Warren proposes to tax the wealth of people over $50 Million at 2%, increasing that to 3% for wealth over $1 Billion. There's a very important word in there: wealth. This isn't an income tax for people who get paid over $50 M/year or $1B, this is a tax on whatever they own. Say they own a nice house, a couple of cars, some nice jewelry or a boat or RV or all of the above. The value of their properties will assessed and they'll be taxed. We're not necessarily talking about just money in a bank or investment vehicle, or a mansions, we're talking about anything that a deeply envious legislature would consider material wealth: which would be everything.
Thinking farther down this road, those assets were bought with money that has already been taxed. The items themselves probably were subject to sales taxes as well as an array of other taxes, state and federal. They've probably been taxed more than one time. She proposes to tax them forever. 2% this year, 2% next year, 2% the year after that and so on, in perpetuity.
Warren's plan has been written by ... (wait for it) ... a couple of economics professors from the University of California at Berkeley. (Who else but professors? From where else but the People's Republic of Berkeley?) They have said the wealth penalty will raise $2.75 Trillion over its first 10 years. You probably know I hate guesses like that. Are they assuming linear distribution at $275 Billion/year, or some growth in revenue so little collected now and more collected every year to year 10? Could they be considering a decrease in collections over the decade so less is collected over the years, which seems likely to me since the wealth will be bled off by this tax - which is the purpose of the tax, after all. Personally, I don't believe any of it. Predictions about revenues from tax increases are virtually always wrong.
The first problem is that this unconstitutional. Unless it says so in the constitution, they can't just tax whatever they want. We have private property in this country. The founders considered and rejected the idea of an income tax; you'll recall it took constitutional amendment (the 16th in 1913) to get an income tax allowed. This is like an ex post facto income tax. A tax on income you earned and have been taxed on several times already. Certainly changing the laws about taxing property one owns after they acquired things is an ex post facto law.
As I talked about in my piece on The Dems Childish View of Wealth yesterday, it will also affect the market values of everything that's considered an asset. If a billionaire fund manager like Warren Buffet has to sell off part of his Berkshire Hathaway holdings to pay his taxes, that could substantially lower the cost of the shares, hurting everyone who holds shares. It could cause or exacerbate a market correction, affecting everyone who's not a millionaire or billionaire but simply trying to save money and get some earnings on it, unlike having it in a bank.
You know that one of the hallmarks of new taxes is that those getting taxed adjust their lives to pay less tax. Which is why you also know that incomes from taxes never quite agree with predictions (particularly from the Congressional Budget Office - who has said nothing about this one). If a billionaire can reduce his tax burden by transferring assets to their favorite charity, look for lots of that to happen. It's hard to imagine people preferring to pay tax than to pay money to their favorite charities. At least, I've never met anyone who'd rather pay taxes.
Look for a lot of confusion and hassle about valuations of these estates. That's a glaring hole in the narrative. If you think that everyone will agree on valuations, you've never been to an auction - or watched an episode of PBS' Antiques Roadshow. Expect large numbers of lawsuits over this. It seems to me, and I've never seen this detail, that if one is being taxed on the value of their property that the value shouldn't be expected to remain the same and could go up or down. Annual appraisals for things that aren't publicly traded, like their houses, cars, and so on?
This is a really bad idea, poorly studied, virtually certainly unconstitutional. As always, it will hurt people other than the rich that Warren wants to hurt. Its only selling point is it appeals to the deeply envious primary voters she's selling it to.
It appeals to loathsome parasites, as I said yesterday. If we have any desire whatsoever to help them reform their concepts (as opposed to simply shooting them), we have to stop rewarding their basic instincts to beg and whine and contribute nothing, nada, zilch, zero to society.
ReplyDeleteI wonder how many RPG's one billion dollars would buy. That is the end scenario here- most people with big money worked their ass off for it, and it will be an act of war to try to steal it from them.
ReplyDeleteBTW, anyone who thinks this idea will remain at 50 million is a F-I.
Ever look at the original 1913 income tax form? One page, IIRC, the tax rate was about 1 or 2 percent for incomes over 500,000, rising to 3 percent or so for incomes over 1 million. I gotta tell ya, one million dollars was a boatload of coin in 1913. If the common folk aka deplorables had been told that level of taxation would descend to those making 2500 dollars a year, and a rate of 40 percent, they would have strung up the entire congress.
(With a conservative AKA US.GOV number, 2500 a year in 1913 is around 65,000 today. )
Arguably, envy is the most corrupting sin.
BTW, anyone who thinks this idea will remain at 50 million is a F-I.
DeleteAbsolutely right. As you say, they promised the income tax would only be a tax on the rich and it would be that 1% you cite. Which turned into 90% by about 1960.
Along the same lines, you may have noticed she absolutely will not say her "medicare for all" program won't raise taxes; just that in some magical way everyone's total expenditures will go down. I take that to mean your taxes go up but your out-of-pocket cost at the doctor will go down.
Sorta like "if you like your plan you can keep your plan" or that "save $2500/year" lie.
"2500 a year in 1913 is around 65,000 today"
DeleteAu contraire. Not even close.
Conservative-schmervative, let's try using the actual standard.
That would be a GOLD standard.:
In 1913. Gold was set at $20.67/oz, as it had remained virtually unchanged since pre-Civil War years(1829-1861, and again from 1879-1932, with the blip being post-Civil War inflation). It was $19.39/ounce most years from 1791-1832, with another brief rise for inflation after the War of 1812.
{https://www.measuringworth.com/datasets/gold/}
That means an income of $1296/yr in 1913 (the avg. income then) was = to 62.7 ounces of gold.
Such an income today would be $94K+/yr.
$2500/yr in 1913 would be $181K now.
{That's with gold selling at a nominal US$1500/oz., recently}
If you aren't seeing average salaries that high, let alone your salary, you've just noticed how worthless your paycheck actually is under fiat debtbux.
$2500/yr now was an income of $30/year in 1913.
That's how far down the poverty scale they've been taxing people.
Torches, pitchforks, and tumbrel carts would seem to be in order.
And a handy hank of stout rope.
I have read that the clowns that did that income tax bill didn't bother to make that 3% a maximum amount because they couldn't imagine the .gov needing more than that. Bwahahahahahah!!!!
Delete"There is no idea so stupid that it won't find traction in academia."
ReplyDeleteTom S.
Frequently stated as "you've got to have a Ph.D. to be that stupid". Speaking of which, have you seen that insanity they call "modern monetary theory"? That's another professor who's Bernie Sanders' advisor.
DeleteAlthough everything stated is true, I'm not worried.
ReplyDeleteWere Fauxcahontas accidentally elected, and somehow proposed such a law, let alone got one of her fellow communists to actually write it, the hail of incoming gunfire on D.C. at that point would make an A-10 squadron airstrike pale in comparison.
The idea that Lieawatha, let alone any sitting government, would think they could come after my $100 in my pocket this year, then take another whack at my remaining $98 next year, on and on in perpetuity, is taxation of the sort that got the Sheriff of Nottingham's men dissuaded at arrow-point, and worse than any scheme that ever toppled a banana republic since Columbus found Hispanola just sitting there minding its own business.
And Benedict Arnold and Vidkun Quisling would have company. In Hell.
The IRS buildings would be a ghost town, with badges and empty suits sitting on the desks, and a trail of middle-aged office workers fleeing home in their underwear, before the peasantry looted and burned the buildings for all time, like Germans entering Stasi HQ after the Berlin Wall came down.
These people think the sheep will serenely stand still for fleecing, then jump into the stew pot too.
They'll find out a minute late they're trying to fleece badgers and wolverines. It's a mistake they'll regret but once, for the rest of their brief lives thereafter.
That's an optimistic view. I just see the millions of communist wannabe "yutes" electing her so they can confiscate that money. Look at that twit I talked about the day before with the word Billionaire being "the name for a human dragon sleeping on his piles of rubies and gold."
DeleteAnyone rich is just Scrooge McDuck swimming in pools of gold coins or Smaug the dragon sleeping on his piles of rubies and gold.
Uh huh.
DeleteBut Smaug's got nothing on what I'll do if someone thinks to come after my hoard, thankyouverymuch.
Killing everyone who tries it and burning down their towns will be just for openers.
The women and children after that will be cocktail hors d'oeuvres.
"That smell! That napalm smell...
Nothing else smells like that.
It smells like...victory."
But their pressing hurry to disarm the peasantry gives away their Venezuelan economic plans for us.
DeleteWe're not campesinos.
This will not turn out like they think it will in their fever dreams. But communism will prove fatal - for the carriers of the virus.
Problem is, they have been stealing with great efficiency since 1913, as you so eloquently point out. And your figures are correct regarding real inflation, I was using the .Gov numbers for expediency to show a example of how the tax slides down the scale from the 1%.. But we have done nothing. Ever actually try to explain inflation to someone?
DeleteIgnorance in action -
I like to watch the "Antique Roadshow " episodes where they compare valuations from 20 years ago to today- hilarious- "wow, my widget is worth twice what it was ! What a great investment". And people seem to swallow this stuff. Inflation has been the greatest theft in the history of the US, and no one cares. boiling pot syndrome? Or just mathematical ignorance?
One of the things having oodles of wealth gives you is options. For a hundred million or so, I suspect you could buy an Island somewhere and set up a sovereign government, or just buy an existing country. Sell your assets, close your businesses, move offshore and tell Fauxchahontas to stick it. You could even set up your country as a haven for your fellow moguls and sell them citizenships and make some extra coin. Of course the transfer of that much wealth from the US would collapse the economy. All of this would happen before President-elect Warren (g_d I hate typing that) is inaugurated.
ReplyDeleteCA has already taken a run at this sort of taxing. During dot.com days they passed a 10% tax on income over $1M, after seeing that there were 18k people in that bracket. That was in addition to the 9+% they already were hit with. 1/3 of them instantly bailed out of CA, taking that money, and whatever businesses that were portable, with them.
DeleteStarting a few years later, probably to gather a new crop of idiots/legislators, they attempted to add to that tax every couple of years. Last year, they added another 3%, and at least 800 of the remaining high tax payers bailed. Evidently, a politician's memory is only good for one session, maybe two.
To the left and indeed to virtually all politicians the Constitution is AT BEST a relic, a curiosity to be ignored. The ONLY way they obey it is at
ReplyDeletegunpoint.
Does this apply to corporations as well? If so, does it apply to, say, the Cherokee Nation?
ReplyDeleteYes, but we'll be fair about it: They'll all only be taxed at 1/1024th of a percent.
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ReplyDeleteThis is a no spam zone. Begone!
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