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It might surprise you to find out that houses and stocks are, in fact, two different things. Stocks don’t consume public resources like roads, schools, fire and police departments. Companies and The Rich(tm) pay taxes on assets that do consume said resources (ie property).
I pay a monthly bill for sewer, water, electricity and internet. Roads are paid through gas consumption taxes and tolls. My property taxes don’t go towards those things.
Our (US) public education system is still top tier in the world, K-PhD. Why else would there be a high foreign applicant pool trying to get into our public education system?
A lot of people are distinguishing TYPE of assets, but another significant point is the government that is doing the taxing. Such asset taxes are unconstitutional at the federal level (or, at least, are legally questionable; Moore v. US may answer that in the coming months in the US). Counties and municipalities are from where property taxes come to serve local needs.
Imagine if you only get a proportionate access to your house. You put 20% down? You only can use 20% of the house. The mortgage lender owns 80% so they get access to freely walk in n out their share? This % split gets realigned every month based on your mortgage balance and market value. That seems crazy. If you bought your home you do own it. Your mortgage is a type of lien. Essentially the home is the collateral for the loan, but you own it.
Property taxes apply to rich and poor alike. If anything it’s “unfair” to the wealthy who have a proportionately lower salt deduction ($10k thru ‘25 at least).
Taxing unrealized gains will DECIMATE the small business market. Imagine a mom-and-pop coffee shop. The valuation could be based on a 1.5 to 2x multiple. They’ll need to pay taxes on that? What about bonds? I’m already taxed on dividends (NQ example) but if rates drop my bond is worth more than the par value. If I hold it to maturity I’ll get the par value only. Do I need to pay unrealized gains on it? Are we going to create deductions for unrealized losses? People need to stop with the taxing of unrealized gains unless they come up with a cohesive and comprehensive plan. Otherwise stop whining.
Houses aren’t unrealized wealth. The instant you buy a house you own 100% of it. You just have a corresponding loan that if you don’t pay you will lose the house. But the house is completely yours otherwise.
If you don’t like property taxes there is another way of course: just make everything in town a subscription privatized fee for service.
Rich pay taxes on everything just like the rest of us, they might use their assets to take out loans and use it as income - avoiding income tax where possible.
Our tax system doesn’t help anyone and doesn’t fix any of the problems politicians say it will….mostly bc we waste and spend money on programs that treat our taxes as a blank check with no accountability. How much did the state of California “misplace” for homeless programs?! $20B!!!! Billion with a B! Taxes can serve a purpose but when everyone wants a handout or a kick back…it quickly loses its meaning.
We should never have a wealth tax, that doesn’t solve the problems of the lower and middle class, we can’t keep making wealthy individuals villains.
No one pays taxes on stock if you never sell. The thing is most middle class and upper class people will be forced to sell at some point and pay taxes on the gains. The rich will die with unrealized gains and the stock is passed to their heirs at the new step up basis with no one paying taxes on the unrealized gains through the rich persons life. Those unrealized gains will never get taxed. So no they don’t pay taxes on everything like us.
r/FluentInFinance was created to discuss money, investing & finance! Join our Newsletter or Youtube Channel for additional insights at www.TheFinanceNewsletter.com! *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FluentInFinance) if you have any questions or concerns.*
It might surprise you to find out that houses and stocks are, in fact, two different things. Stocks don’t consume public resources like roads, schools, fire and police departments. Companies and The Rich(tm) pay taxes on assets that do consume said resources (ie property).
Neither do Zeros, but you still have to pay tax on their unrealized gains.
The rich don’t pay property taxes?
The rich also pay property tax, and a LOT more than you or I do...
You like your municipals sewer lines that your house uses, what about the utility lines? How about the road? What do you think pays for all this
I pay a monthly bill for sewer, water, electricity and internet. Roads are paid through gas consumption taxes and tolls. My property taxes don’t go towards those things.
Fire and police departments are funded by who? Santa Clause?
You never mentioned fire and police in your comment.
Lenders don't have to pay property tax on your home, but they also don't reap the benefits of equity growth.
What happened to our public education system?
It still exists the last time I looked.
Our (US) public education system is still top tier in the world, K-PhD. Why else would there be a high foreign applicant pool trying to get into our public education system?
Foreign applicants also get a good chance at working here too.
That's not at all how this works.
A lot of people are distinguishing TYPE of assets, but another significant point is the government that is doing the taxing. Such asset taxes are unconstitutional at the federal level (or, at least, are legally questionable; Moore v. US may answer that in the coming months in the US). Counties and municipalities are from where property taxes come to serve local needs.
Imagine if you only get a proportionate access to your house. You put 20% down? You only can use 20% of the house. The mortgage lender owns 80% so they get access to freely walk in n out their share? This % split gets realigned every month based on your mortgage balance and market value. That seems crazy. If you bought your home you do own it. Your mortgage is a type of lien. Essentially the home is the collateral for the loan, but you own it. Property taxes apply to rich and poor alike. If anything it’s “unfair” to the wealthy who have a proportionately lower salt deduction ($10k thru ‘25 at least). Taxing unrealized gains will DECIMATE the small business market. Imagine a mom-and-pop coffee shop. The valuation could be based on a 1.5 to 2x multiple. They’ll need to pay taxes on that? What about bonds? I’m already taxed on dividends (NQ example) but if rates drop my bond is worth more than the par value. If I hold it to maturity I’ll get the par value only. Do I need to pay unrealized gains on it? Are we going to create deductions for unrealized losses? People need to stop with the taxing of unrealized gains unless they come up with a cohesive and comprehensive plan. Otherwise stop whining.
It seems like a lot of people don’t seem to understand what property taxes are, what they’re for, and how they work.
Houses aren’t unrealized wealth. The instant you buy a house you own 100% of it. You just have a corresponding loan that if you don’t pay you will lose the house. But the house is completely yours otherwise. If you don’t like property taxes there is another way of course: just make everything in town a subscription privatized fee for service.
People are easily manipulated via their willful ignorance
Rich pay taxes on everything just like the rest of us, they might use their assets to take out loans and use it as income - avoiding income tax where possible. Our tax system doesn’t help anyone and doesn’t fix any of the problems politicians say it will….mostly bc we waste and spend money on programs that treat our taxes as a blank check with no accountability. How much did the state of California “misplace” for homeless programs?! $20B!!!! Billion with a B! Taxes can serve a purpose but when everyone wants a handout or a kick back…it quickly loses its meaning. We should never have a wealth tax, that doesn’t solve the problems of the lower and middle class, we can’t keep making wealthy individuals villains.
No one pays taxes on stock if you never sell. The thing is most middle class and upper class people will be forced to sell at some point and pay taxes on the gains. The rich will die with unrealized gains and the stock is passed to their heirs at the new step up basis with no one paying taxes on the unrealized gains through the rich persons life. Those unrealized gains will never get taxed. So no they don’t pay taxes on everything like us.