No. of Recommendations: 2
But it's also asinine to pretend that someone like Warren Buffett has had "only" a few hundred million dollars in earnings in his lifetime. He went from a negligible amount of assets to having a net worth of $100 billion. He must have earned a lot more money over the last seventy years than the $10-20 million per year he declares in taxable income - you can't go from $0 to $100 billion earning that "little."
It's the difference between income that is "realized" - as in, changed from paper to real - versus "unrealized", or potential income. The left has long wanted to tax the latter.
Unrealized appreciation of assets is not "income" within the meaning of the tax code. But neither is it nothing. If one person bought $10,000 worth of shares in Apple in 2000, and another bought $10,000 shares of IBM at the same time, they'd have about $2,000,000 and $20,000, respectively. One person has earned nearly two million dollars on their investment, and the other has earned only ten thousand, and it's asinine to pretend that they've both "earned" exactly the same - zero - over that time frame.
Yes. And...?
Are you suggesting that risk is something that's normalized across asset classes?
For lots of reasons, we do (and perhaps should) exclude unrealized asset gains from a formal definition of income subject to taxation - but an informal understanding of how much of billionaire's "earnings" are actually paid in taxes doesn't require us to pretend that massive increases in personal wealth in unrealized holdings don't exist.
It's a disingenuous argument. Suppose I take a risk and buy a run-down piece of property in a bad neighborhood but a massive turnaround happens and 10 years later my property is suddenly worth 10x what I paid. The liberal argument is that "through no effort of your own you're now worth 10 times what you were, so you should pay" even though no actual cash has been exchanged. If they had their way, someone who put some capital at risk would then have to turn around and sell a bunch of it to pay the tax bill on income they never really received...until all the capital was exhausted.
It's not workable on many, many different levels.
