MauledAgain

There’s a meme circulating on social media. Here is what it claims:

JUST ONE LITTLE EXAMPLE OF UNREALIZED CAPITAL GAIN:

....your mom purchased her home 40 years ago. She paid $50,000 for it. It's all paid off which is great because mom is living on a fixed income. It is now worth $500,000!! Kamala wants her to pay 25% of that gain even though she has no plans on selling her home. Now mom has to take out a $112,500 loan on the home to pay the Kamala's 25% unrealized capital gain. Mom can't afford that loan on her fixed income with rising inflation so she loses the home she raised her family in and worked so hard to pay off. But don't worry. A big corporation will come in and buy her home and rent it back to her.

They said you'll own nothing and be happy. Do you now see how they will accomplish that? Drain your savings and tax you out of your home!

Capital Gains will also apply to your 401 etc. DO A LOT OF THINKING BEFORE YOU VOTE

It is disappointing that this sort of nonsense gets a life of its own as it spreads from the originator – more on that in a moment – throughout the internet thanks to reposting by people who react emotionally and fail to take time to ask themselves whether it is correct.

The proposal in question is in the Biden Administration proposed budget for fiscal year 2025. The Tax Foundation summarizes the proposal very succinctly and clearly:

The 25 percent minimum tax on unrealized capital gains has several novel features and would for the first time attempt to collect tax on a broad set of assets on a mark-to-market basis or on imputed returns, i.e., without a clear market transaction to firmly establish any capital gain or loss. It would apply to taxpayers with wealth greater than $100 million, requiring a new annual wealth reporting system.

Whenever I see a facebook post in which someone reposts this meme, often along with an expression of fear or dismay that this proposal will ruin them financially, I note that even if the proposal were to be enacted, which I very much doubt, I don’t worry about it because I’m nowhere near worth $100 million. I then write in these or similar words, “And I assume you, also, don’t have wealth anywhere near $100 million, so, please, relax.” Reactions range from expressions of surprise to claims that I am ignorant about taxes.

Of course, my attempt to provide free education to the people who so easily gobble up nonsense reaches an extremely tiny fraction of the people who read this absurd meme, even if they don’t repost it. Perhaps here and there someone else who has taken the time to learn the truth about the proposal shares the results of their research efforts. But the vast majority of Americans are being fed what at best can be described as a lie.

So who created this meme? Someone who does not want to be identified. It’s very likely that the person who created this meme isn’t someone who read the proposal and misunderstood it. The explanations, such as the one from the Tax Foundation, are within the reading level of a second grader. The person who created this meme did so in order to influence the votes of the middle class, by fueling fear of something that doesn’t exist. I ask you, who benefits from a lie about a proposal that seeks to increase taxes on the ultrawealthy? Surely those who oppose increasing taxes on the ultrawealthy. What better way is there to get the middle class to oppose increased taxes on the ultrawealthy than to lie to the middle class and claim that the proposal increases taxes on the middle class?

If the American population were not so ignorant about basic tax concepts, if the American population were more willing to do research rather than to treat as Gospel truth the utterances of the guy next to them at the bar or the words of a meme writer who spreads lies, if the American population understood the realities of economics, this meme would be doing the damage of a spitball directed at an elm tree. Instead, this meme, along with hundreds of other disinformation memes and misrepresentation memes, is fertilized by ignorance and threatens to undercut the foundations of democracy. Sadly, the price of ignorance will be paid not only by the ignorant but by everyone other than the handful who benefit from ignorance and lies.