“We Have A Historic Opportunity” – Senator Wyden Releases Dems’ Plan To Tax Unrealized Capital Gains
Earlier this week, Treasury Secretary Janet Yellen (and a handful of her fellow Democrats in the Senate) announced their intentions to help fund President Biden’s ‘Build Back Better’ agenda with a new tax on unrealized capital gains for the wealthiest Americans. The event led to this widely viewed clip of Yellen explaining that the tax on “extremely liquid assets” would only apply to the wealthiest Americans during an interview with CNN’s state of the Union.
NEW – U.S. Treasury Secretary Yellen proposes a tax on unrealized capital gains to finance Biden’s “Build Back Better” plans.pic.twitter.com/pefi3PhoDe
— Disclose.tv (@disclosetv) October 24, 2021
We later learned that Democrats were setting their sights on $5 trillion of billionaire wealth extraction, something that would move the US closer to AOC’s stated goal of eliminating billionaires.
So overnight, Sen. Ron Wyden, the chairman of the Senate Finance Committee (which is, by the way, different from the Senate Banking Committee) released the much anticipated details of the tax on unrealized capital gains for billionaires as Democrats are working on how they will raise enough taxes to offset the spending in particularly the second part of Biden’s ‘BBB’ plan which involves a massive expansion of the American social safety net, among other Dem agenda items.
Notably, this is the second major tax proposal Wyden has released in recent days, following a proposal for a minimum tax on corporate profits (something that has become a global priority for Democrats).
Wyden claimed, much like Yellen did, that billionaires are “hiding” assets by simply not selling them and passing them down to their heirs, and implied that this act of generational wealth transfer is inherently “unfair”.
“We have a historic opportunity with the Billionaires Income Tax to restore fairness to our tax code, and fund critical investments in American families,” Wyden said in a statement.
From a high-level view, the proposal which would take effect for the 2022 tax year, would affect taxpayers with assets of more than $1 billion, or income of more than $100MM for three years in a row. This would affect about 700 of America’s most important taxpayers. It would impose the 23.8% tax rate for long-term capital gains on tradable assets such as stocks that increase in value over the year, whether or not they have been sold. It would also allow taxpayers to take deductions for losses on assets.
For highly liquid investments, such as stocks, applicable taxpayers would pay taxes on gains, or claim deductions (if they ended up with a portfolio-wide loss) annually. Billionaires would be able to carry forward losses, or carry back losses for three years in some circumstances.
For non-liquid assets like real-estate, billionaires would not pay taxes annually on the gains but would pay a charge, on top of regular capital gains taxes, when they sell the assets. The tax would also impose levies on billionaire ownership stakes in businesses incorporated as pass-through entities and in trusts including real estate investment trusts, according to a statement.
The so-called billionaires tax, announced by Senate Finance Committee Chairman Ron Wyden, is part of a two-pronged legislative strategy that also includes a proposed 15% corporate minimum tax on the most profitable U.S. corporations, which was unveiled on Tuesday.
Wyden and other lawmakers, including Democratic Senator Elizabeth Warren, say the legislation is intended to curtail tax avoidance by corporations and the wealthy and could generate hundreds of billions of dollars to pay for Biden’s “Build Back Better” legislation, which is expected to cost between $1.5 trillion and $2 trillion.
The White House backs the corporate minimum tax, which would dovetail with a global corporate minimum tax recently agreed by 136 countries and aimed at corporations that pay little or no tax by gaming the international tax system.
But the billionaires tax faces potential opposition from Democrats in the House of Representatives, who favor straightforward hikes in tax rates for companies and the wealthy as a way to fund the Biden agenda.
Readers can find the entire 100+ page proposal below:
If you, dear reader, have the time, feel free to read it: because it’s not like too many Congressional Dems will even bother.
Wed, 10/27/2021 – 07:08