The wealth tax is back. We have previously discussed the constitutional and policy concerns surrounding the push by Democrats like Sen. Elizabeth Warren (D., Mass.) to introduce a wealth tax that would start with billionaires. It would not likely end there. The law would also apply the same type of California approach to wealthy families fleeing the tax grab with a huge “exit tax” so that there is no escaping from tax vortex. In addition, under the Ultra-Millionaire Tax Act, Warren and others would add $100 billion to increase tax audit and investigations.
The captivity tax highlights the wealth-redistribution mindset underlying Warren’s “experiment.” Warren thrilled audiences for years by telling the rich she was coming after “your Rembrandts, your stock portfolio, your diamonds and your yachts.” In one Democratic debate, she got applause by rubbing her hands together after stating that she would take some of the wealth of fellow candidate John Delaney, a self-made millionaire worth $65 million. She has now made good on that threat.
The reintroduction of Ultra-Millionaire Tax Act would add a 2% tax on households worth $50 million to $1 billion and a 3% tax on households worth more than $1 billion.
Warren is again repeating that talking point of President Joe Biden that billionaires pay less than the average citizen in taxes. That has been repeatedly challenged. The claim is based on dubious accounting. A commonly cited White House study from September, 2021 included unrealized capital gains in its analysis – something that neither wealthy nor middle class citizens are taxed on. Warren and Biden want that to change but it is a false measure on the current tax burden.
It is also worth noting that “the top 1 percent’s income share rose from 22.2 percent in 2020 to 26.3 percent in 2021 and its share of federal income taxes paid rose from 42.3 percent to 45.8 percent.” The top 50 percent of all taxpayers paid 97.7 percent federal income taxes,. The bottom 50 percent paid the only 2.3 percent.
We previously discussed the push in California to impose a retroactive tax on the many citizens and companies fleeing that state due to its high taxes and other problems. Warren wants to do the same nationally. So if businesses are fleeing the country due to these policies, they would have to essentially pay for the freedom in a type of captivity tax. It is incredibly short-sighted. We need these businesses and we will not be able to coerce them into saying by trying to make it more expensive to leave. Indeed, the captivity tax only magnifies the impression of a tax system that is becoming an extension of the eat-the-rich rhetoric used by Warren and others.
Politicians have long turned to the “Eat the rich!” battle cry when things are not working out politically or economically. When struggling in the 2020 Democratic presidential primaries, Sen. Elizabeth Warren (D-Mass.) pledged a wealth tax, declaring that she was coming after “the diamonds, the yachts, and the Rembrandts too.” Then-New York City Mayor Bill DeBlasio, another Democratic contender at the time, was barely registering in the polls when he promised that “we will tax the hell out of the wealthy.”
The Warren proposal would turn the eat-you-rich rhetoric to an all-you-can eat tax plan for the government.
There are major constitutional concerns raised by the plan to tax unrealized capital gains. However, this is clearly playing well with much of the base of the party.
The Wharton Budget Model at the University of Pennsylvania did find that Warren’s legislation would raise $2.7 trillion in revenue but it would also reduce capital by 3.1%, depress average hourly wages by 1.2% and reduce gross domestic product (GDP) by 1.2% in 2050.
I keep hearing that Israel and the Ukraine need that money more than Taylor Swift does.
Why is it that the people who have never worked a day in their lives–such as Biden, Warren, and Sanders, for example–think the “remedy” for America is tax everyone to death and spend all the money they confiscate from the public on waste, fraud, mismangement, and abuse?
Because it is their money and they have zero accountability for squandering it.
For all these Government Officials & Employees that are planning to retire with a big-ass paycheck.
Trump needs to fire them all and sac half their retirement benefits.
You did a half-ass job, so you get a half-ass retirement[.]
The rest of us have to live on Social Security (if even that) and most of that isn’t at 100%.
So suck it up, We have to.
Democrats are doing more damage to this country than the Soviet Union ever did…by a long shot. Unless, of course, they really are leftovers from the Soviet Union and Communist China.
Jonathan: Your critique of Elizabeth Warren’s wealth tax proposals comes at the exact time the GOP in the House is proposing raising the retirement age for Social Security. The Republican Study Committee (RSC) doesn’t say what age it has in mind–only that “common-sense incremental reforms are needed to secure the future of Social Security”.
The RSC proposal is in response to Pres. Biden’s State of the Union policies–including protecting SS and tax increases for the wealthiest Americans. The RSC is echoing calls by DJT to cut “entitlements” like SS. Social Security and Medicare are NOT “entitlements”. We pay for both over our whole working lives. We continue to pay for Medicare that is deducted from our monthly SS payment. But DJT and the GOP seem to think these programs are some form of government give-away to the the elderly.
How do we pay for SS? This year the taxable max for SS is $168,000. Polls show 71% of all voters want Congress to address future SS shortfalls by raising taxes. Responding to the polls one House Dem proposal is to raise the threshold to $400,000. Elizabeth Warren and Bernie Sanders in the Senate propose raising the the limit to $250,000 and applying a 12.4% tax on employers and investment income. The current tax on employers is 6.2%.
Currently investment income is not taxed for SS purposes. But there are some of the wealthy who are not opposed to taxing investment income. Morris Pearl, Black rock managing director and chair of “Patriotic Millionaires”, supports the ideal of taxing investment income to support SS: “People like me who get investment income should pay at least the same tax rate as people who work for a living”.
The RSC doesn’t say at what age SS should kick in. The retirement age in most Western Democracies is between 64 and 67. In the US it is 67. But increasing the age for retirement creates significant problems. Everyone has friends in their 60s who either can’t work or where it is difficult because of aging disabilities.
So in this election season the lines are drawn. DJT and the GOP don’t want to raise taxes on the wealthy or the super-rich. Don’t “eat the rich” is the mantra–and yours. Instead, they want to “eat” the elderly by increasing the age of retirement. In contrast the Dems think making the rich pay a little more in taxes is the answer. The polls seem to favor the positions of the Dems. Now that the MAGA Republicans in the House seem to spend more time “eating” each other I think the RSC proposals on SS are not going to appeal to most voters.
Dennis, Social Security will run out of money by 2035. If you refuse to change anything, then people will not get the benefits they’ve counted on.
The problem is that there is disagreement over what has to be changed. The immediate options are increase social security taxes, decrease benefits, raise the retirement age, or transition to a system in which people contribute to their own personal retirement accounts instead.
Currently, people do not get out of Social Security what they put into it. Most people withdraw far, far less than they’ve contributed. Some people barely contribute, and withdraw more. The wealthy do not receive a fraction of what they put into the Social Security system, because it is not an investment. It taxes the young to pay for the old, in the hopes that there will always be a far larger proportion of young than old.
We can either keep the current system, and make changes so it can last longer, or we transition to a different system.
Social Security is not enough to cover rent, food, medical bills, medical insurance, and transportation. It was never intended to live off of, but rather to provide food security, and a little boost, to the elderly. At the inception of Social Security, in 1935, the average lifespan for men was 59.9 years, and for women 63.9 years. (https://u.demog.berkeley.edu/~andrew/1918/figure2.html) Today, men live on average 73.5 years, and women live 79.3 years. The age of retirement where Social Security benefits are awarded has remained the same, at 65 years old. We are expecting a system designed in a way where the AVERAGE LIFE EXPECTANCY was before the benefits were awarded, to fund people’s retirement today, in which the average person lived 13 to 19 years longer, in an era where geriatric medicine is costly, and the cost of a memory care facility can exceed $7000/month.
People are living longer, which puts a larger strain on young workers to support them via SS taxes.
The system was never designed for that. It was supposed to be a little help for people who lived LONGER than the average life expectancy. It was not designed to replace retirement savings, or the support network of family. We’re trying to shove a square peg in a round hole.
Raising the retirement age, finally, after 90 years, is not “eating the elderly.” Allowing Social Security to go insolvent would be catastrophic for the elderly, which will happen if the system remains unchanged.
Oversimplified arguments for transitioning Social Security to a system in which people contribute to their own retirement, like an IRA, means that people would get out far more than Social Security benefits provide. It could be enough to actually live on.
Arguments against would be concerns that the poor would not have contributed enough to a retirement account. Perhaps SS would change so that people would automatically have a percentage of their wages deducted and sent to a retirement account, and a far lesser amount than current SS taxes would go to a retirement fund specifically for the poor. This could actually yield higher benefits for the poor than they currently receive, as well as higher retirement income for the working class.
It’s something to consider, but any change that drastic is certainly worrisome, because if you get it wrong, the elderly suffer, an already vulnerable population.
The fact is that neither the Republicans nor the Democrats can be trusted to deal effectively with Social Security and Medicare. Both solutions are deceptive and don’t address any of the problems. The fake “solution” from the Democrats is just to find ways to raise taxes. The fake “solution” from the Republicans is to find ways to cut payouts. In truth the Democrats and the Republicans are the UniParty and they will do both: raise your taxes and cut the payouts. It’s the old shirkflation. They charge you more for a candy bar and they also shrink the size of it.
What you will never hear from any member of the UniParty is a call for a thorough forensic account and forensic finance audit of those programs. How do you know that insiders aren’t stealing money from those programs? How do you know if the receipts and payments are accurately computed by the government? The fact is you don’t know anything about those things because a forensic audit has NEVER been conducted, even though that is the OBVIOUS thing to do first before any proposals are made.
Did you know that the government has overpaid many social security benefits to Americans and then years later comes after them for the overpayments? Did you know that the government also shorts retirerees and never tells them about it or pays back the amouont they were shorted?
Until I hear that a thorough forensic audit of those programs is going to be conducted by the top professionals in the field, all this talk about “fixing” social security and medicare is just rubbish.
The correct answer, as I. Most things in life is a compromise- retirement age could slowly be increased ( the life expectancy when SS was established by FDR admin was 61 for men and 67 for women , workers could start to collect SS at age 65 !) due to the increase in life expectancy ,
And payroll deductions could depend on salary, size of family etc.
A note on Medicare and to a larger extent Medicaid- if a person works a certain number of quarters they will qualify for Medicare part A ( hospitals) Medicare part B( doctors , procedures outside a hospital ) and Medicare part D ( drugs) requres individual payment and the cost varies with IRMA, many times you end up paying what you were with private insurance .
But Medicare and Medicaid adjust prices on everything and reimbursements to doctors and hospitals continue to get lower and lower – Medicare and Medicaid are subsidized by private insurance paying patients , they could not exist in the form they are in at present without the private health careinsurance companies paying higher prices .
To believe that raising 2.7 Trillion dollars through a wealth tax would reduce GDP by only 1.2% is a modeling fantasy made possible by assuming a dollar spent by the government is equal to a dollar spent by the private sector — it ignores opportunity costs and other realities.
For example, using that money to force/subsidize the replacement of a functioning energy system with a fantasy system with its components purchased from China at very high cost, producing universally higher utility bills, a less reliable electrical grid, less reliable and more expensive freight transportation is what I am talking about. I also point out that a lot of government is nothing more than a jobs program.
More examples are readily available.
“[The Left is] coming after ‘your Rembrandts, your stock portfolio, your diamonds and your yachts.’”
And your Trump Tower.
How does making the rich less rich make the poor any less poor?
Professor Turley Writes:
The top 50 percent of all taxpayers paid 97.7 percent federal income taxes,. The bottom 50 percent paid the only 2.3 percent.
…………………………………..
Conservatives are fond of citing this figure to suggest that the upper tax brackets are already over-taxed.
The truth is these figures are a portrait of inequality. No one should mistake these numbers as anything else!
These stats tell us that about half the households in this country lack disposable income. These are households that have just enough money to pay rent and utilities each month with scarcely little left over. That’s not good!!
A few years back, the Los Angeles Times did a study finding that about half the city’s residents barely made the rent each month. And one can be sure that is true for most big cities and many smaller towns.
As a resident of Los Angeles who loves to hike canyons, I have explored, on foot, every canyon community between Malibu and Echo Park (just west of Downtown).
The most expensive homes in every city are usually found at higher elevations. That is especially true in the canyon communities of Los Angeles. The biggest and most expensive estates are always near the top.
But what strikes you in hiking these canyon communities is how quiet they tend to be at the highest elevations. Typically one sees almost no children nor any adults strolling the neighborhood.
Instead you find gorgeously landscaped yards, but no one out and about; except for landscaping crews perhaps. Or the occasional housekeeper leaving an estate in her modest, older car.
In other words, a huge number of estates in Los Angeles are owned for investment purposes. More often than not, the owner is in London, Dubai or The Riviera, maybe. Only hired help is minding the mansion back in L.A.
A large percentage of luxury coops in New York City are also owned for investment purposes. Acres and acres of living space, with breath-taking city views, stand empty most nights.
If most Americans saw these beautiful-but-lifeless properties, they would have a better grasp of how inequitable America has become. But what’s out of sight is out of mind.
Yet we’re supposed to think ‘hard-working job creators’ are shouldering all the tax burdens.
Just because some people make way more than others, it doesn’t mean they can’t be overtaxed. Income inequality and tax fairness are two separate things.
In your view, if someone makes X% of the country’s total income, what % of total income tax should they pay?
These are households that have just enough money to pay rent and utilities each month with scarcely little left over. That’s not good!!
And after all of that, confiscating wealth will not aide a single person.
“Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as “bad luck.”
Robert Heinlein
OT, it wasn’t enough to wage war against the American energy industry or against popular household appliances, now FJB is waging war against gas cars. With that and the open border, he is in fact waging war against the American people. If the people he is trying to kill vote for him again, they get what they deserve.
“If the people he is trying to kill vote for him again, they get what they deserve.”
Oldman, the people who voted for Obama’s second term and didn’t learn from his first or voted third party are getting what they deserve; they don’t know it yet. Under Biden, America committed to Seppuku. The bleeding is falsely corrected with a saline drip (government spending). That keeps the blood pressure up for a short while, but then suddenly, there is no blood, and death occurs. (Isn’t that why Princess Diana didn’t make it?)
Now You Get It
Per Article 1, Section 8, and the 5th Amendment right to private property, Congress has no power to regulate energy, vehicles, household appliances, or anything else other than the value of money, commerce among nations, States, and Indian tribes, and land and naval Forces.
The singular American failure is the judicial branch, with emphasis on the Supreme Court.
“The two enemies of the people are criminals and government, so let us tie the second down with the chains of the Constitution so the second will not become the legalized version of the first.”
– Thomas Jefferson
They won’t vote for him he’ll use old Dle die bold to cheat . Again. But about this – labor – ought to be worth something. We are mere mom and pop landlord- not black Rock gobbling up property – but even we feel guilty trying to get what the market will bear – bc if it does it prices out cops and teachers and workers . Every thing communities need. And they need workers. I9 is not working when Boden gives millions a working amnesty card to make them slaves. No way the survive in our inflayet economy without subsidy that exceeds the ss our seniors paid into- what a kick in the teeth – pay in for decades and “seekers”get as much Per month by crossing the border. Or dod retirees get x on 20 – for to serve and die – but a migrant gets half x by crossing the border? Kmart go trump
And trumpka
Unless someone shuts off the bordeer we as a nation are coloward and pri ven banknotp- and why my grand kids paying salary in Ukraine for a war they can not win? The Ukraine can not win a proxy war there men and people will be genocides by it. The Ukraine will have to give up all its – and still can’t win. Unless other nations men are sent iin.bs this began as a Civil War and nations agreed b4 not to intervene in civil war- but hear we are neglecting self determination and poking the bear in the eye – escalating to ww3 why? Why? Why? Cuz the cookie monster globalist wanted regime change? Regime change puts on its head the un goal of self determination. But USA will bankrupt itself after a regime it can not change? Stupid. Putin isn’t going anywhere – we poked him – self defense – his bush doctrine- meanwhile Bush looked him on the eye – and didn’t see evil. Evil uet wants to genocide Ukraine of its people and bankrupt America to do so – that’s evik
The Ukraine War needs to stop. B4 ukaines are genocided and the west bankrupted. Or worse have no reserve ammo etc against our real rivals. Russia was the west’s ally once – millions of Russians died for our side. It took the cold war and Reagan to get us on the same page against communism et al – that we drive them into the hands of China- genocide the Ukraines and bankrupt the west for what again? For ukraine to be in nato? Why why why poke the bear? Seriously see the bigger picture- made up with Russia under Reagan- for capitalist free markets – to contain derivatives of communissiim. Which Russia no longer wants. Medvedev came here free markets – putim looked bush in eye – free markets. But this war pushes our previously great ally into the arms of communist Chennai- the people of the USA and the people of Russia do not want that – and the Ukrainians being proxies don’t want genocides either. What’s the end game? Ukraine runs out of troops so the west sends their men in? To what end and for what? At least in previous world wars there was a ‘for what’ – now our for what will be the USA cookies monster wanted regime change – for the globalist. Screw you all. Humit has evidence on all you nazis baby.
“The two enemies of the people are criminals and government, so let us tie the second down with the chains of the Constitution so the second will not become the legalized version of the first.”
– Thomas Jefferson