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

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?

Jerome Cody

No matter which route he takes, he might want to move quickly. The current top tax rate on long-term capital gains is 23.8%, but Congress is poised to vote in the next few weeks on adding an 8% surtax on income above $25 million, starting in January. The potential for a surtax gives Elon and others who are considering whether to exercise options or sell appreciated assets an incentive to do so now. The tax difference between triggering roughly $23 billion of compensation this year as opposed to next year could be nearly $2 billion.

IMO while this may or may not be the leading motive, it’s certainly true.

The tax hit that Elon faces likely would have come regardless of the political debate unfolding in Washington. He  signaled at a Code con that he expected to exercise options in the fourth quarter, triggering what he called a huge tax liability. https://www.wsj.com/articles/elon-musks-possible-tesla-share-sale-comes-as-the-taxman-looms-11636482029

IMO while this may or may not be the leading motive, it’s certainly true.  The tax hit that Elon faces likely would have come regardless of the political debate unfolding in Washington. He  signaled at a Code con that he expected to exercise options in the fourth quarter, triggering what he called a huge tax liability. https://www.wsj.com/articles/elon-musks-possible-tesla-share-sale-comes-as-the-taxman-looms-11636482029

All the meaningful returns in life, whether in wealth, relationships, or knowledge, come from compound interest.

🤓 let’s geek out 🤓

Illegitimi non carborundum

Single Malt Society 🥃

Food Porn

Tunes

DANK MEMES

Bio hacking

(Cool) Dev

Dilbert Classics 🖥️

Lens of Passion

Hip-Hop

Podcasts We ❤️

🖼📷Art

MEDITATION (mindfulness)

Digital Wellness 📱🧘

Mixed Martial Arts (MMA)

Chris Nheu

Expiring stock options mean the car maker’s chief executive likely faces a large IRS bill regardless of a proposed billionaires tax.

Elon Musk’s Possible Tesla Share Sale Comes as Tax Bill Looms

The Most Important Thing

TechCrunch Social

Red herring idea meant to do distract from a real solution. Tax net asset value and transactions. Less parasites flipping stocks all day.

Jozhe

A group of likeminded people in The Most Important Thing are talking about this.