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Comment by modeless | Hacker News Reader

On the contrary, taxation based on wealth would be much fairer than taxation based on income. Unfortunately a wealth tax is pretty much impossible to implement. The closest thing we have is property taxes.

> You hold $100. I hold $1. We live the same life, live the same services, make the same income, and you pay 100x the taxes, if you base it on wealth. Does this really feel fair?

Yes, that is fair! How about this scenario instead: I hold $100,000, but suddenly make $300,000 this year because I sold my startup. Trump holds $1,000,000,000, spends $1,000,000, and loses money on a stupid investment so his net income is negative. I pay $120,000 tax, over a quarter of my net worth, while he pays nothing. Is that fair?

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You think it's fair that the government should punish the frugal for not spending every dime they make?

If you and I earn the same but I spend all of my money on alcohol and pot, while you set aside to pay for your kids' college, how is it fair that you pay more tax?

There is an argument wherein you could say that those who merely sit on their wealth are causing economic stagnation. Taxing wealth becomes an incentive for the wealthy to have their money make more wealth, instead of just sitting on a mountain of gold coins and interests rates could again rise.

You could make that argument and I might even listen. It's in no sense fair even if it makes economic sense though.

Yes, your Trump scenario is fair, because he already paid taxes on that $1B that he holds, but you have not paid taxes on that $300k yet.

You should not penalize people for being frugal and saving by taxing accumulated wealth. There's already a strong incentive to pump money back into the economy via investment - interest/yield, to counteract the constant erosion caused by inflation.

Your retire with 100K, that year you lose 20K in the stock market, you pay no taxes. Next year you make 20K in the stock market. Is it fair for that entire 20K to be taxed?

No, and because of that you don't pay next year since you are allowed to carry loss forward.

Only $3000 per year can be carried forward.

This is not true.

Yes, it is true.

> If your capital losses exceed your capital gains, the amount of the excess loss that you can claim on line 13 of Form 1040 to lower your income is the lesser of $3,000, ($1,500 if you are married filing separately) or your total net loss shown on line 16 of the Form 1040, Schedule D (PDF), Capital Gains and Losses. If your net capital loss is more than this limit, you can carry the loss forward to later years.

https://www.irs.gov/taxtopics/tc409.html

The losses that people like Donald Trump can carry forward are not capital losses, which is what we are talking about in this thread, and which apply to the situation pcardh0 described in his comment. The losses Trump took are net operating losses, which he was able to take advantage of because he is in the real estate business.

If your net capital loss is more than this limit, you can carry the loss forward to later years. You may use the Capital Loss Carryover Worksheet found in Publication 550, Investment Income and Expenses, or in the Form 1040, Schedule D Instructions (PDF), to figure the amount you can carry forward.

The 3000 is the deductible limit per year based on a loss, this isn't the limit to carry over.

https://www.irs.gov/publications/p536/ar02.html https://www.irs.gov/publications/p550/ch01.html#en_US_2015_p...

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