You have capital gains tax on it eventually, much of that capital gains is from inflation. The only way for it not to be a wealth tax is if capital gains is indexed to inflation.
Capital gains tax is just a % of your gains. So assuming the appreciation of your asset is due entirely to inflation, capital gains tax will be strictly less than the depreciation of the same amount of cash.
If it's a wealth tax, it is giving the best deal to the people with the most non-cash assets, i.e. the wealthy.
If we are talking about say a house, i think the poorer person who rents (and has rent increase with inflation) would be much more negatively affected over time, notwithstanding the extra capital gains tax the person who owns the house would have to pay upon sale.
Erm... no. That's how people imagine it's supposed to work, but in reality, the wealthy fund their consumption from loans using their wealth as collateral, enjoying the benefit of their wealth while avoiding capital gains taxes. Warren Buffet has famously criticized this, it's not some unheard of thing. There are many, many loopholes and they are very much there on purpose.
Capital gains tax is one of the more disgusting taxes. Most capital gains are simply due to the devaluation of the unit of account. The banks and government work hand-in-hand. The more money the banks print (as interest-chargeable loans), the more the government makes you pay in capital gains taxes. A win-win situation for them.
One way the wealthy get around this is by taking on debt against their hard assets - generally real estate.
As the price of their assets go up, they take out larger and larger loans, each time paying off the old loan and pocketing the difference tax free. The money is devalued faster than the interest rate, so even after paying interest, they are left with free money (our money), tax-free.
cjbgkagh|1 year ago
ramblenode|1 year ago
If it's a wealth tax, it is giving the best deal to the people with the most non-cash assets, i.e. the wealthy.
bawolff|1 year ago
JohnMakin|1 year ago
Erm... no. That's how people imagine it's supposed to work, but in reality, the wealthy fund their consumption from loans using their wealth as collateral, enjoying the benefit of their wealth while avoiding capital gains taxes. Warren Buffet has famously criticized this, it's not some unheard of thing. There are many, many loopholes and they are very much there on purpose.
npoc|1 year ago
One way the wealthy get around this is by taking on debt against their hard assets - generally real estate. As the price of their assets go up, they take out larger and larger loans, each time paying off the old loan and pocketing the difference tax free. The money is devalued faster than the interest rate, so even after paying interest, they are left with free money (our money), tax-free.
jandrewrogers|1 year ago