President plans to unveil new 20% 'minimum tax' on 700 super-rich Americans that would levy ALL forms of income for families worth more than $100M

daily mail ^

[algore]

the worlds richest men, including Elon Musk and Jeff Bezos, have much of their wealth in the form of stock.

As their stock rises in value, they are able to finance lavish lifestyles by taking out loans secured by their stock holdings. But loans are not taxed as income, and in many cases the interest payments are tax deductible.

The rising value of stock holdings -- known as unrealized gains -- is also not taxed as income. Capital gains taxes are only imposed when the stock is sold.

s a result, some 400 billionaire families paid an average federal tax rate of just over 8 percent of their income between 2010 and 2018, according to an estimate from the White House Office of Management and Budget and Council of Economic Advisers.

However, critics of a 'wealth tax' argue that treating unrealized gains as income is unfair and could lead to unintended consequences.

If billionaires are forced to pay taxes on the rising values of their stocks, even before they sell them at a profit, they could be forced to sell off control of companies that they founded in order to pay their tax bills, critics say.

Under Biden's new plan, billionaires already paying more than 20 percent in federal taxes would not owe additional taxes, according to the Post.

The taxes paid toward the minimum tax would count toward whatever billionaires owe whenever they sell their stock and pay ordinary capital gains taxes.

'The Billionaire Minimum Income Tax will ensure that the very wealthiest Americans pay a tax rate of at least 20 percent on their full income,'

'This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters.'

[Purpleperson]

It is a smokescreen,
The real target is retirement savings taxes, which they pass after midterms.

[norwaypinesavage]

"Please tell me where I’m wrong here"

It only works when the value of the stock goes up. Ask the Facebook people who had the stock value get cut in half.

[rktman]

That should bring down gas prices. WTAF? Do something that will actually help the citiz.......... Never mind.

[Wuli]

Won’t get past Manchin I’m betting.

[Mercat]

20% of what?

[Pearls Before Swine]

It’s part of the drive to full employment. The more dependent on government, the merrier.

[aquila48]

“Then, because of market influences, or inflation, suddenly, it is worth three times as much. The local tax assessors now hand you a property tax bill three times higher than what it was 15 years ago. What did you do wrong?”

Oddly enough here in Californiaof all places that’s one problem we don’t have thanks to Howard Jarvis’ Prop 13 passed many years ago. Your property taxes are based on your purchase price not the current assessed value, though there’s a small adjustment in the value each year.

Also the tax rate was orinally set at one percent, now it has gotten a bit higher, but still relatively low.

[nathanbedford]

What is the purpose of our tax system? Is it to raise money or punish people?

A fair question to which I would add algore's amendment that it's about control.

Once we permit our government to depart from raising revenue for legitimate, that is for enumerated powers, we embark on a path of tyranny. We have traveled this path for nearly a century now.

The very practical questions about the proposition in its present form demonstrate that it is unworkable. Taxing people for unrealized capital gains is preposterous and would simply destroy our stock markets. The question about credits for unrealized losses is fair and obviously puts in stark relief the absurdities of the proposition. We cringe when we contemplate these absurdities and we reflexively react when we know that these absurdities are a wet dream of Elizabeth Warren.

So these are practicalities clearly exist but what is the greater danger that we face? This road to tyranny is a threat against our individual liberties by a government too big, too intrusive, and ultimately tyrannical. But what about a threat we now face from another source? I ask about the manifest danger to our liberty posed by these oligarchs who now clearly control our speech, our elections, our Congress and, ultimately, our destinies. Who controls the deep state? Who owns Biden? Is a China or the oligarchs, or both?

We decry the power of Davos as we decry the power of the deep state but are they not one and the same? If we measure the technological revolution we find ourselves controlled by today with the billions of dollars possessed by these oligarchs who have demonstrated a willingness to spend hundreds of millions to control our elections and ruthlessly censor our national discourse, do we not face as great a threat to our liberty? Have we learned nothing from our bondage to billionaires acting through our government and the medical establishment during Covid? Who controls your treatment of your infection, your family practitioner or Bill Gates? If the answer is Bill Gates as I think it is, do we not live in tyranny?

I have argued on these threads many times that great wealth in and of itself is not a threat provided that wealth was not used to influence politics and provided further that the way to wealth for others was left open. Clearly, these provisos have been swept away.

We are in an age in which our political institutions are unable to cope with the power of oligarchs. We are in an age in which crony capitalism dictates the way to wealth. We are in an age in which our political system has become thoroughly corrupt.

Are we not at a turning point in which we must defend our liberty and take back our government by reining in these "malefactors of great wealth?"

How to do it without immense collateral damage done by unintended consequences is the problem. Are these consequences worse than the problem itself? Are these questions worth thinking about? If we ignore them and leave these oligarchs alone will these oligarchs leave us alone?

[cgbg]

“Large amounts of income are nearly impossible to legally disguise.”

I totally disagree with this.

We have a post a few months ago about life insurance schemes where the payout could be controlled for tax purposes.

Offshore or other corporations can be created to hide wealth.

Assets can be held with leases instead of ownership.

Options can be held instead of actual stock.

Real estate can be held by relatives or businesses.

Fine art can be “loaned” to museums with future times for their return.

A good tax attorney could write several books on this topic.

The mere threat of this tax would be enough to cause many wealthy folks to completely rearrange their financial affairs to avoid the tax.

[buwaya]

Apple and co. didnt create it really. This goes back a long way. Warren Buffet for instance.

Dividends were an income stream for small stockholders when small individual stockholders were typical. These days with broad stockholding being much mor a matter of mutual funds, especially in tax deferred investment accounts (IRA and 401K), small stockholders also depend on capital accumulation just like the billionaires.

[SauronOfMordor]

If you REALLY want to tax the super rich, just cancel the tax exempt status of their foundations. The Clinton foundation, the Bill and Melinda Gates Foundation, the Rockefeller Foundation, all of them.

Make them pay full corporate tax on their investment income.

THAT would make the oligarchs scream.

[Chewbarkah]

Let’s pray that jealousy does not help this awful concept pass. Taxing unrealized capital gains will cause havoc in financial markets when the super-rich have to SELL securities to pay their taxes on gains they have never made. The sell-off will trigger a landslide in the stock market, and destroy the wealth of all Americans with retirement funds and invested savings. So after the first go round, there will be little in the way of gains to tax. It is dead certain that once the Dems start down this road, they will reduce the threshold until they tax away the savings of everyone. What happens in their scheme if people have unrealized net losses?

This is an existential threat to capitalism and prosperity in America. Worst idea out there.

[ridesthemiles]

STOCK GOES DOWN??? TAX CREDIT???

Don’t bet on it.

[ridesthemiles]

That is their untimate end goal.

Everyone will pay for the uptick in value if everything they own.

I breed a mare-—she foals out a nice offspring.

I support/feed/water/house/train that foal to age 4-5-6. I have put in alot of sweat equity.

IF I keep that horse for my own use-—do I pay a tax on that
UNREALIZED VALUE” also ?????

[ridesthemiles]

THAT SCENARIO is exactly what led to Prop 13 in Calif in 1978.

[ridesthemiles]

The value of my 1979 Buick station wagon & my 1976 1 ton Chevy truck have gone UP due to lack of used vehicles.

[Kevmo]

I propose that we eliminate 90% of the federal government and return power to the states and the people… By force if necessary.
***I'm with you on that... I think. From my home page

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Secession

It's time for us to jettison those who reject our national values because there's no changing them. Time to secede.

We should extend the invitation to secede on a county by county basis.

While we're at it, since we'd be forming a new country, we should extend the invitation to counties in Canada and Mexico as well.

Note that this option is becoming increasingly popular.

https://freerepublic.com/focus/f-chat/4000029/posts

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[BitWielder1]

First they came for the multimillionaires...
That limit will drop quickly, especially if we go to war.

[freedomjusticeruleoflaw]

I think Alberta Manitoba British Columbia Winnipeg etc. would definitely join the new union.

[Tolerance Sucks Rocks]

I’m aware they want to tax a gain, but since the stock isn’t sold, isn’t this a sort of stamp tax on appreciating stocks? In other words, a kind of wealth tax?

At least a capital gain on sale is more like a form of income, subject to ordinary capital gains tax.

And if the stock goes down in one year, do they get to deduct an unrealized loss? It just sounds nutty to me, since there would probably be some obnoxious worksheet that investors would have to use, listing all their stocks and the supposed gains for each of them.