Abstract: We estimate the average Federal individual income tax rate paid by America’s 400 wealthiest families, using a relatively comprehensive measure of their income that includes income from unsold stock. We do so using publicly available statistics from the IRS Statistics of Income Division, the Survey of Consumer Finances, and Forbes magazine. In our primary analysis, we estimate an average Federal individual income tax rate of 8.2 percent for the period 2010-2018.
The White House, September 2021
Did you ever have income taxed on unsold stock or anything else for that matter?
To use such a tax to pay for new programs is a farce. While new spending is guaranteed to be forever, gains on investments – hence government tax revenue – are guaranteed to decline at some point, some year or years. What then, more deficit spending? This is especially true if the investments are concentrated in one or few stocks.
This push for a new kind of tax, a tax on money one does not and may never have is merely an attempt to deceive Americans from the reality that we all must pay for what we want from government. It is the American left playing games and misleading you.
The tax code applies equally to all citizens although for most people it is a matter of taxing earned income based on tax brackets. The purpose of lower tax rates on dividends and capital gains is to encourage investment – by Americans at all income levels.
For a couple filing jointly there is no tax on qualified dividends if their income does not exceed $89,250. Thus more than half of families can generate tax-free income from dividends – which they can and should be doing. But we aren’t talking about tax free in any case, we are talking about unrealized gains which are taxed when stock is sold – Which applies to everyone.
QUINNSCOMMENTARY 
“The purpose of lower tax rates on dividends and capital gains is to encourage investment – by Americans at all income levels. ” This is the American right playing games and misleading you. Both sides play games and try to point figures at the other side instead of getting serious and finding real solutions together. The American melting pot is no more, the emphasis is on our differences instead of our commonalities. Better to just point out what is wrong with the opposite viewpoint, rather than to also see the flaws in one’s own thinking. “United we stand, divided we fall.”
LikeLike
In addition to your point, while income can be spent immediately, capital gains (long term) must be held for at least a year. This subjects those gains to the effects of inflation. In addition, encouraging long term holding encourages stability in the market… less volatility and price swings.
LikeLike
I don’t think this tax will get through. It will be a nightmare to administer and make a lot of the wrong people mad. I’m not surprised this administration would consider it though.
LikeLike
If they are going to tax “income” on stock not sold, then IRS will have to credit “losses” when that stock is sold (if at a loss). This is how some mega corporation pay zero income taxes. Corporation pay taxes on earning minus their loses. And sometime through bad investment, new market players, or pandemics, even the best corporations have losses.
I guarantee that Wall Street, lawyers, accountants, and other financial advisors will find a way for people to have losses on their stock portfolio’s for tax purposes. The IRS makes their code so complex and Congress is so generous to buy votes, there will be a loophole that only people who can afford to hire professional will find. Meanwhile, normal people who are able to invest outside of their IRA and 401K will get burned.
LikeLike