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Disingenuous article about Supreme Court case on unrealized income

tommyguns2

tommyguns2

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The way this article is written is so deceptive, I wanted to punch my computer screen. The Supreme Court has already ruled on this issue almost 100 years ago that the income tax authorized by the 16th Amendment allows the gov't to tax only realized income.


In this case, a couple had an investment in India that has appreciated in value. They have not sold their shares in the investment, but the IRS is claiming they owe $14K in taxes based on unrealized income. The 9th Circuit, always the wackjobs held that this was OK, and the Supreme Court granted cert.

The author of this article says this would only affect the rich. Sound familiar? And all that casino revenue is going to kids' education! LOL This is clearly a foundational issue for the gov't going after a "wealth tax." That's a tax based on your net worth. Of course, it won't affect you, only Bill Gates and Elon Musk, LOL. Just imagine having to do an accounting each year for your taxes to value all your assets to determine your net worth. All your real estate, businesses, artwork, crypto, boats, etc. Then the gov't taxes you on it, even though you haven't sold any of the assets and generated any profit. How do you generate the cash to pay for income that you haven't realized? Tough shit...

Don't let anyone fool you. Once the IRS has their foot in the door, all assets are on the table. Just imagine your house appreciating $10K in value next year? Well, first you have to pay an appraiser to get your house appraised in a certified manner, that'll cost you $500, and then they tax you X% on the $10K profit that you allegedly made. Do you think the IRS will allow you to account for unrealized losses? Don't count on it, LOL. It's a one-way rachet.

The gov't doesn't have a revenue problem. It has a spending problem. Until we say "no more" they'll never address the root cause.
 
tommyguns2

tommyguns2

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What's frustrating is that the core issue of the case seems to be getting blurred. If the facts are consistent with the slant of the article, then the taxpayer was receiving "profits" from the business and reinvesting them. That's nothing unusual, as profits from the business are "dividend" income, which is taxable. The only time this doesn't happen, that I'm aware of, is if the biz is some type of limited partnership and the dividend income is characterized as a return of equity, which is then not taxed, but it reduces your cost basis.

What is screwy is that the 9th circuit court of appeals is stating that Congress has the authority to tax unrealized income. That is NOT dividend income, so something is screwy with how the facts are being described. When you own a stock, for example, if it doubles in value, from $10/share to $20/share, do you have to pay $10 X #of shares if you haven't sold the stock? Of course not. It's a profit "on paper", but it hasn't been realized, and the Supreme Court already has precedent that the 16th Amendment only authorizes Congress to tax realized income.

It 's funny that the libs are already attacking conservative justices, and Durbin sent a letter to the court demaning that Alito be recused. They don't want a solid 6-3 holding that unrealized income is NOT taxable, as that puts their dream of a wealth tax to bed.

Wealth taxes are the most stupid idea on the planet. Extremely high net worth guys have the most ability to move their money and alter their behavior with no change to their lifestyle or quality of life.

Jeff Bezos, that liberal schmuck, just announced that he's leaving Seattle for Miami. Hmmm, moving from Washington state to Florida. While both states have no state income tax, Washington state just recently passed a 7% state capital gains tax, pretty much directed straight at Bezos and Gates. That means, any Amazon stock or Microsoft stock that they sell, in addition to getting taxed federally at the capital gains rate will also get taxed at 7% by the state gov't. That's hundreds of millions of dollars. So Bezos moves to Miami and gives Washington state the middle finger. Remember, for liberals, getting taxed your "fair share" is for other people. LOL

I don't blame the guy for moving, but I find it funny how liberals think taxes are great, until they get applied to them.
 
JackD

JackD

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I read this article and it pissed me off. They are already changing the tax codes and % for next year again.

Hopefully the high court will side with the people and get the IRS off them. They really need to be abolished.
 
tommyguns2

tommyguns2

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Here's the first place that I found an accurate description of the facts and both sides of the discussion. Can't rely on the media to be informative anymore. Instead of telling you what happened and then let you decide what to think about it, they're constantly trying to tell you what to think.

Good summary here:
The U.S. Supreme Court on Dec. 5 heard oral arguments in Moore v. United States. The narrow question in this case is whether Congress had the constitutional power—on a one-time basis in 2017 as part of a reform to certain foreign tax rules—to require U.S. shareholders in foreign corporations to pay tax on their share of the foreign company’s accumulated and undistributed earnings, without any actual dividend being declared or paid. It is sometimes called the mandatory repatriation tax, or MRT.

A somewhat similar tax was found by the Supreme Court to be unconstitutional in 1920. A pivotal question in front of the Court is whether and to what degree that 1920 case applies today.

Some observers believe that a decision invalidating the MRT—because no income was “realized” by the individual shareholders—could raise questions about many other provisions of the U.S. tax code under which taxpayers pay taxes even though they have not received any cash. (my comment: not sure what other provisions they're talking about here)

On the other side, some are concerned that a decision holding that “realization” is not required would suggest that it is constitutionally permissible to change the treatment of long-term capital gains—requiring taxes to be paid even before a gain is realized. (my comment: and the Marxists' holy grail, a wealth tax).

During the oral arguments, many of the justices were concerned about the reaches of their ruling; that a ruling for the Moores could cause major portions of the tax law to be invalidated. But many were also concerned that the absence of any restriction on the government’s ability to tax could lead to abusive or onerous taxation.

Based on the oral arguments, it appears unlikely that the Supreme Court is poised to issue a decision that will bring about significant changes to the current federal tax rules. However, the Court’s decision could affect the viability of future tax legislation governing both domestic and global capital markets, such as legislation relating to a wealth tax or a tax on unrealized capital gains.

When never-Trumpers tell me they can 't stand the guy, I get it. He's sometimes classless. But he did exactly what he campaigned on. That makes him the most honest President over the last 30 years IMO. And he got three sane people on the Supreme Court that actually follow the Constitution. That alone was worth it.
 
Friggemall

Friggemall

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Being from IL Dick Durbin is an idiot and as left as it gets Illinois Democrat. He should have been tossed in jail years ago in the house post office scandal. How he continues to get elected is beyond belief.
 
JackD

JackD

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Being from IL Dick Durbin is an idiot and as left as it gets Illinois Democrat. He should have been tossed in jail years ago in the house post office scandal. How he continues to get elected is beyond belief.
It’s all states, people do no research, and just pick the name because it’s all they know. Very left City, then far right Rural from
The burbs to the last ear of corn…
 
jackedpuckstar

jackedpuckstar

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A disingenuous USA Today article... color me shocked
 
norm

norm

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Wealth tax is a perfect socialist / communist tool. Just take as much of your wealth as I please...
 
tommyguns2

tommyguns2

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France tried to implement a wealth tax a while ago, and they had a ton of ultra-wealthy pack their bags and move to places like Monaco, just an hour or two away. So stupid. Assets can be easily moved, and the ultra-rich already are traveling all over the world. Raising stakes and planting them somewhere else won't change their life one iota.

That's exactly what will happen if the U.S. ever succeeds in implementing a wealth tax, and I wouldn't blame the rich for leaving. They've already paid their taxes, tons of it, and they don't owe anyone anything.
 
tommyguns2

tommyguns2

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The U.S. simply spends too much money, and there is nothing that I see stopping it. That means there will be increasing pressure on gov't to "find more money." So look around and see where all the money is... high net-worth individuals first (who can easily evade legally) and then 401(k) accounts. Don't be shocked if you start to see articles about all that money that hasn't been taxed, and how upper middle class people (who will be called rich people) have unfairly taken advantage of tax loopholes to avoid paying income tax. Want to get the bottom 50% of voters all angry and envious of those who've diligently saved for their retirements, and now can have the golden years they've always wanted.
 
jipped genes

jipped genes

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The gov't doesn't have a revenue problem. It has a spending problem. Until we say "no more" they'll never address the root cause.
A truer statement has never been made on this or any other forum other than Glyco likes to sniff my used underpants which is equally true.

Seriously, it sickens me as our rights erode the gov wants more.

Agree Tommy, but with a 401K or 457 when you get your money out you pay taxes at the higher value and interest. It is not like rich people using LLCs to shelter $$$ in which many pay no taxes but our congress and senate are all rich so that will not change. Any way you slice it the middle class bear the burden of taxes so the 2 parties can spend it and more.
 
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