Senate Democrats unveil a plan for a new tax on billionaires(npr.org)
npr.org
Senate Democrats unveil a plan for a new tax on billionaires
https://www.npr.org/2021/10/27/1049505682/senate-democrats-unveil-a-plan-for-a-new-tax-on-billionaires
104 comments
> Do we force people to sell pieces of their property to pay the taxes on that property? (In short, for many types of property, yes, but it still has always seemed strange to me)
Not that strange, really. If your income tax at the end of the year leaves you in the red, you might sell some of your property to balance your accounts.
Just like how plenty a corporation, or rental property, has been sold because it was too expensive to hold profitably. In the case of land in particular, people who make poor use of it and fail to extract a profit probably should be forced to sell it. That's the market correcting their inefficient use.
Not that strange, really. If your income tax at the end of the year leaves you in the red, you might sell some of your property to balance your accounts.
Just like how plenty a corporation, or rental property, has been sold because it was too expensive to hold profitably. In the case of land in particular, people who make poor use of it and fail to extract a profit probably should be forced to sell it. That's the market correcting their inefficient use.
Seems reasonable in a business context but normal folks should have a more generous carve out for a single home, single property, etc. assuming utilized for personal use
Another issue on my mind is that non-liquid assets are really hard to assess the value.
Let’s say I had a complete set of Picasso’s paintings for a year. Every painting he did that year, I have.
Who is qualified to say how much each painting individually is worth (other than an auction), and who can say what the total set value is in comparison to the individual value?
Of course this proposal isn’t quite the Wealth Tax that Warren originally wanted but I could see even this tax not being enough in the future.
Let’s say I had a complete set of Picasso’s paintings for a year. Every painting he did that year, I have.
Who is qualified to say how much each painting individually is worth (other than an auction), and who can say what the total set value is in comparison to the individual value?
Of course this proposal isn’t quite the Wealth Tax that Warren originally wanted but I could see even this tax not being enough in the future.
Perhaps when getting a loan against collateral, they could tax the value of the collateral. Make it so the loaner cannot receive more than they declare the collateral worth ( which should prevent overly low valuations by making them a risk to the loaner ), and require the loanee to pay taxes against the 'loan-value' of the collateralized resource.
Treating the lien itself as something created by the loanee and sold to the loaner, I suppose.
Treating the lien itself as something created by the loanee and sold to the loaner, I suppose.
Seems like that would fall under the non-tradeable asset part, which is paid upon sale rather than mark-to-market.
In theory it could work the same way as land/building assessment for certain assets.
Physical goods can be taxed on sale though, that's easy.
Physical goods can be taxed on sale though, that's easy.
> Another issue on my mind is that non-liquid assets are really hard to assess the value.
If the assets in question are equities listed on a public market it's actually quite easy for the government to assess the value.
If the assets in question are equities listed on a public market it's actually quite easy for the government to assess the value.
> Do we force people to sell pieces of their property to pay the taxes on that property?
I don't see the problem here. Slowly breaking up ownership like that would be a net good to society.
I don't see the problem here. Slowly breaking up ownership like that would be a net good to society.
Why would it be a net good? (Just curious about your thoughts)
(not GP) Better distribution of wealth comes to mind.
Wouldn't that also force the less wealthy to sell their assets to pay the tax? They have less cushion and fewer assets, so they would be more likely to need to sell and reduce the compounding they could achieve, leading to less upward mobility.
There are approaches that can alleviate the impact on the less wealthy (think progressive taxation; taxing progressively only amounts above predefined limits, such that you don't end up getting less money in hand after a promotion etc).
But, I'd be curious to hear what do you (and people in general) consider wealthy-but-less-so, if that makes sense. Can we try to assign very rough dollar ranges on these categories?
But, I'd be curious to hear what do you (and people in general) consider wealthy-but-less-so, if that makes sense. Can we try to assign very rough dollar ranges on these categories?
I think that makes sense in an academic/theoretical setting. I think it would require a massive tax/policy overhaul to make it work in real life (which would be good but seems unlikely). We seem to tax just about every level of income, but then offer all sorts of credits, deductions, etc to promote some special interest. And the special interests (looking at your TurboTax) want to keep it complicated to make money off of it. Then we have all sorts of use based taxes like property, gas, sales, guns, alcohol, cigarettes, etc.
Probably the simplest way to assign ranges of income is to apply statistics to the unadjusted pretax income in the US. It would probably make sense to adjust it based on COL too. I'm not sure what numbers and adjustments the following distribution used. I did not expect to see 10% of households making over $200k. That seems insanely high to me, but maybe that's an effect of HCOL places like Silicon Valley and dual income families.
https://www.statista.com/statistics/203183/percentage-distri...
Probably the simplest way to assign ranges of income is to apply statistics to the unadjusted pretax income in the US. It would probably make sense to adjust it based on COL too. I'm not sure what numbers and adjustments the following distribution used. I did not expect to see 10% of households making over $200k. That seems insanely high to me, but maybe that's an effect of HCOL places like Silicon Valley and dual income families.
https://www.statista.com/statistics/203183/percentage-distri...
I wonder with crypto and the dysfunction of nation states growing if property tax or some sort of land value tax may be the only collectible one in the future?
If it collapses that far, then I think there's a chance that we could see the old Depression farm sale paradigm where the community would gather at the auction to make sure the only bidder would be the evicted owner so they could buy it back for a penny. Or we could see complete overthrow of the system.
This still happens now. So I'm quite sure we'd see it happen.
Is it possible for everyone in a society to achieve upward mobility through compounding?
No. Some limitations might be inherent (disabilities), some might be personal choices (spend rather than save, gamble). It also depends on inflation and what sort of returns one gets. It offers a chance at mobility, but no guarantees. There's almost no mobility in today's world without some sort asset appreciation.
At the moment, wealth in most western countries is concentrating upwards:
1) employees, especially low-wage employees such as Amazon delivery and warehouse workers, Walmart employees or "gig workers" get exploited (e.g. Walmart is infamous for workers being paid such pittances that they require food stamps to survive)
2) customers are exploited by having to bear the cost of bad products (e.g. getting hacked because Microsoft can't be bothered to do proper QA)
In the meanwhile of that, the companies rake in billions - and many of them are owned to a large part by extremely rich individuals and thus gain (depending on corporate structure) wealth by dividend payments or stock price growth: Jeff Bezos, the Walton family, Elon Musk, Bill Gates to name a few.
The average employee in contrast doesn't see anything from that paper wealth gain: the poorest class doesn't even have enough money to put in a 401k or other investment vehicles, 70% of all stock investments is held by the 10% top earner class (per https://www.forbes.com/sites/teresaghilarducci/2020/08/31/mo...), and wage increases have been scarce prior to the current COVID-resulting crunch.
An implicitly forced break-up would at least redistribute the wealth gain to a broader class of people, and if it were done by levying taxes against the super-rich, the government would actually have money to provide services to its citizens: a decently trained, competent police force, health care access, housing cost assistance, public transport, to name those where the last two years showed the worst issues.
Let's face the truth: Elon Musk alone is worth 288 billion $. Taxing off half of that would still leave him with more money than he can reasonably spend in ten life times and provide money desperately needed to fix a lot of issues. The usual counter-point is that this eliminates the control the owners hold over their company and with it, the driver for success goes away - however that can easily be bypassed by converting the sold-off shares to simple capital-interest-only shares without voting power.
1) employees, especially low-wage employees such as Amazon delivery and warehouse workers, Walmart employees or "gig workers" get exploited (e.g. Walmart is infamous for workers being paid such pittances that they require food stamps to survive)
2) customers are exploited by having to bear the cost of bad products (e.g. getting hacked because Microsoft can't be bothered to do proper QA)
In the meanwhile of that, the companies rake in billions - and many of them are owned to a large part by extremely rich individuals and thus gain (depending on corporate structure) wealth by dividend payments or stock price growth: Jeff Bezos, the Walton family, Elon Musk, Bill Gates to name a few.
The average employee in contrast doesn't see anything from that paper wealth gain: the poorest class doesn't even have enough money to put in a 401k or other investment vehicles, 70% of all stock investments is held by the 10% top earner class (per https://www.forbes.com/sites/teresaghilarducci/2020/08/31/mo...), and wage increases have been scarce prior to the current COVID-resulting crunch.
An implicitly forced break-up would at least redistribute the wealth gain to a broader class of people, and if it were done by levying taxes against the super-rich, the government would actually have money to provide services to its citizens: a decently trained, competent police force, health care access, housing cost assistance, public transport, to name those where the last two years showed the worst issues.
Let's face the truth: Elon Musk alone is worth 288 billion $. Taxing off half of that would still leave him with more money than he can reasonably spend in ten life times and provide money desperately needed to fix a lot of issues. The usual counter-point is that this eliminates the control the owners hold over their company and with it, the driver for success goes away - however that can easily be bypassed by converting the sold-off shares to simple capital-interest-only shares without voting power.
> Do we force people to sell pieces of their property to pay the taxes on that property?
You answered your own question, but to add more context the answer isn't "For many types of property" but for most people the answer is an emphatic yes. For the vast majority of people the only piece of property they own in this sense is their home, and if they cannot pay the property taxes on that, the state sells it on tax sale. So yes, absolutely, we already do this.
The fact that ownership of businesses is exempt from this is part of the inequitable structure of our laws that benefits the wealthy at the expense of everyone else. Because the primary property of the wealthy is currently exempt from property taxes (we only tax the gains, not the assets themselves), but the primary property of the middle class is taxed.
You answered your own question, but to add more context the answer isn't "For many types of property" but for most people the answer is an emphatic yes. For the vast majority of people the only piece of property they own in this sense is their home, and if they cannot pay the property taxes on that, the state sells it on tax sale. So yes, absolutely, we already do this.
The fact that ownership of businesses is exempt from this is part of the inequitable structure of our laws that benefits the wealthy at the expense of everyone else. Because the primary property of the wealthy is currently exempt from property taxes (we only tax the gains, not the assets themselves), but the primary property of the middle class is taxed.
I have an LLC. Taxing it (more) would be catastrophic. Why should we tax the assets and not the gains?
I actually don't like property tax on homes/land. I dont like the idea of the government forcing people out of their homes (usually the elderly). I prefer taxing based on income/gains because they actually have money coming in and largely removes the government seizure aspect.
I actually don't like property tax on homes/land. I dont like the idea of the government forcing people out of their homes (usually the elderly). I prefer taxing based on income/gains because they actually have money coming in and largely removes the government seizure aspect.
Taxing unutilized assets is the key idea of Georgism. We don't do that in the US, rather we give tax incentives to farmers to underutilize their land.
But taxing resources, whether utilized or not, will increase consumption, right? That doesn't seem like a sustainable option.
It depends. In areas where home prices have risen or are relatively high, home improvement activities increase the home value and so that is generally reserved for sales preparation periods. Consumption is delayed until it is untaxed.
Otherwise, I am not sure how taxing land will increase consumption, unless you're saying people will make land productive in order to offset tax liability? In some cases maybe, but certainly not on low-density residential plots.
Otherwise, I am not sure how taxing land will increase consumption, unless you're saying people will make land productive in order to offset tax liability? In some cases maybe, but certainly not on low-density residential plots.
You're talking about Georgism and taxing unutilized assets. If you have trees on your land, those could be utilized for lumber and you would be taxed on them if if they were unutilized. The same for oil, minerals, even raw land with agricultural potential. The main premise of Georgism is tha the resources belong to everyone and that people should be charged rent for access/ownership of them, whether used or not. This provides incentive for the owner to consume the resource to pay the tax.
> So yes, absolutely, we already do this.
Just because something is already being done doesn't make it right. Kick someone out of their house which they bought with their hard earned work and money is immoral and abusive and abhorrent.
Just because something is already being done doesn't make it right. Kick someone out of their house which they bought with their hard earned work and money is immoral and abusive and abhorrent.
And means that even once one manages to buy a house, one is still just renting from the government, and property taxes can be quite high, equivalent to a mortgage in some cases (sleep tight knowing they'll only increase, to boot)
>The fact that ownership of businesses is exempt from this is part of the inequitable structure of our laws that benefits the wealthy at the expense of everyone else.
This will hurt the middle class who have 401ks or pensions. I get wanting to tax the rich, but this is absolutely going to hurt more than just the wealthy.
This will hurt the middle class who have 401ks or pensions. I get wanting to tax the rich, but this is absolutely going to hurt more than just the wealthy.
I think it will only hurt 401k's if they have over a billon in assets, or pull out $100M/annual. In which case... I think I'm still ok with it. I remember someone has a billon+ Roth IRA, and at some point that is just getting really lucky and then abusing the structure.
Income tax was originally only applied to the wealthy. Now look where we are. Even if they do pass the bill with those limits it is only a matter of time until they lower it more and more and it applies to everyone.
Yep, it's a strategy to divide opposition and get people used to the idea of it
401k already have a slew of different rules and exemptions and it would make sense to continue to exempt them from regular taxes.
Seeing how they are talking about unrealized gains, I wouldn't count on an exemption.
Well that's clearly not the intent of the bill and regardless:
> The tax proposal would apply to just about 700 taxpayers, Democrats say — people who earn more than $100 million per year or who have more than $1 billion in assets for three straight years.
If you have $1 billion in your 401k, you can probably afford the taxation.
> The tax proposal would apply to just about 700 taxpayers, Democrats say — people who earn more than $100 million per year or who have more than $1 billion in assets for three straight years.
If you have $1 billion in your 401k, you can probably afford the taxation.
Looks like you missed part of the article
>Most of the gains on tradeable assets like stocks would be taxed at the existing capital gains rate, which is currently 20% for individuals earning over $445,850.
>Most of the gains on tradeable assets like stocks would be taxed at the existing capital gains rate, which is currently 20% for individuals earning over $445,850.
That quote is putting the 20% rate in context, it's not saying that anyone earning over $445,850 would pay it. The legislation still only applies to the ultra-rich, but they'd be using the existing capital gains rate, which is currently 20% for individuals earning over $445,850.
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> For the vast majority of people the only piece of property they own in this sense is their home
I agree with what you said, and just wanted to make a minor(ish) correction: if you exclude homes bought w/ a mortgage which is still ongoing, probably the "vast majority" part does not hold, anymore.
I agree with what you said, and just wanted to make a minor(ish) correction: if you exclude homes bought w/ a mortgage which is still ongoing, probably the "vast majority" part does not hold, anymore.
They're still considered to own their home, even when they have a mortgage on it. Though, I'm not sure how many people do own their home at all - so I probably should have said "For the vast majority of people who own any property at all in this sense, the only piece of property they own is their home". I think the majority probably own no property in the sense of assets.
One difference is that you benefit directly and personally from owning your home in that you live in it and don't pay rent. Owning equity in a business doesn't yield the same direct personal benefits.
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This is effectively a wealth tax and making people sell assets is indeed one of the consequences of such taxes where they exist.
These tend to be political and symbolic measures as in general they are neither really fair nor beneficial (in Europe the main result in countries like France has been to make people move to Switzerland, Belgium, London, etc).
Edit: A fair way to tax is to tax all incomes equally and not to offer any loopholes. But politically an issue (or not) is that people will still be able to claim that e.g. Bezos only pays x in tax although he is worth zillions, which plays on people not understanding that they are comparing apples and oranges...
These tend to be political and symbolic measures as in general they are neither really fair nor beneficial (in Europe the main result in countries like France has been to make people move to Switzerland, Belgium, London, etc).
Edit: A fair way to tax is to tax all incomes equally and not to offer any loopholes. But politically an issue (or not) is that people will still be able to claim that e.g. Bezos only pays x in tax although he is worth zillions, which plays on people not understanding that they are comparing apples and oranges...
The federal government is literally chasing us out of our own country.
Just to be clear, this would be a tax on "people who earn more than $100 million per year or who have more than $1 billion in assets for three straight years."
If you qualify and feel it's unjust, you could simply go and buy your own country.
If you qualify and feel it's unjust, you could simply go and buy your own country.
I agree and it is the wrong approach. Rich people can always find ways to hide their money because they can afford to pay people to help them because of the sheer scale.
I'd rather see us get rid of the like kind exchange and also modify how we handle capital gains. Get rid of the long term rate. How about any time you make money, you have to pay tax on it. It seems more reasonable and simple. Additionally, we should start adding VAT on certain kids of revenue, especially digital advertising. It is far too profitable to propagate hate today. I'd also like to see additional taxes on real estate with an exception for everyone's personal residence. We need to make it too expensive to just sit on an asset everyone needs. I know some places like Vancouver have started programs like this but we need it more broadly. Personally, I'd also like to see an additional tax on buybacks. Companies should have to pay the corporate tax rate plus and additional rate to buyback their own stock.
I'd rather see us get rid of the like kind exchange and also modify how we handle capital gains. Get rid of the long term rate. How about any time you make money, you have to pay tax on it. It seems more reasonable and simple. Additionally, we should start adding VAT on certain kids of revenue, especially digital advertising. It is far too profitable to propagate hate today. I'd also like to see additional taxes on real estate with an exception for everyone's personal residence. We need to make it too expensive to just sit on an asset everyone needs. I know some places like Vancouver have started programs like this but we need it more broadly. Personally, I'd also like to see an additional tax on buybacks. Companies should have to pay the corporate tax rate plus and additional rate to buyback their own stock.
For illiquid holdings, the plan only taxes them at time of sell (which, by definition is when they are liquid). The only thing that is taxed continually are things like stocks, that are pretty liquid (though can be put into structures that make it illiquid, which may be a tax avoidance strategy?)
Right, so this doesn’t hit real estate or private companies (yet), but it would hit many very wealthy people who have large holdings in publicly traded companies (often ones they founded).
Looking at you Bezos…
And it’s true stocks are quite liquid, but if the person never sells to realize gains, they will never be taxed…
Looking at you Bezos…
And it’s true stocks are quite liquid, but if the person never sells to realize gains, they will never be taxed…
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> That said, the more I read about the low or no interest loans against investments that seem to be the primary “income” of the mega-rich, it seems more and more that something needs to be done here.
The problem isn't that people don't pay taxes on unrealized gains, the problem is that people pay low taxes on realized gains, and usually no taxes on the very large gifts and estates. A tax on unrealized gains of billionaires raises a little bit of money without dealing with the giant structural unfairness in the tax system—which, really, is why it might be politically viable.
Actual tax fairness would be simple and not require a tax on anyone's unrealized gains: special taxes (with low rates and broad exemptions) on long-term capital gains and estates and the givers of gifts would be eliminate, and all of those things would be regular income to the recipient. Windfall gains and gains requiring long-term effort/ownership would be addresaed by allowing everyone the option of advance tax recognition of future income and deferring windfall gains over a period of years, both tools to smooth income.
The problem isn't that people don't pay taxes on unrealized gains, the problem is that people pay low taxes on realized gains, and usually no taxes on the very large gifts and estates. A tax on unrealized gains of billionaires raises a little bit of money without dealing with the giant structural unfairness in the tax system—which, really, is why it might be politically viable.
Actual tax fairness would be simple and not require a tax on anyone's unrealized gains: special taxes (with low rates and broad exemptions) on long-term capital gains and estates and the givers of gifts would be eliminate, and all of those things would be regular income to the recipient. Windfall gains and gains requiring long-term effort/ownership would be addresaed by allowing everyone the option of advance tax recognition of future income and deferring windfall gains over a period of years, both tools to smooth income.
I’m not sure this solves the current problem of the wealthy living off loans against unrealized capital investments. One of the issues that this plan is trying to address is that these gains are forever unrealized, but the person still has access to billions of dollars as a result…
Or have I misunderstood your point?
Or have I misunderstood your point?
> One of the issues that this plan is trying to address is that these gains are forever unrealized
To the extent that is a real issue, it's not even approximately just for billionaires; again, the point of this bill isn't to deal with structural problems rewarding the rich at the expense of the working class, its to raise a little money making a symbolic gesture at a handful of people while preserving the features benefitting the wealthy at the expense of the working class. The action does not match the problem is that it supposedly addresses.
If you wanted to fix that problem in the system I describe upthread (and you’d do basically the same in the status quo system, leaving the broader problems the system upthread fixes in place), you’d tax non-cash assets as income at market value less purchase price at the death against the estate after subtracting any unused advance-recognized income (and likewise adding in any leftover deferred income.) Nothing is then “unrealized forever” for tax purposes. Not for billionaires. Not for hundred-millionaires. Not for anyone.
To the extent that is a real issue, it's not even approximately just for billionaires; again, the point of this bill isn't to deal with structural problems rewarding the rich at the expense of the working class, its to raise a little money making a symbolic gesture at a handful of people while preserving the features benefitting the wealthy at the expense of the working class. The action does not match the problem is that it supposedly addresses.
If you wanted to fix that problem in the system I describe upthread (and you’d do basically the same in the status quo system, leaving the broader problems the system upthread fixes in place), you’d tax non-cash assets as income at market value less purchase price at the death against the estate after subtracting any unused advance-recognized income (and likewise adding in any leftover deferred income.) Nothing is then “unrealized forever” for tax purposes. Not for billionaires. Not for hundred-millionaires. Not for anyone.
Instead of taxing asset growth, they should tax the loan trick. For example Elon Musk uses loans taken out with stock as collateral, with no intention to ever pay them back - the banks are happy to take the collateral when the shareholder dies or something, because they're happy enough to put the debt on their books.
I agree, except the confusing "instead of." You can do both.
Taxing asset growth would encourage business people to do all of their valuations "under the table" and never go public, to defer asset growth taxes. Valuations would become a tax accounting fiction.
Agreed. You could tax proceeds from this kind of loan as income and then make repayment tax-free. Or I suppose just tax that too as a form of disincentive.
Fairly sure this is illegal in the UK, and it was the enforcement against such schemes that blew up Rangers football club among others. https://www.gov.uk/government/publications/loan-schemes-and-...
Right, it doesn't seem too difficult or unreasonable to treat the value of something used as collateral for a loan as an opportunity to establish its realized value from a capital gains perspective.
This could also help resolve the issue with taxing non-liquid asset values (like homes), in that you hit wealth when it is utilized (easy to judge) rather than when it is generated (often difficult to judge).
This could also help resolve the issue with taxing non-liquid asset values (like homes), in that you hit wealth when it is utilized (easy to judge) rather than when it is generated (often difficult to judge).
1. Kill the insane Opportunity Zone tax dodge.
2. Kill GRATs. I personally know of at least one person who has been passed a gain of over a billion dollars through that nonsense. And that was a decade ago.
Oh, but wait, both of those things affect major donors...
Yeah, never mind, let’s just waste lots of time distracting the populace with something with a catchy name — “the Billionaire’s Tax” — that will keep lots of polarized discourse going while absolutely nothing gets accomplished.
2. Kill GRATs. I personally know of at least one person who has been passed a gain of over a billion dollars through that nonsense. And that was a decade ago.
Oh, but wait, both of those things affect major donors...
Yeah, never mind, let’s just waste lots of time distracting the populace with something with a catchy name — “the Billionaire’s Tax” — that will keep lots of polarized discourse going while absolutely nothing gets accomplished.
The only way I'd support something like this is if they limited it to taxing investments when they are used. If a person holds onto an inflated asset they shouldn't be penalized. If they use that asset as collateral for a loan then I think it's fair game.
That said, I'd like to see an analysis of what the financial system would look like if we applied that sort of logic to all asset classes and included various entities like corporations, trusts, etc., before I'm fully sold on it.
I really appreciate the desire to reign in the massive wealth inequality in the world today. I'm just wary of these sorts of 'hackish' approaches. I think of the law like I think of source code. It should be clear, consistent, analyzable, and come with a clear set of testable goals and intentions.
That said, I'd like to see an analysis of what the financial system would look like if we applied that sort of logic to all asset classes and included various entities like corporations, trusts, etc., before I'm fully sold on it.
I really appreciate the desire to reign in the massive wealth inequality in the world today. I'm just wary of these sorts of 'hackish' approaches. I think of the law like I think of source code. It should be clear, consistent, analyzable, and come with a clear set of testable goals and intentions.
There's a serious problem where people are just sitting on valuable land in dense areas, your proposal would exacerbate that.
We need https://en.wikipedia.org/wiki/Land_value_tax to avoid squatting, instead of property tax which considers the value of land + building.
Yeah, this is an excellent idea, especially for the environment.
Let's penalize urban gardening co-ops, dog parks, arboretums, and anyone else who thinks preserving some semblance of nature in urban environments is nice to have.
Let's not rest until every urban area is paved completely over into a high-density, lifeless, brutalist hellscape.
Screw species diversity. Homo sapiens is #1!
Let's penalize urban gardening co-ops, dog parks, arboretums, and anyone else who thinks preserving some semblance of nature in urban environments is nice to have.
Let's not rest until every urban area is paved completely over into a high-density, lifeless, brutalist hellscape.
Screw species diversity. Homo sapiens is #1!
Yeah obviously there are tradeoffs. I'd need to see a more thorough analysis of this before I fully support it. It may be the case that there are too many downsides to the proposal. It also may be the case that a few other proposals in concert with this one can achieve the goals in a more comprehensive and productive manner.
There's no way a radical bill like this would ever get even close to being passed. Do legislatures in other nations waste this much time virtue signaling? Given her background, I have a hard time believing that Warren genuinely thinks that it's a good idea. I'm sure it will make her more popular though.
I'm curious, what are the tax loopholes they talk of for the companies? It seems they are using credits, etc built in by Congress to support policy, like EVs and stuff.
This sounds overly complicated. Why not just fix the capital gains tax structure to match better with the standard tax rate for higher earners? Keeping track of individual's wealth seems a little tricky, especially once people start hiding assets.
This sounds overly complicated. Why not just fix the capital gains tax structure to match better with the standard tax rate for higher earners? Keeping track of individual's wealth seems a little tricky, especially once people start hiding assets.
QSBS deduction, LLC to Type S conversions etc. These won't be fixed apparently anytime soon if ever.
But how are those used as loopholes? Aren't these policies that were enacted for the the purposes of giving tax breaks to small businesses?
If you define small business as $10M in the former and $100M market caps in the latter then sure. Now imagine having a portfolio of such "small businesses" like this. I'm hoping we can agree this is abusing the law, but I give up mostly.
I'm at the point of telling all the billionaires who somehow can't figure out what their assets are worth for a wealth tax (yet seem to always know their total net worth down to the dollar or so) to tell us what their assets are worth, whatever their hearts desire it should be and pay taxes on that value. Except now all such assets go on to an exchange where anyone can buy it immediately for that price. Thank you Robert Heinlein for that idea.
I'm at the point of telling all the billionaires who somehow can't figure out what their assets are worth for a wealth tax (yet seem to always know their total net worth down to the dollar or so) to tell us what their assets are worth, whatever their hearts desire it should be and pay taxes on that value. Except now all such assets go on to an exchange where anyone can buy it immediately for that price. Thank you Robert Heinlein for that idea.
It depends on how you determine market cap on private equity. $10M still seems like a small business. $100M might, and could be consistent with the worker limit found in other small business definitions (<200 people).
If they are legitimate businesses, then I don't see the problem with having a portfolio of them. Each one can be a significant risk. If they aren't legitimate, then additional regulations should be formed. If you still think it's a problem to have a portfolio, then they could change the language to use the limit as an aggregate of all businesses owned/sold.
"I'm at the point of telling all the billionaires who somehow can't figure out what their assets are worth for a wealth tax"
It's not just them. Forbes has this issue when ranking them. The IRS needs to be able to validate the numbers too, which is unlikely.
If they are legitimate businesses, then I don't see the problem with having a portfolio of them. Each one can be a significant risk. If they aren't legitimate, then additional regulations should be formed. If you still think it's a problem to have a portfolio, then they could change the language to use the limit as an aggregate of all businesses owned/sold.
"I'm at the point of telling all the billionaires who somehow can't figure out what their assets are worth for a wealth tax"
It's not just them. Forbes has this issue when ranking them. The IRS needs to be able to validate the numbers too, which is unlikely.
We need more tax revenue to fund our largess says bloated, inefficient government. More news at 11.
How about we implement a tax for any person or entity with more than 10 homes. More than 10 homes, each additional home has a 1% or more federal property tax against all homes. 15 homes = 5% property tax on all homes. For the big buyers like Zillow or BlackRock this would be business-destroying. Small investors and flippers would be unaffected.
You’d see home shortages end at light speed. And yes home prices may crash but it’s a long term fix. People would probably appreciate it long term much more than this plan.
Or maybe it phases in over a 5 year period. Something though.
You’d see home shortages end at light speed. And yes home prices may crash but it’s a long term fix. People would probably appreciate it long term much more than this plan.
Or maybe it phases in over a 5 year period. Something though.
So much spin on HN today, i hope you all read this before poo-pooing it.
" The tax proposal would apply to just about 700 taxpayers, Democrats say — people who earn more than $100 million per year or who have more than $1 billion in assets for three straight years. It would require them to give the IRS a detailed account of how much the assets they own gained or lost each year, a process called mark to market."
" The tax proposal would apply to just about 700 taxpayers, Democrats say — people who earn more than $100 million per year or who have more than $1 billion in assets for three straight years. It would require them to give the IRS a detailed account of how much the assets they own gained or lost each year, a process called mark to market."
That’s what they said about the federal income tax too, back in 1913. Now it’s by far the largest tax that regular people pay on an annual basis.
Same shit was claimed about the Federal Income Tax. How'd that turn out?
I mean, it funds a global economic hegemony without being nearly as burdensome as taxes in the rest of the developed world, so pretty great?
So you agree then? This wealth tax will soon leech off the middle class?
That the Federal Income Tax is responsible for the United State's brief stint at Pax Americana, 80 years after it was instituted, is highly debatable to say the least.
But this time around, I challenge anyone to confidently say the US will maintain it's "global hegemony" within the next few decades. But at least the middle class will be poorer, and the government more powerful and burdensome than ever.
That the Federal Income Tax is responsible for the United State's brief stint at Pax Americana, 80 years after it was instituted, is highly debatable to say the least.
But this time around, I challenge anyone to confidently say the US will maintain it's "global hegemony" within the next few decades. But at least the middle class will be poorer, and the government more powerful and burdensome than ever.
Next think you'll hear is that they only want to additionally tax the 0.5%, then the 1%, then the 5%, then then.
Why? The amount of money this week raise is small. And of course, many will take steps to not pay it, making the asking even smaller.
So why? Is it to get the "wealth"tax started so they can grow who it affects? There are already a ton of comments here about how it didn't affect them or it is a good idea to steal wealth from the rich.
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Problem is big companies dodge taxes and that needs a fix.
Example -- you buy a smart phone you pay sales tax (consumer or normal people), what they should do is put something like 0.5% or some small Federal tax which companies have to pay on sale. Because most of the time companies park their profit offshore and pay nothing in tax.
Lets face with real tax on the rich is never going to happen in the US as they hold and pull all the lobbying strings.
Just raise interest rates and use eminent domain to build housing in locally zoned off areas.
Of course we can't do either of these things (gov debt and people with power have money -> own land -> love strict zoning)
Of course we can't do either of these things (gov debt and people with power have money -> own land -> love strict zoning)
Optics of it are bad given the CCP has been accelerating their crack down on billionaires, also known as state-independent power centers. This is the direction they want to take us I guess.
This will wipe put any wealth the middle class has.
It's becoming very clear that the US has few years left.
Would such a law be legal? It seems like it would be a direct tax that is not an income tax.
The trend in any economic system over time is going to be for those with wealth to extract more from those without it. Ultimately, the end game is either going to be cyclical revolution / violence, or some sort of redistributive tax scheme.
There's no abstract plan that lets Bill Gates own all of the nation's farm land, and lets Blackrock clear-cut all of the forests of the Amazon jungle, and lets Michael Bloomberg mass-arrest protesters of his political party after buying his way into office, and/or lets Google cover the landscape with armed ai-drone protected company towns.
That said, the only reason DNC senators have proposed such a thing is that they have Manchin and Sinema to prevent it from actually being voted on by the 30 other DNC senators who would also oppose it for the sake of their donors.
There's no abstract plan that lets Bill Gates own all of the nation's farm land, and lets Blackrock clear-cut all of the forests of the Amazon jungle, and lets Michael Bloomberg mass-arrest protesters of his political party after buying his way into office, and/or lets Google cover the landscape with armed ai-drone protected company towns.
That said, the only reason DNC senators have proposed such a thing is that they have Manchin and Sinema to prevent it from actually being voted on by the 30 other DNC senators who would also oppose it for the sake of their donors.
> That said, the only reason DNC senators have proposed such a thing is that they have Manchin and Sinema to prevent it from actually being voted on by the 30 other DNC senators who would also oppose it for the sake of their donors.
No the only reason this bill is being proposed is because Sinema was a hard "no" on the corporate tax rate hike that was in the original bill, but she was amenable to Warren's 'Billionaire tax.'
No the only reason this bill is being proposed is because Sinema was a hard "no" on the corporate tax rate hike that was in the original bill, but she was amenable to Warren's 'Billionaire tax.'
> No the only reason this bill is being proposed is because Sinema was a hard "no" on the corporate tax rate hike that was in the original bill, but she was amenable to Warren's 'Billionaire tax.'
And she'll be off to have a fundraiser with the people who want her to oppose this directly, I'm sure. And collect half on behalf of DNC PACs.
And she'll be off to have a fundraiser with the people who want her to oppose this directly, I'm sure. And collect half on behalf of DNC PACs.
I would also like to see term limits while we are at it.
zpeti(2)
I find it very hard to support that much spending when they haven't even figured out where they're going to get the money from.
Quit layering more laws on top of other laws. Review the current system because it's _obvious_ it's not working - and update the tax system. Too bad the government has so much corporate money baked into it's procedures that it'll never happen.
I glanced at the article and I'm not sure if I'm incorrect/misremembering, or if it's the classic NPR spin, but wasn't this part of the whole "taxing unrealized gains" plan as a way to pay for this?
Quit layering more laws on top of other laws. Review the current system because it's _obvious_ it's not working - and update the tax system. Too bad the government has so much corporate money baked into it's procedures that it'll never happen.
I glanced at the article and I'm not sure if I'm incorrect/misremembering, or if it's the classic NPR spin, but wasn't this part of the whole "taxing unrealized gains" plan as a way to pay for this?
> I find it very hard to support that much spending when they haven't even figured out where they're going to get the money from.
How are you defining "figured out"? It sounds like you are expecting that to mean consensus, but the nature of politics is that every politician has "figured out" their own solution. So the only way to consensus is compromise, and that is what we are seeing here.
How are you defining "figured out"? It sounds like you are expecting that to mean consensus, but the nature of politics is that every politician has "figured out" their own solution. So the only way to consensus is compromise, and that is what we are seeing here.
I would support this if I didn’t already know it was going to be thrown away by the govt. I would wager the capital is more effectively deployed to benefit society where it currently is.
Effective by whose standards? The market?
I think it varies, but I'm open to the idea.
However much we tax Elon Musk is too much, because he is the driving force for many fantastic companies in the USA.
However much we tax Mark Zuckerberg is too little, because he has weaponized the social network for politics and profit.
However much we tax Elon Musk is too much, because he is the driving force for many fantastic companies in the USA.
However much we tax Mark Zuckerberg is too little, because he has weaponized the social network for politics and profit.
It will start as a wealth tax on billionaires but within five years it will be a wealth tax on anyone with a net worth greater than 100k. That’s how these things go. Take a look at the history of the history of the federal income tax for an example. It started in 1913 as a mere 1% on the lowest income earner. By 1918, the lowest bracket was 6%. Now it’s 10%.
You’ll have to do some adjusting for inflation, but this document lists every federal income tax bracket over the past 150 years:
https://files.taxfoundation.org/legacy/docs/fed_individual_r...
You’ll have to do some adjusting for inflation, but this document lists every federal income tax bracket over the past 150 years:
https://files.taxfoundation.org/legacy/docs/fed_individual_r...
Valid point, but I'd note that it's backed off significantly since WW2, when top tax rates were close to 90%.
Tax rates seem to more closely track actual government funding requirements than they do any sort of moral justification of such. The only reason congress is considering this is that TSY yields are starting to creep up, making government funding through debt more expensive.
If 10y yields were still tracking around 1%, none of this noise would be here.
Tax rates seem to more closely track actual government funding requirements than they do any sort of moral justification of such. The only reason congress is considering this is that TSY yields are starting to creep up, making government funding through debt more expensive.
If 10y yields were still tracking around 1%, none of this noise would be here.
Well, maybe. People do vote. You can look at the strong opposition local and state level politicians see with any property tax or state income tax increase. There's a built-in regulating mechanism. Taxes are usually one of the top issues that swings elections from one party to another, so the democratic regulating mechanism works somewhat well, I believe. It's not an obscure topic that can escape democratic oversight, like subsidies for lumber harvesting in a few counties in Montana, for example.
> Look, this slippery slope argument was valid, so the one I'm making now must be too!
I'm not convinced.
I'm not convinced.
That said, the more I read about the low or no interest loans against investments that seem to be the primary “income” of the mega-rich, it seems more and more that something needs to be done here.
Or am I wrong? Thoughts?