Loans against unrealized gains should just be taxed directly as income. Not indirectly creating more loopholes. Same way stock buybacks should be taxed at the same rate as short term capital gains.
Yes let's encourage more risky behavior! Absolutely braindead takes.
This sort of proposal would establish a minimum 35 % return in any project. Thus halting investment entirely
Let's put this in perspective. I'm currently going to collaterize a few hundred thousand in equity to take a loan to develop homes in my very housing short city of Portland. My calculated return is 40%. This is an excellent return..
It this were taxed then my initial loan would have to be 40% larger which means all my profit would go into paying that back, which means this project never gets done.
You are already going to get the money once the homes are sold and the capital gains are realized. Why is everyone so greedy? You essentially want to tax twice
The point is you should realize your gains before you reinvest the money. Circular borrowing causes asset bubbles. You could collateralize against OTHER assets, but unrealized gains you should be paying taxes on if you are borrowing against them. It's really just closing a loophole. If the loophole is BIG enough, the you could lower the rate for everyone!
2008 was literally people getting mortgages on unrealized gains, and then getting more loans. Even if the market wouldn't support the sale, they borrow against it and then get another load and causing an asset bubble. Its not ancient history.
My issue is singling out stocks for this. Try telling people they're laying taxes on their heloc and that this is now income so their 300k heloc cash out now puts them in the highest tax bracket! Good luck
Of course people taking out equity cash for investments are actually putting the money for productive use.
How about there's no capital gains tax on equity if it's rolled into another investment of any kind. Eliminate the like kind nonsense. Tax only consumption income.
Im building more homes in a market lacking homes where no outside group wants to invest. If you're building more homes on your property, by all means. No one is though and people are being priced out.
Just to be clear: you think you deserve a tax break for becoming a for-profit landlord? Isn’t the money you’re going to make by renting the homes sufficient incentive? Why should you also get a tax break?
