Tax on Unrealized Capital Gains.

“Unrealized gains” ultimately don’t exist, so taxing them is unfair.
Whenever they are realized, of course they should be taxed.
It’s that simple.

A small percentage of a BIG, BIG number nevertheless yields, in absolute terms, a big tax payment. NOT merely one dollar.

Now, do you know WHY a very affluent person might sometimes pay a smaller percentage of tax than the top bracket rate would indicate?

First of all, the top bracket rate isn't applied until a certain income is reached. But that's hardly the reason, since a very affluent person reaches that top bracket income relatively quickly -- and then earns far beyond it.

But there are a number of SOCIALLY BENEFICIAL reasons why very affluent people might sometimes lower their "taxable" income.

For example, a tax-free municipal bond might be purchased with what's left over from their income after ordinary income tax. Is RECEIVING tax-free bond income socially beneficial? Not that I can see.

BUT the issuance and selling (by some governmental entity) of low-interest-rate tax-free bonds can sometimes provide a low-cost method of financing for the issuing entity. The affluent BUYER of those bonds typically accepts a lower interest rate (than he or she could have received from a different type of security) in exchange for the favored tax treatment that results. Seems like a possible win-win. The affluent bond-buyer might be helped and so might the issuing governmental entity.

For another example, the very affluent might invest in a capital asset (like an apartment building or a factory) and then depreciate that asset to provide at least a partial offset to the income that the asset subsequently generates. Of course, under some circumstances even that depreciation benefit might later be recaptured by the government. But I'm not giving anybody tax advice or trying to teach a tax course here. To the extent you have tax questions, you'll have to figure them out without my help and seek any needed advice elsewhere.

But just stop and think -- is it SOCIALLY BENEFICIAL for the very affluent to invest in such depreciable assets?

It certainly seems to be! People live in apartments and work in factories (or even in apartment buildings). And the people who are employed in constructing, maintaining, managing and working in such assets thereby make incomes of their own, that typically get taxed, too!

Encouraging investment HELPS society. We can tax the pudding out of affluent investors and what will happen? Well, you might lose some of that investment. People can turn to other investment or even move away. And that can end up costing others, and governmental entities, revenue and jobs.

Nothing ever seems to be as simple as some politicians try to make it sound. I, for one, am grateful for the contributions of the nation's most affluent. And I haven't even yet mentioned their tendency to give huge amounts to charity.

I wish people would be more careful before gleefully wolfing down political red meat from ANY party.

It's only a commentary of @Jchess202 said in #21:

“Unrealized gains” ultimately don’t exist, so taxing them is unfair.
Whenever they are realized, of course they should be taxed.
It’s that simple.
In that case, never realize them - and just use your investments as collateral for loans that aren't taxed - as only the 1% can and do.

@Noflaps said in #22:

A small percentage of a BIG, BIG number nevertheless yields, in absolute terms, a big tax payment. NOT merely one dollar.
Yes - which is more of a commentary on people having unfathomably more sums than any human needs, than a reason why they should pay lower %'ages(when the overall relative burden is less)

It would take 550 years for Jeff Bezos to run out of money, spending 1 million $ a day lol

I don't mind at all that Bezos is much, much (much!) better off than I will ever be. I've accomplished but a tiny fraction of what he has.

I suspect that most of the many, many people -- the enormous number of people -- who have benefitted from Bezo's amazingly fruitful life might resent his affluence less than some others.

Indeed, if Bezos had never taken the risks that he did and created what he did, getting through Covid would have seemed MUCH harder to many of us, I think.

And, by the way, don't loans incur interest? Which, in turn, helps the recipient of the interest, doesn't it?

It's hard to become affluent without doing a lot of good for others. Not impossible, admittedly. But pretty hard.

@salmon_rushdie said in #23:

It's only a commentary of In that case, never realize them - and just use your investments as collateral for loans that aren't taxed - as only the 1% can and do.
Unless there is a regulation against using unrealized gains for collateral.

@Jchess202 said in #26:

Unless there is a regulation against using unrealized gains for collateral.
Which there currently is not - so yes one or another.

@Noflaps said in #25:

I don't mind at all that Bezos is much, much (much!) better off than I will ever be. I've accomplished but a tiny fraction of what he has.

I suspect that most of the many, many people -- the enormous number of people -- who have benefitted from Bezo's amazingly fruitful life might resent his affluence less than some others.

None of this has to do with resentment - it has to do with extreme concentration of wealth causing economic dysfunction. If a handful of people controlling extremely large %ages of the monetary supply didn't make substantially less wealth available to the rest of the population - it wouldn't be a problem.

But fact is - it inflates prices, keeps money out of the economy, exports jobs out of the country, and moves money out of our economy. The more and more it goes to the top - the more people starve, the more people are unhoused, the less revenue the government has to uphold its infrastructure.

With an 18/hr average employee hourly income across the company, I'm going to go ahead and purport that the average employee benefits bezos massively more in productivity than he - them.

And, by the way, don't loans incur interest? Which, in turn, helps the recipient of the interest, doesn't it?
The loans they take out have extremely low rates that normal people couldn't fathom

"But fact is - it inflates prices, keeps money out of the economy, exports jobs out of the country, and moves money out of our economy. The more and more it goes to the top - the more people starve, the more people are unhoused, the less revenue the government has to uphold its infrastructure."

Source?

"The loans they take out have extremely low rates that normal people couldn't fathom"

Source?

I didn't just fall off the turnip truck, friend. I think I could "fathom" any real number.

@salmon_rushdie said in #18:

At what point in this pattern do you suggest action is taken?

??

You need money to generate income.
The more income you have and use to produce money, the more you gain.

It starts slow, but it grows over time. When you have enough money, it starts to skyrocket as in the graph.

Thats a natural progression. There is nothing wrong with it.