There is a difference in income and taxable income. Appreciation of assets that has not been sold or converted to cash is called “unrealized” income. There are some assets that are marked to market on a financial statement and considered to be income. You are correct these are generally not taxable income. As to whether the 16th amendment definition of taxable income includes unrealized gains isn’t specifically clear. That is something the courts rule upon. The courts have generally sided on income needing to be realized/recognized, I think.
Gnerally capital gains are “stepped up” on death. So the person inheriting the assets do not owe capital gains, and are treated as if they just bought them. So the capital gains are not taxed, but the estate tax applies to amounts over something like $24 million for a married couple.
He is an awful person because he thinks Uber rich should be taxed more? That is a bizarre statement. I guess I’m awful too because I think Uber rich should pay more. There are legal ways to reduce your tax burden when you get to that level of wealth.
Sure I’ve had 100% gains round trip in the past. It’s taught me a valuable lesson take some profit, if it doubles or quickly triples sell half and now you’re playing with the house’s money. I’ve also punched out of plenty of stocks to see them continue to rise. I’ve never said myself or anyone can time a stock perfectly(what you are describing). Hell spring of 2020 I missed some huge gains on PINS and SNAP sold them on a bounce expecting the market to retest the lows, never really did. Missing a big gain sucks. The whole crux of this discussion was the assertion that stock gains are “passive” gains. An idea personally I disagree with(regardless of the tax treatment of them). Sure for some people they maybe passive (index fund lovers).
When I said taxed at his death I was implying the estate tax, I'm pretty sure Bezo's estate will surpass the $24 million estate exemption or whatever it is at the time of his death.
Your points essentially are the rich are paying about what they always have and the poor are paying less. Spending is what’s gone up like crazy. Just look at what the Federal budget was precovid and post covid. We all can agree during covid it likely needed to go up to support all the closed business. Sad thing is the spending didn’t even drop to close to precovid levels it’s just kept growing. FWIW I’ve never been registered as a Pub so you left a party I was never a member of good on you.
Unless you live in one of the 10 states that have an inheritance tax, you are not subject to inheritance tax as there is no federal inheritance tax. There is a federal estate tax.
Pfizer has been terrible for years, their pipeline began drying up and they haven’t had a big hit since Viagra. They also lost out on some drugs like Trovan,Bextra and Celebrex.
How often are you going to tax the same wealth? You taxed it once when he earned the income that was used to purchase the original asset. An example, a person has bought a collection of art that increased dramatically when the artist died. You would tax that income in year 1, then again in year 2, but the person has no liquid assets to pay the tax. Would you force him to sell his assets to pay your wealth tax?
I am sure being in the medical field you have often run across people, including patients, that seem to think they know a lot more than you on health care matters, but what they think they know is wrong and/or nonsense The same holds in the financial / investing field. You will find most people trained in finance are not spending a lot of times picking stocks. They invest in index funds. Because there is a vast body of evidence that active investing returns lag passive investing. I can find and link studies if you wish. This repeats itself over and over again. This isn’t a coincidence, because by definition the average of all active investors will lag passive investors, because the only difference is the fees on active. Now you may seem to think you have some insight that the thousands of financial professionals don’t, but you don’t. Warren Buffet is arguably the best investor of all time, and he says you should invest in an S&P 500 stock fund. When you get a basic background in concepts such as risk, return, diversification etc this stuff becomes more intuitive. The dirty secret is many of these Wall Street investors and mutual fund managers put their own money in index funds.
What about if someone inherited a business? How is the tax figured on that? What about in regards to real property? I don’t think the heirs get to step up the basis.
Well you need to tell the other 2 guys who called it the 'inheritance tax' before I did. And yeah, if we're not going to tax the wealth of the living, then we need to increase taxes on their estates after they die.
My last 5 years and yes we’ve had a good bull run, part of the reason I’m taking profits now. No that won’t happen forever. I don’t have any special insight but a smart man once said buy what you know and that’s where I focus.(other than some typical blue chips when they get beat down). I listen to Buffett all the time, he may say that but that’s not what he’s done for decades. I’m sure lots of those guys use index funds, they also have individual stocks(they disclose this all the time).
What difference does it make? We pay a certain amount of taxes every year. If the person has no liquid assets maybe they should get a job and make more money. Do I sound like a right winger now? I have to pay a property taxes every year. If I can't afford to pay them, I need to either sell my property or take out a loan to pay them. Do you think we should get rid of property taxes?
The rich are paying more, mainly because they make a lot more. Their overall tax burden vs income hasn’t increased. It may have decreased, depending on how you define it. I didn’t say the poor are paying less. I said the bottom 90% are paying less. Perhaps the bottom 95%. I don’t consider 95% of our population poor. I think we’ve discussed this before. Much of the increase is attributable to inflation, retiring boomers on entitlements, and increased debt service. But yes there are other categories that seem to have increased, which I can’t account for all of it. Some of the Biden bills like infrastructure Ira and chips are additional spending - most of which I support, as they are investments with a likely long term payoff.
Step-Up in Basis: Definition, How It Works for Inherited Property Yes all of those get step up. The reason they get step is due to estate tax, the theory being you shouldn’t have to pay capital gains then turn around and pay estate tax on the same assets. But there is now a large exemption before you pay any estate tax. Part of the Bush tax cuts was phase out and elimination of the estate tax. But before we got to the elimination they preserved it at high levels. What most people didn’t remember was when the estate tax was scheduled to be eliminated, the step in capital gains was to be eliminated also. For some people who had estates in the lower millions, they probably would have paid more in taxes upon death.
