That’s why I ask that METARs not post on legislation in progress. Only post when it actually passes.
Disagree. It is much easier to stop a piece of legislation from passing if enough people contact their congressmen/women/whatever than it is to get a piece of legislation changed or repealed after it has been enacted.
IMHO discussion of proposed legislation should be okay - as long as we stay away from discussion of the proposers, supporters, and opposers.
“My objection is that these are on unrealized capital gains. Once the tax is paid, the money is gone gone gone. What happens if the value of the asset drops? What if there are losses? Will the IRS reimburse?”
I’m not concerned - these applies to people with $100,000,000 minimum.
I mean who cares?
If the value of the asset drops by 50%, they’ve still got $50,000,000 left and no longer pay the tax.
“I’m not concerned - these applies to people with $100,000,000 minimum.
I mean who cares?”
Because if it works, then next year it might apply to people with 10 million…then 1 million - those “MILLIONAIRES and BILLIONAIRES”.
Like to pay 20% of your IRA value and stock assets each year to Uncle Sam?
I suspect the ‘rich’ will find ways to dodge the taxes. Moving stuff into offshore trusts. Partnerships that generate massive losses.
t.
I’m not concerned - these applies to people with $100,000,000 minimum.
I mean who cares?
Me too would love to have that problem.
But seriously- the positive would be to contribute towards social peace by getting that GINI a bit under control. The consideration here is that Elon et al. would likely have to sell a lot of his company’s shares to pay the tax, gradually reducing his stake and influence (arguably that could turn out both negative or positive).
Other than that, taxing unrealized gains brings with it challenges in form of necessary periodic valuations, even on illiquid assets, and may be exposed to constitutional challenge, especially if levied only from a 100m threshold.
Lastly, once implemented for the billionaire crowd, politicians‘ appetite for steadily lowering the threshold may grow.
Then again, I strongly suspect a lot of well-funded lobbyists and lawyers are very busy already ensuring the proposal gets shredded before any ‚harm‘ is caused to the job creators.
However, I do object to calling it a “Billionaire’s” tax when those who are worth a mere $100 million are to be treated as if they were ten times more wealthy than they are.
Ha Ha. You must be totally out of touch with the average billionaire-want-to-be!
Mr 101M is golfing with his richer friend, Mr 1.01B. And he says, “yeah that billionaire tax is a killer, my accountant says I can’t get around it.”
Mike
< As the most active discussion board on the Motley Fool, METAR is surely on the radar of savvy policymakers. >
Do you really think so?
I’d be flattered but honestly I don’t think anyone cares what we say here.
Wendy
I’m sure most most are replying almost tongue in cheek, but does anyone think this has
a 1 in a billion chance of being enacted into tax law ??
Have y’all forget who writes the tax laws ?? lol
Don’t spend too much time worrying about the billionaires, they’ve had their
lobbyist on high alert from the second they heard the first hint of this.
They’ll probably end up getting a tax cut out of it.
Disagree. It is much easier to stop a piece of legislation from passing if enough people contact their congressmen/women/whatever than it is to get a piece of legislation changed or repealed after it has been enacted.
Agree. The time to decide if legislation is good or not it before, not after it has passed.
we don’t know anyone even close to this level of assets
We know two. One is a Democrat, active in the party, fundraising, etc. She acknowledges that the wealthy should have a higher tax rate. The other I don’t know anything about his politics.
But I have a few objections to this legislation. First has already been mentioned: taxing unrealized gains. It’s a needless complication: taking, then having to rebate if the value goes down, and how do you account for artwork, jewelry, or other things which have only approximated value year by year? Are you going to have them appraised every year? What a job! And what an opening for fraud. Why, you might declare the value of a building to be far less than it’s worth for tax purposes, not that anyone would actually do that, I suppose.
I also don’t like the “hard cutoff” idea: zero below, 20% above. (OK, not actually zero, but pretty close in some cases.) There is already a mechanism to do this, it’s called the progressive income tax. Having a hard cutoff is another inducement to shenanigans.
I think there’s also an inducement for the super-wealthy to renounce their citizenship and declare domicile in some Central American country (or other), so if there’s to be a tax it ought to be on “wealth earned” in this country, not necessarily “wealth owned”. Again I’m not sure how you police that, but I’d not be happy to see some of the great entrepreneurs chased away once they acquire substantial wealth.
Oh. And get rid of the “step up” basis on inheritance. At SOME point, taxes should be paid on great wealth, just like the rest of us. I see no reason for the Walton daughters to have multiple billions sitting around while the workers who built the company are on food stamps.
< As the most active discussion board on the Motley Fool, METAR is surely on the radar of savvy policymakers. >
Do you really think so?
I’d be flattered but honestly I don’t think anyone cares what we say here.
Wendy
I would suspect they don’t even know who TMF is.
IP
It’s not without precendent however. My property taxes on my house (Texas) is exactly that.
Bingo!
In something like 48 states just about all adults are paying this sort of tax for decades on autos and housing. It is far more onerous for 99.9% of our citizens than it will ever be for someone with assets over $100 million.
There is another principle here. In the Great Depression we discovered as a nation that our economy is dependent on breadlines, figuratively speaking, to cycle the money supply. In 1981 we decided, some of us anyway, to try and shake the breadlines. What we have found is now only billionaires and millionaires dominate the breadlines. This money is owed the rest of us as American citizens. It is long over due.
Yes this will be changed again to get rid of the tax in possibly less than ten years. I am for that as well. This is really in large part about the needs of the economic cycle. We need a vibrant middle class back. We need our manufacturing base back. We need major investment in America.
"This is really in large part about the needs of the economic cycle. We need a vibrant middle class back. We need our manufacturing base back. We need major investment in America. "
Taxing folks with the capital which can be invested has always been the most successful way to
grow the economy.
Howie52
And should it not generate the government funding desired, the tax can always be increased and
the number of folks taxed can also be increased.
Government for the select, by the select and from where-ever there might be someone else’s money.
Without getting into the debate about the specific legislation…
I think there’s also an inducement for the super-wealthy to renounce their citizenship and declare domicile in some Central American country (or other), so if there’s to be a tax it ought to be on “wealth earned” in this country, not necessarily “wealth owned”. Again I’m not sure how you police that, but I’d not be happy to see some of the great entrepreneurs chased away once they acquire substantial wealth.
There is already a big disincentive for this. There is an “exit” tax for anyone denouncing citizenship if they have a net worth > ~$4.2 million (for a couple). And that tax is like 41% on total net worth.
and how do you account for artwork, jewelry, or other things which have only approximated value year by year? Are you going to have them appraised every year? What a job! And what an opening for fraud.
And all of this is considered in the exit tax.
If it hasn’t already been mentioned, the taxation of unrealized gains would likely require the liquidation of “something” - the sudden sale of which by lots of people would drive the prices of those assets lower.
Jeff
once implemented for the billionaire crowd, politicians‘ appetite for steadily lowering the threshold may grow.
And this is why I oppose taxing unrealized gains. They shouldn’t even be called “gains,” because they can evaporate at any time, exactly as they did on October 29, 1929, and many, many other times.
If they start taxing us on money that we haven’t earned yet, there will no end of it. And one party would rather tax poor people than rich people, so you know it would never stop with the multimillionaires.
I’m not concerned - these applies to people with $100,000,000 minimum.
I mean who cares?
You should. We all know how bad politicians are at math. So they name this the “billionaire tax” but the start line is 1/10th that. And remember 10+ years ago about raising taxes on millionaires but when the details were released a married police officer and school teacher would have increased taxes.
Definite an "F"s for truth in advertising.
So how low does the threshold have to go before you care? Because that is where politicians will take it.
JLC
“And get rid of the “step up” basis on inheritance. At SOME point, taxes should be paid on great wealth, just like the rest of us. I see no reason for the Walton daughters to have multiple billions sitting around while the workers who built the company are on food stamps.”
Walmart is paying $15/hr to start here. And health care benefits.
Of course, you’d allow ‘inflation’ to be counted, right? Buy 100 shares of XYZ in 1960, and by 2020, probably half the ‘gain’ is just for inflation. Your $30,000 house in 1960…now worth $500,000…but half the gain is just inflation. Not ‘wealth’.
“And get rid of the “step up” basis on inheritance. At SOME point, taxes should be paid on great wealth, just like the rest of us. I see no reason for the Walton daughters to have multiple billions sitting around while the workers who built the company are on food stamps.”
Your property tax (and any personal property tax in some state on cars, planes, boats) is a STATE TAX, which states can do. Or municipal tax or county tax. Big difference.
The billionaire tax law will fail for several constitutional problems. First, the constitution says the feds can only have ‘direct taxes’ proportional to state population. There is no ‘wealth’ ‘direct tax’ …
One obvious way around this would be to have ‘billionaires’ contribute large sums to their ‘family foundations’ and 'charitable foundations. Like the Clintons, where Clinton kids get nice $500,000 ‘director jobs’ for life. Those foundations would be tax exempt.
If fact, they are already doing it with Buffet promising to give ALL his wealth to the Gates Foundation. Billions and billions and billions, along with of course, Bill Gates. That might just speed up the transition or cause more ‘foundations’ to be created.
Let’s see…the Elon Musk Space Foundation - which funds research and development into space travel.
The Elon Musk advanced car foundation - which funds research into EVs and autonomous driving cars…
All donations would be, of course, written of as charitable donations likely reducing their income taxes on ‘unrealized gains’ by 90%…
Of course, that 100 million limit…with 8% inflation for 10 years, would move the curve down to just ‘50 billion’ equivalent… if not inflation indexed…and before you know it in another 10 years of high inflation, down to 25 million equivalent…
There’s a reason the Kennedy clan keeps most of it’s real estate in off shore 'Family" trusts. They ‘rent’ their homes. The offshore trust likely pays next to zero income taxes as it’s set up ‘not to make money’.
t.
“So how low does the threshold have to go before you care? Because that is where politicians will take it.”
I’m not worried. There’ll be regime change before it gets down to ordinary people’s level, even ordinary rich people.
$100,000,000 - seriously?
F*** them…
I’m not worried. There’ll be regime change before it gets down to ordinary people’s level, even ordinary rich people.
$100,000,000 - seriously?
F*** them…
Exactly. What seems to be lost on these big economic “thinkers” is that if “100 millionaires” and inherited wealth continues to escape taxation, lower income millionaires will have to pay even more.
Remember, the dumbest thing you can do in America, tax-wise, is to work for wage & salary income.
intercst
<>
It’s not without precendent however. My property taxes on my house (Texas) is exactly that.
Absurd! Your property taxes in Texas HAVE NO RELATION WHATSOEVER to unrealized capital gains on that house.
There are 5 identical houses on your block, they are each worth $1M, and the assessed value is $1M, and the tax rate is 1.8%, so each house has $18,000/yr in property taxes. You bought your house 17 years ago for $200k and are sitting on an $800k unrealized capital gain. The neighbor to your right bought it 3 months ago for $1.05M, and is sitting on a $50k unrealized capital loss. The neighbor to your left bought 2 years ago at $750k, and is sitting on a $250k unrealized capital gain. Yet, all 3 of you pay the same amount of property taxes - $18k/yr.
Absurd! Your property taxes in Texas HAVE NO RELATION WHATSOEVER to unrealized capital gains on that house.
There are 5 identical houses on your block, they are each worth $1M, and the assessed value is $1M, and the tax rate is 1.8%,
Mark,
The burden of property taxes which are different than assets, but at the same wedding going down the aisle, is the $100 million minimum to face this tax. There is no burden for the multimillionaire paying this. There is a very large burden on small property owners.
The reasons people have $100 million and up involve gaming the system. The system needs to call in a few chips. We need economic growth. This thread should be including that as the motive.