Biden Wants to Tax You on Gains of Unsold Stock.
There are a large number of truly horrible things lumped into President Biden‘s 2023-24 budget, including at least eight tax increases. https://www.cato.org/blog/8-biggest-tax-increases-bidens-budget#:~:text=The%20budget%20proposes%20a%20new,%24100%20million%20in%20total%20wealth
But the one that is most odious and un-American is the proposal to tax Americans on unrealized capital gains.
It’s bad enough that Biden is calling for a doubling of the capital gains tax. This action would spiral America’s stock market into a freefall, as incentivization for investment would evaporate. (Let’s not forget that it was the cooperative work of Democrat Bill Clinton and the Republican Congress in Clinton’s second term that cut the capital gains tax significantly, thereby leading to an incredible bull market over the next two decades.)
But now, Biden wants — for the first time ever — to tax Americans on unrealized capital gains. https://thehill.com/opinion/finance/3487486-bidens-tax-on-unrealized-gains-will-hit-far-more-taxpayers-than-he-claims/
Though it’s targeted for the moment just at high-income earners, once the door is opened, the concept will be legitimized to spread across all income brackets.
It has always been the case that we would have to pay a tax once we sold our house or our stock. The tax was realized upon the sale. But Biden wants to tax you on the appreciation of your stock over the past year, EVEN IF YOU HAVEN’T SOLD IT.
This is insanity! First off, you’ll have to come up with money to pay the taxes, even though your equity is still in the stock that hasn’t been sold.
Equally devastating is the fact that, while your stock might have gone up this year, it might go down next year when you’re forced to sell. So, you would have paid a tax on a stock that is now actually selling lower than the price at which you purchased it.
Biden is pandering to the progressives who believe that only millionaires have investments in the stock market. The reality is half of America is invested in the market, especially as it pertains to their retirement IRAs.
This proposal is Marxist socialist nonsense. It will never pass this year because the Republicans hold the house. But just a couple of years ago, it was very possible that this nonsense could’ve had real legs, were it not for the mavericks such as Senator Joe Manchin (D-West Virginia) putting up a firewall.
Biden thought he had a free virtue-signaling gift by being able to announce this dead-on-arrival proposal to placate his radical left base while knowing it would never pass. But the problem for Biden is that it stains his administration and his legacy and creates an out-of-touch brand that will be hard to shake.