So you have to pay this every year until you have nothing left? Your assets will be reduced by 20-30% every year after you withdraw that much to pay the tax. Within a few years most people will be broke. And then there are those who have little to no cash savings, but have equity in their home. Where will they get the money to pay the outrageous tax on that equity? The consequences of such a radical tax is horrifying to think about.
They will take 20-37% of the positive change in value. The initial hit will be huge because it represents many years of value change (I've lived in this house since height of the recession and bought it after the previous owner was foreclosed on).
But yes there are many scenarios where with this policy (if you don't sell) the asset will be worth less than taxes either paid or owed.
With my house I paid $400k and it is worth $1.5M now thanks to Trump's economy. The change in value less $500,000 for married filing jointly would be the amount taxed at capital gains rate upon sale. But if this policy goes through it will be taxed at the same rate even if I don't sell ($120,000-222,000).
It will cause a lot of selling activity which will devalue assets right after they were taxed at a higher market value.
But hey the government did give us $600 one time, so that should cover part of it.
Better article with more details
"Mark-to-market" taxes you annually for money you could potentially make if you were to sell your real estate, stocks, bitcoin or gold that you own.
If you don't actually sell, or don't actually make that much or even enough to cover the tax when you do sell, they keep the tax monies anyway.
So you have to pay this every year until you have nothing left? Your assets will be reduced by 20-30% every year after you withdraw that much to pay the tax. Within a few years most people will be broke. And then there are those who have little to no cash savings, but have equity in their home. Where will they get the money to pay the outrageous tax on that equity? The consequences of such a radical tax is horrifying to think about.
They will take 20-37% of the positive change in value. The initial hit will be huge because it represents many years of value change (I've lived in this house since height of the recession and bought it after the previous owner was foreclosed on).
But yes there are many scenarios where with this policy (if you don't sell) the asset will be worth less than taxes either paid or owed.
With my house I paid $400k and it is worth $1.5M now thanks to Trump's economy. The change in value less $500,000 for married filing jointly would be the amount taxed at capital gains rate upon sale. But if this policy goes through it will be taxed at the same rate even if I don't sell ($120,000-222,000).
It will cause a lot of selling activity which will devalue assets right after they were taxed at a higher market value.
But hey the government did give us $600 one time, so that should cover part of it.