly going to the supreme court. But the above three bullets would meaningfully raise revenues, are simple in terms of legislation, and have clear statutory authority and case law on their side.
The only thing hard is electing enough people who actually care about the budget and the people.
Income tax may be a solution to government revenue, but it’s not a solution to inequality.
Capital accumulates exponentially, and if you don’t address that exponential growth, then there will be ludicrously wealthy people, social immobility, and all the problems we have now. Tax wealth.
Of course it will be complicated. Of course there will be court cases. All of that is true of the current system. We can’t get to a working system if we don’t even start. Tax wealth.
Tax wealth.
Agreed.
I don’t think we even need to tax all wealth. We need to specifically tax registered securities. Financial assets.
Economically, it isn’t a problem for a rich person to buy a yacht or a plane: Those assets were produced by workers; they are maintained by workers. The purchase of tangible assets means paychecks for the workers producing those assets. Economically, we shouldn’t be discouraging the purchase of personal property assets.
The value the ultra-wealthy are capturing is the ownership of companies. The value of those companies is generated by workers, but is transferred to the ultra-wealthy. The workers are compensated with cash, rather than ownership interest.
What we need to do is make those securities more expensive for the ultra-wealthy to hold, and cheaper for the workers to hold. We need a progressive tax on securities, payable in shares of the security, rather than the dollar value of those securities.
Exactly. Company value shoots through the roof, it becomes a worker owned cooperative. Original owners get paid in cash, rather than in market distorting power.
Billionaires will argue they wouldn’t take the bet, but they’re bullshitting. They’re constantly betting on stupider risks with lower payouts, all the time.
How difficult would it be to enact legislation to prevent using loans against stock/assets and avoiding income/capital gains tax? Something like “if you have things worth money you need to sell them before taking a frivolous loan.”? Idk I just hate that loophole
Forget 39%. We have greater national debt as a percentage of GDP than we did in 1944. We need to reinstitute the tax brackets from then until 1965, which had a top rate of 90%. There are reasons we had a middle class back then, and this is one of them.
Nobody paid that 90%. Just like today, there were methods around it.
But they paid much more, and that’s the point.
Capital gains should just be taxed as regular income instead of having a special rate.
Realized capital gains are usually taxed at a higher rate depending on the amount of time it was held, but I agree high earners should be taxed a lot more.
I think Denmark does it like that, but I haven’t verified with any Danes yet.
Proposal:
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minimum wage = 0% taxes
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N * minimum wage = N% taxes
So mathematically that serves as a pay cap, because once you get to 100x you are taxed 100%. Some countries do have compensation caps for CEOs that are a multiple of the lowest paid employee, and I tend to like the model because it incentives increasing pay of employees who aren’t generally considered competitive or in high demand, and those are the folks that need market intervention most.
In this exact formula, I suspect it would underwhelm. Someone who earned the federal minimum wage, $7.25/hour working full time would get a paltry $15,080 per year. Someone making $250k/year would only pay 16% income tax, a meet decrease. Now, maybe it is good to shift the cost burden more to the ultra wealthy giving relief to even those making good money. But that would require some data crunching to see where the breakpoint is.
That pay cap would hit at about $1.5m. I think that’s okay. I did some napkin math and eyeballed it to graph the proposed tax rates vs 2018’s marginal and effective (because that’s what was available): https://lemmy.zip/pictrs/image/61835557-1968-4d28-be95-493de6de6900.avif
It’s not the worst idea I’ve heard, but I’d want to scale by the number of taxpayers in each bracket to find out how much tax revenue we’d win or lose. A real congressional study would also consider what is considered “income” for tax purposes, and whether this would cause anyone to get creative with their compensation to avoid paying more tax (well, even more than they already do).
Under that plan, the maximum net income would come from a gross income of 50x minimum wage. Above that, taxes rise faster than pay.
Any minimum raise hike would automatically cut income tax rates across the board.
What would likely happen is the same thing that happened when we had a 91% top-tier tax rate: People with gross earnings above that rate would figure out how to turn everything they bought into a deductible business expense, and spend until they were under the line. Which isn’t really a problem, IMO, as that spending turns into worker compensation, rather than a rich-person’s stock portfolio.
Under this plan, executive compensation would still come primarily in the form of stock rather than pay. That’s already a problem, and this would compound it. Stock needs to be easy and cheap for the working class. It needs to be supremely expensive for the ultra rich to acquire and hold. We need cap gains taxes that start lower but progress much faster and higher than income taxes.
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Because you’re poor and don’t have any influence over tax policy or enforcement.
Owning stocks instead of real property is not wealth. If you don’t like the system, sell your house to buy stocks instead.
Yeah, just be homeless, that will solve all your problems.
Rich boy thinks everyone owns a house 🙄
The post was litterally about soemone who owns a house
Tax everyone, tbh.
If the taxes are going towards making life easier, maybe we’ll end up in a utopia and not the shithole corporations are building.
That’s the rub… Rich people don’t want life easier for society. They just want it easier for them.
If poor people have life easier, they might rise up and form unions, demand livable wages, and my million’s of dollars I inherent every year might be a few thousand less and that is unconscionable.
100% agreed. This has been going on for some decades, hand-in-hand with “The FED” being so complex that only bankers and their ilk can handle banking, so we must have bankers control their own banking and our dollar.
Banking is easy. You put money in the bank, they save it until you need it for a small fee. But they don’t save it any more, you see. They have about one dollar for every 10 dollars deposited. The rest exists only in banking system itself, and is not a tangible asset.
The complex part is their labyrinthine banking-created machinations to manipulate that one dollar into ten.
I’d get into it, but mods often think anything about The FED is a conspiracy. Don’t be like them. Take The Fed at its word, note who serves and where they worked before and after their terms, and reach your own conclusions.
I agree with the core argument, here, but…
Interesting how “unrealized gains” only become a problem when wealthy folks are involved
…do you think wealthy people don’t own property? 🤔
Ah! So you’re telling me that wealthy people DO get taxed on the unrealized gains of the properties they own? Just like us normies do?
Not for long, see the push by Republican groups for abolishing property tax.
If property taxes are abolished it better be for EVERYBODY, not just for billionaires & corporations & private equity groups.
In the US, the mortgage interest tax write-off goes disproportionately to the wealthy. It also inflates housing prices, so it doesn’t really help affordability. Certainly not enough to justify the cost.
We need a tax system where the government figures out how much they need each year, and then just takes it proportional to net wealth above a certain amount.
You can bet Elon won’t be declaring himself a trillionaire under that system.
We need a tax system where the government figures out how much they need each year, and then just takes it proportional to net wealth above a certain amount.
That’s exactly how property taxes work if you replace “net worth” with “assessed property value.”
(As opposed to what some people think, that rising property values on their own lead to rising property taxes)
So yeah, why the heck not do the same with other forms of wealth?
So, the government should decide how much wealth its citizens should have, and enforce that? I think there are better ways to approch this than turning citizens into subjects.
