Washington, D.C. - In case you missed it, U.S. Senator Pat Toomey (R-Pa.) spoke on the Senate floor Thursday afternoon in opposition to a proposal from Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) to impose annual taxes on unrealized investment gains. You can watch the full speech here.
Select excerpts:
"Under Senator Wyden's proposal, if an asset goes up in value, even though it hasn't been sold, the fact that it has gone up in value would require that increase in value to be taxed."
"There's a good reason why our system has never imposed taxes on unrealized gains... one is the value of the asset could go back down. One very widely held asset in America is stocks. Stocks that you can buy on an exchange, a share of a company. Stocks famously go up and down... it strikes most people as unreasonable to force people to pay a tax on this notional gain on a stock without having sold it when that stock could go back down, the gain could be completely lost, but you've still paid the tax."
"The tax would be imposed without a liquidity event for the investor... the investor hasn't sold the asset, doesn't have the cash, what if the investor doesn't have enough cash to pay the tax bill on it? This risk alone would have a chilling effect on investment, it would discourage people from making the investment in the first place because they would have to wonder and worry about what type of tax bill will they incur even if they don't sell the asset."
"It would be a big mistake to go down this road. It would be a big mistake to tax unrealized gains."
"[This proposal] would have a chilling effect on investment... a chilling effect on investment would mean a chilling effect on economic growth."
"Clearly the reforms we implemented have been an incentive for more investment, that has led to more growth, and I sure wouldn't want to see us do anything that would disrupt the fact that we created an environment where there's now so much opportunity, and where work is paying so much more than it has before."
