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?
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 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.
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.
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 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 don't see the problem here. Slowly breaking up ownership like that would be a net good to society.
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.
Or have I misunderstood your point?
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.
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.
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.
Treating the lien itself as something created by the loanee and sold to the loaner, I suppose.
Physical goods can be taxed on sale though, that's easy.
If the assets in question are equities listed on a public market it's actually quite easy for the government to assess the value.
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…
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...
If you qualify and feel it's unjust, you could simply go and buy your own country.
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).
" 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 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.
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...
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.
I'm not convinced.
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.
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.
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.
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.
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?
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.
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.
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.
Of course we can't do either of these things (gov debt and people with power have money -> own land -> love strict zoning)
