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mostlysignssomeportents · 11 months

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Washington State's capital gains tax proves we can have nice things

Today (June 3) at 1:30PM, I’m in Edinburgh for the Cymera Festival on a panel with Nina Allen and Ian McDonald.

Monday (June 5) at 7:15PM, I’m in London at the British Library with my novel Red Team Blues, hosted by Baroness Martha Lane Fox.

Washington State enacted a 7% capital gains tax levied on annual profits in excess of $250,000, and made a fortune, $600m more than projected in the first year, despite a 25% drop in the stock market and blistering interest rate hikes:

https://www.theurbanist.org/2023/06/01/lessons-from-washington-states-new-capital-gains-tax/

Capital gains taxes are levied on “passive income” — money you get for owning stuff. The capital gains rate is much lower than the income tax rate — the rate you pay for doing stuff. This is naked class warfare: it punishes the people who make things and do things, and rewards the people who own the means of production.

The thing is, a factory or a store can still operate if the owner goes missing — but without workers, it shuts down immediately. Everything you depend on — the clothes on your back, the food in your fridge, the car you drive and the coffee you drink — exists because someone did something to produce it. Those producers are punished by our tax system, while the people who derive a “passive income” from their labor are given preferential treatment.

The Washington State tax is levied exclusively on annual gains in excess of a quarter million dollars — meaning this tax affects an infinitesimal minority of Washingtonians, who are vastly better off than the people whose work they profit from. Most working Americans own little or no stock, and the vast majority of those who do own that stock in a retirement fund that is sheltered from these taxes.

(Sidebar here to say that market-based pensions are a scam, a way to force workers to gamble in a rigged casino for the chance to enjoy a dignified retirement; the defined benefits pension, combined with adequate Social Security, is the only way to ensure secure retirement for all of us)

https://pluralistic.net/2020/07/25/derechos-humanos/#are-there-no-poorhouses

Washington’s tax was anticipated to bring in $248m. Instead, it’s projected to bring in $849m in the first year. Those funds will go to public school operations and construction and infrastructure spending:

https://www.seattletimes.com/seattle-news/politics/was-new-capital-gains-tax-brings-in-849-million-so-far-much-more-than-expected/

That is to say, the money will go to ensuring that Washingtonians are educated and will have the amenities they need to turn that education into productive work.

Washington State is noteworthy for not having any state personal or corporate income tax, making it a haven for low-tax brain-worm victims who would rather have a dead gopher running their states than pay an extra nickel in taxes. But places that don’t have taxes can’t fund services, which leads to grotesque, rapid deterioration.

Washington State plutes moved because they relished living in well-kept, cosmopolitan places with efficient transportation, an educated workforce, good restaurants and culture — none of which they would have to pay for. They forgot Karl Marx’s famous saying: “There’s no such thing as a free lunch.”

The idea that Washington could make up for the shortfalls that come from taxing its wealthiest residents by levying regressive sales taxes and other measures is mathematically illiterate wishful thinking. When the one percent owns nearly everything, you can tax the shit out of the other 99% and still not make up the shortfall.

Meanwhile: homelessness, crumbling roads, and crisis after crisis. Political deterioration. Cute shopping neighborhoods turn into dollar store hellscapes because no one can afford to shop for nice things because all their income is going to plug the gaps in health, education, transport and other services that the low-tax state can’t afford.

Washington State’s soak-the-rich tax is ironic, given the propensity of California’s plutes to threaten to leave for Washington if California finally passes its own extreme wealth tax.

There’s a reason all these wealthy people want to live in California, Washington, New York and other states where there’s broad public support for taxing the American aristocracy: states with rock-bottom taxes are failed states. All but two of America’s “red states” are dependent on transfers from the federal government to stay in operation. The two exceptions are Texas, whose “free market” grid is one nanometer away from total collapse, and Florida, which is about to slip beneath the rising seas it denies.

Rich people claim they’d be happy to live in low-tax states, and even tout the benefits of a desperate workforce that will turn up to serve drinks at their country clubs even as a pandemic kills them at record rates. But when the chips are down, they don’t want to depend on a private generator to keep the lights on. They don’t want to have to repeatedly replace their luxury cars’ suspension after it’s wrecked by gaping potholes. They don’t want to have to charter a jet to fly their kids out of state to get an abortion.

This is true globally, too. As Thomas Piketty pointed out in Capital in the 21st Century, if the EU and OECD created a wealth tax, the rich could withdraw to Dubai, the Caymans and Rwanda, but they’d eventually get sick of shopping for the same luxury goods in the same malls guarded by the same mercenaries and want to go somewhere, you know, fun:

https://memex.craphound.com/2014/06/24/thomas-pikettys-capital-in-the-21st-century/

We’re told that Americans would never stand for taxing the ultra-rich because they see themselves as “temporarily embarrassed millionaires.” It’s just not true: soak-the-rich policies are wildly popular:

https://balanceourtaxcode.com/wp-content/uploads/2023/02/WA-State-Wealth-Tax-Poll-Results-3.pdf

The Washington tax windfall is fascinating in part because it reveals just how rich the ultra-rich actually are. Warren Buffett says that “when the tide goes out, you learn who’s been swimming naked.” But Washington’s new tax is a tide that reveals who’s been swimming with a gold bar stuck up their ass.

It’s not surprising, then, that Washingtonians are so happy to tax their one percenters. After all, this is the state that gave us modern robber barons like Bill Gates and Jeff Bezos. And then there’s clowns like Steve Ballmer, star of Propublica’s IRS Files, the man whose creative accounting let him claim $700m in paper losses on his basketball team, allowing him to pay a mere 12% tax on $656m in income, while the workers who made his fortune on the court paid 30–40% on their earnings.

https://pluralistic.net/2021/07/08/tuyul-apps/#economic-substance-doctrine Ballmer’s also a master of “tax loss harvesting,” who has created paper losses of over $100m, letting him evade $138m in federal taxes:

https://pluralistic.net/2023/04/24/tax-loss-harvesting/#mego

These guys aren’t rich because they work harder than the rest of us. They’re rich because they profit from our work — and then, to add insult to injury, pay little or no taxes on those profits.

Washington’s lowest income earners pay six times the rate of tax as the state’s richest people. When the wealthy squeal that these taxes are class warfare, they’re right — it is class war, and they started it.

Catch me on tour with Red Team Blues in Edinburgh, London, and Berlin!

If you’d like an essay-formatted version of this post to read or share, here’s a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/06/03/when-the-tide-goes-out/#passive-income

[Image ID: The Washington State flag; the circular device featuring George Washington has been altered so that it is now the head of a naked man clothed in a barrel with two wide leather shoulder straps.]

#pluralistic #steve ballmer #irs files #washington state #soak the rich #capital gains #taxes class war #euthanasia of the rentier

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godwhore · 3 months

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The IRS is piloting this new tool where you can file your taxes for free. If you’re in the following states:

Arizona

California

Florida

Massachusetts

Nevada

New Hampshire

New York

South Dakota

Tennessee

Texas

Washington state

Wyoming

You may be eligible. Let’s help them roll this out so we don’t need to rely on third party companies who just want to grab our money for something that should be free.

#IRS #taxes #direct file #tax season #finance #news

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bedupolker · 1 year

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#im going to get audited by the irs for posting this #also i wish turbotax would stop emailing me i havent filed with them in like 4 years

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bitchesgetriches · 2 months

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Just finished filing my taxes with one of the IRS's free tax filing partners, how was that easier than using HR Block? I knocked it out in like 30 minutes today compared to like a whole morning with HR Block in past years

The best kept secret in government is how easier taxation COULD be... but isn't. H&R Block has a vested interest in convincing you it's super complex and time consuming so you'll keep paying for their services. Glad you took their bullshit and shoved it straight down their throats!

We're working on updating this, but most of the numbers haven't changed since last year:

How to File Your Taxes FOR FREE in 2022: Simple Instructions for the Stressed-out Taxpayer

Did we just help you out? Tip us!

#taxes #filing taxes #tax season #personal finance #adulting #IRS

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anastasiaoftheironwood · 1 month

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IRS Free File Program

US taxpayers whose adjusted gross income (AGI) is less than $79,000 for 2023 can use the IRS Free File Program to file their taxes: https://www.irs.gov/irs-free-file-do-your-taxes-for-free

It's offered through a number of partners, but you have to start on the IRS Free File site to have the fee waived.

If you made more than the limit, you can still use the Free File site to get fillable forms if you want to file a paper return, or have them for calculation purposes.

You can also use the site to file an extension for free, regardless of your income.

#US income taxes #IRS Free File

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nerdpoe · 2 months

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i hate taxes

#i fucking hate filing them to be more specific #it's not complicated i'm just terrified of the irs

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nando161mando · 9 days

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$150,000,000,000

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transsurlee · 13 days

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happy "wait. my taxes" mega-invasion to all who celebrate

#vveh!#toontown #toontag #toonblr #toontown rewritten #remember if you make $79k or less you can file for free using the irs's guided software

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altschmerzes · 5 months

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want to share a clip from an original wip i'm working on that has the placeholder title 'dresden files but good' which is like what if the dresden files was about a butch woman who lived in toronto and the narrative was also less horny (like. horny in a Bad Way. incapable of being normal about young women horny). this is a bit i wrote mainly to establish a Vibe for the protagonist and her nemesis who are like two steps down their four-hundred step 'enemies to friends' journey and i mean enemies. they hate each other right now.

Because there was no god and life is an endless prison designed to torment Scottie specifically and directly, the person standing on the other side of the door isn't the CRA, a vampire, or a gun pointed directly in her face. "Good morning, Cameron." The greeting is infuriatingly toneless and neutral. Remember: If you get arrested, Ghost is going to have to bail you out, and she told you after last time that if you make her talk to cops again, she's going to reset the WiFi password every day until you die. "Hellspawn!" Scottie says brightly, smiling with too much teeth. "What brings you to the office? I assume it must be big, since it got you out of Tartarus before noon." Helen Hallow doesn't rise to the bait, which is disappointing. She never does. Even so, Scottie can dream.

#'cra' is canadian irs #for my american friends out there #gav gab #writing liveblog #original: dresden files but good

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bonesandpoemsandflowers · 12 days

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i can do this i can do this i can do this (file my taxes a day late) i can do this i can do this if i consume enough coffee i can do this i can do this i can

#yes i've had my rx stimulants too today! it is just.#i've never filed on time in my life #i was SO CLOSE this year #idk i know i've been held at gun point and knife point in my life but those are intense and one way or another v temporary problems #tax forms????????? formless boundless anticipatory dread forever #one year i filed so late that e-filing was CLOSED #I had to PRINT OUT MY FORMS and MAIL THEM to the IRS #do not reccomend #sometimes i truly understand my father #mister yeah I want hazard pay sure send me to negotiate with terrorists idfc yolo fuck it we ball. just get me a really good secretary #mister I have highly personal beef with several legitimate insurgency leaders and have had literal bounties on my head #mister “sweetheart i mailed your birthday present to your address from five years ago can you handle it”#like. i get it. i get it! I would also rather have heavy problems limited in time #paperwork that can get you audited is way scarier #paperwork where the punishment for getting it wrong is like. a lot more paperwork #okay! i have blogged about my personal failings.#time to actually do something useful #about me

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emsuemsu · 4 months

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@hprecfest day 27: muggle au

Muggle au’s are the bane of my existence. I have such a deep love-hate relationship to them and I don't even know why. Every time I say I don't fuck with muggle au's I go and read like five of them back to back. I am Icarus and muggle au's are my sun 🥹

these violent delights (have violent ends) by @imdamagecontrol 🩵 95,138 words, regulus/james, sirius/remus

The RMS Titanic is the Ship of Dreams—considered unsinkable and insurmountable in her luxury, she is the largest ocean liner in the world. Her maiden voyage from Southampton to New York begins 10 April 1912 with more than 2,000 souls on board. Regulus and Sirius Black are English-French royalty and First Class passengers. It's a luxury most can only dream of. But for both brothers, the Titanic is a nightmare bringing them closer to futures they do not want. James Potter and Remus Lupin aren't supposed to be on the Titanic. They get lucky winning Third Class tickets in a poker game just moments before she sets sail. For them it's a fresh start, a sure shot to new lives and freedom across the sea. It's purely by accident that their paths cross; First and Third Class passengers don't often end up in the same spaces. Yet this time they do, and what begins is a tumultuous and harrowing love story marked by a tragedy none of them will ever forget.

Ma’am 😀 sir 😀 your honor 😀 I'm devastated. In the best way possible, again. It's everything you can assume from a Titanic AU. Pain and heartbreak, but delivered in such a beautiful, poetic at times way. In love with this one, I re-read it before writing this and it hit even more the second time reading it. I don't think I've yet read a happy jegulus fic, I am convinced there is no such thing as happiness with these two at this point in my life.

to be where I'm going (in the sunshine of your love) by theweightofmywords 🩵 19,080 words, draco/harry

"He imagined Draco’s smile, all gums and slightly crooked teeth, his hair slicked back with Pacific water, and he knew: He’d travel as long as he’d need to if it meant he’d see that face. If it meant that Draco would hear the message he’d been carrying for so long. Maybe he didn’t have to travel the road alone anymore." Draco and Harry go on a road trip together. It's about the journey, not the destination.

There's something about american road trips that make me WEAK. I dream of going back to visit the places I didn't have the chance to visit while I lived there, but I'm so scared they'd yeet my ass back to Europe at the border because of my unpaid taxes. Idk how the american government works, do they keep records of that kind of stuff?? Whatever. This fic is a vibe with all capitals. So sweet, so soft, so angsty, a perfect mix of everything I need in life. There's the euphoric getting together while on the road part, there's the unavoidable coming back to home-crash (speaking from experience, that shit hurts) and there's the happy ending these stupid boys deserve, every goddamn time, in every universe, muggle or magic. Lovely.

#hprecfest2023 #harry potter fic recs #i never even filed my taxes #so maybe im safe from the irs #american tax system is so fucking weird #my rec

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mostlysignssomeportents · 1 year

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How Goldman Sachs's "tax-loss harvesting" lets the ultra-rich rake in billions tax-free

Tomorrow (Apr 25) I’ll be in San Diego for the launch of my new novel, Red Team Blues, at 7PM at Mysterious Galaxy Books, hosted by Sarah Gailey. Please come and say hi!

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With the IRS Files, Propublica ripped away the veil of performative complexity disguising the scams that the ultra-rich use to amass billions and billions (and billions and billions) of dollars, paying next to no tax, or even no tax at all. Each scam is its own little shell game, a set of semantic and accounting tricks used to gussy up otherwise banal rip-offs.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/04/24/tax-loss-harvesting/#mego

The finance sector has a cute name for this kind of complexity: MEGO, which stands for "my eyes glaze over." If you're trying to rip off a mark, you just pad out the prospectus, make it so thick they decide there must be something good in there, the same way that any pile of shit that's sufficiently large must have a pony under it...somewhere.

Propublica's writers haven't merely confirmed just how little America's oligarchs pay in tax - they've also de-MEGO-ized each of these scams, like the way that Peter Thiel used the Roth IRA - a tax-shelter for middle-class earners to help save a few thousand dollars for retirement - to make $5 billion without paying one cent in tax:

https://pluralistic.net/2021/06/26/wax-rothful/#thiels-gambit

One of my favorite IRS Files reports described how Steve Ballmer - the billionaire ex-CEO of Microsoft - laundered vast fortunes into a state of tax-free grace by creating hundreds of millions in "losses" from his basketball team, the LA Clippers. Ballmer paid 12% tax on the $656 million he took out of the Clippers - while the players whose labor generated that fortune paid 30-40% on their earnings:

https://pluralistic.net/2021/07/08/tuyul-apps/#economic-substance-doctrine

That was Propublica's first Ballmer story, back in the summer of 2021. But they ran a followup last February that I missed (it came out while I was on a book tour in Australia), and it's wild: a tale of "loss harvesting," a form of fuckery involving Goldman Sachs that's depraved even by their own standards:

https://www.propublica.org/article/irs-files-taxes-wash-sales-goldman-sachs

Loss farming is a scam that was invented in the 1920s, whereupon it was promptly banned by Congress. But Goldman and other plutocrat Renfields have come up with tiny modern variations on this century-old con that the IRS is either unable or unwilling to address.

Here's how it works. Say you've got a stock portfolio where some of the stocks have gone up and others have gone down. You want to sell the high stocks and hang onto the low ones until they bounce back. But if you sell those stocks that have gone up, you have to "realize" the profit from them and pay 20% capital gains tax on them (capital gains tax is the tax you pay on money you get from owning things; it's much lower than income tax - the tax you pay for doing things).

But you pay tax on your net capital gains - the profits you've made minus the losses you've suffered. What if you sold those loser stocks at the same time? If you made a million on the good stocks and lost a million on the bad ones, your net income is zero - and so is your tax bill.

The problem is that selling stocks when they've gone down is a surefire way to go broke. Every investing book starts with this advice: you will be tempted to hold onto your stocks that are going up, because they might continue to go up. You'll be tempted to sell your stocks that are going down, because they may continue to go down. But if you do that, you'll only sell the stocks that have lost money, and never sell the stocks that have made money, and so you will lose everything.

Back when the pandemic started, your shares in movie theater chains were in the toilet, while your stock in tech companies shot through the roof. If you sold the tech stocks then and held onto your movie stocks and sold them now, you'd have cleaned up - today, tech stocks are down and movie theater stocks are up. But if you sold the cinema shares when they bottomed out, and held onto your tech stocks when they were peaking, you'd be busted today.

So selling your loser stocks to offset the gains from your winners is a bad idea. That's where loss-farming comes in: what if you sold your tech stocks at their peak, and sold your bottomed-out cinema stocks at the same time, but then bought the cinema stocks again, right away? That way you'd have the "loss" from selling the cinema stocks, but you'd still have the stocks.

That's called "wash trading," and Congress promptly banned it. If you've heard of wash-trading, it's probably something you picked up during the NFT bubble, which was a cesspit of illegal wash-trading. Remember all those eye-popping NFT sales? It was just grifters with multiple wallets, buying NFTs from themselves, making it seem like there was this huge, white-hot market for monkey JPEGs. Wash-trading.

Turns out that crypto really did democratize finance...fraud.

Wash-trading has been illegal for a century, but brokerages have invented modern variations on the theme that are legal-ish, and the most lucrative versions of these scams are only available to billionaires, through companies like Goldman Sachs.

There are a bunch of these variations, but they all boil down to this: there are lots of ways to sell an asset and buy it again, while making it look like you bought a different asset. Like, say you're invested in Chinese tech companies through an exchange-traded fund (ETF) that bundles together "all the Top Chinese tech stocks."

Maybe you bought this fund through Vanguard, the giant brokerage. Now, say Chinese stocks are way down, because the Chinese government is doing these waves of lockdowns on the factory cities. If you could sell those Chinese stocks now, you'd get a massive loss, enough to wipe out all the profits from all your good stocks.

But of course, China's going to figure out the lockdown situation eventually, so you don't want to actually get rid of those stocks right now, especially since they're worth so much less than you paid for them. So right after you sell your Vanguard Chinese tech ETF shares, you buy the same amount of Schwab's Chinese tech-stock ETF.

An ETF of "leading Chinese tech companies" is going to have basically the same companies' stock in it, no matter whether it's sold by Vanguard, State Street or Schwab. But as far as the IRS is concerned, this isn't a wash-trade, because you sold a thing called "Vanguard ETF" and bought a thing called "Schwab ETF" and these are different things (even if the main difference is the name on the wrapper, and not what's inside).

There's other ways to do this. For example, lots of companies have different "classes" of stock. Under Armour sells both Class A (voting) and Class C (nonvoting) stocks. Though voting stock is worth a little more than nonvoting stock, they both rise and fall together - if the Class A shares are up 10%, so are the Class C shares. So you can dump your Under Armour Class A's, buy Under Armour Class C's and own essentially the same amount of Under Armour stock - but as far as the IRS is concerned, you just sold your interest in one company and bought an interest in a different company, and you can take a big loss and write down your profits from other stock trades.

The IRS does prohibit wash-trading, but only in the narrowest sense. Brokerages are obliged to report trades in which a customer buys and sells exactly the same security, with the same unique ID (the CUSIP number), within 60 days. Beyond that, IRS guidance is extraordinarily wishy-washy, calling on filers to "consider all the facts and circumstances" of their transactions. Sure, that'll work.

Propublica found zero instances of the IRS targeting any of these trades, ever, for enforcement. That's especially true of the most egregious version of loss-harvesting, a special version that only the ultra-rich can take advantage of, called "direct indexing." You might know about "index funds," where a brokerage sells a single fund that tracks a broad index of stocks - for example, you can buy an S&P 500 index that goes up and down with the total value of the top 500 stocks in America.

Direct indexing is something that giant banks like Goldman Sachs offer to their very richest clients. The brokerage buys a mix of stocks that are likely to track the whole index, and puts those shares directly into the client's account. Rather than owning shares in a fund that owns the stocks, you own the stocks directly. That means that when you want to harvest some losses, you can sell just a few of the stocks in the index, rather than your shares in the whole fund.

Here's how that works. In 2017, the US index was up 20%; global indexes were up even more. Steve Ballmer made a bundle. But Goldman Sachs, acting on Ballmer's behalf, sold s few of the stocks in the portfolio and harvested a $100,000,000 loss, that Ballmer could use to trick the IRS into treating his massive profits as though he'd made very little taxable income.

Goldman uses a whole range of tricks to keep billionaires like Ballmer in a lower tax-bracket than the janitors who clean the floors after his team's games. They not only buy and sell different classes of stock in companies like Discovery and Fox; they also buy and sell the same company's stock in different countries. For example, they sold Ballmer's shares in Shell in one country, and then immediately bought the same amount of shares in another country. The IRS doesn't treat this as a wash-trade, despite the fact that the shares have the same value, and, indeed, companies like Shell routinely merge their overseas and domestic shares with no change in valuation.

Thanks to Goldman's ruses - and the IRS's willingness to accept them - Ballmer's wealth has swollen to grotesque proportions. He generated $579 million in losses from 2014-18, and as a result, got to keep at least $138m that he'd have otherwise had to pay to the IRS.

Goldman's not the only one in on this game: Iconiq Captial - a firm that also offers marriage partner scouting for its richest clients - has $13.2 billion under management on behalf of just 337 people. Among those high-rollers: Mark Zuckerberg, whose $88m in gains from Iconiq investments were offset by $34m in imaginary losses that the company manufactured with wash-trades.

In theory, the simplest form of wash-trading - selling your Vanguard China fund and buying a Schwab China fund - is available to any investor. Leaving aside the fact that the top 1% of Americans own most of the stock, this is still a deceptive proposition. This kind of wash-trading only benefits investors who hold their shares outside of a sheltered retirement account, which is a vanishing minority indeed.

Instead, the primary beneficiaries of this activity are the usual suspects: convicted monopolists like Ballmer, or useless scions of wealthy families, like the kids of Walmart founder Sam Walton, who emerged into this world through very lucky orifices and are thus effectively exempt from the need to work or pay tax for life.

Jim Walton is Sam Walton's youngest orifice-lottery-winner. Young Jim saw a $10 billion increase in his wealth from 2014-18, making him the tenth richest person in America. Thanks to wash-trading, he declared only $111 million of that $10 billion on his taxes, and paid $0.00 in tax on that $10 billion gains.

One way that the rich are especially well-situated to exploit loss-harvesting is in converting short-term gains - which are taxed at 40% - into long-term gains, which are taxed at 20%. For people who make a lot of money buying and selling shares as pure speculation, flipping them in less than a year, wash-trading can create the appearance of long-term holdings. Analyzing their trove of leaked IRS files, Propublica showed that Americans who report over $10 million in income almost never report short-term gains. Instead, two-thirds of the richest Americans report short-term losses.

One fascinating wrinkle is that rich people may not even know this is going on. Whatsapp co-founder Brian Acton, managed to "lose" $2.9 million ��when he sold $17 million in shares - the same day he bought $17 million in shares in nearly the same companies from another brokerage. Then, a few months later, he reversed those transactions, selling his new fund and buying the old one and harvesting another $600,000 in losses.

When Propublica asked Acton about this, he told them he was "not really aware of any events like that...Broadly my wealth is managed by a wealth management firm and they manage all the day to day transactions."

This is completely believable and consistent with the extraordinarily frank account of how elite money-management works that Abigail Disney described in 2021, where the ultra-rich are insulated from the scams, tricks and wheezes that lawyers and accountants dream up to keep their fortunes steadily mounting with no action needed on their part:

https://pluralistic.net/2021/06/19/dynastic-wealth/#caste

Could the IRS block this kind of wash-trading? Yes, but they'd need action from Congress. The most effective way to do this would be to force shareholders to "mark to market" the value of their holdings, taxing them each year on the fluctuations in their portfolio.

Propublica notes that this is incredibly unlikely to happen, though. As an alternative, Congress could change the rule that blocks investors from claiming losses when they buy and sell "substantially identical" shares with a rule that applies to "substantially similar" stocks. This proposal comes from Columbia Law's David Schizer, who says the law "ought to be updated to reflect how people invest today instead of how they invested 100 years ago."

But for any of that to have an effect, the IRS would have to change its auditing and enforcement practices, which currently see low-income earners (who can't afford fancy tax-lawyers who'll tie up the IRS for months or years) being disproportionately targeted, while America's super-rich, ultra-rich, and stupid-rich are allowed to submit the most hilariously, obviously fictional returns and get away with it.

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Catch me on tour with Red Team Blues in San Diego, Burbank, Mountain View, Berkeley, San Francisco, Portland, Vancouver, Calgary, Toronto, DC, Gaithersburg, Oxford, Hay, Manchester, Nottingham, London, and Berlin!

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[Image ID: A dilapidated shack. A sign reading 'Internal Revenue Service Building' stands next to it. From its eaves depends another sign, reading 'Internal Revenue Service' and bearing the IRS logo. From the window of the shack beams the grinning face of billionaire Steve Ballmer. Behind the shack is a DC avenue terminating in the Capitol Dome.]

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Image: Matthew Bisanz (modified) https://commons.wikimedia.org/wiki/File:NYC_IRS_office_by_Matthew_Bisanz.JPG

CC BY-SA 3.0 https://creativecommons.org/licenses/by-sa/3.0/deed.en

Ted Eytan (modified) https://commons.wikimedia.org/wiki/File:2021.02.07_DC_Street,_Washington,_DC_USA_038_13205-Edit_%2850920473547%29.jpg

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Bart Everson (modified) https://www.flickr.com/photos/editor/1287341637

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#pluralistic #paper losses #direct indexing #tax-loss harvesting #steve ballmer #propublica #irs files #the rich are different from you and me #mego #wash trading #tax evasion #goldman sachs #vampire squid #mark zuckerberg

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