Why Unrealized Gains Tax will Kill Our Economy

September 12, 2024

Why Unrealized Gains Tax Will Kill Our Economy

Alright, folks, grab your popcorn because we’re about to dive into one of the most ludicrous ideas that’s ever been pitched in the world of economics—taxing unrealized gains. Yep, you heard that right. Just when you thought you had a handle on your investments, here comes a new tax proposal that’s about as welcome as a porcupine at a balloon party.

Now, before you roll your eyes and think, “Here we go, another boring tax article,” let me assure you—this one’s different. We’re not just talking numbers and spreadsheets here; we’re talking about the very thing that keeps our economy’s engine running. And believe me, taxing unrealized gains is like pouring sugar into that engine. It’s not going to end well.

What the Heck Are Unrealized Gains, Anyway?

Imagine you bought a stock for $100. A week later, that stock is worth $5,000 because the company you invested in just cured cancer or invented a zero-calorie donut (we can dream, right?). That $4,900 increase? That’s your unrealized gain because you haven’t actually sold the stock yet. You’re richer on paper, but your wallet is still as thin as it was last week.

Now, some politicians think it’s a great idea to tax you on that $4,900 gain—even though you haven’t cashed out. It’s like them saying, “Hey, I know you don’t actually have the money, but why not give us a chunk of it anyway?” You’d have to sell your stock just to pay the tax, which defeats the whole purpose of investing in the first place.

Why This Tax Is a One-Way Ticket to Economic Disaster

Let’s take it a step further. You’ve worked hard, saved up, and bought a fixer-upper in a neighborhood you hope will turn around. You put in sweat equity, and a year later, that house is worth $250,000—nice, right? But wait, you haven’t sold it yet, and the market isn’t great, so you’re holding on. But under this proposed tax, you’d owe Uncle Sam a cool $50,000 on that unrealized gain. Where are you supposed to get that cash? Sell the house at a discount just to cover the tax bill? That’s economic suicide.

And it doesn’t stop there. Small businesses, the backbone of our economy, would be hit hardest. Imagine having to pay taxes on your growing business's value before you even see a dime of profit. It’s like trying to build a house of cards in a wind tunnel—impossible.

The Calculated Moves You Need to Make

Now, before you start tossing your financial plans into the shredder, let’s talk strategy. At Calculated Moves, we believe that navigating the unpredictable waters of business shouldn’t leave you seasick. We’re here to help you chart a course that keeps your ship steady, your profits up, and those pesky taxes down.

We get it—accounting is the last thing you want to deal with when you’ve got a business to run. But that’s where we come in. With our expertise, you can focus on what you love while we handle the number-crunching, ensuring you don’t fall into any financial traps. Because let’s face it, you’ve got better things to do than worry about the IRS knocking on your door.

Don’t Let This Bad Idea Set Sail

This unrealized gains tax is a bad idea, plain and simple. It’s like setting sail with a hole in your boat—you’re going to sink. So, let’s use our voting power to patch that hole before it’s too late. And remember, when it comes to steering your business toward success, it’s always best to leave it to the pros.

Stay tuned for more insights on how to protect your business from economic storms. Because when it comes to your financial future, we’re all about keeping you afloat and on course to smoother seas.

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Donna Bordeaux, CPA with Calculated Moves

Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA, as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.