Lessons from Investment Gurus

The Most Important Thing

 Successful investing requires thoughtful attention to many separate aspects, all at the same time. 
Omit any one and the result is likely to be less than satisfactory.

The idea of the most important things—each is a brick in a solid wall, and none is dispensable. 

What do you guys think about this? Taxes on the unrealized gains..

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Jozhe

Bezos and Co. Face Billionaires’ Tax

Talk last fall that Democrats in Washington are contemplating a tax on unrealized capital gains turns out to be true. Yes, it’s laid out in the Biden administration’s 2023 budget proposal, which you can read here. 

https://home.treasury.gov/system/files/131/General-Explanations-FY2023.pdf?utm_medium=email&utm_campaign=article_email&utm_content=article-7550&utm_source=sg

On first glance, it might not seem like too big a deal. Yes, taxing anyone on gains they haven’t actually made—the simple fluctuations of a stock or other asset—is crazy. But Biden’s proposal only affects people with a net worth of more than $100 million. So this isn’t going to affect the vast majority of people buying and selling stocks. 

Instead, it seems likely to hit hardest billionaires such as Jeff Bezos and Mark Zuckerberg, who have hugely valuable shareholdings in the tech giants they founded and little in the way of regular income. Biden’s idea is that “unrealized gains” on such stakes would count as part of regular income to be taxed at a minimum rate of 20%. 

The problem, of course, is that in years of big stock rallies, these folks can see enormous gains worth tens of billions of dollars in the value of their stakes. Suggesting they pay taxes on those gains raises a number of questions, including whether they will get a credit if the value of their shareholdings falls. 

Moreover, it’s not like these folks don’t have any other capital gains to tax. Bezos and others regularly sell shares in their companies as they diversify their wealth. Presumably, every time they do so, they’re liable for capital gains tax. Does it really make sense to go after the value of their stock when they don’t sell it?

Bezos and Co. Face Billionaires’ Tax  Talk last fall that Democrats in Washington are contemplating a tax on unrealized capital gains turns out to be true. Yes, it’s laid out in the Biden administration’s 2023 budget proposal, which you can read here.   https://home.treasury.gov/system/files/131/General-Explanations-FY2023.pdf?utm_medium=email&utm_campaign=article_email&utm_content=article-7550&utm_source=sg  On first glance, it might not seem like too big a deal. Yes, taxing anyone on gains they haven’t actually made—the simple fluctuations of a stock or other asset—is crazy. But Biden’s proposal only affects people with a net worth of more than $100 million. So this isn’t going to affect the vast majority of people buying and selling stocks.   Instead, it seems likely to hit hardest billionaires such as Jeff Bezos and Mark Zuckerberg, who have hugely valuable shareholdings in the tech giants they founded and little in the way of regular income. Biden’s idea is that “unrealized gains” on such stakes would count as part of regular income to be taxed at a minimum rate of 20%.   The problem, of course, is that in years of big stock rallies, these folks can see enormous gains worth tens of billions of dollars in the value of their stakes. Suggesting they pay taxes on those gains raises a number of questions, including whether they will get a credit if the value of their shareholdings falls.   Moreover, it’s not like these folks don’t have any other capital gains to tax. Bezos and others regularly sell shares in their companies as they diversify their wealth. Presumably, every time they do so, they’re liable for capital gains tax. Does it really make sense to go after the value of their stock when they don’t sell it?