…but only for those selfish, greedy billionaires, who of course don’t deserve their money – or, in this case, their potential money.
Right? Right? Just like the original income tax proposal, this is only for the very very very rich.
The Biden administration isn’t through trying to mess with people, and sometimes succeeding. So now we have this:
President Biden’s $2 trillion spending package continues to stall as senior Democrats are hoping to finalize a proposal on a new annual tax on billionaires’ unrealized capital gains, Democratic leadership has indicated.
“We probably will have a wealth tax,” House Speaker Nancy Pelosi (D-Calif.) confirmed Sunday on CNN.
The proposal, which is being reviewed by Senate Finance Committee Chairman Ron Wyden (D-Ore.), would impose an annual tax on unrealized capital gains on liquid assets held by billionaires, Treasury Secretary Janet Yellen said.
“I wouldn’t call that a wealth tax, but it would help get at capital gains, which are an extraordinarily large part of the incomes of the wealthiest individuals and right now escape taxation until they’re realized,” Yellen said on CNN.
The proposal would likely only affect less than 1,000 of the nation’s wealthiest citizens, according to the Wall Street Journal.
A few wild guesses here: (1) Whatever level of rich person this proposed tax would reach, it would stop short of affecting the very very rich Nancy Pelosi (2) It wouldn’t stay at 1000 billionaires (2) the billionaires would mostly manage to evade it in one way or another, but the insane precedent of government taking unrealized assets would be set.
And don’t you just love Yellen’s reformulation of the idea of unrealized gains, which are now merely gains that have “escaped taxation until they’re realized.” See, those gains are escaping the clutches of the IRA by being just on paper, and we can’t have that, can we?
Do Manchin and Sinema think this is just peachy keen? And what about all the other Democrat members of Congress who hold themselves out to be moderates at election time in order to appeal to more moderate voters in states that aren’t true blue, and who nevertheless vote “yes” on all the leftist bills the Democrats propose? What do they think?
You can do almost anything you want to billionaires because so many people have the notion that so much money in one person’s (or entity’s) hands is “obscene” (a word I sometimes see used). But the bell will toll for thee, and doing something to just a few billionaires doesn’t make it right. But it makes it something that most people won’t care about, because after all – billionaires.
It is Senator Wyden and the Senate Finance Committee who have been “looking at this.” In fact, they’ve been “looking at it” – and salivating – for quite a long time, although none of the current articles I’ve read mention it. But I wrote a post on the subject in April of 2019, when Democrats were proposing something related but slightly different.
At the time I wrote that post, the proposal’s details were hard to discover, and I was guessing at some of them. The post is long, and I suggest looking at it. But the most important thing to remember is that Democrats have been planning this sort of thing for a long time, and not just for billionaires, either.
For example (from an article written in March of 2020):
The Wyden proposal [as of March 2020] would apply to anyone with at least either $1 million in income or $10 million in assets for three consecutive years — with complex exclusions. In computing the value of assets for the $10 million threshold, for example, the proposal would exclude the first $2 million in personal residences, the first $5 million in family farms and the first $3 million in retirement portfolios.
However, many questions remain about which taxpayers would be subject to the Wyden proposal and how it would treat individuals moving in and out of the new regime.
I also notice that in MSM articles about the current proposal the word “billionaires” is often emphasized, for obvious reasons. But here’s a caution from my April 2019 post, involving the history of the income tax:
The main argument for ratification [of the 16th Amendment] was that the amendment would force the wealthy to take on a fairer share of the federal tax burden that had in the past been largely carried by those earning relatively little…
Rep. Cordell Hull introduced the first income tax law under the newly adopted Sixteenth Amendment. He proposed a graduated tax starting with a 1-percent rate for incomes between $4,000 and $20,000 increasing to a top rate of 3 percent for those earning $50,000 or more. The House Ways and Means Committee called upon citizens to “cheerfully support and sustain this, the fairest and cheapest of all taxes. . . .”
The first tax collection day under the new law took place on March 1, 1914. Since the average worker earned only about $800 a year, few people actually had to pay any federal income tax. Less than 4 percent of American families made an annual income of $3,000 or more. Deductions and exemptions further shrank the pool of taxpayers. Nevertheless, the federal government collected $71 million that first year. Millionaire John D. Rockefeller alone paid an estimated $2 million.
All in all, most Americans thought the new tax was a great idea. One taxpayer wrote to the Bureau of Internal Revenue, “I have purposely left out some deductions I could claim, in order to have the privilege and the pleasure of paying at least a small income tax. . . .”
Once the camel gets its nose in the tent, it will ultimately get the whole body in, and then some.