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Washington state approves capital gains tax

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Re: Washington state approves capital gains tax

#41

Post by BuyMyBitcoins »

verst wrote: post #16
PragmaticPulp wrote: post #3

Details are sparse in this article. Looks like 7% capital gains tax, first $250K excluded, real estate excluded. Proceeds to primarily fund childhood education (for now). > For example, stock sales higher than $250,000 would be taxed at 7%. Real estate would not be. 7% (on top of federal cap gains, which are also increasing) is a significant tax rate to start with. If it was 1-2%, I could see people rolling with it.…

The first 250k in profits from capital gains are exempt. It is estimated that this tax only affects the 7000 richest individuals in Washington. Keep in mind we don't have any income taxes here.

“ It is estimated that this tax only affects the 7000 richest individuals in Washington.”

Careful, that’s how it always starts. Give it a decade or so and politicians will be upset at how few people are actually paying this tax. They’ll demand all sorts of changes to the exemption structure so that they can raise more revenue. All while saying it’s only going to effect other people.

Re: Washington state approves capital gains tax

#42

Post by hourislate »

zacharycohn wrote: post #19

As a Washington resident, I think this is great. WA has one of the most regressive tax systems in the country, and this is a move in the right direction. It's crafted to have a very narrow impact. It is capital gains, but essentially only for stock sales, and only for stocks sales over a quarter million dollars. If someone sells half a million dollars worth of stock, it seems very fair the state gets some cut of that…

>If someone sells half a million dollars worth of stock, it seems very fair the state gets some cut of that

Yes very fair, after all the state took all that risk on those stocks and deserves something too. And to think that business you built should be all yours and not theirs also.

Like Warren said you are only successful because of the rest of us......

“You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.

- Elizabeth Warren

Re: Washington state approves capital gains tax

#43

Post by ptmcc »

grumpitron wrote: post #32
zacharycohn wrote: post #19

As a Washington resident, I think this is great. WA has one of the most regressive tax systems in the country, and this is a move in the right direction. It's crafted to have a very narrow impact. It is capital gains, but essentially only for stock sales, and only for stocks sales over a quarter million dollars. If someone sells half a million dollars worth of stock, it seems very fair the state gets some cut of that…

I think it's even narrower than you point out, as it should be 250K of gains, not just of stock sales. If I, for example, sell 260K of an index fund that I bought for 240K, I shouldn't owe this tax. However, if I sell 260K of stock that I got at basically 0 monetary cost as a company founder, then I'd owe the tax.

This is correct, it's over 250k in gains. Important distinction that may be getting intentionally muddied.

Re: Washington state approves capital gains tax

#44

Post by BuyMyBitcoins »

Relys wrote: post #34
decremental wrote: post #11

Earlier quoted context omitted.

I doubt any business owners are thinking about moving to Portland.

When I lived there a few years ago, there was an increasing amount of tech companies from Seattle opening up offices in Portland.

With all the sustained civil unrest and property destruction I’d steer clear of Portland if I wanted to open an office.

Re: Washington state approves capital gains tax

#45

Post by toomuchtodo »

cynicalkane wrote: post #31
hahaxdxd123 wrote: post #9

Ah, so this bill will tax gains from productive activities like investing in and building companies, while exempting gains from rent seeking activities like real estate. Why am I not surprised?

Real estate has a powerful lobby and many property owners are well-connected themselves. A lot of people own property and don't see it as free money. They empathize with property owners. Though it's easier money if you're politically connected and/or already wealthy. Stocks are held by rich people and techbros, in the minds of the public. Whether something is valuable or not valuable depends on who you empathize with…

If you borrow against your investments, you never have to sell, and your investments will simply grow faster than your borrowing costs. Wealth must be taxed, taxing income alone is insufficient.

We have property taxes for property, there’s no reason we can’t have investment taxes for securities.

Re: Washington state approves capital gains tax

#46

Post by leephillips »

I recently came across this comment by Philip Greenspun:

“if you bought an asset for $10,000 in 2000, for example, the BLS says you spent $15,700 in today’s mini-dollars; if you sell it for $15,000 in 2021 you’ve actually suffered a loss, but will owe capital gains tax nonetheless” (https://philip.greenspun.com/blog/2021/04/29/economic-wisdom...).

I’m not a finance person, and this had never occurred to me. Does he have a point? Should the calculation of capital gains take inflation into account?

Re: Washington state approves capital gains tax

#48

Post by pupdogg »

hourislate wrote: post #42
zacharycohn wrote: post #19

As a Washington resident, I think this is great. WA has one of the most regressive tax systems in the country, and this is a move in the right direction. It's crafted to have a very narrow impact. It is capital gains, but essentially only for stock sales, and only for stocks sales over a quarter million dollars. If someone sells half a million dollars worth of stock, it seems very fair the state gets some cut of that…

>If someone sells half a million dollars worth of stock, it seems very fair the state gets some cut of that Yes very fair, after all the state took all that risk on those stocks and deserves something too. And to think that business you built should be all yours and not theirs also. Like Warren said you are only successful because of the rest of us...... “You built a factory out there? Good for you. But I want to be…

Thank you for giving me hope that common sense still exists!

Re: Washington state approves capital gains tax

#49

Post by BuyMyBitcoins »

leephillips wrote: post #46

I recently came across this comment by Philip Greenspun: “if you bought an asset for $10,000 in 2000, for example, the BLS says you spent $15,700 in today’s mini-dollars; if you sell it for $15,000 in 2021 you’ve actually suffered a loss, but will owe capital gains tax nonetheless” ( https://philip.greenspun.com/blog/2021/04/29/economic-wisdom... ). I’m not a finance person, and this had never occurred to me. Does he…

It would be great for the taxpayer if you could do that but the government would lose out on so much revenue. So I think any such proposal is dead on arrival.

Re: Washington state approves capital gains tax

#50

Post by karl11 »

leephillips wrote: post #46

I recently came across this comment by Philip Greenspun: “if you bought an asset for $10,000 in 2000, for example, the BLS says you spent $15,700 in today’s mini-dollars; if you sell it for $15,000 in 2021 you’ve actually suffered a loss, but will owe capital gains tax nonetheless” ( https://philip.greenspun.com/blog/2021/04/29/economic-wisdom... ). I’m not a finance person, and this had never occurred to me. Does he…

Absolutely. But really there should not be capital gains tax as it is double taxation - you have already paid income tax on the same dollar.
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