ilmscore | Prediction Details
"in this case however they want to tax the unrealized gain on those making more than a hundred million dollars who don't pay a minimum 20 tax on their income which suddenly starts to get a lot more difficult to implement see all of this begins with the narrative that billionaires pay a lower tax rate than their secretary and to a large extent that's true most billionaires don't get there by working a salary but instead their worth is tied up in the stock of their business of which a controlling interest makes them a lot of money on paper in this case if their business does well the stock goes up in price and they're able to grow a lot of wealth completely tax-free without ever needing to sell anything although in addition to that there's also the grunt criticism that the long-term capital gains tax rate is lower than that of an earned wage and as someone is pretty open-minded to All Things money I have to say it makes sense and there's a good reason behind it see as it is right now the tax code differentiates between earned income and investment income earned income from a job payroll or manual labor is subject to payroll tax Medicare tax Social Security tax and to federal income tax as high as 37 percent depending on how much money you make on the other hand investment income is taxed to the flat zero to twenty percent depending on your income bracket regardless of how much you make which kind of seems weird because income is income right well not really when you invest your money not only are you putting your Capital At Risk but you also lose purchasing power each and every year to inflation and that inflation adds up like just consider that had you made a hundred thousand dollar investment in 1922 that only increases at the same rate of inflation you would have one million six hundred and eighty eight thousand dollars in today's money of which if you sold would be subject to a twenty percent capital gains tax leaving you with less purchasing power today than what you started out with in 1922. that's why the government wants to incentivize people to invest long term with money that gets redeployed back into businesses that leads to more economic growth with of course a lower tax rate not to mention unlike a job investment income is not guaranteed and there's a chance you might also lose money so in a way taxes have to be lowered to compensate for that but let's just assume this passes in capital gains or taxed regardless of whether or not you sold what would happen one it sets the precedent that unrealized capital gains could be taxed which some argue is unconstant institutional for example the Constitution denies Congress the power to Levy a direct tax unless it's apportioned among the several States in proportion to the population not to mention in 1920 the U.S Supreme Court concluded that under the 16th Amendment there must be some actual transfer of Rights before Congress get tax appreciation as income so from the very get-go this would be highly unlikely to pass two it would force business owners who might not have the cash liquidity to pay the tax bill to sell off a portion of their ownership and potentially lose control of their company or sending the stock price falling as more shares enter the market just consider the case where someone builds up their company to 500 million dollars takes absolutely no money for themselves for the sake of growth but has to sell a hundred million dollars of their stock to satisfy a tax bill of which they had no intention of ever selling that could lead to Market instability price swings throughout thinly traded companies and new ownership if the stock price suddenly Rises too high and three it sets a dangerous precedent that unrealized capital gains can be taxed that threshold could become an arbitrary number that changes over time after all who's to say they won't eventually lower it to 50 million dollars 10 million dollars one million dollars and then eventually everyone pays some sort of unrealized capital gains tax depending on how well they do but realistically regardless of what you think of this proposal the chance of this actually passing is pretty much not going to happen"
By Graham Stephan | March 30, 2022 | Pending
From video
It Started: My Thoughts On The Joe Biden Tax Plan 00:04:03 - 00:08:20
Interpreted Prediction
The proposal to tax unrealized capital gains for individuals with over $100 million in net worth is unlikely to pass due to constitutional concerns and potential market instability. It would require business owners to sell assets to pay taxes, potentially leading to loss of control and market volatility.

Prediction Details

Topic
Taxation of Unrealized Capital Gains

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