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Old 09-02-2019, 05:52 PM
Wrenching Spanners is offline
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Join Date: Jun 2011
Location: London
Posts: 538
Quote:
Originally Posted by Ludovic View Post
I'm not sure whether to tax unrealized gains, but if so then those effects for fungible equities could be tolerated (except the odd case of where an employee, even a high level one, has options that they are prevented from selling, which would make it not quite right to force them to pay taxes on them prematurely.).
I'm thinking more in terms of new money than old money, but the principle is the same. The government shouldn't be forcing Mark Zuckerberg to sell his Facebook shares until he's ready to. When he's ready to diversify his holdings, he should pay tax on his realised gains. But based on ups and down in the stock market, where he's not receiving any dollars? No.

The same goes for the Waltons, owner of a large portion of Walmart corporation. If their stock is doing nothing from a price perspective, they shouldn't be paying any taxes on that lack of price volatility. But if the price shoots up, the idea that they should pay taxes on a notional profit, without actual receiving any cash from a sale of stock, is simply penalising them for having money in equities, rather than cashing out and spending it.