The case before the Supreme Court, Moore v. US, Could allow the government to tax you on income gains you’ve never received and may never receive.
The Wall Street Journal reports: If the Supreme Court rules for the government in Moore v. U.S., all unrealized gains will be taxable under existing law.
It has long been recognized that when people invest, it’s for the long term because of the ups and downs. They didn’t expect you to pay the government for that investment. This administration expects you to pay them off yearly even if you don’t cash in those stocks or sell that house.
During Tuesday’s oral arguments, justices focused on the question of whether the 16th Amendment authorizes income taxes on individuals for unrealized gains – gains they didn’t collect or sell and don’t have in hand.
It has always been understood that income taxes only apply to realized gains. In other words, gains that are real and that the taxpayer has received or has control over.
The government found a handful of provisions, out of 10,000 in the tax code that favor their argument.
Solicitor General Elizabeth Prelogar told the justices that the “ordinary conception of income” means any “economic gain between two points in time.” She told them “to not rely on concerns about far-fetched hypotheticals” as to what sort of taxes this position might justify, like “a tax on appreciation.”
Being concerned about limits to the government is not hypothetical!
If the court decides that the realization of income is unnecessary under the 16th Amendment, the tax code can tax all unrealized gains.
The tax code allows for taxing individuals on taxable income, which is based on the taxpayer’s gross income, which the code has long defined to mean “all income from whatever source derived.” No one has interpreted it to mean that they can tax imaginary income based on what people say it’s worth at that moment in time.
For example, they could tax a home’s appreciation yearly as it increases in value. It could crash and be worth nothing by the time you sell.
It’s a socialist dream. The progressive tax system is already socialist but apparently not socialist enough to suit this administration. This is where we are headed under this Democrat administration – taxing gains you don’t have.
These wealth taxes start out with the wealthy, but they always end up with the middle class. As they run out of money, they have to hit up more and more people.