Sanders Campaign releases plan for Tax on Extreme Wealth

[HerbChestnut]

Only applies to those with a net worth of $32million or higher for married couples and $16million or higher for singles. Would fund his plan for affordable housing and universal childcare and would put a good dent into medicare for all. Full text at the link.

https://berniesanders.com/issues/tax-extreme-wealth/

How the Tax on Extreme Wealth Would Work

This tax on extreme wealth would have a progressive rate structure that would only apply to the wealthiest 180,000 households in America who are in the top 0.1 percent.

It would start with a 1 percent tax on net worth above $32 million for a married couple. That means a married couple with $32.5 million would pay a wealth tax of just $5,000.

The tax rate would increase to 2 percent on net worth from $50 to $250 million, 3 percent from $250 to $500 million, 4 percent from $500 million to $1 billion, 5 percent from $1 to $2.5 billion, 6 percent from $2.5 to $5 billion, 7 percent from $5 to $10 billion, and 8 percent on wealth over $10 billion. These brackets are halved for singles.

Under this plan, the wealth of billionaires would be cut in half over 15 years which would substantially break up the concentration of wealth and power of this small privileged class.

Under current law, the IRS is already required to assess the net worth of the wealthiest Americans when they pass away, to calculate estate tax liability. A federal wealth tax would require the IRS to make the same assessment on an annual basis for the wealthiest Americans. Steps would also be taken to streamline the process for purposes of the wealth tax.

For assets that are difficult to appraise, the Treasury Department would have the option of allowing taxpayers to have appraisals done periodically instead of annually. The Treasury Department would establish the average rates of appreciation for several classes of assets. Those appraised only every few years would be assumed to appreciate in the intervening years at the average rate established for their designated class.

Assets placed in a trust would be treated as owned by the grantor of the trust (by the person giving assets to the trust) until that person’s death.

[Celerity]

1. good luck getting 6 billion or so from Bezos (it would be 15 billion plus if he were still married)

You think Bernie's press from WaPo is bad now, just wait, roflmaooooo.

[HerbChestnut]

3. Oh no question

Bernie, and Elizabeth for that matter, are not making friends among certain social classes that's for sure.

[George II]

2. Lots of details are missing...

Is this a one-time tax on net worth or a recurring tax on the same net worth periodically (yearly?)?

So a person has $X net worth. That person is taxed 1% when (if) this goes into effect.

Now, let's say that person does nothing with that net worth, doesn't reinvest it, move it, or add to it. Will it be subject to 1% again the following year?

The net result of this, if implemented (it has zero chance anyway), is that billions if not trillions of dollars will leave the country.

[Celerity]

4. trillions for sure nt

[HerbChestnut]

5. It's a tax on net worth, similar to the property tax that most of us pay.

As for enforcement, it's referenced in the link I posted...

A Wealth Tax Is Enforceable

In order to ensure that the wealthy are not able to evade the tax, the proposal includes a number of key enforcement policies. First, it would create a national wealth registry and significant additional third party reporting requirements.

Second, it includes an increase in IRS funding for enforcement and requires the IRS to perform an audit of 30 percent of wealth tax returns for those in the 1 percent bracket and a 100 percent audit rate for all billionaires. Third, the wealth tax includes a 40 percent exit tax on the net value of all assets under $1 billion and 60 percent over $1 billion for all wealthy individual seeking to expatriate to avoid the tax. Finally, the wealth tax proposal will include enhancements to the international tax enforcement and anti-money laundering regime including the strengthening of the Foreign Account Tax Compliance Act.

[George II]

9. Property tax is paid to a municipality to cover local services, schools, police, etc.

[HerbChestnut]

10. Great

And the wealth tax will be paid into the federal treasury to pay for things like affordable housing, universal childcare, and medicare for all.

[George II]

16. Not great. That's the purpose of the income tax. The income tax structure should be revised....

.....not add another, most likely illegal, tax.

I don't see how the Federal government can legally continually impose a tax on the same asset over and over again.

[TidalWave46]

6. I greatly appreciate this....

But it’s pretty much assumed, already. There aren’t really any secrets that a number of our candidate want to “drastically” change the tax burden in this country. What still seems to be missing is the honest and necessary conversation that that burden will also increase for the masses. I wish we built that narrative in a stronger way. The reasons are hugely beneficial and in the end it’s truly a selling point.

Pushing to raise taxes on the rich is nothing new. Raising taxes across the board, in a very progressive manner, still seems taboo.

[comradebillyboy]

11. Good observation...

[BlueMississippi]

7. This will not go anywhere

First, it won't even pass a committee.

Second, it would be double taxation and would be shot down by the courts. Whatever wealth a person has. they have already paid taxes on it so this will amount to double taxation and it violates the equal protection clause.

Although it makes the residue of purists jump with joy, it remains a slogan and a platitude to please people who viscerally hate rich people.

Most Americans don't hate rich people - actually admire them for their success. Most Americans have a dream of becoming like Bezos or Bill Gates or Mark Zuckerberg.

[HerbChestnut]

8. From the link...

A Wealth Tax Is Constitutional

Since 1916, we have taxed the inherited wealth of the richest people in this country through the estate tax. For more than 100 years, we have taxed investment income from capital gains and dividends. In order to reduce extreme inequality, we must also establish a tax on the net worth on the top 0.1 percent.

Bruce Ackerman and Anne Alstott, two highly respected Yale law professors, have both written in support of a wealth tax on the richest Americans in this country. Here is what they wrote for the Los Angeles Times on September 20, 2011:

“In the United States, anti-tax zealots will try to use the Constitution to cut off debate about a wealth tax before it begins. Article 1, Section 8 grants Congress plenary power to impose any and all ‘taxes, duties, imposts and excises,’ but it contains a special limitation on ‘capitation and other direct taxes.’ Under this little-known proviso, such taxes may be imposed only if they are apportioned among the states according to their population. This provision was part of a compromise with the slave-holding South, and its intention was to prevent the North from imposing a "head tax" on slaves because this could not be apportioned equally among the population of all the states.

Given its origins, this provision has consistently been construed very narrowly by the Supreme Court, which has found only head taxes and real estate levies to be within its scope … Given this history, it is extremely unlikely that the justices will cite the founders' original compromise with slavery to bar a tax that would serve the cause of economic equality and democratic legitimacy. The Roberts court may be conservative, but it is not quite as reactionary as all that.”

Many more articles, including a very recent one published by the American Bar Association, make the unambiguous case for the wealth tax’s constitutionality.

EDIT: Should add there are links within the quote above that provide articles in support of their argument.

[BlueMississippi]

15. It is a screed from the residue of purists who will justify anything.

Estate tax is a transfer tax -- when ownership goes from one individual to another.
Capital gains tax is a part of income tax -- i.e. tax on income that has not been taxed before.

Wealth tax will be tax on assets that are post-income tax. Those people have already paid taxes on those assets once (and will pay on unrealized capital gains in case of equity that will be sold in the future.)

That would mean DOUBLE taxation on the same income -- once while earning it and second while holding it. Americans will never go for it because it is fundamentally unfair. Like I said, it may sell in socialistic circles where confiscating other people's money is fashionable but it will not sell in mainstream America.

Lastly, there is a very easy loophole -- divide all wealth into chunks of $30 million irrevocable trusts with children, grand children and great grand children as beneficiaries and the grantor as the trustee. The grantor will still control the money but won't be taxed because the wealth is no longer theirs.

[comradebillyboy]

12. Looks like Bernie is trying to one-up Warren on this...

[HerbChestnut]

13. Maybe

But it fits in with his core message so it may just be that two of them share a similar ideology.

[Nanjeanne]

14. Sanders first proposed wealth tax in 2017.