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by thunky 483 days ago
Because you paid taxes on something that's worthless, which is the argument against this kind of tax: the value is too dynamic and hard to determine.

If paid $1000 for the stock, then took a loan and paid interest on it, then paid taxes on the $900 gain, and now the stock is worth $0. Now all I get to take is a loss on the $100. Bad deal.
1 comments
magicalhippo 483 days ago
In that case you took a gamble and you lost. That's how gambling works.

If you don't want to gamble then sell the stocks, that way you are not surprised by later changes.

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thunky 483 days ago
Yeah, I lost $100. That's what I gambled. So why am I paying taxes on $1000 again?
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magicalhippo 483 days ago
No, you also gambled that they'd keep or increase in value, potentially to get even more out of them in the future.

Again, if you didn't want to accept that risk you could have just sold the stocks instead of taking a loan.

This isn't much different from taking a loan against a house, and then due to external circumstances the house drops in value, say a landfill next door. You're not getting back the property tax you paid.

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thunky 483 days ago
> Again, if you didn't want to accept that risk you could have just sold the stocks instead of taking a loan.

I could have reasons for not wanting to sell it. Maybe I don't want to boost up my income for the year and be subject to even more taxes or loss of benefits (i.e. ACA). Or maybe I want to keep the dividend stream.

It any case it's already overcomplicated, and I don't think we need to make it moreso by giving the govt another opportunity to take yet another slice of a transaction they had nothing to do with.

Not to mention, the lender that gave me a loan has to give the govt a slice of their income, which comes from me.

> This isn't much different from taking a loan against a house

The difference is that houses rarely lose 100% of their value. Normally they hold their value or thereabouts.

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