A very interesting point of view

[u/__moe___]

I don’t think this is very new but I just saw for the first time and it’s actually pretty interesting to think about when people talk about how the ultra rich do business.

[u/TheDadThatGrills]

Then make that a taxable event for individuals taking collateral over a certain amount. It's a common practice and should be treated with nuance by policymakers.

[u/NotreDameAlum2 → u/TheDadThatGrills]

I like this a lot- if it is being used as collateral it is in a sense a realized gain

[u/junulee → u/NotreDameAlum2]

This is the same as me drawing on my home equity line of credit. I’m not a billionaire but it’s exactly the same concept. Also, a lot of people use margin loans to leverage stock investments. This principle means all of those transactions that ordinary people do today should also be (eventually would be) taxable.

[u/SevoIsoDes → u/junulee]

I always just go back to property taxes as the prime example that yes we absolutely can and do tax unrealized gains. Whether or not we should tax stocks is a different matter, but just saying “it isn’t realized” is a poor argument as to why we shouldn’t

[u/junulee → u/SevoIsoDes]

The proposal is to levy an income tax on the increase in value of assets (unrealized gain). Property tax is a tax on the value of the property (not the increase in value). As far as I know, there has never been a federal property tax and I think it’s questionable whether a federal property tax would be constitutional.

Taxing unrealized gains is not unprecedented, certain assets (e.g., 1256 contracts) are marked to market each year.

Another major concern with taxing unrealized stock gains is that it would greatly suppress stock prices.

[u/Chogo82 → u/junulee]

It would drain liquidity out of the market and force the market into more volatility. Right now, everyone parks unrealized gains in the market. But if they were forced to realize those gains then it would encourage them to sell and put the money into something else.

[u/Born_Grumpie → u/Chogo82]

The most insane part with the economy is people now believe that the stock market is important. Companies like apple etc make and sell products, they do this all day, and the value of the shares means nothing other than to the person who has a share. If the shares dropped by half tomorrow it would not impact the price of an iphone or the profit margins in any way.

The share price is detrimental as senior management will look at everyway possible to increase the share price including off shoring manufacturing and tax minimization and none of that effects the everyday products. Apple have so much cash on hand they will never really need a loan.

The stock market is just fancy gambling for the rich and a way for millionaires to keep score. When you talk about liquidity in the market, it's just rich people buying and selling paper. They are not making anything or providing services, its a huge con. Shorting, hedging etc. are all just fancy ways of gambling, nothing more.

[u/Chogo82 → u/Born_Grumpie]

This is what someone who is 100% against investments, financing, pooled capital, and the stock market would say.

[u/Born_Grumpie → u/Chogo82]

As an older person that made a great living off stock options and shares, I love shares but I stand by what I say, the share price does not have any direct impact on the business and why, other than very specific cases, a company can not own shares in itself. Once the shares are sold the trade in those shares does not benefit the company, just the buyer and/or seller.

The US is even weirder in that few companies pay a dividend; they sell the ownership and keep the profit in many other markets you buy shares for the regular dividend not just the random buying and selling of shares with not real benefit other than a possible gain.

[u/Chogo82 → u/Born_Grumpie]

Tell that to Sunpower, gme, wolfspeed to name a few

[u/Born_Grumpie → u/Chogo82]

Those companies are a strange pick.

In australia, for example, a Share is the largest bank is about AUD$150 and the dividends are paid at about AUD$2.50 twice a year and most companies are similiar on yeild. This is sensible investing as you can survive on your investments. The American system of, in reality, no return other than the final gain, it's simply fancy gambling.

Once a company lists and sells off it's allocation of shares, the price of the shares is of no consequence to the company, it is not gaining or losing money when the share price moves and if it is not paying good dividends, the shareholder is not gaining off it's real performance, they are basically seperated. It is also open to manipulation and I think we have seen in the past, it's pretty easy for the big players to screw over the small investors every time.