Top tech leaders and other billionaires would be forced to hand over billions of dollars in wealth they’ve gained during the coronavirus pandemic under a new bill introduced by Sens. Bernie Sanders, I-Vt., Ed Markey, D-Mass., and Kirsten Gillibrand, D-N.Y.
The “Make Billionaires Pay Act” would impose a one-time 60% tax on wealth gains made by billionaires between March 18, 2020, and Jan. 1, 2021. The funds would be used to pay for out-of-pocket health-care expenses for all Americans for a year. As of Aug. 5, the bill would tax $731 billion in wealth accumulated by 467 billionaires since March 18, according to a press release. If passed, the bill would tax billionaires on wealth accumulated through the end of the year, however.
Ignoring the theater-of-the-absurd, laughable statement that it's a one time tax, I don't think the Senate has the power to do this, but I'll get back to that in a minute.
To begin with, the whole proposal reeks of the absurdly childish view the Stupid Party voices all the time that billionaires are Scrooge McDuck, swimming and playing in vast piles of gold coins and other material wealth. Or maybe they think every billionaire is Smaug the Dragon from the Hobbit stories. One of the Tweets I read while researching said, "If you can spell hors d'oeuvres without checking, you need to have your taxes raised." (Almost as dumb as the twit in the first link in this paragraph) I've done inches of column space on this.
First off, I don't believe the Fed.gov has the authority to tax wealth. That's not part of the 16th Amendment that authorized an income tax. Second off, and with all due respect to CNBC for their projections, no one can know how much those assets are worth until they're sold. It doesn't matter if the stock price on January 1st, 2021 (the time at which this bill declares what they're worth) is some number of dollars per share. What matters is how badly the stock price collapses when those shares go on the market and all the fund managers in the world who know the billionaires have to sell those shares bid them down. What that means in practice is that if the price collapses badly, their bill may be based on 60% of their assets on 1-1-21, but when they sell for a fraction of that valuation, the payers will end up selling quite a bit more than 60% to pay that 60% tax.
Wealth taxes are a bad idea. How about an example where Elizabeth Warren's proposed 6% wealth tax really adds up a 158% tax? To quote Larry Summers, who worked in the Obama and Clinton administrations, speaking about Senator Warren's planned wealth tax:
"We do need to study pretty carefully why it is that most of the European countries, who usually are more progressive than we are and had wealth taxes, have decided over the last 15 or 20 years to eliminate those wealth taxes and why almost none of them get anything like the kinds of revenue that Sen. Warren is aspiring to get,"
Sanders, Markey, Gillibrand and Warren are overcome with greed. The people CNBC names in the article are all innovators who have made contributions to society that people willingly support with their own money, so they're infinitely more valuable to the world than any politician. Politicians can't stand the idea that someone accomplished things on their own, without groveling to them, and are so insulted that they think they can claim that wealth. Warren was famous for her, "you didn't build that" speech in the Obama years. It's the same thing.