How the Dems (Whacky) Tax On ‘Unrealized’ Stock Gains Would Work

Treasury Secretary Janet Yellen defended a plan to tax the appreciation of investors’ assets, no matter whether they sold their assets or not.

Currently, capital gains taxes are levied on profits investors realize when they sell their assets. For example, if an investor bought a stock at $100 and sold it for $300, his capital gains would be $200.

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Under a new proposal, investors may have to pay the taxes on those gains each year – even if they don’t sell!

Senator Ron Wyden, the head of the Senate Finance Committee put forward a proposal for a tax on “unrealized capital gains.”

The proposal, states Yellen, “would impose a tax on unrealized capital gains, on liquid assets held by extremely wealthy individuals, billionaires.”

“I wouldn’t call that a wealth tax,” Yellen stated.

The tax would be levied against an “extraordinarily large part of the incomes of the wealthiest individuals,” Yellen said.

These incomes escape taxation until the investors realize them, or sell the assets, Yellen explained.

“It’s not a wealth tax, but a tax on unrealized capital gains of exceptionally wealthy individuals,” the Treasury Secretary concluded.

Investors Not Happy With The Proposals 

The proposal worries investors. Some are concerned that average investors would eventually have to pay the new tax. 

Others are concerned that they may have to sell their assets at an unfavorable time, just to pay the tax. This worries crypto investors, due to the inherent volatility of crypto.

Others questioned whether unrealized losses would count as tax write-offs. There’s also the concern on what a new tax could do to the overinflated stock market.

 

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