As you said, right now, you only pay taxes on profits at the time stocks are sold. Which means I could gather billions in “wealth” and never cash in, thus never pay a single dollar in taxes.
Suppose we would change how taxes are paid on stock profits. What if you had to pay taxes on yearly profits every year? This way, you can cash out at any time, because the tax is already paid. It would work just like regular income tax. Deductions and losses on the market would still apply.
The issue with this idea is that it doesn’t reflect how stocks work. Think about it like this: Owning a stock is like owning a block of gold. The value of the gold can go up or down. One year the value of your gold block could double and another year it could half. However, the actual value of your gold won’t be determined until you actually sell it. The tax your proposing isn’t a tax on wealth, but rather a tax on exchange rates. Besides if the stocks aren’t cashed then no harm is done. That money is being used and invested by the business.
I don’t think the issue is with the things we tax. We have good tax policy on that. The issue is that the system is flawed because corporations keep lobbying for new loopholes. If you want to see billionaires and corporations pay their faire share then we have to go after these loopholes. There should absolutely zero reason why individuals like you and me pay more in taxes than corporations like Salesforce, Nike, and FedEx. I’m not even talking about percentages here, we literally pay a larger monetary amount than they do. Actually some of these corporations get rebates for their profits. These are the type of things we should go after. We have to dig through the tax code, find every loophole, and hound our politicians to close them… And oh, not open new ones.
If we’re just talking fantasies that we wish America would make reality, I would like to see it be way harder for the filthy rich to manipulate the stock market instead of rewarding them with day trading exemptions and tax breaks make them pay more to day trade as their trades are more volatile to the markets, make it way easier for the poor to enter into stock ownership of real street name stocks without having to have in depth knowledge of trading, and cherry-on-top ban short selling outright and require locates for all trades.
Just spitballing here.
As you said, right now, you only pay taxes on profits at the time stocks are sold. Which means I could gather billions in “wealth” and never cash in, thus never pay a single dollar in taxes.
Suppose we would change how taxes are paid on stock profits. What if you had to pay taxes on yearly profits every year? This way, you can cash out at any time, because the tax is already paid. It would work just like regular income tax. Deductions and losses on the market would still apply.
The issue with this idea is that it doesn’t reflect how stocks work. Think about it like this: Owning a stock is like owning a block of gold. The value of the gold can go up or down. One year the value of your gold block could double and another year it could half. However, the actual value of your gold won’t be determined until you actually sell it. The tax your proposing isn’t a tax on wealth, but rather a tax on exchange rates. Besides if the stocks aren’t cashed then no harm is done. That money is being used and invested by the business.
I don’t think the issue is with the things we tax. We have good tax policy on that. The issue is that the system is flawed because corporations keep lobbying for new loopholes. If you want to see billionaires and corporations pay their faire share then we have to go after these loopholes. There should absolutely zero reason why individuals like you and me pay more in taxes than corporations like Salesforce, Nike, and FedEx. I’m not even talking about percentages here, we literally pay a larger monetary amount than they do. Actually some of these corporations get rebates for their profits. These are the type of things we should go after. We have to dig through the tax code, find every loophole, and hound our politicians to close them… And oh, not open new ones.
If we’re just talking fantasies that we wish America would make reality, I would like to see it be way harder for the filthy rich to manipulate the stock market instead of rewarding them with day trading exemptions and tax breaks make them pay more to day trade as their trades are more volatile to the markets, make it way easier for the poor to enter into stock ownership of real street name stocks without having to have in depth knowledge of trading, and cherry-on-top ban short selling outright and require locates for all trades.