"Unrealised gains"

"Musk, Tesla’s largest individual shareholder, is roughly $83 billion richer since Election Day, according to the Bloomberg Billionaires Index."

Every time someone mentions a “wealth tax”, defenders of the wealthy rise up, and in unison, cry “But you can’t tax unrealised gains”

By that, they mean that you can’t tax an asset, only the income once it is pocketed.

To tax it when it’s just sitting there, as a poor lonely “unrealised gain”, is unfair.

But as you can see, talking about “fair” and “billionaire tax policy” in the same sentence is a nonsense. The tax code was written mostly by wealthy lawyer/businessmen/politicians to protect the assets of truly rich. To think otherwise is to defy reality.

As the accountant of a very wealthy doctor/entrepreneur friend in the States told me 20 years ago: ‘Gary, you make too little for me to really help you. Once you make over a million a year, then we can find some highly effective ways to shield your money.’

Instead of working towards that, I took a different path, moving to New Zealand, happily taking a 50% pay cut in return for a 300% more satisfying job.

But back to unrealised gains.

They’re only unrealised when the rich want them to be, in order to avoid paying taxes.

When they’re useful to the rich, then they’re suddenly not “unrealised” anymore.

What this means is that in practice, you can take those unrealised assets, lets say those 7 homes you owned as Chris Luxon in 2023 (before he used the newly changed bright-line law to pocket a cool half-million dollars in profits, tax-free) and use them as collateral for a sweet-as loan at lower-than-market rates. And the richer you are the sweeter it gets.

If you’re a billionaire, you can use your pile of gold to take out loans at interest rates you and I could only dream of. Suddenly your unrealised gains are paying off handsomely for you in cold hard cash. They are the collateral that gets you great loans at rock bottom rates, potentially saving you millions of dollars. Your unrealised gains are making you very real money.

But suddenly, when it comes time to pay taxes on those unrealised gains, they are nowhere to be found. “They’re unrealised” the rich cry. “It wouldn’t be fair to tax them.”

And thus it will forever be: you cannot touch rich people’s money. Indeed, you need to bend your laws and tax policy to ensure their money remains untouchable, free only to grow, but never to be taxed to pay for the necessities that keep a good society healthy and productive.

Let’s get a wealth tax going. We’ve had literally 50 years of corrosive policies in the West, made expressly to benefit the rich. It’s time we focused on the 99%.

#WealthTax