Tag:taxes
Wealth Tax
There is an old adage regarding investing that when your stocks are down, you haven’t actually lost any money until you sell the stock. Because of this, the corollary has always been, that likewise, the gain is not realized until you sell the stock. Gains and Losses “on paper” don’t really matter, until they are realized when they are converted to cash or traded for other things. President Biden and now candidate Harris, along with some members of Congress are pushing a Wealth Tax, which would tax these paper gains.
As an example, if you bought 100 shares of Apple’s stock in 2010, it was 6 dollars a share. It cost $600 to make that purchase. It is now over $200 per share so your $600 investment is worth upwards of $20,000 or a 33 times as much as when you bought it. But that gain is on paper. You’re not able to use that value to purchase anything until you sell the stock, at which time you’ll take a $5,800 capital gains haircut.
The wealth tax proposal suggests that you should pay tax on that unrealized gain now. But how will the unrealized tax be determined? Apple’s stock’s all time high was $237, but its highest day end value was $234. And on August 5th with the short crash, it was at $207. Those numbers all are within the past month. With the constant fluctuation of stock prices, will there be an arbitrary day chosen? The all time high? An average of the past year? At a minimum, this seems like a record keeping nightmare. Record keeping is already a problem with the current capital gain tax where you have to keep documentation of a stock purchase price, transaction costs, and splits along the way… sometimes over decades. This is worse with a business or property where you have to track expenditures on improvements, depreciation and other things that affect value.
Another local example is what has happened to many families around Lake Maxinkuckee. Their ancestors owned a lake cottage which was bought decades ago. The property was passed down to descendants. Not all of these descendants were wealthy, but suddenly they were wealthy on paper because of the appreciation in lake property values. They were then forced to sell property that may have been in the family for generations because they couldn’t afford the real estate taxes on the appreciated value. The wealth tax could be another hit on unrealized generational wealth like that.
In a Kiplinger.com article, John Goralka posits this concept about estate planning, “The cash people receive from you is more cash than you have.” This translates to day to day things as well. Wealthy people don’t live like Scrooge McDuck, with a vault in the back of their home where they swim in gold coins. How much money do you think Elon Musk or Jeff Bezos have that they can access immediately? More than me, I’m sure, but as a percentage of their wealth, I would guess the percentage is smaller. Wealth is generally tied up in “things” and those things are working to help you create more wealth. Some of those things employ people who provide goods and services. It’s likely that a wealth tax would require forced liquidation of those things to pay the tax. That would result in less investment in those things so that cash that should be put to work in the economy is held back in anticipation of tax liabilities.
John Goralka’s article has made me think about my own situation. I own my home and currently have no plans to sell it. That value adds to my net worth, but it’s not money I can spend. But when I die, that home will be converted to cash to distribute to heirs. A smaller version of what Elon Musk has with Tesla and Jeff Bezos has with Amazon, but the concept is the same.
In our current DEI world, it has become de rigueur to bash successful people. Hard work, saving and investing are out of fashion. Along with the wealth tax, there are discussions about taxing 401(k)s and IRAs where people have saved too much or invested successfully. Envy of wealth has replaced the aspirational goal of becoming wealthy. Most wealth is the result of some risk. Most wealth remains at risk as it remains invested. No government has been good at playing Robin Hood. We should push back on this, as a tax on those creating wealth by a government that can’t live within its means won’t end well.
The Cost of NIMBYism to the NIMBY Advocates
June 23, 2025
Kevin Berger
Commentary, Marshall County, Politics
Community, Economic Development, government, taxes, Trends
Marshall County is five months into a two year moratorium on construction of Solar Farms, Battery Storage Facilities, Carbon Capture and Data Centers. This has been due to a small, but vocal group of NIMBYs. This has trickled down to restrictions in Culver and consideration of these issues in other Marshall County communities. As per a previous post here, I maintain that communities are either growing or dying. Setting that aside, there may be additional costs to our leadership’s decision to limit or stop development.
The recent actions of the state legislature and new governor has reimagined our tax structure. This means that local governing bodies have to figure out how to do more with less tax income. Turning away new development, with the associated additional tax income, is not a proactive way to address this.
All of the development associated with the construction under the moratorium has minimal long-term impact on county resources. As with any construction, there will be short-term impacts on roads, but those can be mitigated or negotiated as part of the development package. These are not projects that will employ hundreds of people (though the few they do require will be highly-skilled and well-paid), so they will not require acres of parking lots, they will not increase traffic counts on our roads post-construction, they will not cause any increase to our current housing shortage… What these developments will do is pay a lot in taxes, donate to local charities and provide resources for other development where we can look to additional high wage jobs.
Of the four moratorium targets, Data Centers in Indiana have specifically been touted by President Trump and our State government. Turning our backs on any of these initiatives makes us look provincial. That’s not the way I want our county to be perceived.
I am not saying that these should be given free rein and there should be no restrictions on their construction. I don’t know that a short (very short) moratorium isn’t appropriate while research is done, but a two year moratorium likely means that nothing happens for 18 months or more. We don’t have to reinvent the wheel here. Other communities have these and would happily share what they have learned. To my knowledge, there has been little time spent working on new regulations by Marshall County, let alone trying to reduce the length of the moratorium… of which 5 months have passed already… The recent changes to tax laws should make this a priority, not to mention the possibility that we are missing opportunities while other communities take advantage. Those opportunities could be gone if the needs are filled elsewhere.
The tax cost is just one effect on the NIMBYs (and the rest of us). A Department of Energy (DOE) report from December of last year found, “…data centers consumed about 4.4% of total U.S. electricity in 2023 and are expected to consume approximately 6.7 to 12% of total U.S. electricity by 2028. The report indicates that total data center electricity usage climbed from 58 TWh in 2014 to 176 TWh in 2023 and estimates an increase between 325 to 580 TWh by 2028.” As Data Centers consume more power, there will be costs to all of us as power production is ramped up (more costs), and competition for power drives the price up. Our moratorium stops two of the ancillary developments, solar and battery storage, that could help mitigate this too.
Allowing these facilities won’t reduce our electric bills. They could keep us from getting a double hit from higher taxes and higher electric bills and if done right, maybe lower taxes to help mitigate those higher electric bills.
One more time, for those in the back of the room… Communities are either growing or dying! This doesn’t mean we shouldn’t assure that it is smart growth, but extending an open hand in friendship is probably better than showing a closed fist. Our vocal NIMBYs may well cost us all in the end…
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