SB 105-16: Capital Gains Inflation Deduction Act (Passed)
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  SB 105-16: Capital Gains Inflation Deduction Act (Passed)
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Author Topic: SB 105-16: Capital Gains Inflation Deduction Act (Passed)  (Read 2293 times)
The world will shine with light in our nightmare
Just Passion Through
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« on: October 14, 2021, 08:39:33 PM »
« edited: December 01, 2021, 11:05:36 PM by President Scott☀️ »

Quote
AN ACT
To reform the taxation system

Quote
Be it enacted by the Senate of the Republic of Atlasia assembled

Section I. Title

This act may be cited as the Capital Gains Inflation Deduction Act.

Section II. Definition

CPI is the Consumer Price Index as published by the Bureau of Labor Statistics for any particular moment in time.

Section III. Capital Gains Inflation Deduction

A. As explained in Section II B, the portion of any capital gain that can be attributed to inflation is exempt from taxation.

B. For each capital gain derived from the sale of an asset, the product of the percentage change in CPI from the purchase of said asset to its sale and the purchase price is added to an individual's capital gains inflation deduction.

C. The total amount of an individual's capital gains inflation deduction is deductible from said individual's total capital gains tax liability for any given year. This deduction shall not be deductible from any other form of taxable income.

Section IV. Effective Date

This act shall be incorporated into to the tax code immediately.

Section V. Cost

This act is estimated to lower tax revenue by $15 billion annually.
Sponsor: AGA

The gentleman from New York is recognized.
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Spark
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« Reply #1 on: October 14, 2021, 08:42:32 PM »

Quote
AN ACT
To reform the taxation system

Quote

Be it enacted by the Senate of the Republic of Atlasia assembled

Section I. Title

This act may be cited as the Capital Gains Inflation Deduction Act.

Section II. Definition

CPI is the Consumer Price Index as published by the Bureau of Labor Statistics for any particular moment in time.

Section III. Capital Gains Inflation Deduction

A. As explained in Section II B, the portion of any capital gain that can be attributed to inflation is exempt from taxation.

B. For each capital gain derived from the sale of an asset, the product of the percentage change in CPI from the purchase of said asset to its sale and the purchase price is added to an individual's capital gains inflation deduction.

C. The total amount of an individual's capital gains inflation deduction is deductible from said individual's total capital gains tax liability for any given year. This deduction shall not be deductible from any other form of taxable income.

Section IV. Effective Date

This act shall be incorporated into to the tax code immediately.

Section V. Cost

This act is estimated to lower tax revenue by $15 billion annually.
Sponsor: AGA

The gentleman from New York is recognized.

I oppose this bill on the grounds of being against increased taxation.
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Just Passion Through
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« Reply #2 on: October 14, 2021, 08:46:00 PM »

Would I be correct in assuming this is meant as a competing alternative to the Financial Transaction Tax Act?
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AGA
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« Reply #3 on: October 14, 2021, 09:38:20 PM »

No, this has nothing to do with the financial transaction tax. This would also lower taxes, not raise them.

This bill simply allows people to deduct inflation from capital gains taxes. Consider a person who purchased an asset for $100 and sold it a year later for $102. If the inflation rate was 2%, then the real value of the asset did not change; its price only increased due to inflation. Under the current structure, the person would have to pay taxes on the $2 of capital gains even though there were no capital gains in real terms. This proposal would allow the person to pay no taxes by allowing inflation to be deductible. I believe that this makes the tax system more fair.
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« Reply #4 on: October 14, 2021, 10:08:07 PM »

I would like to know if the sponsor would support an amendment to this bill raising the general capital gains rate in exchange for allowing this deduction.

If I'm not mistaken, the income tax (and corporate?) are what we are focusing to cut for this budget?
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AGA
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« Reply #5 on: October 14, 2021, 10:26:39 PM »

It seems that capital gains are taxed as income, so I would be open to raising income taxes to compensate for the shortfall of revenue. The point of this bill is not to provide a tax cut, but to reform the tax structure.
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« Reply #6 on: October 14, 2021, 10:51:10 PM »

I can definitely see myself supporting this bill, especially if we can expand capital gains ownership to workers. (This is something simple in theory but would be complicated in practice, but an idea that should be considered regardless.)

My understanding was that certain individuals pay 100% of their income in taxes, which I don't know if we can verify is true or not given that even a high income tax rate is usually compensated for with generous deductions.
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AGA
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« Reply #7 on: October 15, 2021, 04:00:45 PM »

An amendment:
Quote
AN ACT
To reform the taxation system

Quote

Be it enacted by the Senate of the Republic of Atlasia assembled

Section I. Title

This act may be cited as the Capital Gains Inflation Deduction Act.

Section II. Definition

CPI is the Consumer Price Index as published by the Bureau of Labor Statistics for any particular moment in time.

Section III. Capital Gains Inflation Deduction

A. As explained in Section II B, the portion of any capital gain that can be attributed to inflation is exempt from taxation.

B. For each capital gain derived from the sale of an asset, the product of the percentage change in CPI from the purchase of said asset to its sale and the purchase price is added to an individual's capital gains inflation deduction.

C. The total amount of an individual's capital gains inflation deduction is deductible from said individual's total capital gains tax liability for any given year. This deduction shall not be deductible from any other form of taxable income.

Section IV. Effective Date

This act shall be incorporated into to the tax code immediatelystarting with FY2023.

Section V. Cost

This act is estimated to lower tax revenue by $15 billion annually.
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« Reply #8 on: October 15, 2021, 04:22:19 PM »

Senators have 24 hours to object to the amendment.
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lfromnj
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« Reply #9 on: October 16, 2021, 04:09:36 PM »

Wouldn't it be better to do the estimate with regards to inflation % * X billion ?
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Southern Senator North Carolina Yankee
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« Reply #10 on: October 16, 2021, 06:24:18 PM »

I am certainly in favor of the proposal though I would recommend that we examine closely how inflation is being calculated and such as LfromNJ referenced.


Also I support the delayed implementation with regards to the fiscal year alteration.
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AGA
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« Reply #11 on: October 16, 2021, 09:02:04 PM »

Wouldn't it be better to do the estimate with regards to inflation % * X billion ?

Are you talking about the cost estimate? The number I gave was a very, very rough estimate, so if you have a better idea to share, go ahead.
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« Reply #12 on: October 16, 2021, 10:40:57 PM »

Hearing no objection, the amendment is adopted.
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Joseph Cao
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« Reply #13 on: October 17, 2021, 10:26:07 PM »

Yep, I think this is a fairer arrangement for all individuals involved.

A better cost estimate would obviously depend on how much we know about inflation ITTL as opposed to RL. If we're going off the budget I really am not sure where the inflationary value there came from (or whether it's been updated recently) but it is a start for us.
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lfromnj
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« Reply #14 on: October 19, 2021, 06:35:41 PM »

Wouldn't it be better to do the estimate with regards to inflation % * X billion ?

Are you talking about the cost estimate? The number I gave was a very, very rough estimate, so if you have a better idea to share, go ahead.

My bad it would probably be an average of inflation over the past few years times a few billion.
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SevenEleven
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« Reply #15 on: October 30, 2021, 01:11:39 AM »

I will not sign this bill unless equal measures are in place for losses.
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AGA
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« Reply #16 on: October 30, 2021, 12:39:36 PM »

I will not sign this bill unless equal measures are in place for losses.

Could you elaborate what you mean by this? If one experiences capital loss, this just would just add onto that deduction.
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OSR stands with Israel
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« Reply #17 on: November 13, 2021, 09:49:23 PM »

I am willing to sponsor this
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Joseph Cao
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« Reply #18 on: November 16, 2021, 10:55:24 PM »

I know ~36 hours have passed without objection, but just to be on the safe side, senators have 24 hours to object to OSR assuming sponsorship.
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Joseph Cao
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« Reply #19 on: November 17, 2021, 11:27:36 PM »

OSR is recognized as sponsor.
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The world will shine with light in our nightmare
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« Reply #20 on: November 18, 2021, 08:07:26 PM »

This still has my support and I will sign the bill in its current form. Since we don't have to do any number-crunching for this year, we might as well vote.
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S019
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« Reply #21 on: November 19, 2021, 11:43:48 PM »

since no one has added anything to this bill for nearly 3 weeks, I will motion for a final vote, 24?(I believe) hours to object
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Joseph Cao
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« Reply #22 on: November 20, 2021, 01:24:07 AM »

since no one has added anything to this bill for nearly 3 weeks, I will motion for a final vote, 24?(I believe) hours to object

PSA for everyone else, not just S019: the presiding officer can handle the job of processing these motions just fine, and if the situation ever calls for backseat presiding of this kind by someone not the PPT or the Deputy, I will be sure to inform you all. Rest assured that the current situation does not require you to add the bolded when I am perfectly capable of handling the PPT's duties at present.

In any case, 24 hours to object.
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Joseph Cao
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« Reply #23 on: November 26, 2021, 02:33:51 AM »

Nobody acted on this either apparently.

With no objections, a final vote is open on the bill. 72 hours to vote; please vote Aye, Nay, or Abstain.
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Joseph Cao
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« Reply #24 on: November 26, 2021, 02:34:39 AM »

AYE.
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