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Capital gains, income tax, the wash sale rule and deductions.
7 entries
1770s–1920s
Thinkers explain prices, trade and competition, while the telegraph and the ticker speed markets up.
After the 16th Amendment was ratified in 1913, Congress passed an income tax with a 1% rate and extra rates on higher incomes, reaching 7% on income over $500,000. Each rate applied only to income within its band.
💡 Why it made sense then
The government wanted revenue that rose with ability to pay, rather than relying on tariffs that fell on everyone's purchases.
Ideas it gave us
A tax bracket is a range of income taxed at one rate. Under a progressive system each rate applies only to the income inside its bracket, so moving into a higher bracket never lowers your take-home pay.
🎮 The game uses two flat rates instead of brackets: 22% on income and short-term gains, and 15% on longer-term gains, after the weekly tax-free amount.
Open the full entry →The Revenue Act of 1921 taxed gains on assets held over two years at 12.5%, below the top income tax rate. The same year, Congress stopped investors claiming a loss when they sold and quickly bought the same shares back: the wash sale rule.
Laws of the same years first let losses carry over to reduce tax in later years. Today US investors can use up to $3,000 a year of net losses against other income, a limit set in 1978, and carry the rest forward.
💡 Why it made sense then
High wartime tax rates made people hold on to investments rather than sell, and some sold at a loss only on paper to cut their tax.
Ideas it gave us
Capital gains tax is tax on the profit from selling an investment for more than you paid. In the US, gains on assets held over a year are taxed at lower long-term rates (0%, 15% or 20%) than short-term gains, which are taxed as income.
🎮 Game gains on shares held a week or less are taxed at 22%, longer holds at 15%, on a weekly tax year.
Open the full entry →A capital gain is the profit from selling an investment for more than you paid for it; selling for less is a capital loss.
🎮 Gains are taxed on a weekly tax year: holds of a week or less at 22%, longer at 15%.
Open the full entry →The wash sale rule stops you from claiming a tax loss if you buy the same or a substantially identical investment within 30 days before or after selling it at a loss. The loss is added to the new shares' cost basis instead.
🎮 The game applies the wash sale rule with a window of about 14 hours either way, the real 30 days scaled to a one-week tax year.
Open the full entry →A tax loss carryforward lets you use an investment loss you couldn't use this year to cut your taxes in later years.
🎮 Losses cancel gains within the week. Up to $57.69 a week of a net loss reduces your taxable income (the real $3,000 a year spread over 52 weeks), and the rest carries forward to later weeks.
Open the full entry →1929–1950s
The Great Depression leads to deposit insurance, securities law, margin rules and modern economic statistics.
With property taxes going unpaid in the Depression, Mississippi adopted a 2% general retail sales tax in 1932, the first modern one in the US. Within a decade, about half of the states had followed.
💡 Why it made sense then
States needed money that kept coming in when incomes and property values had fallen, and a small charge on every purchase did that.
🎮 In Journey Shares
Everything in the city's stores includes 7.53% sales tax, which goes to the treasury.
Ideas it gave us
A sales tax is a tax added to the price of goods and services when they're sold. The seller collects it and pays it to the government.
🎮 Everything sold in the city's stores includes 7.53% sales tax, the average combined US state and local rate. It goes to the treasury.
Open the full entry →With far more people paying income tax during World War II, the Individual Income Tax Act of 1944 introduced the standard deduction, so most filers didn't need to itemize.
💡 Why it made sense then
Millions of new taxpayers needed a simple way to file.
Ideas it gave us
The standard deduction is a fixed amount of income that isn't taxed at all. Taxpayers take it or itemise their deductions, whichever is larger.
🎮 The first $309.62 a week is tax-free in the game, the real US $16,100 standard deduction spread over 52 weeks.
Open the full entry →1950s–1990s
Risk gets measured, options get a formula, and index funds and ETFs bring the whole market to everyone.
The first federal income tax returns were due on 1 March 1914, and the deadline later moved to March 15. The Internal Revenue Code of 1954 moved it to April 15, starting in 1955.
Late payers owe a penalty, today 0.5% of the unpaid tax for each month, plus interest.
💡 Why it made sense then
Far more people filed after World War II, and the IRS needed more time to process returns.
🎮 In Journey Shares
The game's tax day is every Monday at 12 AM ET, with the same 0.5% late penalty.
Ideas it gave us
Tax day is the deadline to file your return and pay what you owe. In the US it's usually April 15, and paying late adds penalties and interest.
🎮 The game's tax year is a week. Taxes owed build up and are due on tax day, Monday 12 AM ET. Pay any time before then, or they're taken from your cash, savings or shares with a 0.5% late penalty, the real IRS monthly rate.
Open the full entry →🎮 Practise with $10,000 in play money
Try it in a live 3D city with play money: trade shares in real public figures, get margin-called, pay your taxes and rob a bot or two. Free, and nothing real is at stake.
For learning only. This isn't financial advice.
