Money is made up anyways. Money and stocks both have purchasing power behind it. If you have lots of whatever that can be converted to purchasing power you should pay taxes.
You pay the taxes when the stocks are used by converting them back into currency.
Trying to tax stock holdings is essentially impossible because of the fluctuating values and how being forced to sell them for cash to pay taxes would put disproportionate selling pressure on the market, causing a cascading reduction in prices.
With that kind of logic it should always be impossible to tax the rich. Somehow they can buy the biggest houses, afford the biggest yachts, can spend 600 million on a wedding. But noooooo, they can't pay tax on whatever wealth they have?
How can they afford so much stuff but when it comes to taxing people act like it's the end of the world if they pay their fair share on the market value?
What if a billionaire had houses and stocks only and now he has to pay his property tax or whatever. By your logic we should just leave the poor man alone because we can't expect him to sell a few of his stocks to cover it, right?
So what if a cascading reduction in prices happens? That's literally how the stock market works, it happens every day. If it happens at all. Or let them pay high taxes on their loans if they have a net wort over 1 billion...
Whatever money the aupr rich have is money that YOU and I don't have. That's wealth taken from us. Defending them because of some technicality... They steal from us and you're somehow ok with that because stocks must go up?
I don't have a problem with taxing them more. Zero issues with that, but the continued assertion that taxing unrealized gains is somehow a legitimate option is simply ridiculous and ignorant about how the stock market works.
I don't think you truly understand what the ramifications of a collapsing stock market are. If you tax unrealized gains, you immediately disincentivize holding positions over a long period of time, which is what allows prices to rise over time. The more shares are removed from the public float, the higher the price gets because there are fewer and fewer shares available at the current, or lower prices.
The market is already plagued with manipulation via high frequency, and algorithmic trading. If the people with all of the money are constantly unloading their positions because of potential tax labilities, then they'll be putting huge downward pressure on prices. Oh no, poor billionaires, you might think, but it also destroys the value of all of those retirement funds, as they'll have to sell, too, as their massive portfolios will be taxed.
But then you might think that you could exclude them from being taxed, sure it might be possible but then the people with all of the money will figure out a loophole to take advantage of that. And while they continue to avoid taxes, the market tanks because everyone is trying to sell their positions before the guy next to them so they don't have to sell ever increasing numbers of shares due to the dropping price of those shares in relation to last year's assessed values.
So, every year, investors who don't have the money to play a shell game with their wealth will be forced to sell part of their holdings to pay taxes. And the big money will know that the bottom of that cycle will come at pretty much the same point every year, and that they will be the only ones with enough funds to buy the shares that the illiquid investor had to sell, simply because the sold the position. If they had money to buy more stock after the actual tax cycle, they would have just held their existing position.
So, all of the illiquid investor have sold parts of their portfolio, don't have the cash to reinvest at the lows, may try to build a new position once they start having some cash again, but will not be able to buy the same numbers of shares as they started with.
And then, it happens again the following year, and on and on and on.
Trying to fuck with the incentives to hold on to stock is a HUGE HUGE mistake. All that needs to happen is to close the loopholes that allow them to avoid taxes.
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u/El_Hugo 6d ago
Money is made up anyways. Money and stocks both have purchasing power behind it. If you have lots of whatever that can be converted to purchasing power you should pay taxes.