A so-called "billionaire's tax" – a proposal to tax unrealized capital gains on people with $1 billion in assets – is circulating in Congress.
While not all Democrats support the idea, Sen. Joe Manchin (D-WV) indicates he could support new ways to ensure the wealthy pay their "fair share." It's all about funding President Biden's $2 trillion social spending plan.
"I'm open to any type of thing that makes people pay that's not paying now," the moderate Democrat senator said. "People that don't report income like you and I do, earned income. There has to be a way for them to pay their fair share."
Senate Finance Committee Chairman Ron Wyden (D-OR) is writing up the new Billionaire Income Tax with input from the U.S. Treasury Department and the White House, according to the Sovereign Wealth Fund Institute (SWFI), a global corporation analyzing public asset owners such as sovereign wealth funds and other long-term governmental investors.
Under Wyden's emerging plan, the billionaires' tax would hit the wealthiest of Americans – fewer than 1,000 people. It would require those with assets of more than $1 billion, or three-years consecutive income of $100 million, to pay taxes on the gains of stocks and other tradable assets, rather than waiting until holdings are sold.
Senate Republican leader Mitch McConnell called the billionaire's tax a "hare-brained scheme" and warned of revenue drying up during downturns. Some Republicans indicated such a tax plan could be challenged in court.
Key Democrats are also raising concerns about such a tax, saying the idea of simply undoing the 2017 tax cuts by hiking top rates was more straightforward and transparent.
A Tax Just for Billionaires? Or Could It Be Something Else?
But would the so-called billionaire tax just apply to billionaires? One report indicates it would just be the starting point, and your IRA could be the next Democrat target as the party looks for a way to fund Biden's massive social spending and climate change plan.
Stephen Green, a columnist for PJ Media, warns Biden's real objective by floating the idea of "billionaire's tax" is your retirement savings. And he's not the only one.
"It's not a wealth tax, but a tax on unrealized capital gains of exceptionally wealthy individuals," U.S. Treasury Secretary Janet Yellen told CNN on Sunday.
Green explained Yellen's remarks writing, "That's like saying you have a four-legged pet that eats kibble, barks, fetches, and looks exactly like a Golden Retriever — but it isn't a dog."
Yellen told host Jake Tapper, "I think what's under consideration is a proposal that Senator Wyden and the Senate Finance Committee have been looking at that would impose a tax on unrealized capital gains, on liquid assets held by extremely wealthy individuals, billionaires. I wouldn't call that a wealth tax."
"It's a wealth tax," Green responded in his article. "Worse, it's a tax on the investments and productivity gains that make the entire country richer."
The PJ Media columnist then uses himself as a pretend example of a business owner whose company went public and virtually overnight owns shares worth a billion dollars.
In his example, Green pretends that some wise investors bought a few shares of his IPO and stashed them in their IRA.
"I don't actually have a billion dollars. I just have these shares that the stock market values at a billion dollars. But according to Yellen, wealth tax-proponent Elizabeth Warren (D-MA) and Presidentish Joe Biden, I 'made' a billion dollars yesterday. And being a naughty rich person, I must pay taxes on that money I don't actually have," he writes.
"So what do I do? I'm forced to sell off enough shares in my own company to pay the tax bill," Green explains.
"What does that do to you, Mr. or Mrs. Smart Investor?" he asks. "My big sell-off reduces the value of your shares and your retirement account. In essence, you're paying the 'Billionaire Income Tax' even though you aren't a billionaire and haven't made any income."
"Every year around Tax Day there would be a big sell-off," Green forecasts.
"So not only is Yellen lying when she says it isn't a wealth tax, she's lying when she says it will fall only on the 'extremely wealthy'," he wrote.
Conservative commentator Ben Shapiro points out that taxes like this one end up morphing to affect the entire country.
He noted in a tweet Tuesday: "The original 1913 income tax was 1% for people with incomes above $3,000 (about $80,000 today) and 6% on $500,000 or more ($13 million). About 3% of the population was taxed. Just keep that in mind when Democrats lie and say the wealth tax will remain targeted at just the top."
The original 1913 income tax was 1% for people with incomes above $3,000 (about $80,000 today) and 6% on $500,000 or more ($13 million). About 3% of the population was taxed. Just keep that in mind when Democrats lie and say the wealth tax will remain targeted at just the top.
— Ben Shapiro (@benshapiro) October 25, 2021
Green also noted in his article, "The income tax was sold by early 20th Century progressives as a way to sock it to the rich, but progressives made sure it become a way to sock it to everybody."
"You can bet your bottom dollar — if Congress doesn't confiscate that, too — that today's 'Billionaire Income Tax' is tomorrow's 'Tax Your Middle Class Retirement Accounts Before You Even Retire'," he concluded.