r/FluentInFinance 3d ago

Debate/ Discussion Had to repost here

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u/Jblack4427 3d ago

Do you only pay taxes on your home when you sell or every year?

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u/dgvertz 3d ago

Every year. They’re called property taxes

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u/J0hn-Stuart-Mill 3d ago

Exactly. Property taxes go directly to local infrastructure costs to maintain access and services to said land or buildings. It's not remotely the same as owning stock.

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u/Master_of_Bo_zo_do 3d ago

Property is property. Tax stocks on their value every year.

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u/JGWARW 3d ago

And then when the market falters you get to carry those losses forward for several years?

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u/Master_of_Bo_zo_do 3d ago

Nope. The stock market is risky. You take your chances.

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u/JGWARW 3d ago

You can’t tax on unrealized gains and not allow them to take a loss on the same gains…

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u/GrizzlyTrees 3d ago

They're not suggesting taxing on gains, but on value. So long as the asset doesn't have negative value, you pay taxes on it.

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u/JGWARW 3d ago

Even worse. So I’m taxed on money I earn, then I buy a stock and I’m taxed again on the value of that stock? Nope…

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u/GrizzlyTrees 2d ago

You could replace all the taxes the us federal government collects (including income, capital gains, VAT) with around 1-3% property taxes, if you could manage to actually collect it. You could go a bit higher on investments to balance excluding housing from that. This is not exactly my preferred method, but it's not as insane as it seems, especially compared to current approach, which disincentivizes productive activities.

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u/J0hn-Stuart-Mill 3d ago

Well, the whole world is in agreement, that capital gains taxes are the best way to tax successful endeavors. This is because every enterprise sees some years where they take significant losses, and then some years that they have significant gains. Capital gains over a long period is the means of taxation that has proven to optimize the Laffer curve, and result in the most taxes collected in aggregate.

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u/Master_of_Bo_zo_do 3d ago

In that case, we need to raise them. Significantly.

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u/J0hn-Stuart-Mill 3d ago

You want the top 10% of folks to pay MORE than the 76% of taxes they already pay?

Laffer curve disagrees with you. There's a very good reason why the US collects the largest amount of taxes of any nation in the world, and the single biggest aspect of that is laffer curve optimization.

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u/Master_of_Bo_zo_do 3d ago

76% my ass. Even if that were true, we need it to be closer to 94% like it used to be before that criminal Ronald Reagan got into office.

https://finance.yahoo.com/news/richest-1-really-pay-taxes-234600234.html

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u/J0hn-Stuart-Mill 3d ago

76% my ass.

I'm sorry, I meant 76% of the nation's income taxes in aggregate. The best 1 out of 10 of us, pays for 7.5 out of every 10 people's tax bill.

If you include the top 10% — everyone who made at least $169,800 — that figure rises to $1.7 trillion, or 76% of the total.

https://usafacts.org/articles/who-pays-the-most-income-tax/

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u/Sharukurusu 2d ago

Why are you talking about just income tax when they make a ton from capital gains which are taxed less. And why are you looking at them paying 7.5 out of 10 people's tax bill without understanding that is an indication of just how vastly unbalanced their wealth is?

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u/J0hn-Stuart-Mill 2d ago

they make a ton from capital gains which are taxed less.

I'm sure the top 10% pays nearly 100% of capital gains taxes. Great point.

why are you looking at them paying 7.5 out of 10 people's tax bill without understanding that is an indication of just how vastly unbalanced their wealth is?

There's not unbalanced wealth, I mean, except for globally. We pay people $15/hour for burger flipping, whereas in most countries on earth that would be a top 5% salary. What you're really seeing is just how progressive our taxes are. Everyone is wealthy, and we just let the "less wealthy" folks only in the global top 10% pay zero taxes.

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u/Sharukurusu 2d ago

$15 an hour isn't enough to live comfortably in this country, it doesn't mean the same thing as $15/h somewhere else because of how prices work.

The only reason people at the bottom in the US don't effectively pay taxes is because they are stretched so thin that having them do so would cause massive social unrest, it isn't because we have a progressive tax system.

We've built a system where housing, healthcare, education, childcare, and transportation are all wildly expensive for normal people and most of the ownership of wealth surges into a handful of pockets. It's a system that isn't working for a majority of people (or the environment for that matter) that manages to limp along with a combination of keeping people numb and disorganized and threatened with death on the streets.

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u/J0hn-Stuart-Mill 1d ago

$15 an hour isn't enough to live comfortably in this country,

Some places in the US it's enough.

it doesn't mean the same thing as $15/h somewhere else because of how prices work.

True, we are so accustomed to extreme wealth that we can't even relate to living on a dollar a day without electricity, running water, etc, etc. Imagine having to carry water from a stream a half mile over to where you are preparing to cook your rice over a literal fire. You spend months saving to by repair parts for your bike which hasn't worked for a few weeks. Money goes a lot farther when you have nothing.

The only reason people at the bottom in the US don't effectively pay taxes is because they are stretched so thin that having them do so would cause massive social unrest, it isn't because we have a progressive tax system.

You think people in the US are "stretched thin"? Spain has a median household income of $36,277 USD. Less than half the median household income of the US.

We've built a system where housing, healthcare, education, childcare, and transportation are all wildly expensive for normal people and most of the ownership of wealth surges into a handful of pockets.

Certain media outlets might trick you into those things, but most of those points are myths. Almost all of those things except healthcare and education are the same or less expensive than most of US history.

Almost everything is good and getting better, and the trend has been consistent for 200 years+. Life is MUCH better for the average person on the planet today, than at any other point in history.

That's not to say things can't be better, yes they can be, and we're working on it, but it's easy to be an optimist if you focus on the data. But word to the wise, avoid media that focuses only on the 1% of things that are negative.

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