Washington's $849 Million Capital Gains Windfall Shows 'Taxing the Rich Is a Really Good Idea'

[diva77]

https://www.commondreams.org/news/tax-the-rich

"Hey, hey! What we knew would happen: Make the wealthiest pay their fair share and it finances investments in education, transportation, and more," said Rep. Pramila Jayapal.

by Brett Wilkins 5-26-2023

Proponents of progressive taxation on Friday pointed to data showing Washington state stands poised to reap $849 million in revenue during the first year of its capital gains tax as proof that taxing the rich works—and could serve as a template for federal legislation.

The Seattle Timesreports that when Washington state lawmakers passed this fiscal year's budget, they anticipated collecting $248 million in revenue from the 7% tax on the sale or exchange of stocks, bonds, and certain other assets above $250,000.

However, the legislators were pleasantly surprised when figures showed the state has collected over $600 million more than that.

SNIP

Jayapal touted federal legislation she introduced with Sen. Elizabeth Warren (D-Mass.) in 2021—the Ultra-Millionaire Tax Act—that would levy a 2% annual tax on the net worth of households and trusts above $50 million, plus a 1% annual surtax on billionaires.

An analysis by University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman found that the legislation would bring in at least $3 trillion in revenue over 10 years without raising taxes on 99.95% of American households worth less than $50 million.
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Some good news for a change!!

[Buns_of_Fire]

1. Well, there went my incentive to work hard

and earn that last $49,977,000 of my personal fortune. And I was so close, too.

[diva77]

2. What will you do with your new-found free time?

[Buns_of_Fire]

3. You're right, I need a hobby now. I think I'll build

that fully-functional half-scale 747 out of toothpicks that I've been planning. That, or take up drinking, like they do on Lifestyles of the Nowhere-Near Rich and Nowhere-Near Famous.

[ret5hd]

9. "Lifestyles of the Broke and Lonely"

[LoisB]

5. +1000

[Maru Kitteh]

4. WHOA!

. . . . . . . . . .

[Stargazer99]

6. The next well to do whiner about the tax needs to be shown the way to their local foodbank

[NowISeetheLight]

7. Not Bad

I think by restricting the tax to sales over $250k they do a good job of not catching the middle class. Anyone selling that much in stock in one year is doing OK.

Does anyone know what "other assets" are affected by this tax? I'd assume things like jewelery, art, etc, but not things like homes?

[DFW]

8. Sell one share of Warren Buffet's Berkshire Hathaway, and you are already at double the threshold

The Berkshire Hathaway-A stock is trading at somewhere around $490,000 a share. I have to assume that some people in Washington State own some of it. So if someone had the cash to invest $475,000 in one of these shares, and sells it at $490,000, they will now be penalized $35,000 if they sell that share, even if their gain is less than that? I would hope that the law instituting this tax takes into account whether or not the 7% is variable if it means the stock owner is put into a loss position because of it. What if the owner of that share is making a forced sale due to an uninsured medical emergency? I'd want to see the fine print on that law before approving of it.

While I know nothing about trusts, and will never know what it is like to be worth $50 million, I wouldn't advocate a tax on households worth over $50 million. If anyone has that much, and is willing to declare it, it is very conceivably money that has already been taxed. Taxing it again just reminds me too much of how this was done here in Germany 80 years ago. The post-war constitution here forbade double taxation for that very reason. I agree with the principle. One politician here called double taxation an "envy tax." I tend to agree. Make the income tax what it is deemed fair to be, but don't make a law saying, "you have done too well, so I'm taking some more of it." That kind of thing reeks of confiscation, and encourages capital flight. We don't need either. Let's keep "Enteignung" a foreign word, especially as it was used here in Germany from 1933 to 1945. There will always be a few people who figure out how to build a better mouse trap. So? Good for them. I don't see why they should be punished for it, and I don't see why they should be forced to accept a medal saying "Герой Социалистического Труда (Hero of Socialist Labor) " as their sole remuneration.