Ultra Millionaire Tax Proposal

[The General]

Proposal

Some of the highlights:

"The bill, called the Ultra-Millionaire Tax Act, would apply an annual 2% tax on individuals with net worths between $50 billion and $1 billion. Individuals worth over $1 billion would pay an annual 3% tax...estimates are that the tax would generate $3 trillion in revenue over 10 years...it is  proposed that the new federal money would be invested in programs such as child care, education and infrastructure.

Biden doesn't appear on board with this. Don't believe he has discussed this since being elected, I am sure he talked about this during debates but I can't recall his responses.

Closest I see related to this is his Treasury Sec talking about this: LINK

What say you? Where do you fall here?

[Shula-holic]

8 minutes ago, The General said:

Proposal

Some of the highlights:

"The bill, called the Ultra-Millionaire Tax Act, would apply an annual 2% tax on individuals with net worths between $50 billion and $1 billion. Individuals worth over $1 billion would pay an annual 3% tax...estimates are that the tax would generate $3 trillion in revenue over 10 years...it is  proposed that the new federal money would be invested in programs such as child care, education and infrastructure.

Biden doesn't appear on board with this. Don't believe he has discussed this since being elected, I am sure he talked about this during debates but I can't recall his responses.

Closest I see related to this is his Treasury Sec talking about this: LINK

What say you? Where do you fall here?

I don't think it's constitutional and I also feel it's double taxation.  I'd rather this be addressed in the income tax code.  I realize even as a fiscal conservative we have to have some revenue component to getting the deficit/debt under control, I just don't see this working.  Several European countries have tried this as well and it failed.

[joffer]

between $50 million and $1 billion right?

who is determining someone’s net worth? IRS?

[tonydead]

Math

Biden wont really do any of these types of things. His palms are greased.  

[parasaurolophus]

14 minutes ago, joffer said:

between $50 million and $1 billion right?

who is determining someone’s net worth? IRS?

Yes. In the general's defense the typo is in the article itself. 

[Shula-holic]

13 minutes ago, joffer said:

between $50 million and $1 billion right?

who is determining someone’s net worth? IRS?

This is part of the issue.  You're trusting the taxpayer to establish this.  I'm sure their tax attorneys and CPA's will find a way to try and defend an insanely low number.  Many assets have very difficult values to determine.  As a former auditor myself, I don't know how you'd train IRS agents in the field to try and fairly value many assets.  Not everything is as simple as looking at the closing price of a stock on 12/31,

[The General]

13 minutes ago, Shula-holic said:

This is part of the issue.  You're trusting the taxpayer to establish this.  I'm sure their tax attorneys and CPA's will find a way to try and defend an insanely low number.  Many assets have very difficult values to determine.  As a former auditor myself, I don't know how you'd train IRS agents in the field to try and fairly value many assets.  Not everything is as simple as looking at the closing price of a stock on 12/31,

Yellen in that article I added in the OP seems to agree with this and says money needs to come but Warren’s path isn’t the best / most effective way to do this.

[The General]

14 minutes ago, parasaurolophus said:

29 minutes ago, joffer said:

between $50 million and $1 billion right?

who is determining someone’s net worth? IRS?

Yes. In the general's defense the typo is in the article itself.

Apparently yahoo’s people are as thorough as I am

Yes this proposal is def 50 million to 1 billion. Just watched Warren in an interview talking about this.

[The General]

21 minutes ago, tonydead said:

Math

Biden wont really do any of these types of things. His palms are greased.  

Biden is def not aligned with Warren on this (at least if my memory is correct from the debates).

[The General]

36 minutes ago, Shula-holic said:

I don't think it's constitutional and I also feel it's double taxation.  I'd rather this be addressed in the income tax code.  I realize even as a fiscal conservative we have to have some revenue component to getting the deficit/debt under control, I just don't see this working.  Several European countries have tried this as well and it failed.

I take it you would be in favor of revenue coming from what is considered “ultra-wealthy” in some form.

If so, what would be a more effective way to achieve this?

[Shula-holic]

Just now, The General said:

I take it you would be in favor of revenue coming from what is considered “ultra-wealthy” in some form.

If so, what would be a more effective way to achieve this?

There's several ways.  I'm probably not in line with most fiscal conservatives when I say this but if you truly want to address this it's firmly my belief you have to address the capital gains tax at some level.  It is true we want to encourage investment but maybe you have to look at stratifying capital gains into additional brackets.  I've said here many times I can't stand when we get the stale political talk about the rich paying "their fair share" and to address that they trot out the old talking points of changing incremental earned income rates.  They fail to tell you that the people Warren is mentioning aren't touched in any significant way by a change in earned income rates so it's really nothing more than political speak.  I don't think it's too hard when you look at who the big donors are to political campaigns as to why that happens.

[The General]

4 minutes ago, Shula-holic said:

There's several ways.  I'm probably not in line with most fiscal conservatives when I say this but if you truly want to address this it's firmly my belief you have to address the capital gains tax at some level.  It is true we want to encourage investment but maybe you have to look at stratifying capital gains into additional brackets.  I've said here many times I can't stand when we get the stale political talk about the rich paying "their fair share" and to address that they trot out the old talking points of changing incremental earned income rates.  They fail to tell you that the people Warren is mentioning aren't touched in any significant way by a change in earned income rates so it's really nothing more than political speak.  I don't think it's too hard when you look at who the big donors are to political campaigns as to why that happens.

This is what Warren Buffet talked about, right? That he was taxed at a lower rate than his secretary.

[Shula-holic]

1 minute ago, The General said:

This is what Warren Buffet talked about, right? That he was taxed at a lower rate than his secretary.

Yes I believe so.  I remember the story but not a lot of details.  But this is the most likely way that occurs.

[fatguyinalittlecoat]

I’m a huge fan of the bill but as mentioned above I can’t see it getting through this Supreme Court.  I’d support a constitutional amendment.

[The General]

Seems so far that people realize that the money needs to be raised, and that the ultra rich should be where it comes from.

I guarantee that this polls highly in both parties.

Got to be a way to do this.

[Sand]

1 hour ago, The General said:

What say you? Where do you fall here?

It's unconstitutional, generally unworkable, will bring in way less than proposed, and will create a cottage industry in appraisals.  There is a reason just about every country that has tried this has dropped it.  It's generally ineffective.  From the article - "there were some clear themes with the policy: it was expensive to administer, it was hard on people with lots of assets but little cash, it distorted saving and investment decisions, it pushed the rich and their money out of the taxing countries—and, perhaps worst of all, it didn't raise much revenue."

I'm baffled, other than dreams of schadenfreude, why this has any serious consideration behind it.

 

24 minutes ago, Shula-holic said:

There's several ways.  I'm probably not in line with most fiscal conservatives when I say this but if you truly want to address this it's firmly my belief you have to address the capital gains tax at some level.  It is true we want to encourage investment but maybe you have to look at stratifying capital gains into additional brackets.  I've said here many times I can't stand when we get the stale political talk about the rich paying "their fair share" and to address that they trot out the old talking points of changing incremental earned income rates.  They fail to tell you that the people Warren is mentioning aren't touched in any significant way by a change in earned income rates so it's really nothing more than political speak.  I don't think it's too hard when you look at who the big donors are to political campaigns as to why that happens.

Capital gains and repealing the carried interest provision are the effective ways to get this done if it is to be done.

[Shula-holic]

1 minute ago, Sand said:

It's unconstitutional, generally unworkable, will bring in way less than proposed, and will create a cottage industry in appraisals.  There is a reason just about every country that has tried this has dropped it.  It's generally ineffective.  From the article - "there were some clear themes with the policy: it was expensive to administer, it was hard on people with lots of assets but little cash, it distorted saving and investment decisions, it pushed the rich and their money out of the taxing countries—and, perhaps worst of all, it didn't raise much revenue."

I'm baffled, other than dreams of schadenfreude, why this has any serious consideration behind it.

 

I can't even imagine the size of the enforcement staff if you truly wanted to audit someone like a Bezos or Buffett in regard to this kind of tax.  Perhaps even more difficult would be someone with old family money with assets very diverse and not as heavily weighted toward easily valued assets.  Then you'd have to consider the tax court implications, these things could get drawn out years for each year of return you wanted to audit.  You'd need massive expansion of tax court capacity and an immense support staff.

[parasaurolophus]

14 minutes ago, fatguyinalittlecoat said:

I’m a huge fan of the bill but as mentioned above I can’t see it getting through this Supreme Court.  I’d support a constitutional amendment.

Would an amendment make it legal to tax wealth on anybody or just above 50 million? 

[The General]

7 minutes ago, Sand said:

It's unconstitutional, generally unworkable, will bring in way less than proposed, and will create a cottage industry in appraisals.  There is a reason just about every country that has tried this has dropped it.  It's generally ineffective.  From the article - "there were some clear themes with the policy: it was expensive to administer, it was hard on people with lots of assets but little cash, it distorted saving and investment decisions, it pushed the rich and their money out of the taxing countries—and, perhaps worst of all, it didn't raise much revenue."

I'm baffled, other than dreams of schadenfreude, why this has any serious consideration behind it.

 

Capital gains and repealing the carried interest provision are the effective ways to get this done if it is to be done.

Let’s do that then. Or a bit of both.

More importantly it seems people are in agreement that we need to raise revenue. This revenue will come from the very wealthy.

[Shula-holic]

2 minutes ago, The General said:

Let’s do that then. Or a bit of both.

More importantly it seems people are in agreement that we need to raise revenue. This revenue will come from the very wealthy.

I think the real problem is the political establishment of both parties are financed by people who this would directly impact.  We sometimes get drawn into name calling against politicians who aren't on our side, but very few of them are truly stupid.  Even if a few were, there's no way in their political career to get to where they are they haven't been made well aware of it.

Edited March 2 by Shula-holic

[Sand]

9 minutes ago, parasaurolophus said:

Would an amendment make it legal to tax wealth on anybody or just above 50 million? 

An amendment would generally open the door to a direct tax like this, just like the 16th did for income taxes.

It is legal for a wealth tax to be imposed right now, but it would have to be apportioned.  If you thought people were fleeing California now...

ETA:  It would be funny to see the good Gov. Newsom's reaction when the Warren wealth tax was ruled by SCOTUS that it was to be apportioned starting immediately.  

Edited March 2 by Sand

[Sand]

1 minute ago, Shula-holic said:

I think the real problem is the political establishment of both parties are financed by people who this would directly impact.  

It's why, shockingly enough and despite DJT speaking heavily about ending the practice, the carried interest rule didn't get removed by the TJCA.

[fatguyinalittlecoat]

1 minute ago, Sand said:

An amendment would generally open the door to a direct tax like this, just like the 16th did for income taxes.

We could make the amendment say whatever we want it to say.  If we want the government to be limited to only taxing the wealthiest 2%, that could be part of the amendment.

[Sand]

1 minute ago, fatguyinalittlecoat said:

We could make the amendment say whatever we want it to say.  If we want the government to be limited to only taxing the wealthiest 2%, that could be part of the amendment.

No doubt - there is no structure to follow for these.  Heck, we could pass an amendment allowing our dogs to vote.  Except poodles - everyone hates those.

[Shula-holic]

1 minute ago, Sand said:

It's why, shockingly enough and despite DJT speaking heavily about ending the practice, the carried interest rule didn't get removed by the TJCA.

Definitely.  I also am certain if you asked the average voter or taxpayer to write a couple of sentences about carried interest you would have in the low single digits percentage of people who actually could do so.  It's why the "fair share" piece is always tied to the incremental rates.  It always sounds great to the general public because most of them have no reason to know how someone at that level of wealth generates income and the tax law in that area.

[The General]

6 minutes ago, Shula-holic said:

I think the real problem is the political establishment of both parties are financed by people who this would directly impact.  We sometimes get drawn into name calling against politicians who aren't on our side, but very few of them are truly stupid.  Even if a few were, there's no way in their political career to get to where they are they haven't been made well aware of it.

Does this address what you are talking about?

I don’t think that double taxation is an issue when talking about this amount of wealth.

What you are saying about applying this in realty does make sense and is a potential issue for me with that - it won’t work well.

I would like to hear Warren’s response to this.

[Shula-holic]

8 minutes ago, fatguyinalittlecoat said:

We could make the amendment say whatever we want it to say.  If we want the government to be limited to only taxing the wealthiest 2%, that could be part of the amendment.

The biggest problem is how do you determine who those 2% are?  There's no database of net worth to draw it from.  Essentially we would be relying on the taxpayers themselves.

[Sand]

1 minute ago, The General said:

I would like to hear Warren’s response to this.

She doesn't have one.  It's all about posturing and garnering support by sticking it to those evil, rich bastards.

[The General]

1 minute ago, Sand said:

She doesn't have one.  It's all about posturing and garnering support by sticking it to those evil, rich bastards.

She’s trying to raise revenue, people are arguing in an ineffective way. But aren’t people saying this money should be taken just in other more effective forms? 

[Shula-holic]

8 minutes ago, The General said:

Does this address what you are talking about?

 

That's what they are getting at but I think we will see reality when it's time for the rubber to meet the road.  What I mean by that is I doubt there's any serious level of support on this to where the politicians have to put their name beside a vote on this issue.  

Edited March 2 by Shula-holic

[Sand]

6 minutes ago, Shula-holic said:

The biggest problem is how do you determine who those 2% are?  

That dips down to households with 2M or so.  In other words, those that have saved and invested for retirement on 80k/year.  Not exactly the caviar and Ferrari crowd.

[The General]

3 minutes ago, Sand said:

That dips down to households with 2M or so.  In other words, those that have saved and invested for retirement on 80k/year.  Not exactly the caviar and Ferrari crowd.

So I understand are you saying your problem with Warren’s proposal is that it would be easily dodged and not that people at a certain level should be taxed higher?

[timschochet]

Is it just individuals or is it corporations as well? 

[Sand]

1 minute ago, The General said:

So I understand are you saying your problem with Warren’s proposal is that it would be easily dodged and not that people at a certain level should be taxed higher?

My problems with it are legion.    Seriously, it is double taxation and it's a dumb way to tax people if you really want an effective tax.  Capital gains is the effective way.  

[Sand]

5 minutes ago, timschochet said:

Is it just individuals or is it corporations as well? 

Oh, please for the love of all that's holy, let's not get into Citizen's United.

[supermike80]

Its an utter shame. People go out and make money, legally.  And everyone wants to take it away from them

What a counrty

[knowledge dropper]

10 hours ago, Shula-holic said:

This is part of the issue.  You're trusting the taxpayer to establish this.  I'm sure their tax attorneys and CPA's will find a way to try and defend an insanely low number.  Many assets have very difficult values to determine.  As a former auditor myself, I don't know how you'd train IRS agents in the field to try and fairly value many assets.  Not everything is as simple as looking at the closing price of a stock on 12/31,

My state used to have a corporate net worth tax.  We got rid of it 15+ years ago for the very reasons you mentioned.  Nobody ended up paying anything -especially larger taxpayers.  Also, taxing on your net worth often does not mean they have the liquidity to pay the tax.  What makes sense in theory to some gets impractical to implement.  

[The Commish]

10 hours ago, Shula-holic said:

There's several ways.  I'm probably not in line with most fiscal conservatives when I say this but if you truly want to address this it's firmly my belief you have to address the capital gains tax at some level.  It is true we want to encourage investment but maybe you have to look at stratifying capital gains into additional brackets.  I've said here many times I can't stand when we get the stale political talk about the rich paying "their fair share" and to address that they trot out the old talking points of changing incremental earned income rates.  They fail to tell you that the people Warren is mentioning aren't touched in any significant way by a change in earned income rates so it's really nothing more than political speak.  I don't think it's too hard when you look at who the big donors are to political campaigns as to why that happens.

Said this a billion times on these boards. Captial gains needs to be scheduled. 

Now bring on all the fear mongering that says it will be the end of the stock market if we do this.

[Shula-holic]

4 minutes ago, knowledge dropper said:

My state used to have a corporate net worth tax.  We got rid of it 15+ years ago for the very reasons you mentioned.  Nobody ended up paying anything -especially larger taxpayers.  Also, taxing on your net worth often does not mean they have the liquidity to pay the tax.  What makes sense in theory to some gets impractical to implement.  

I could see that leading to corporations also distributing more liquidity than would otherwise be advisable to avoid the tax for their owners who could avoid the tax.

[knowledge dropper]

1 minute ago, The Commish said:

Said this a billion times on these boards. Captial gains needs to be scheduled. 

Now bring on all the fear mongering that says it will be the end of the stock market if we do this.

Would you prefer a much higher rate on short term gains?

[The Commish]

1 minute ago, knowledge dropper said:

Would you prefer a much higher rate on short term gains?

Perhaps a different discussion but id treat the alogrythmic buying selling by computers as a completely different kind of transaction. 

[GoBirds]

11 hours ago, Shula-holic said:

This is part of the issue.  You're trusting the taxpayer to establish this.  I'm sure their tax attorneys and CPA's will find a way to try and defend an insanely low number.  Many assets have very difficult values to determine.  As a former auditor myself, I don't know how you'd train IRS agents in the field to try and fairly value many assets.  Not everything is as simple as looking at the closing price of a stock on 12/31,

 

Exactly, there is just no way to effectively do this. You can’t put an accurate value on a business and real estate yearly factor the risk and other factors. This is a terrible idea by someone that has no understanding of what she’s proposing. 

[supermike80]

10 hours ago, parasaurolophus said:

Would an amendment make it legal to tax wealth on anybody or just above 50 million? 

I keep asking this, and no one listens.  Who gets to decide when income gets taken away?  

Where is the line?   There are people who make significantly less than I do, do they now get to decide to "take" some of my income for no other reason than they don't have it?  Or they are jealous of what I have?  When does it end?   

I hate this idea..In every way possible.  But whatever.  It's where we are headed as a nation.  No doubt about it.  I just hope I can protect my 401K long enough to make it through before they come for that as well.

[Stealthycat]

and the rich people will raise the cost of their goods and services and in the ends, consumers will pay this tax, not rich people

c'mon, ya'll REALLY think you're going to get one over on the wealthy ?  LOL

[Sand]

1 hour ago, knowledge dropper said:

Would you prefer a much higher rate on short term gains?

Short term capital gains are already at regular income tax rates.

[The General]

1 hour ago, supermike80 said:

I keep asking this, and no one listens.  Who gets to decide when income gets taken away?  

Where is the line?   There are people who make significantly less than I do, do they now get to decide to "take" some of my income for no other reason than they don't have it?  Or they are jealous of what I have?  When does it end?   

I hate this idea..In every way possible.  But whatever.  It's where we are headed as a nation.  No doubt about it.  I just hope I can protect my 401K long enough to make it through before they come for that as well.

In this proposal the line is drawn at 50 million, another threshold at 1 Billion.

Do you favor what appears to be Biden / Yellen proposals that raise capital gains taxes or something else?

 

 

[Godsbrother]

12 hours ago, Shula-holic said:

This is part of the issue.  You're trusting the taxpayer to establish this.  I'm sure their tax attorneys and CPA's will find a way to try and defend an insanely low number.  Many assets have very difficult values to determine.  As a former auditor myself, I don't know how you'd train IRS agents in the field to try and fairly value many assets.  Not everything is as simple as looking at the closing price of a stock on 12/31,

Yep.  There is a reason many insanely rich people pay little or no taxes.  

[fatguyinalittlecoat]

1 hour ago, GoBirds said:

This is a terrible idea by someone that has no understanding of what she’s proposing. 

It's fine to oppose the policy but the notion that Senator Warren has "no understanding of what she's proposing" is absurd given her expertise in this area.  I see this all the time in the AOC thread, where differences in policy are attributed to AOC's purported lack of understanding.  Even when they're proposing ideas that are advocated by Nobel prize winning economists.

[supermike80]

53 minutes ago, The General said:

In this proposal the line is drawn at 50 million, another threshold at 1 Billion.

Do you favor what appears to be Biden / Yellen proposals that raise capital gains taxes or something else?

 

 

Yeah I think thats a better method Vs just taking it from people.

And why are you telling me the current thresholds?  That wasn't my point at all.

Edited March 2 by supermike80

[The Commish]

51 minutes ago, fatguyinalittlecoat said:

It's fine to oppose the policy but the notion that Senator Warren has "no understanding of what she's proposing" is absurd given her expertise in this area.  I see this all the time in the AOC thread, where differences in policy are attributed to AOC's purported lack of understanding.  Even when they're proposing ideas that are advocated by Nobel prize winning economists.

These are my favorite ones to watch unfold and it happens all the time