[mrmcd]

Unrealized capital gains aren't income because I can't pay my rent and buy groceries with Amazon stock. Even if I could once I did it would be realized same as if I sold it for cash, and I'd owe tax.

You could argue that capital gains rates are too low, but that's a different argument than saying stock owners are getting "invisible income".

[rileymat2]

I was under the impression that loans can be secured by stock. Then you don't pay the gains but get the money to spend on rent or whatever.

[hsitz]

Well, yes, and a loan can be secured by a house too, using a mortgage. In fact, millions of people do that to buy their houses. Do you consider the loans people get to buy houses "income"? Of course not, because it's not. Loans are not income.

[jgalt212]

You are correct sir. I own $10,00 in stock. per reg T, I can borrow $5,000 against it. Now the stock goes on an Apple/Amazon like tear and it's worth $1,000,000. Now I can borrow up to $500,000 against it--that's a lot of rent groceries.

The above assumes you control the shares and they are pledgeable as collateral. It is not easy, but doable, to borrow against RSU's. i.e. you probably need a high net worth/private banker relationship.

[charlesdm]

Yes. It's even better than actually selling your shares. If using portfolio margin you can even use more leverage, i.e. you can basically defer taxes in many (not all) cases pretty much indefinitely.

[uiri]

It links to another article on the same site that basically explains that US macroeconomic measures of Income and Savings ignore capital gains. By transforming the income from profit and dividends into capital gains, the income becomes invisible to economists, politicians, etc who rely upon those measures.

[toyg]

Surely that's a problem with the measurement...? This could probably be fixed relatively rapidly these days, since all money is electronically tracked somewhere. It would certainly be easier than trying to persuade (or compel) every player to file this or that income in a different way "so that we can run statistics".

[kspaans]

Not to mention that anyone who can save money in a savings account is also perfectly able to buy some shares or funds and get capital gains themselves.