this post was submitted on 15 Jan 2024
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[–] abraxas@sh.itjust.works 1 points 10 months ago

So are you saying we need to add an oppressively high tax on retirement accounts? Or are they going to be an exception?

and it’s taxed less than income from your job

Oh I agree. Realized capital gains really should differentiate estate gains or home appreciation vs stock. As long as we're careful.

This is part of the reason why wealthy people pay lower % taxes than people who work

Not wealthy, but I pay less taxes because a percent of all my assets and expenses are used in my 1099 job. My boss (the owner of the company) pays far less than I do because almost everything he does with his vehicle (for example) is work-related. My experience with wealthy people is that being able to deduct their (sometimes expensive) lifestyle is a huge part of why they pay less in taxes. That's not the ultra-wealthy, but it is the 1%.

The ultra-wealthy it's because of unrealized gains, not unearned gains. If we do not solve unrealized gains, Bezos will still have years where he nets $80,000 in income while his net worth doubles. He's already not taxed on his unrealized gains, so raising the capital gains rate will just disincentivise him from liquidating some of it. Flip-side, I have known a few "lifestyle investors" who invest just enough to live but live super-small to do. Programming retirees mostly. Looking at them (and the taxes they pay), the issue seems more about needing to raise the top gains rate cutoff, not just raising capital gains across the board.