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Taxing rich Americans gains steam as Biden and states push plans
Several states are unveiling new tax proposals, adding to an effort by the Biden administration and Senate Democrats to tax ultra-rich Americans and corporations.
Lawmakers in California are considering a tax on extreme wealth that would impose an annual excise tax of 1% on those who have wealth exceeding $50 million per taxpayer and a 1.5% tax on those with wealth above $1 billion. The tax would raise an estimated $22.3 billion starting in 2023. New York and Washington are also looking at new taxation targeting ultra-wealthy individuals.
On a national level, the Biden administration and Democratic lawmakers are floating several different tax measures related to higher taxes for wealthy Americans and corporations.
President Biden recently told Good Morning America that "anybody making more than $400,000 a year will see a small to significant tax increase" under the tax plan his administration is developing. “If we just took the tax rate back to what it was when Bush was president — the top rate paid 39.6% in federal taxes," Biden added, "that would raise to $230 billion."
Sen. Elizabeth Warren (D-MA) recently reintroduced her proposal on taxing the ultra-rich.
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The proposed wealth taxes in California and Washington state are similar to Warren’s plan and would impose an annual tax rate on income above certain thresholds.
“Since the start of the pandemic, billionaires have accumulated an additional $1.1 trillion in wealth,” Assembly Member Alex Lee (D-San Jose) said. “In order for California to really come back roaring, we need sizable investments in our communities… we’re proposing a modest 1% tax on households with net worths of over $50 million, and 1.5% on wealth over $1 billion.”
Critics of the wealth tax say it may be difficult to calculate and be enforced. The revenue generated might not be as much as expected while the costs of administering the tax could be higher than calculated.
“Taxing wealth is something we've never done in the United States and that most countries have not done,” Jared Walczak, the Tax Foundation's vice president of state projects, told Yahoo Money. “They're complex and they create a lot of economic harm because they're paid on your assets — which often have to be liquidated to pay them.”
While wealth taxes reached their peak in OECD countries in the 1990s, the number of OECD countries that currently have a wealth tax dropped to five from 12 by 2019 because of the challenges those taxes create.
The proposed plan in New York — which includes raising income taxes, imposing new capital gains taxes, and increasing the estate tax among other measures — is similar to President Joe Biden's campaign plan to raise the corporate tax rate to 28%, require a true minimum tax of 21% on all foreign earnings on U.S. companies, raise the top individual income tax rate to 39.6% (the current maximum is 37%), and require those who make more than $1 million annually to pay the same rate on investment income as they do on their wages.
'We create more billionaires than anywhere in the world'
This isn’t the first time California has proposed a wealth tax on its richest residents: Last year, a similar bill to levy a 0.4% tax on the wealthiest who have a net worth of more than $30 million did not garner enough support.
The new proposal, instead, raises that to a 1% tax on individuals who earn more than $50 million per year.
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Washington's wealth tax would only target intangible financial instruments, meaning that investments and ownership in publicly traded companies would be taxed but not houses or business ownership. Walczak noted that the Washington state wealth tax would only affect 12 billionaires.
“If any one of them were to leave the state, or make another state their state of residence, the tax revenue would plummet on this,” he said. “Not just the revenue from this new wealth tax, but also potentially all of the other taxes.”
www.yahoo.com
Firstly, I don't care what CA, NY, WA, and any other state does with their tax policies. But what I do not want is for federal tax dollars to be bailing those taxes out when their out of control spending and stupid tax proposals wreck their budget. But this is what happens when you vote democrats into office.
I suspect that many if not most of the wealthy folks will pull up stakes and move to Texas or Florida, maybe even offshore somewhere, where the tax hit is reduced or even eliminated. It's so stupid, over and over again we see the same thing happen, here and abroad: when you raise taxes on the rich, the rich move out. And the upshot is, you don't get as much tax revenue as you thought, plus you don't get as much investing in new businesses or business expansions, and that cuts into your tax revenue too. Not to mention fewer job and less economic grow than otherwise. But they never learn, or don't want to cuz it buys them votes in the next election. Maybe it's the voters who never learn.
Several states are unveiling new tax proposals, adding to an effort by the Biden administration and Senate Democrats to tax ultra-rich Americans and corporations.
Lawmakers in California are considering a tax on extreme wealth that would impose an annual excise tax of 1% on those who have wealth exceeding $50 million per taxpayer and a 1.5% tax on those with wealth above $1 billion. The tax would raise an estimated $22.3 billion starting in 2023. New York and Washington are also looking at new taxation targeting ultra-wealthy individuals.
On a national level, the Biden administration and Democratic lawmakers are floating several different tax measures related to higher taxes for wealthy Americans and corporations.
President Biden recently told Good Morning America that "anybody making more than $400,000 a year will see a small to significant tax increase" under the tax plan his administration is developing. “If we just took the tax rate back to what it was when Bush was president — the top rate paid 39.6% in federal taxes," Biden added, "that would raise to $230 billion."
Sen. Elizabeth Warren (D-MA) recently reintroduced her proposal on taxing the ultra-rich.
.
.
The proposed wealth taxes in California and Washington state are similar to Warren’s plan and would impose an annual tax rate on income above certain thresholds.
“Since the start of the pandemic, billionaires have accumulated an additional $1.1 trillion in wealth,” Assembly Member Alex Lee (D-San Jose) said. “In order for California to really come back roaring, we need sizable investments in our communities… we’re proposing a modest 1% tax on households with net worths of over $50 million, and 1.5% on wealth over $1 billion.”
Critics of the wealth tax say it may be difficult to calculate and be enforced. The revenue generated might not be as much as expected while the costs of administering the tax could be higher than calculated.
“Taxing wealth is something we've never done in the United States and that most countries have not done,” Jared Walczak, the Tax Foundation's vice president of state projects, told Yahoo Money. “They're complex and they create a lot of economic harm because they're paid on your assets — which often have to be liquidated to pay them.”
While wealth taxes reached their peak in OECD countries in the 1990s, the number of OECD countries that currently have a wealth tax dropped to five from 12 by 2019 because of the challenges those taxes create.
The proposed plan in New York — which includes raising income taxes, imposing new capital gains taxes, and increasing the estate tax among other measures — is similar to President Joe Biden's campaign plan to raise the corporate tax rate to 28%, require a true minimum tax of 21% on all foreign earnings on U.S. companies, raise the top individual income tax rate to 39.6% (the current maximum is 37%), and require those who make more than $1 million annually to pay the same rate on investment income as they do on their wages.
'We create more billionaires than anywhere in the world'
This isn’t the first time California has proposed a wealth tax on its richest residents: Last year, a similar bill to levy a 0.4% tax on the wealthiest who have a net worth of more than $30 million did not garner enough support.
The new proposal, instead, raises that to a 1% tax on individuals who earn more than $50 million per year.
.
.
Washington's wealth tax would only target intangible financial instruments, meaning that investments and ownership in publicly traded companies would be taxed but not houses or business ownership. Walczak noted that the Washington state wealth tax would only affect 12 billionaires.
“If any one of them were to leave the state, or make another state their state of residence, the tax revenue would plummet on this,” he said. “Not just the revenue from this new wealth tax, but also potentially all of the other taxes.”
Taxing rich Americans gains steam as Biden and states push plans
Several states are unveiling new tax proposals, adding to an effort by the Biden administration and Senate Democrats to tax ultra-rich Americans and corporations.
Firstly, I don't care what CA, NY, WA, and any other state does with their tax policies. But what I do not want is for federal tax dollars to be bailing those taxes out when their out of control spending and stupid tax proposals wreck their budget. But this is what happens when you vote democrats into office.
I suspect that many if not most of the wealthy folks will pull up stakes and move to Texas or Florida, maybe even offshore somewhere, where the tax hit is reduced or even eliminated. It's so stupid, over and over again we see the same thing happen, here and abroad: when you raise taxes on the rich, the rich move out. And the upshot is, you don't get as much tax revenue as you thought, plus you don't get as much investing in new businesses or business expansions, and that cuts into your tax revenue too. Not to mention fewer job and less economic grow than otherwise. But they never learn, or don't want to cuz it buys them votes in the next election. Maybe it's the voters who never learn.
