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Washington state approves capital gains tax

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Re: Washington state approves capital gains tax

#71

Post by Jtsummers »

enahs-sf wrote: post #62
endisneigh wrote: post #54

Earlier quoted context omitted.

I don’t think you understand how capital gains work... If you invest a dollar today and get ten dollars tomorrow you’ve gained 9 dollars. When were you taxed for that?

I think his point was the initial dollar you invested was at some point subject to income tax to get it.

The (now gray) comment talks about being double taxed. That is, taxed twice for the same money.

If I invest $100 (post-tax money) and sell the investment at $1000, I do not pay taxes on that $100. There is no double taxing. I do pay taxes on the $900 gain.

Re: Washington state approves capital gains tax

#72

Post by nate_meurer »

karl11 wrote: post #50
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.

"Double taxation" as a concept is complete nonsense. You pay sales tax, property tax, VAT, etc out of money (or assets bought with money) that has already been subject to your income tax. You pay both federal and local income taxes on the same money. Tax systems are naturally layered, and have been since the beginning of civilization.

There are good arguments against capital gains tax, but this is not one of them.

Re: Washington state approves capital gains tax

#73

Post by wonminute »

Consultant32452 wrote: post #56
BuyMyBitcoins wrote: post #49

Earlier quoted context omitted.

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.

I think it’s important to recognize that taxes are not primarily about revenue. The government can just create/inflate as much money into existence as it wants. All taxes are about behavior control and signaling. We’re either trying to discourage a behavior or signal we’re sticking it to some group or other who is getting taxed. Once you see the world through this lens all of these tax laws make much more sense.

Federal Government, maybe. But State and Local do not have this option.

Re: Washington state approves capital gains tax

#74

Post by arrozconcosas »

swsieber wrote: post #30
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…

> especially if it's earmarked for childhood education. If it's earmarked for childhood education then don't be surprised if other childhood education funds are reallocated elsewhere.

Haha yes ... earmarking funds for noble causes is the ultimate fake out. Lottery money all goes to noble causes right, right?

Re: Washington state approves capital gains tax

#75

Post by ShockedUnicorn »

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…

Isn't that the same way it works for buying stocks?

I don't live in the US, but if I buy stocks for 100$, then sell them five years later for 150$, I have to pay a percentage of the winnings (so a % of 50$). This means that if inflation was more than what's left over after the taxes are removed then I would effectively "lose" money.

Re: Washington state approves capital gains tax

#76

Post by 0xEFF »

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…

> Really you should just tax income at high rates and investment at near-0%.

Does this address taxes lost from people being paid in stock units?

Re: Washington state approves capital gains tax

#77

Post by ihsw »

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 sounds like the government is double dipping -- printing money to fill budgets and therefore causing inflation, and taxing capital asset sales whose prices are rising as a result of inflation.

Re: Washington state approves capital gains tax

#78

Post by procombo »

endisneigh wrote: post #54
karl11 wrote: post #50

Earlier quoted context omitted.

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.

I don’t think you understand how capital gains work... If you invest a dollar today and get ten dollars tomorrow you’ve gained 9 dollars. When were you taxed for that?

They're saying if that growth occured over 60 years then you've just kept up with inflation. Might as well have just put it in a standard savings account and NOT get capital gains tax. *Well, maybe a standard money market account or bond.

Re: Washington state approves capital gains tax

#79

Post by ihsw »

endisneigh wrote: post #54
karl11 wrote: post #50

Earlier quoted context omitted.

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.

I don’t think you understand how capital gains work... If you invest a dollar today and get ten dollars tomorrow you’ve gained 9 dollars. When were you taxed for that?

If you invest a dollar today and get ten dollars tomorrow due to inflation rather than an actual gain in value, have you actually gained 9 dollars?

Re: Washington state approves capital gains tax

#80

Post by arrosenberg »

enahs-sf wrote: post #62
endisneigh wrote: post #54

Earlier quoted context omitted.

I don’t think you understand how capital gains work... If you invest a dollar today and get ten dollars tomorrow you’ve gained 9 dollars. When were you taxed for that?

I think his point was the initial dollar you invested was at some point subject to income tax to get it.

That’s a bad point, because the first dollar won’t be subject to cap gains, so there is no double taxation happening.
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