Elon Musk Slams Democrats Over Extreme Proposal To Tax Unrealized Capital Gains

[Teh One Who Knocks]

By Ryan Saavedra - The Daily Wire


https://i.imgur.com/7FAyDxRl.jpg

Entrepreneur Elon Musk slammed Democrats in a tweet on Monday over a proposal they are considering that would tax unrealized capital gains.

The proposal for the tax plan has gained steam in the wake of Sen. Kyrsten Sinema (D-AZ) opposing raising corporate and individual tax rates to pay for Democrat President Joe Biden’s massive multi-trillion dollar social spending bill.

The New York Times reported:


Billionaires could be taxed on unrealized capital gains on their liquid assets, Democratic officials said yesterday. It would affect people with $1 billion in assets or those who have reported at least $100 million in income for three consecutive years, according to news reports. That would ensnare perhaps 700 taxpayers — or the wealthiest 0.0002 percent — but Democrats hope it would generate at least $200 billion in revenue over a decade. It would cover not only stocks, but also other assets like real estate.

Musk criticized the plan in a tweet that came in response to a sample letter that someone posted online that offered a template for what Americans should say to their elected officials.

The letter stated:


Dear (Senator of Congress Member’s name),

I expect you to oppose the Wyden proposal to tax unrealized capital gains. Although the proposal targets billionaires and not myself, the government of elected representatives have a track record of scope creep when writing new taxes. I anticipate that any new unrealized capital gains taxes will slowly make their way down to middle class retirement investments over the next several years. It will start with billionaires, then eventually millionaires, then the modest investments will get hit possibly within a decade. Although principle residences and holdings in 401K plans apparently will be excluded, the Wyden proposal takes new tax hikes a step closer to imposing unrealized capital gains tax on the average investor.

Thank you for your support.

“Exactly,” Musk, who is at the moment the wealthiest person in the world, wrote. “Eventually, they run out of other people’s money and then they come for you.”
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Tilman Fertitta, the owner of the Houston Rockets and numerous other businesses, warned on Monday that if the plan from Democrats was passed that it could destroy capitalism in the U.S.

When asked about the tax during a Fox News interview, Fertitta said that if it passes it will “make me not build as much because I won’t have the ability that creates so many more jobs.”

“And then you’re paying so many different taxes,” he continued. “Every employee pays payroll taxes, all your sales taxes, all the taxes they pay. It’s truly a mistake. It’s a social way of not doing things in this country. It’s the European way. Our great capitalism will slowly come to an end. And do I believe in taxes to make our country great? Absolutely. I don’t think a balance sheet billionaires tax is the way to do it. Do it on income. You can’t do it on balance sheets. It’ll never be right.”

[Teh One Who Knocks]

You know for a fact that if this goes thru, it's not going to stop at billionaires, it will trickle it's way down as low as the democrats can get it. Just imagine every year getting taxed on any new equity you get in your house when the market keeps going up and you get unrealized capital gains on it. Or if your stock portfolio does well some year and you get taxed on the money that only exists on paper which are unrealized capital gains.

[PorkChopSandwiches]

This is the craziest shit I ever heard, so will they get tax breaks on the unrealized losses too?

[Teh One Who Knocks]

This is the craziest shit I ever heard, so will they get tax breaks on the unrealized losses too?

:rofl:

[PorkChopSandwiches]

How can you do one without the other :idk:

[Muddy]

This is the craziest shit I ever heard, so will they get tax breaks on the unrealized losses too?

Tell me what is going on..

[PorkChopSandwiches]

Say you have 100 shares of stock and they go up 100$ over the course of a year. You didn't sell them, so your gains are strictly on paper.
They could go up, they could go down.
They want to tax you on that money you never took ownership of (just for holding the appreciating stock), when normally you would need to sell the stock and pay capital gains

[Teh One Who Knocks]

Tell me what is going on..


Say you have 100 shares of stock and they go up 100$ over the course of a year. You didn't sell them, so your gains are strictly on paper.
They could go up, they could go down.
They want to tax you on that money you never took ownership of (just for holding the appreciating stock), when normally you would need to sell the stock and pay capital gains

Or say the real estate market stays hot and your home goes up $75K over the course of the year. At tax time, the government is going to want to tax you on that $75K even though it only exists on paper because you didn't sell your house.

[Muddy]

Say you have 100 shares of stock and they go up 100$ over the course of a year. You didn't sell them, so your gains are strictly on paper.
They could go up, they could go down.
They want to tax you on that money you never took ownership of (just for holding the appreciating stock), when normally you would need to sell the stock and pay capital gains


Or say the real estate market stays hot and your home goes up $75K over the course of the year. At tax time, the government is going to want to tax you on that $75K even though it only exists on paper because you didn't sell your house.

Jesus.. That's fuggin' insane.. Do they refund you if the market drops like it always does..? ( kidding, of course they dont.)

[PorkChopSandwiches]

Jesus.. That's fuggin' insane.. Do they refund you if the market drops like it always does..? ( kidding, of course they dont.)

Exactly

[PorkChopSandwiches]

Or say the real estate market stays hot and your home goes up $75K over the course of the year. At tax time, the government is going to want to tax you on that $75K even though it only exists on paper because you didn't sell your house.

I dont think your home value is viewed as capital gains, unless it was an income property maybe

[Teh One Who Knocks]

I dont think your home value is viewed as capital gains, unless it was an income property maybe

It is considered capital gains, but there are ways to lower the tax implications if it's your primary residence.

https://i.imgur.com/nLAFTho.png

[Teh One Who Knocks]

But of course the government has kept slowly chipping away what the average person can deduct, so I could easily see them going after that exemption in some way (lower the amounts or repeal it completely) if it meant they could get their hands on more of our money.

[lost in melb.]

Dumbest proposal ever.

Just undo Reaganomics Tax cuts a wee bit.

[Godfather]

You know for a fact that if this goes thru, it's not going to stop at billionaires, it will trickle it's way down as low as the democrats can get it. Just imagine every year getting taxed on any new equity you get in your house when the market keeps going up and you get unrealized capital gains on it. Or if your stock portfolio does well some year and you get taxed on the money that only exists on paper which are unrealized capital gains.

We do pay tax on unrealized gains of our houses. Property Tax. And that comparatively impacts us more than the ultrarich, who don't have the majority of their net worth in their houses.


Elon pays an averaged tax rate of 3.3% by borrowing from his company without taking salary. In 2018 he paid zero income tax.


Eventually, they run out of other people's money and then they come for you

Well I'm the 'other people' Elon. I read this as he's scared they'll come for his money instead of ours :lol:

All that said... I think taxing unrealized capital gains is still a bad idea - these gains are speculative and represent risk, taxing them seems like a bad economics experiment.

But there must be tax loopholes on the ultra rich that can be closed so they pay their fair share.

[DemonGeminiX]

We do pay tax on unrealized gains of our houses. Property Tax. And that comparatively impacts us more than the ultrarich, who don't have the majority of their net worth in their houses.


Elon pays an averaged tax rate of 3.3% by borrowing from his company without taking salary. In 2018 he paid zero income tax.



Well I'm the 'other people' Elon. I read this as he's scared they'll come for his money instead of ours :lol:

All that said... I think taxing unrealized capital gains is still a bad idea - these gains are speculative and represent risk, taxing them seems like a bad economics experiment.

But there must be tax loopholes on the ultra rich that can be closed so they pay their fair share.

We already have property taxes (depending on the state you live in). It would start with billionaires, but then they'd move on to millionaires and keep going lower. That's how it always goes. It's never enough for these Dems.

[Teh One Who Knocks]

We do pay tax on unrealized gains of our houses. Property Tax. And that comparatively impacts us more than the ultrarich, who don't have the majority of their net worth in their houses.


Elon pays an averaged tax rate of 3.3% by borrowing from his company without taking salary. In 2018 he paid zero income tax.



Well I'm the 'other people' Elon. I read this as he's scared they'll come for his money instead of ours :lol:

All that said... I think taxing unrealized capital gains is still a bad idea - these gains are speculative and represent risk, taxing them seems like a bad economics experiment.

But there must be tax loopholes on the ultra rich that can be closed so they pay their fair share.

https://i.imgur.com/HJN7NXz.png

The highest income earners already pay their "fair share" (I absolutely HATE that overused phrase). As you can see from this chart, in the United States at least, the top 1% of income earners pay 40% of all federal income tax. The top 10% of earners paid more than 71% of all federal income taxes, and the top 50% paid more than 97% of all federal income tax. Do they have loopholes where they can get creative in the ways they pay themselves to get around the income tax? Of course and yet they STILL pay the greatest share of federal income tax. The United States government in that same year from the chart (2018) took in $3.33 TRILLION in federal income tax. The government has a spending problem, not an income issue.

And if the government goes forward with taxing unrealized capital gains, what do you think that will do to people investing in anything? They won't do it. Why would you open yourself to MORE taxation by the government? Say goodbye to stocks and bonds and anything that you could gain from on paper because the government will take it.

As for property tax, that's not a tax on unrealized capital gains. It's a flat tax rate based on the overall value of your home. Not an additional tax based on the appreciation of your property. If they were to go ahead with this new tax, you would pay your property tax AND the tax on the capital gains on the property on whatever it appreciated in value in the calendar tax year. Plus, you can fight the valuation given to your property when it comes to property tax (we did this year and we won) but there will be no way to contest this new wealth tax.

And like DGX said below, this won;t stop at the top, when democrats in this country levy taxes, they ALWAYS trickle down so they can keep getting more and more money, so Elon is right, they will eventually come for you.


We already have property taxes (depending on the state you live in). It would start with billionaires, but then they'd move on to millionaires and keep going lower. That's how it always goes. It's never enough for these Dems.

[Muddy]

We need a flat tax. Everyone pays, no exemptions. Everyone bleeds equally at their level.

And Lance they don't pay 40% of all income tax.. Add the numbers up across the line.. That's 358.80 %

[Teh One Who Knocks]

We need a flat tax. Everyone pays, no exemptions. Everyone bleeds equally at their level.

And Lance they don't pay 40% of all income tax.. Add the numbers up across the line.. That's 358.80 %

:facepalm:

You don't add it up across as you go. :shakehead: The top 1% pay 40.1% of all taxes. Then if you increase it to the top 5%, they are paying 60.3% of all taxes, and if you increase it to the top 10%, they are paying 71.4% of all taxes, etc....that's why the last column shows 'all taxpayers' and 100%.

[Muddy]

:facepalm:

You don't add it up across as you go. :shakehead: The top 1% pay 40.1% of all taxes. Then if you increase it to the top 5%, they are paying 60.3% of all taxes, and if you increase it to the top 10%, they are paying 71.4% of all taxes, etc....that's why the last column shows 'all taxpayers' and 100%.

I'm not sure I agree with the way you're reading it. If that logic was true then the 100% would be should at the bottom 50% bracket.

[Teh One Who Knocks]

I'm not sure I agree with the way you're reading it. If that logic was true then the 100% would be should at the bottom 50% bracket.

You read the columns down, not across.

[Muddy]

You read the columns down, not across.

Righto.. But if the Top 50% and the top 1% are essentially combined in one column under the top 50% column... I dunno.. I think I see what you are saying..

[DemonGeminiX]

Do I need to come in here and tutor on how to read that graph?

[Teh One Who Knocks]

Do I need to come in here and tutor on how to read that graph?

:yup:

[Muddy]

Do I need to come in here and tutor on how to read that graph?

https://i.imgur.com/BWTJBKy.jpg

[Godfather]

We already have property taxes (depending on the state you live in). It would start with billionaires, but then they'd move on to millionaires and keep going lower. That's how it always goes. It's never enough for these Dems.

Yes that's what I mentioned, we pay property tax today already.

Property tax is a tax based on the unrealized value of your home, not what you originally paid for it (is that different down there?). My parents pay property tax annually on a $1.4m home they paid $270k for in 1992. I pay property tax based on the annual value of my townhouse that's up 10% from what I bought it for.

Very similar premises to taxing billionaires on the unrealized capital gains of their stocks which is where they hold their wealth rather than home value like us.

[PorkChopSandwiches]

Yes that's what I mentioned, we pay property tax today already.

Property tax is a tax based on the unrealized value of your home, not what you originally paid for it (is that different down there?). My parents pay property tax annually on a $1.4m home they paid $270k for in 1992. I pay property tax based on the annual value of my townhouse that's up 10% from what I bought it for.

Very similar premises to taxing billionaires on the unrealized capital gains of their stocks which is where they hold their wealth rather than home value like us.

In CA if your value goes down you can have the state reassess the tax liability , but that doesnt happen often

[Muddy]

Yes that's what I mentioned, we pay property tax today already.

Property tax is a tax based on the unrealized value of your home, not what you originally paid for it (is that different down there?). My parents pay property tax annually on a $1.4m home they paid $270k for in 1992. I pay property tax based on the annual value of my townhouse that's up 10% from what I bought it for.

Very similar premises to taxing billionaires on the unrealized capital gains of their stocks which is where they hold their wealth rather than home value like us.

Very good point...