Washington state approves capital gains tax

Re:Washington state approves capital gains tax by grumpitron on Friday April 30, 2021 @05:21PM (#26999506)

It does not turn into a wealth tax. A wealth tax is a tax on the entire value of the property. A capital gains tax is a tax on the gains. The only, extremely narrow situation in which they’re the same for a particular investment is when someone has a $0 cost basis on their investment. Runaway high inflation will have them trend closer to one another, but we don’t have that.

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Re:Washington state approves capital gains tax by bpodgursky on Friday April 30, 2021 @05:49PM (#26999815)

The "runaway high inflation" is exactly what I'm saying is a possibility. But it's not even necessary.

Capital gains is a LOT compared to any proposed wealth tax, _and_ it affects most people (as opposed to the "billionaire tax"). 2x inflation (which is very plausible over a decade) translates into a 10% wealth tax, even at 20% cap gains. 4x inflation is 15%. Those are real numbers!

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Re:Washington state approves capital gains tax by loeg on Friday April 30, 2021 @09:54PM (#27002147)

2x inflation over 10 years would require something like 7.2% annualized inflation. We're nowhere near that and haven't been for decades. Average over the last 20 years is around 3%, and it's been even lower over the past decade.

4x requires historically high inflation over a decade.

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Re:Washington state approves capital gains tax by imtringued on Saturday May 01, 2021 @12:10PM (#27007424)

It's also unlike a wealth tax in the sense that you are not approaching a legislated minimum. If there is 1000x inflation you still only lose the capital gains taxes. If the government introduces a 5% wealth tax you lose everything after 100 years.

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Re:Washington state approves capital gains tax by grumpitron on Friday April 30, 2021 @06:49PM (#27000513)

Those ARE real numbers - though we may disagree on how likely those levels of inflation are. Does higher inflation increase capital gains tax bills? Yes, we'll agree on that. Do capital gains impact more people than any proposed wealth tax I've seen? Also, yes we'll agree there too.

However, one fundamental difference between capital gains taxes and wealth taxes is that capital gains taxes are only imposed on the gains on the disposition of an asset, whereas a wealth tax is applied to an individual's entire net worth, and all proposals I've seen are applied annually. This is relevant to the original comment that said "all property" would be subject to a 20% tax - but my point was that's not the case, regardless of inflation.

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