John Hinderaker:
Apart from its unworkability, the fundamental problem with this plan is that it seeks to impose the income tax where there is no income. Asset values rise and fall, sometimes dramatically—in both directions. An investor typically holds assets for a period of time until he decides to sell. At that point, he has either a gain or a loss that is relatively easy to calculate. It is axiomatic that you haven’t made any money on a stock until you sell it, but the Biden proposal senselessly ignores this elementary principle.
The Biden plan raises the obvious question, what happens when asset values fall? Next time the stock market crashes or real estate values decline, will the federal government write checks to (only) the richest Americans to cover some portion of their paper losses? Will they get refunds of amounts they have paid on appreciation that has now gone up in smoke? I suppose not, which exposes the gross unfairness of the Biden plan.
# posted by Ranger @ 8:08 PM
