If you think that it’s only the 700 or so billionaires at the very top of the financial food chain that are awaiting the salivating lefts taxation plan you may want to think again. As much as that excites them to no end, they have more draconian ideas to turn the nation into the socialist dystopia they dream of. Why stop with so few, when so much more can be extracted from those of you who really don’t need it. But I digress.
Put forth by Oregon Senator Ron Wyden on October 27, 2021, he states his manifesto for this herculean tax as follows:
“Working Americans like nurses and firefighters pay taxes with every paycheck, while billionaires defer paying taxes for decades, if not indefinitely. The tax code’s preferences for capital income over wage income fuel the concentration of dynastic wealth among the nation’s billionaires. The wealthiest few who avoid taxes by indefinitely holding assets are also able to borrow against those assets to fund their lifestyles. This means they opt out of paying taxes and instead pay only low interest rates on loans from Wall Street banks. As a result, middle-class families who earn their incomes from wages and salaries may face higher average tax rates than billionaires.”
Senator Ron Wyden
I left out the gratuitous portion regarding paying their fair share for child care, paid leave, the climate crises, blah, blah, blah. Anyway, why should this affect other wealthy Americans who lay downstream of this proposal? Well, one must read between the lines to observe a radical change in this approach to taxation. According to Laura Saunders of the Wall Street Journal, “What made this a landmark proposal is that it would have fundamentally altered the way Americans are taxed. As the law works now, people typically owe taxes when a cash event happens—as when a worker is paid wages or an investor sells an asset.” However, the Wyden proposal would have taxed individuals on the paper gains of profits, as opposed to an actual sale.
I’m guessing the hair is starting to stand up on the back of your neck at this point. Once in place, it would surely be a matter of time until the tax was broadened to apply to the assets of less wealthy taxpayers. Michael Graetz, a former Treasury Department official who teaches at Columbia University’s law school, says, “The billionaire’s tax was a dramatic change in rules that have been around for more than a century.” We’ve gone from Steve Forbes’ flat tax idea to mucking up the waters even more, where sophisticated tax advisors will work tireless to get around the system. As such, the heavy hand of the Internal Revenue Service will come into play to surely hunt down those Americans who have actually succeeded in finding the American financial dream, and to make them pay. This isn’t the first dance between big money and big government. In most cases big money still can win out. As usual, Democrats’ biggest challenge in designing such a tax may be devising ways to make sure that the richest Americans actually end up paying it. “The lawyers and accountants are going to be winners in this,” said Warren Racusin, a partner at Lowenstein Sandler in New York.
While pretending to have the back of the proletariat, the bourgeois has a disdain for publically traded assets like stocks and bonds, but not so much for their prized artwork and other non-public businesses that are harder to value. One can see where assets will ebb and flow from publically traded assets to more esoteric ones in the pursuit of tax avoidance. You have to wonder if this might not have a deleterious effect on the stock market at some point in the future.
So how do the other Americans with money deal with this or something like it down the road? One way to stay out of the grip of the billionaire’s tax could be to give your assets away to family. Especially rich families may spread the wealth to “try to make it so there are multiple taxpayers that are all under $1 billion,” said Thomas Giordano, a partner at Karlin & Peebles in Los Angeles. And if you’re not tight with family, just give it away! Charity will likely be a big winner in this as well. The large seas are filled with water from rivers and streams. There are many more small streams and creeks than there are oceans, as there are more with less than there are billionaires. For politicians, the allure of taxation to pay for their causes makes those at the top an easy mark. However, there are more of you than them, and over half of you voted to be taxed. After all, they know better what to do with your money than you do, right?
