One of the proposed taxes making headlines is the unreleased capital gains tax. Here's why this proposal might be one of the worst ideas yet:
This is one of the worst proposals. You hate the tariffs. I hate the unreleased capital gains tax. You're reducing the amount that's being invested long term. You're putting it into short term consumption. The worst part of it is completely unmanageable and it's such a disincentive to do anything.
Unmanageable and Disincentivizing
- Reduces long-term investments.
- Shifts focus to short-term consumption.
- Creates a disincentive to invest or act.
Comparing Incentives
When discussing incentives, it's crucial to compare this proposal with other existing or potential options:
- The amount of tax increase doesn't matter if the overall gain from investments is higher.
- Investing in ultra-profitable opportunities is more beneficial even if taxed heavily.
- Less taxed opportunities may not provide the same return on investment.
Impact on Investment Potential
The essence of this proposal revolves around the impact on investment potential. Consider these factors:
- With increased taxation, there is less capital available for investment.
- Questions arise around where the taxed money is being rerouted.
- This assumes existing amounts available for investment, though taxes reduce available funds.
Concluding, the unreleased capital gains tax could potentially hinder investment growth, induce short-term consumption, and reduce overall available capital for future investments. It's a proposal that warrants careful consideration before implementation.
Full Transcript
This is one of the worst proposals. You hate the tariffs. I hate the unreliced capital gains tax. You're reducing the amount that's being invested long term. You're putting it into short term consumption. The worst part of it is completely unmanageable and it's such a disincentive to do anything. When we talk about incentives, we have to compare these things to other things. It doesn't matter if you triple or quadruple my tax. My overall gains, my index is going to be way higher investing in that ultra profitable opportunity rather than investing in less taxed other things. When we talk about how the tax will increase and it will disincentivize one thing, what we should be talking about, what else is the money going towards? You're presuming that there's just as much money to invest. When in fact, when you're taxing it, there isn't as much money to invest.
