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Treasury Secretary Says Democrats Considering Taxing ‘Unrealized Capital Gains’

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Janet Yellen

On Sunday, Treasury Secretary Janet Yellen told CNN’s Jake Tapper that Democrats are considering imposing a tax on unrealized capital gains.
The suggestion drew criticism for those wondering how Democrats could tax a profit before the profit exists, and questions on if the proposal would include the ability for unrealized loss to also be included.

As Investopedia explains, “An unrealized loss occurs when a stock decreases after an investor buys it, but has yet to sell it. If a large loss remains unrealized, the investor is probably hoping the stock’s fortunes will turn around and the stock’s worth will increase past the price at which it was purchased. If the stock rises above the original purchase price, then the investor would have an unrealized gain for the time they hold onto the stock.”

Yellen’s comments were made in response to a question from Tapper about whether a wealth tax would be a part of how Democrats pay for President Biden’s $3.5 trillion social spending bill.

“Well, I think what’s under consideration is a proposal that Senator Wyden and the Senate Finance Committee have been looking at that would impose a tax on unrealized capital gains, on liquid assets held by extremely wealthy individuals, billionaires,” Yellen said. “I wouldn’t call that a wealth tax. But it would help get at capital gains, which are an extraordinarily large part of the incomes of the wealthiest individuals, and right now escape taxation, until they’re realized, and often they’re unrealized in the death benefit from a so-called step-up of basis.”

“So, it’s not a wealth tax, but a tax on unrealized capital gains of exceptionally wealthy individuals,” she added.

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4 Comments

4 Comments

  1. WILLIAM FLYNN

    October 26, 2021 at 9:13 am

    Yellen has been a CORRUPT POS for DECADES !! This IDIOCY should not be a surprise. The whole Dementia Joe FASCIST REGIME should be run out of DC !

  2. Joseph

    October 26, 2021 at 11:05 am

    If they are allowed to impose a tax on phantom income for the wealthy, they will be able to impose taxes on “unrealized” income for everyone else!

  3. RC

    November 7, 2021 at 6:52 am

    Absolutely correct! But think of the bigger implications, once you implement taxation of unrealized capital gains what will the tax be applied to – stocks, small business assets, goodwill valuations, home values etc. In essence the tax will be a vortex sucking all capital out of all investments and destroying the entire economy. Wake up America – this is called Communism.

  4. BlueBoomerange

    November 7, 2021 at 10:51 am

    If the value of your stocks increase, it’s only ‘paper profit’ just like if they loose value, it’s only a ‘paper loss’. You don’t officially ‘gain’ or suffer a ‘loss’ until you sell. To tax a stock portfolio that’s increasing in value in unconscionable. It’s not a capital gain until you sell the stock.

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Economy

Biden Calls On FTC To Investigate Oil Companies Over Rising Gas Prices

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Gas Prices

President Biden has called on the Federal Trade Commission to investigate oil and gas companies over rising fuel prices, suggesting that the companies may be engaging in illegal conduct that results in the rising prices – despite Biden consistently enacting policies that restrict the domestic production of oil since entering office.

“I am writing to call your attention to mounting evidence of anti-consumer behavior by oil and gas companies,” the letter said. “The bottom line is this: gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining. The Federal Trade Commission has authority to consider whether illegal conduct is costing families at the pump. I believe you should do so immediately.”

The letter added, “prices at the pump have continued to rise, even as refined fuel costs go down and industry profits go up. Usually, prices at the pump correspond to movements in the price of unfinished gasoline, which is the main ingredient in the gas people buy at the gas station. But in the last month, the price of unfinished gasoline is down more than 5 percent while gas prices at the pump are up 3 percent in that same period. This unexplained large gap between the price of unfinished gasoline and the average price at the pump is well above the pre-pandemic average. Meanwhile, the largest oil and gas companies in America are generating significant profits off higher energy prices.”

Gas prices have reached their highest level since 2014, and are currently about 50% higher than they were when Biden entered office.

“U.S. gasoline prices in October averaged $3.38 per gallon while U.S. oil prices averaged $81.48 per barrel, according to the U.S. Energy Information Administration,” the Wall Street Journal reported. “The last time U.S. gas prices reached similar levels in October 2014—$3.25 per gallon—U.S. oil prices were $81.40 per barrel. U.S. oil production sharply increased since last year to about 11.5 million barrels per day, according to the EIA, but is still well below pre-pandemic levels of around 13 million barrels per day.”

The letter comes after the Biden administration confirmed that it is considering shutting down an oil pipeline in Michigan, which would place further pressure on fuel prices to rise.

“Revoking the permits for the [Line 5] pipeline that delivers oil from western Canada across Wisconsin, the Great Lakes and Michigan and into Ontario, would please environmentalists who have urged the White House to block fossil fuel infrastructure, but it would aggravate a rift with Canada and could exacerbate a spike in energy prices that Republicans are already using as a political weapon,” Politico Pro reported. “Killing a pipeline while U.S. gasoline prices are the highest in years could be political poison for Biden, who has seen his approval rating crash in recent months.”

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Economy

Thanksgiving Dinner Will Be 14% More Expensive This Year

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Thanksgiving

As President Biden’s inflation crisis continues to worsen, the average cost of a Thanksgiving dinner will be 14% more this year than last year, according to the Farm Bureau.

The Farm Bureau noted, “The average cost of this year’s classic Thanksgiving feast for 10 is $53.31 or less than $6.00 per person. This is a $6.41 or 14% increase from last year’s average of $46.90. The centerpiece on most Thanksgiving tables – the turkey – costs more than last year, at $23.99 for a 16-pound bird. That’s roughly $1.50 per pound, up 24% from last year.”

Farm Bureau used ‘volunteer shoppers’ to check the prices from Oct. 26 to Nov. 8, about two weeks before most grocery store chains started lowering the price of whole frozen turkeys.

“Several factors contributed to the increase in average cost of this year’s Thanksgiving dinner,” AFBF Senior Economist Veronica Nigh explained. “These include dramatic disruptions to the U.S. economy and supply chains over the last 20 months; inflationary pressure throughout the economy; difficulty in predicting demand during the COVID-19 pandemic and high global demand for food, particularly meat… The trend of consumers cooking and eating at home more often due to the pandemic led to increased supermarket demand and higher retail food prices in 2020 and 2021, compared to pre-pandemic prices in 2019.”

According to the Department of Labor, U.S. inflation has hit its highest annual rate in more than 30 years in October. The consumer price index, a key inflation metric, increased 6.2% from October 2020 to October 2021, the fastest annual rate since 1990. In the month of October alone, inflation surged 0.9% compared to the 0.6% economists expected, according to CNBC.

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