Biden says he supports taxing billionaires' investment gains annually

[Yo_Mama_Been_Loggin]

Source: The Hill

President Biden on Friday said he supports an idea championed by a key Senate Democrat to tax billionaires' unrealized investment gains annually.

Biden said the idea is one of a number of tax proposals he backs as ways to finance legislation that would advance his economic agenda.

"I support a lot of these proposals. We don't need all of the things I support to pay for this, but I do support that," Biden said at the White House after giving a speech about COVID-19 vaccines.

Biden's comments come as congressional Democrats are working to determine how to pay for a $3.5 trillion social spending bill that includes many of the president's priorities in areas such as climate change and child care.

Read more: https://www.msn.com/en-us/news/politics/biden-says-he-supports-taxing-billionaires-investment-gains-annually/ar-AAOMNTt?li=BBnbfcQ&ocid=DELLDHP

[ColinC]

1. Great move!

Go Biden!!

[BlueJac]

2. Agree 100%

[DanieRains]

3. Tax Unrealized Capital Gains What I Have Been Saying For Years - Over 10 Million

Finally....

I say tax capital gains over $10 million, and use part of the money to give working people tax cuts.

You don't pay the tax till your wealth is $10 million, but you have a chance of getting there for once.

[jmowreader]

13. Uhh...no

I like Biden's plan to tax "unrealized" gains (in other words, if your 10 million shares of Acme stock increases in value by $5 per share and you don't sell your Acme shares, you're on the hook for $50 million in taxes this year; selling the shares would push the gain into the "realized" column and that's already taxed), but forget the tax cut thing. By using the money to fund the government, we won't have to borrow so much and the national debt won't go up as fast.

[PoliticAverse]

4. I'm gonna guess there's not 50 Democratic votes in the Senate that would support that. n/t

[Budi]

5. He has long been advocating for taxing those Capital investment gains

I hope in his 4 yr term as President he has the opportunity to fulfill that years-long call to action.

[SWBTATTReg]

6. An old idea that is gaining traction finally, again. These capital gains will never be...

realized since these people will never sell these securities and instead, loan or borrow any money needed, pay back via dividends or such, thus ensuring that the securities are never sold, causing a capital gains/or losses to be generated.

[Sogo]

7. I'm not a wealthy person by any means.

My banks that hold my Roth IRAs informed me that I would probably lose the holdings I have in those two accounts and would have to pay tax on the gains if this thing passes. I've had those accounts since 2000, and the Roth was set up under the rules that anything put in it is AFTER TAX money, and the gains grow tax free. Now the rug may be pulled out from under me. I am in my seventh decade. I can't start over building a retirement income! I'm pissed!!!!

[airplaneman]

10. This simply is not true no different than the voices that said $15 minimum wage would destroy jobs.

[Sogo]

12. What about what I said is not true....

that my account holders sent me those letters, or what they said?

If you have the creds to look at those letters (sans my name attached to them) and evaluate them, I'd be happy to hear your assessment of what they said....

[csziggy]

15. I suspect that existing retirement accounts would be grandfathered in

And would not be impacted under any new policies put into effect.

I also suspect that the information your banks put out are scare tactics to make people believe that they will lose everything and therefore resist any changes.

[DemocraticPatriot]

20. Are you a billionaire on paper?

It was stated that this proposed tax on unrealized capital gains would apply to "billionaires"-- not regular folk.

[moriah]

22. I'm *hopeful* that it will only apply to multi-millionares or billionaires, as was promised.

I'm also not wanting to diss your bank and say they are misinterpreting/lying to you, and I don't know if you were lucky enough in life to accumulate millions for retirement savings. Very few are, but you might be one of the 3000 people to have more than $5 million on a Roth IRA.

And even $5 mil might not go very far if your savings are going to be used for a good long-term-care facility or care in your home, vs planning with the knowledge you might need to become Medicaid-eligible in order to have any long term care at all. (Those plans usually involve deeding real estate to kids well before you presume that you're gonna need LTC, so the state doesn't take everything.)

I can't tell you not to worry, as I'm not your banker and I haven't read the law as codified. But I'm hopeful they are going to be focusing on the 156 individuals who together have more than $15 billion in Roth IRAs combined, rather than even the 3000 who have managed to sock away $5 million through great investments -- and certainly not the regular person who usually only has 40k in one.

[elias7]

8. I don't understand how Weyden's proposal would work

Let’s say you $100,000 tax deferred investment goes up to $110,000 over year 1. You get taxed for $10,000 in capital gains.

Let’s say the next year, your investment drops back down to $100,000. Do you get to claim a loss?

Let’s say in year 3, your investment goes back up to $110,000. Do you have to pay tax again on that $10k gain? Or had the pay clock been reset to 0 until you’re back up to $110,000.

[WhoWoodaKnew]

9. i was ready to post this exact same thing...

i have traded at times and if i was taxed on UNREALIZED gains i could potentially pay tax on an investment that eventually tanks and costs me $20k. or $30k, etc.


now, multiple that by millions.

[PoliticAverse]

14. Basically it is "mark to market". You are taxed on the market value at the end of the year

and that value becomes your new basis for next year.

So for example:

Year 1: Bought at 50, end of year 80, gain +30. Tax on 30. New basis 80.

Year 2: Ends year at 70, loss 70-80: -10. Tax loss of 10. New basis 70.

Year 3: Ends year at 90, gain 90-70, +20. Tax on 20. New basis 90.

[csziggy]

16. If you are going to have to track and report every year's gains

Rather than one capital gain when the securities are sold, this sounds like a great boon for accountants. My CPA would have to bill me for a lot more hours just to report this to the IRS, even if there were no significant gains or losses from year to year.

That is probably why the existing capital gain tax is how it is - until a security is sold there is no profit to be taxed or loss to the claimed. Everything that happens in between is just theoretical.

[PoliticAverse]

18. Yes it would complicate taxes and make more work for tax preparers. n/t

[DallasNE]

11. Unless This Happens

The wealth never gets taxed. It gets passed on to the kids. Romney is a good example. In his run for President it showed that Romney had transferred something like $100 million of his wealth to each of his 5 kids tax free. There must be some loophole around the gift tax. The kids in a few decades will rinse and repeat to their kids and on and on it goes.

[csziggy]

17. There is some one time gift exemption aside from the $15k a year gift exemptions

I don't know how it works other than my father did that once over forty years ago - gave each of his children a single large gift.

I would agree that giving $100 million to each heir is excessive. Maybe keep that exemption in the case of family businesses and farms, but restrict the size and type of gift. (In my father's case it was some orange groves and a family corporation, but it was nowhere near the $100 million mark, )

[BadGimp]

19. Taxing people on unrealized gains is just the kind of thing the GOP will use to kill the Dems

Unrealized Gains to me are gains that have not been cashed out.

You buy 10 shares in Amazon and hold them for 2 years, you will have gains but not realized nickel in cash gains. If you earn a dividend then that is income and is taxed accordingly.

[Steelrolled]

21. Yeah it seems kind of tricky how that would work.

If you paid the taxes, and the stock dropped in value the next year, would you get the tax back?

[ck4829]

23. K&R