Picture this: It’s election season, the air is thick with campaign slogans, and politicians are tossing around shiny new ideas like confetti. Among these glittering nuggets, one particularly alarming concept is gaining traction: taxing unrealized gains. You might be wondering, “What on earth does that mean?” Well, dear reader, grab a comfy seat and maybe a snack, because this is about to get wild.
Imagine you’ve got $100 and, with the giddy excitement of a kid in a candy store, you decide to invest in a promising pharmaceutical company. Fast forward a week: the company launches a groundbreaking drug that cures cancer and suddenly, your investment is worth $5,000. Cha-ching, right? Not so fast! Under the proposed tax on unrealized gains, you’d owe taxes on that $4,900 gain—even though you haven’t seen a single cent in your pocket.
Now, let’s sprinkle in some math magic. If the tax rate is 20%, you’d owe $250 in taxes. Where are you supposed to conjure up that cash? You’d have to sell off part of your investment just to pay the taxman. Congratulations! You just turned a profitable venture into a cash-strapped headache.
But wait, let’s take this concept up a notch. Picture yourself as a budding real estate mogul. You pour $50,000 into a fixer-upper in a neighborhood that’s ripe for revival. After a year of blood, sweat, and tears (and maybe some questionable DIY projects), your investment is now valued at $250,000. But hold on! You’re sitting on a $200,000 unrealized gain, which—surprise!—means a $50,000 tax bill. Spoiler alert: you only had $50,000 to buy that house.
So, what do you do? Dump the house at a loss just to cover your tax bill? Now that’s a plot twist nobody saw coming. It’s like a financial horror story where the villain is taxation.
Let’s not stop there. What if you take that same $50,000 and invest it in your own business? Maybe you’re brewing the next big coffee chain or designing revolutionary RVs (shoutout to our campground-loving friends!). Your business skyrockets to a valuation of $250,000, but here comes the grim reaper of taxes again.
In order to pay that tax, you’ll have to find a buyer for your business, which—spoiler alert—might not even exist. If the world’s biggest tech giants like Amazon and Apple had to fork over taxes on every unrealized gain while reinvesting in their growth, we’d probably still be in the Stone Age, wondering what a smartphone is.
So, what’s the bottom line here? This proposal isn’t just a tax on the wealthy; it’s a tax on everyone who dares to invest, innovate, or create something new. It threatens to stifle small businesses and entrepreneurs who are the lifeblood of our economy. If you’re a legacy-builder, a steward of a family business, or just someone with a dream, this tax will make you question every investment decision you make.
We need to breathe life into campground ownership and all entrepreneurial endeavors, not choke them with taxes that make no sense! So let’s band together, raise our voices, and use our voting power to stop this madness in its tracks.
Because remember, folks: the only thing we should be taxing is our imagination—so let’s put our energy into that instead!
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Donna Bordeaux, CPA with Campground Accounting
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA, as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.