Jeff Bezos’s net worth shrank by $15.2 billion on August 4th, leading a wide-ranging slump that erased $134 billion from the fortunes of the 500 richest people in the world.
Of course, much has recovered since, but no doubt it will dip again.
How does taxing unrealized appreciation or net worth work again?
QUINNSCOMMENTARY 
good point James–they have all types of schemes to control the folks–they never cease to amaze me
LikeLike
looks like a scramble of my last missive–first is the % we all fall into based on earnings–next is % of income taxes paid–finally our adjusted gross income share.
LikeLike
Let’s see. If I have a stock that goes up 20% in year 1. I’m taxed on that 20%. The next year the stock goes down 20%. Do I get the tax I paid back? They’re gonna’ need a lot lot more IRS agents. What a nightmare. Must be a Lefty idea.
LikeLike
hmmm….it seems to me that property taxes work that way, i.e. you are taxed on unrealized gains as your property values are assessed higher, then if the property values fall, you are assessed lower. Not my preferred solution, but it would be good to make some changes to the tax system that currently gives billionaires much lower effective tax rates than teachers or firemen…
LikeLike
so how do you assess art–jewelry–antiques–valuable coins–your Mickey Mantle baseball card? you want IRS agents sent to your home–what about a tip line for miscreants with unreported assets-your analogy is good but there are many exceptions as you know–I, as a homeowner who lives in my house receive a homestead reduction–folks with low income have a reduction–
just because one lives in a home with a high value doesn’t mean the person has the income to pay the tax–I bought in 1973 for $47,500 and house comparable are now $1.5 million–we bought a starter house and stayed.
Vern–take out your google machine and plug in: “what % of federal tax do the top 10% of wage earners pay in the U.S.?”–let us know what it says.
LikeLike
okay I did the Google thing and it turns out they have a zero percent effective tax rate since they have no wages. They just borrow against the unrealized gains until they pass away, then heirs get the unrealized gains tax free via the reset in the cost basis. So again, not saying this is the best way, but you are being intellectually dishonest if you don’t realize that this is a loophole that makes their effective tax rate much lower than the Average Joe.
LikeLike
we use different google machines:
IRS STATISTICS OF INCOME 2021
INCOME % share of personal income taxes paid Adj. Gross Inc. Share
1% 46% 26%
5% 66% 42%
10% 76% 53%
25% 89% 72%
50% 98% 90%
bottom 50% 2.34% 10.4%
How is it that the top 1% pay 46% of personal federal income taxes collected with no income? Looks like they earn 26% of the income. I suspect your effective tax rate has to do with what they own like stocks–bonds–real estate. The above is federal only–no state– no local–and no Social Security.
Now we can discuss whether your assets when passed along should be subject to “step-up” or not. I always wondered why there is a $500,000 exclusion from federal tax if I sell my house (primary residence) and if I live there for 2-years of every 5 I could do a number of houses if I was young enough. If only my declared cap gains had some exclusions. Maybe adding them back to determine cost basis answers my question.
Needless to say a simple tax code with but a few brackets and few exclusions is a dream for this lifetime.
LikeLike
@Al Lindquist
I think for all art, collectibles, jewelry etc., Uncle could just confiscate it all and the owner would have to bid to get it back. I sometimes surprise myself with all the ways this could be handled. Harris/Walz are probably seeing trillions dancing across their laptop screens.
LikeLike
the whole thing is so foolish–been tried and failed in a number of European countries–
I want to know how they tax brother Quinn’s Picasso hanging in the living room of his new digs and the gold coins he keeps in the safety deposit box, and let’s not forget the antique car he has stored in his son’s garage.
The same folks who decry the foolishness will vote for the folks who would love to do it if they could–they have an insatiable appetite for our money to provide for things like forgiving student loans–$25,000 grants for folks to buy homes–all kinds of aid for illegal immigrants–any vote buying scheme you can think of they want.
Let’s not forget when asked what programs they would cut we get crickets–all spending is good no doubt.
Oh, they only want to go after those with $100,000,000 in assets–come back in 10-15 years to see what we have.
there is no pill for stupid!
LikeLike
Those guys aren’t dumb. You can bet that by the time a wealth tax is enacted, they will all be worth maybe a million or so. The billions will have vanished into the woodwork. If you want less of something, just tax it. The politicos have to repeatedly learn this.
LikeLike