See, I think the key way to win this lawsuit (IANAL) would be to argue that despite the federal government categorizing them as a subset of income taxes, it treats capital gains very different...
The federal government does categorize capital gains as part of income taxes.
See, I think the key way to win this lawsuit (IANAL) would be to argue that despite the federal government categorizing them as a subset of income taxes, it treats capital gains very different from other incomes (as they are not subject to the same tax brackets). So until capital gains are taxed the same way regular income is, it should be thought of as a separate class of property.
Even if the existing law gets scrapped, couldn't a tax of 1% be leveraged against the value of the stock itself in the same way ownership of a home is? So if you would only pay $1 on the capital gains of $100 from say 1 share of Amazon, you'd also pay $34 purely for the ownership of the stock?
Ownership for how long? Stocks change hands a lot more than once a year. I guess the tax could be on ownership at a particular point in time, sort of like a reverse dividend, and prices would go...
Ownership for how long? Stocks change hands a lot more than once a year.
I guess the tax could be on ownership at a particular point in time, sort of like a reverse dividend, and prices would go down as the date approaches and shoot up afterwards. But that would be a good reason to sell to someone out of state temporarily.
I'd say stocks shouldn't change hands frequently, as I think that blurs the lines between "investment" and "casino," but that's a much bigger ideological discussion. Does make me want to have a...
I'd say stocks shouldn't change hands frequently, as I think that blurs the lines between "investment" and "casino," but that's a much bigger ideological discussion. Does make me want to have a law that says if you're gonna invest in a company, you must do so for no less than 5 years.
I hadn't thought about that, but that rapid transfer makes it easier to argue as an excise and not an income. Capital gains/losses are realized when you buy or sell the stock in question. So taxing those is very much an excise the same way that taxing a real estate transaction is.
The great thing about stocks is that it's very easy to detail out precise ownership: You owned X for Y time, and it appreciated/depreciated Z. So the function for a property tax on stock could be 0.01*(X+Z)/Y, where Y is the fractional of the year you owned the stock.
There are good reasons to own stock temporarily. This is what professional market-makers do, providing a service so that investors can buy and sell any time the stock market is open. You might...
There are good reasons to own stock temporarily. This is what professional market-makers do, providing a service so that investors can buy and sell any time the stock market is open. You might compare it to what distributors and retail stores do. They buy goods not for themselves, but to resell.
As Y goes to zero, the tax formula you propose would go to infinity. That would be a problem for them.
I don’t want to overstate the problem. In theory there could be an auction once a day and that would probably be good enough for long-term investors. This isn’t up to Washington state, though.
There is some encouragement of long-term investing already. Federal capital gains tax is lower if you hold stock more than a year, to encourage buy-and-hold investors.
Incidentally, for California state taxes, capital gains are taxed the same as regular income, at a progressive rate. California state revenue varies a lot depending on how investors are doing.
See, I think the key way to win this lawsuit (IANAL) would be to argue that despite the federal government categorizing them as a subset of income taxes, it treats capital gains very different from other incomes (as they are not subject to the same tax brackets). So until capital gains are taxed the same way regular income is, it should be thought of as a separate class of property.
Even if the existing law gets scrapped, couldn't a tax of 1% be leveraged against the value of the stock itself in the same way ownership of a home is? So if you would only pay $1 on the capital gains of $100 from say 1 share of Amazon, you'd also pay $34 purely for the ownership of the stock?
Ownership for how long? Stocks change hands a lot more than once a year.
I guess the tax could be on ownership at a particular point in time, sort of like a reverse dividend, and prices would go down as the date approaches and shoot up afterwards. But that would be a good reason to sell to someone out of state temporarily.
I'd say stocks shouldn't change hands frequently, as I think that blurs the lines between "investment" and "casino," but that's a much bigger ideological discussion. Does make me want to have a law that says if you're gonna invest in a company, you must do so for no less than 5 years.
I hadn't thought about that, but that rapid transfer makes it easier to argue as an excise and not an income. Capital gains/losses are realized when you buy or sell the stock in question. So taxing those is very much an excise the same way that taxing a real estate transaction is.
The great thing about stocks is that it's very easy to detail out precise ownership: You owned X for Y time, and it appreciated/depreciated Z. So the function for a property tax on stock could be 0.01*(X+Z)/Y, where Y is the fractional of the year you owned the stock.
There are good reasons to own stock temporarily. This is what professional market-makers do, providing a service so that investors can buy and sell any time the stock market is open. You might compare it to what distributors and retail stores do. They buy goods not for themselves, but to resell.
As Y goes to zero, the tax formula you propose would go to infinity. That would be a problem for them.
I don’t want to overstate the problem. In theory there could be an auction once a day and that would probably be good enough for long-term investors. This isn’t up to Washington state, though.
There is some encouragement of long-term investing already. Federal capital gains tax is lower if you hold stock more than a year, to encourage buy-and-hold investors.
Incidentally, for California state taxes, capital gains are taxed the same as regular income, at a progressive rate. California state revenue varies a lot depending on how investors are doing.