The following is from a “new report” from Senator Warren’s office. Of course, it’s not a report, but merely rehashing well known information.
Our current tax system does little to tax America’s wealthiest individuals. Income taxes target income, and standard income is not how the richest of the rich build their fortunes. For example, Jeff Bezos earned $81,840 in salary in 2020, a barely noticeable figure when compared to his $179 billion in wealth. That’s exactly why the Ultra-Millionaire Tax targets wealth. Applying Senator Warren’s wealth tax to five of America’s richest individuals alone, the report shows, would have raised over $9 billion dollars in 2020.
Standard income is not how anyone builds their wealth. We save, invest and accumulate wealth through the growth in value of those investments. Unlike Bezos, we don’t start new industries that employ thousands and change the lives of a big chunk of the people on earth.
The amount of money is vastly different, but the principle is the same. It’s just a matter of time before the wealth accumulated by more average Americans becomes a target for taxation. Consider that the alternate minimum tax (AMT) and even the inheritance tax were initially designed to impact a relatively few very wealthy Americans, but were allowed to grow in their application.
Note in her statement she uses the billions of Bezos as an example, but the text says “Ultra-Millionaire” whatever that means. [as proposed it means $50 million].
QUINNSCOMMENTARY 
News report today (9-21-21) to be in the top 1% in 2018 you only needed to make $540,000. They paid 40% of all federal income taxes, total $615B.
The bottom 50% only paid 3% of all federal income taxes.
1) how is this fair?
2) Even taxing the rich will not cover the government’s spending problem, when they pass $3.5T bills.
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You seldom see any explanation of WHY Long Term Capital Gains (LTCG) tax rates are lower than income tax rates.
First, LTCG encourages holding stocks for extended periods. This not only reduces market “froth”, but also encourages corporations to be able to plan for the long term instead of just for short term gain. This is better for both employment and for the environment. Secondly, unlike wages, which can be spent immediately, LTCG must be held at least a year, which exposes the gain to the ravages of inflation.
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I see several possible unintended consequences with all this wealth tax business.
1) The government wants people to save for retirement. They will stop saving.
2) Nobody will own anything. They will just rent and lease, and will have no assets or just stop buying. The government proved this in the 1991 when they put luxury taxes on cars, boats, and planes among other things. It killed the private yacht building businesses and general aviation plane building business in the US and it never recovered even though the luxury tax on yachts was repealed in 1993 (cars in 2002). The government got less taxes after the passage of the luxury tax then before the tax. In my home town, a yacht builder’s buildings are finally being used again providing jobs since 2019 as a sign company.
3) Went times go bad, the government will have to support the people through more welfare because the people will have no assets as a safety cushion. this will be important for long term medical care.
4) People will lose their farms and businesses because that is part of their wealth. They will not be able to pass them on to their heirs. This has already been proven because the estate tax exemption is raised every year. It currently sits at $11.7m for 2021 because this was happening.
5) Senator Warren hates banks and big businesses. This will only help them, especially those that are off shore own US property. The corporations will own everything. We are seeing that in the real estate / housing market today. Banks will make money off of people leasing cars, boats, and vacation homes.
6) When collecting enough taxes from the ultra-millionaires fails, the government will just keep lowering the definition of who is wealthy just as they keep raising the definition of who is in poverty. That means retired folks with $1m+ IRAs and 401Ks will be next. One day the definition of those who are poor and those who are rich will meet and there will be no one in between.
7) The government will be force to restructure the tax code, add another 1000 pages, and create a way that investors can invest into companies so that the peasants can have jobs or the unemployment rate will raise when companies fail and new ones can’t get startup capital.
8) The wealth will leave and go off shore and may never return just like labor costs drive jobs offshore so will tax rates higher than the rest of the world. Some companies refuse to bring their profits home now.
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