Absolute travesty. Nobody should be forced to pay a made up number, let alone under the duress of having your door kicked in if you refuse.
Many ultra-wealthy individuals borrow against their holdings to avoid having to sell their assets and therefore paying taxes. They shouldn’t be allowed to have their cake and eat it too. Relying on “realization” for taxation stops being reasonable when access to cash is basically the same as income. If anything, not taxing unrealized gains essentially punishes people who labor for income and unfairly favors people who use asset appreciation as a form of income.
My guess is that the very rich can instead figure out a way to avoid it mostly, but I like the idea of taxing ridiculously high wealth, even if it is difficult.
However, a tax an unrealized gains would seem to greatly reduce or maybe kill the chance for the poor or middle class to use investments to save enough to retire early. That seems very unfair. I do not understand why such a tax should apply to anyone not well into the upper middle class range of wealth.
And trying to make clever calculated bets on individual stocks now has risk of having to sell everything and still not having enough to pay the taxes, if they were assessed during a temporary spike in price. Even holding an index fund during a market crash could mean ending up with nothing because of the tax on fictional gains.
Ultra-wealthy individuals aren't holding that much directly. That's what family offices or similar constructs are for.
I work in a family office. The owner is worth around 700 millions. I wouldn't be surprised if he didn't have more than a house and a car to his name, on paper.
The rationale is that you cannot startup with your family office or foundation at the helm of the company because of costs etc.
So if you hit it big you are trapped with the stock in your name and with this unrealized gains system
These are very volatile assets, so maybe it shouldn’t be possible to take credits against them unless one realizes the gains or pays taxes for them.
This is also one of the reasons why financial crisis go out of hand so quickly, because once the value of an asset goes down, these credits become worthless as well, but rich people bought real assets with those credits, so the crisis just keep expanding to other sectors.
And nobody should go hungry, and nobody should lack basic healthcare. But here we are balancing the scales.
We shouldn't be balancing things we want to do for people in need against what kinds of things we will do to peaceful people that we shouldn't do. Nonmaleficence precedes beneficence.
In any case, abundance generally comes from not crossing those lines — from nonmaleficence. The US crosses those lines a plenty, but still less so than the EU, and consider how much higher its average wages are:
EU Europe average ≈ $30,500
United States ≈ $68,000
Have to sell your stock because you can't otherwise pay the taxes? Yeah, well, fuck you because the government is having budget shortfalls, and it's easier for the government to do it that way.
"State Secretary for Taxation Eugène Heijnen acknowledged during parliamentary debate that the caretaker government would have preferred to tax investment returns only when they are actually realized, but said this was not feasible by 2028, as taxing unrealized gains would avoid billions in budget losses and is easier to implement." <emphasis mine>
do you have a link to that quote in the second paragraph?
I expect this will be challenged and overturned as unconstitutional as the similar effort was in 2021, however it's insane as it stands, especially coming from a caretaker government.
Taxing imaginary gains on anything - land, stocks, crypto, comic books, etc - is illogical class envy.
They're all invested real estate, and want the rest to invest in real estate as well.
You can always sell to pay the taxes.
More liquidity is good, actually.
The first test balloon in one of the smaller EU countries: Take a bed that this will be considered a blueprint and will be rolled out across other EU countries.
The theft will become more and more egregious until the regimes collapse.
Given how volatile crypto is it seems like a bad deal for equity holders.
Me thinks they are factoring in a high % of evasion under 100,000 euros per year gains.
This leaves as potential taxpayers only those who cannot afford or don't want to structure their holdings via offshore entities
> Me thinks they are factoring in a high % of evasion under 100,000 euros per year gains.
Paultry individual investors have it the hardest to evade and optimize the taxes actually. Oftentimes they pay double dividend tax (WHT, only partial write off because of bilateral treaty, local dividend tax) while financial institutions were receiving... double refund of WHT (CumEx scandal).
Evasion is basically just not declaring it. The individual investors are the best equipped to do that.
Europe has a different system , the broker doesn't automatically subtract the tax owed or even send the form to the tax authorities .
Real brokers require TIN of an EU citizen and report the total capital gain over CRS to the country of your tax residence. If they don't do it they are not a broker and what you are buying with them are not shares.
RMDs force me annually to liquidate stocks to pay US Government taxes.
I'm not complaining; merely observing feasibility.
I get downvoted to goatse.cx territory every time I point this out, but: Kamala Harris's threat to tax unrealized gains just prior to the election is probably why we have Donald Trump in office today. Even if you support such a tax, it was sheer insanity to propose it in the months leading up to the election. Did she honestly think people like Bezos and Soon-Shiong would allow their media outlets to endorse her after that, or that people like Musk wouldn't react by throwing everything they had at Trump?
Hopefully the Dutch political scene is a little less volatile than ours was in 2024. Otherwise a tax on unrealized gains will be a massive self-own for Dutch progressives, just as it was in the US. Failure to understand and acknowledge the reality of concentrated media ownership will just lead to the same results, again and again. Progressives who want to tax unrealized gains need to first get elected and then float their proposals.
Those of us who are against such taxes can then argue from a position of principled opposition, instead of having to deal with the myriad of other consequences and side effects that happen when far-right demagogues win elections instead.
I realize people want to tax the rich but seems to me that taxing unrealized gains would seriously penalize investment.
That’s a huge blow to the natural compounding that occurs as stocks appreciate over time.
Wouldn’t that kill their stock market? Who would invest with such taxes?
Seems like people would just pour their investment funds into real estate rentals or such where only “realized” income would exist to be taxed… (ignoring appreciation of the property)
Whenever I bring up the idea of taxing the rich via unrealized gains, people oppose it by saying it’ll hurt investment. The reality is that years of huge stock market returns haven’t made life easier for the vast majority of people who actually do the work that makes companies successful. At least in the US, wages haven’t kept up with housing, healthcare, or basic costs, and I’m sure European workers face these kinds of problems too. At some point, it’s fair to ask why protecting unlimited tax-free growth for the top 0.1% should matter more than the financial stability of the workers actually doing the hard work to drive that growth. If the Netherlands finds that people avoid taxes by investing into real estate rentals, then maybe there should be laws covering those loopholes too.
But if the alternative becomes more real estate investment than we already have won't that be even worse?
Investing in the stock market at least in principle is investing in businesses that use that money to increase productivity. We should discourage investment in vehicles that do not optimize for productivity (real estate, bitcoin, metals and similar).
Selling your investment to pay taxes for unrealized gains forces more liquidity and movement in the market and might have a huge impact on preventing bubbles forming.
How does that work when some of the most outstanding ways remaining to make money are from a bubble?
You are somehow romanticizing the hard workers who build the real economy. No one works hard anymore. Within EU it's all about real estate and leveraging it to buy even more real estate, and then a small studio for short term rental on top of it.
You might be right. I’m sure it didn’t help her case.
A crummy idea is a crummy idea, even if you otherwise like the person having it.
> Kamala Harris's threat to tax unrealized gains just prior to the election is probably why we have Donald Trump in office today
It was not a good policy and was unpopular with many Democrats, but I think there were several other more major contributing factors to why as Trump won (ex. general displeasure with inflation post-COVID, high emphasis on the asylum crisis/trans issues, plus only having 4 months lead-up time after Biden's withdrawal).
Add to that the fact that there were no Democratic primaries.
Another factor was tech and crypto. The Biden administration was widely seen as hostile to crypto and DeFi, which turned off a lot of younger and online voters and created unexpected opposition to Harris.
There was also a perception of politicization in agencies that are supposed to be neutral. People pointed to things like EV summits excluding Tesla, or regulatory pressure and delays affecting SpaceX launches and Tesla investigations. Whether justified or not, the optics made it look selective and punitive.
Individually these aren't huge voting blocs, but at the margins they likely added to the broader dissatisfaction.
And what also didn't help was the perception that the Harris campaign operated in something of an ideological bubble. For example, reports that staff discouraged her from doing a Joe Rogan interview because they disliked him reinforced the idea of an echo chamber, which ties into your point about trans issues.
Even if what you’re saying is true, this just goes to show how badly we need to rein in the ultra-wealthy by taxing their unrealized gains. Like I’ve pointed out elsewhere in the comments, letting billionaires (some of whom will soon be trillionaires) get away with having tax-free spending power disenfranchises the many people who labor for a living. The very fact you so casually say “their media outlets” just goes to show how their concentrated wealth threatens the public discourse. As a society, we can’t allow people to use their wealth to influence government and civilization as a whole without at the very least being able to tax said wealth. The solution to taxing the rich isn’t to downplay the issue for electoral convenience. It is to educate and build a grassroots movement that can oppose the power of concentrated media ownership. The very points you make kind of undermine any principled opposition to taxing unrealized gains.
You're aiming at two different targets, one being tax policy and the other being media ownership. What I'm saying is, let's fix the latter, then the former.
Otherwise there's no way to put the issue in front of the people for discussion.
> Hopefully the Dutch political scene is a little less volatile than ours was in 2024.
They have 3-4 party coalitions and all of them want markup on your wallet. This is how tax the rich ends up, everyone else gets hit with taxes.
Absolute travesty. Nobody should be forced to pay a made up number, let alone under the duress of having your door kicked in if you refuse.
Many ultra-wealthy individuals borrow against their holdings to avoid having to sell their assets and therefore paying taxes. They shouldn’t be allowed to have their cake and eat it too. Relying on “realization” for taxation stops being reasonable when access to cash is basically the same as income. If anything, not taxing unrealized gains essentially punishes people who labor for income and unfairly favors people who use asset appreciation as a form of income.
My guess is that the very rich can instead figure out a way to avoid it mostly, but I like the idea of taxing ridiculously high wealth, even if it is difficult.
However, a tax an unrealized gains would seem to greatly reduce or maybe kill the chance for the poor or middle class to use investments to save enough to retire early. That seems very unfair. I do not understand why such a tax should apply to anyone not well into the upper middle class range of wealth.
And trying to make clever calculated bets on individual stocks now has risk of having to sell everything and still not having enough to pay the taxes, if they were assessed during a temporary spike in price. Even holding an index fund during a market crash could mean ending up with nothing because of the tax on fictional gains.
Ultra-wealthy individuals aren't holding that much directly. That's what family offices or similar constructs are for.
I work in a family office. The owner is worth around 700 millions. I wouldn't be surprised if he didn't have more than a house and a car to his name, on paper.
The rationale is that you cannot startup with your family office or foundation at the helm of the company because of costs etc.
So if you hit it big you are trapped with the stock in your name and with this unrealized gains system
These are very volatile assets, so maybe it shouldn’t be possible to take credits against them unless one realizes the gains or pays taxes for them.
This is also one of the reasons why financial crisis go out of hand so quickly, because once the value of an asset goes down, these credits become worthless as well, but rich people bought real assets with those credits, so the crisis just keep expanding to other sectors.
And nobody should go hungry, and nobody should lack basic healthcare. But here we are balancing the scales.
We shouldn't be balancing things we want to do for people in need against what kinds of things we will do to peaceful people that we shouldn't do. Nonmaleficence precedes beneficence.
In any case, abundance generally comes from not crossing those lines — from nonmaleficence. The US crosses those lines a plenty, but still less so than the EU, and consider how much higher its average wages are:
EU Europe average ≈ $30,500
United States ≈ $68,000
Have to sell your stock because you can't otherwise pay the taxes? Yeah, well, fuck you because the government is having budget shortfalls, and it's easier for the government to do it that way.
"State Secretary for Taxation Eugène Heijnen acknowledged during parliamentary debate that the caretaker government would have preferred to tax investment returns only when they are actually realized, but said this was not feasible by 2028, as taxing unrealized gains would avoid billions in budget losses and is easier to implement." <emphasis mine>
do you have a link to that quote in the second paragraph?
It’s from TFA, here’s your link: Ctrl-F.
Or maybe this works:
https://www.imidaily.com/europe/dutch-lawmakers-approve-a-36...
I expect this will be challenged and overturned as unconstitutional as the similar effort was in 2021, however it's insane as it stands, especially coming from a caretaker government.
Taxing imaginary gains on anything - land, stocks, crypto, comic books, etc - is illogical class envy.
They're all invested real estate, and want the rest to invest in real estate as well.
You can always sell to pay the taxes.
More liquidity is good, actually.
The first test balloon in one of the smaller EU countries: Take a bed that this will be considered a blueprint and will be rolled out across other EU countries.
The theft will become more and more egregious until the regimes collapse.
Given how volatile crypto is it seems like a bad deal for equity holders.
Me thinks they are factoring in a high % of evasion under 100,000 euros per year gains.
This leaves as potential taxpayers only those who cannot afford or don't want to structure their holdings via offshore entities
> Me thinks they are factoring in a high % of evasion under 100,000 euros per year gains.
Paultry individual investors have it the hardest to evade and optimize the taxes actually. Oftentimes they pay double dividend tax (WHT, only partial write off because of bilateral treaty, local dividend tax) while financial institutions were receiving... double refund of WHT (CumEx scandal).
Evasion is basically just not declaring it. The individual investors are the best equipped to do that.
Europe has a different system , the broker doesn't automatically subtract the tax owed or even send the form to the tax authorities .
Real brokers require TIN of an EU citizen and report the total capital gain over CRS to the country of your tax residence. If they don't do it they are not a broker and what you are buying with them are not shares.
RMDs force me annually to liquidate stocks to pay US Government taxes. I'm not complaining; merely observing feasibility.
I get downvoted to goatse.cx territory every time I point this out, but: Kamala Harris's threat to tax unrealized gains just prior to the election is probably why we have Donald Trump in office today. Even if you support such a tax, it was sheer insanity to propose it in the months leading up to the election. Did she honestly think people like Bezos and Soon-Shiong would allow their media outlets to endorse her after that, or that people like Musk wouldn't react by throwing everything they had at Trump?
Hopefully the Dutch political scene is a little less volatile than ours was in 2024. Otherwise a tax on unrealized gains will be a massive self-own for Dutch progressives, just as it was in the US. Failure to understand and acknowledge the reality of concentrated media ownership will just lead to the same results, again and again. Progressives who want to tax unrealized gains need to first get elected and then float their proposals.
Those of us who are against such taxes can then argue from a position of principled opposition, instead of having to deal with the myriad of other consequences and side effects that happen when far-right demagogues win elections instead.
I realize people want to tax the rich but seems to me that taxing unrealized gains would seriously penalize investment.
That’s a huge blow to the natural compounding that occurs as stocks appreciate over time.
Wouldn’t that kill their stock market? Who would invest with such taxes?
Seems like people would just pour their investment funds into real estate rentals or such where only “realized” income would exist to be taxed… (ignoring appreciation of the property)
Whenever I bring up the idea of taxing the rich via unrealized gains, people oppose it by saying it’ll hurt investment. The reality is that years of huge stock market returns haven’t made life easier for the vast majority of people who actually do the work that makes companies successful. At least in the US, wages haven’t kept up with housing, healthcare, or basic costs, and I’m sure European workers face these kinds of problems too. At some point, it’s fair to ask why protecting unlimited tax-free growth for the top 0.1% should matter more than the financial stability of the workers actually doing the hard work to drive that growth. If the Netherlands finds that people avoid taxes by investing into real estate rentals, then maybe there should be laws covering those loopholes too.
But if the alternative becomes more real estate investment than we already have won't that be even worse?
Investing in the stock market at least in principle is investing in businesses that use that money to increase productivity. We should discourage investment in vehicles that do not optimize for productivity (real estate, bitcoin, metals and similar).
Selling your investment to pay taxes for unrealized gains forces more liquidity and movement in the market and might have a huge impact on preventing bubbles forming.
How does that work when some of the most outstanding ways remaining to make money are from a bubble?
You are somehow romanticizing the hard workers who build the real economy. No one works hard anymore. Within EU it's all about real estate and leveraging it to buy even more real estate, and then a small studio for short term rental on top of it.
You might be right. I’m sure it didn’t help her case.
A crummy idea is a crummy idea, even if you otherwise like the person having it.
> Kamala Harris's threat to tax unrealized gains just prior to the election is probably why we have Donald Trump in office today
It was not a good policy and was unpopular with many Democrats, but I think there were several other more major contributing factors to why as Trump won (ex. general displeasure with inflation post-COVID, high emphasis on the asylum crisis/trans issues, plus only having 4 months lead-up time after Biden's withdrawal).
Add to that the fact that there were no Democratic primaries.
Another factor was tech and crypto. The Biden administration was widely seen as hostile to crypto and DeFi, which turned off a lot of younger and online voters and created unexpected opposition to Harris.
There was also a perception of politicization in agencies that are supposed to be neutral. People pointed to things like EV summits excluding Tesla, or regulatory pressure and delays affecting SpaceX launches and Tesla investigations. Whether justified or not, the optics made it look selective and punitive.
Individually these aren't huge voting blocs, but at the margins they likely added to the broader dissatisfaction.
And what also didn't help was the perception that the Harris campaign operated in something of an ideological bubble. For example, reports that staff discouraged her from doing a Joe Rogan interview because they disliked him reinforced the idea of an echo chamber, which ties into your point about trans issues.
Even if what you’re saying is true, this just goes to show how badly we need to rein in the ultra-wealthy by taxing their unrealized gains. Like I’ve pointed out elsewhere in the comments, letting billionaires (some of whom will soon be trillionaires) get away with having tax-free spending power disenfranchises the many people who labor for a living. The very fact you so casually say “their media outlets” just goes to show how their concentrated wealth threatens the public discourse. As a society, we can’t allow people to use their wealth to influence government and civilization as a whole without at the very least being able to tax said wealth. The solution to taxing the rich isn’t to downplay the issue for electoral convenience. It is to educate and build a grassroots movement that can oppose the power of concentrated media ownership. The very points you make kind of undermine any principled opposition to taxing unrealized gains.
You're aiming at two different targets, one being tax policy and the other being media ownership. What I'm saying is, let's fix the latter, then the former.
Otherwise there's no way to put the issue in front of the people for discussion.
> Hopefully the Dutch political scene is a little less volatile than ours was in 2024.
They have 3-4 party coalitions and all of them want markup on your wallet. This is how tax the rich ends up, everyone else gets hit with taxes.
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