Joe Biden is planning to go all-in on “soaking the rich” by slapping a 20% tax on households with more than $100 million in income.
The White House will release the 2023 budget on Monday, which is intended to “ensure that the very wealthiest Americans pay a tax rate of at least 20 percent on their full income, including unrealized appreciation,” according to the press handout.
It’s “unrealized appreciation” that allows the wealthy to shield much of their wealth from taxes.
Under the proposal, households worth more than $100 million that don’t pay at least 20% in tax on a combination of their standard reported income and their gains on unsold assets such as stocks would owe additional tax until they have paid the new minimum 20%, according to the White House fact sheet. This would apply to the top 0.01% of households, the White House said.
Under current law, capital gains are taxed only when they are realized—when assets are sold—and they are taxed at lower rates than ordinary income. The White House said the new tax would reduce the U.S. deficit by about $360 billion in the next decade.
Since no tax in history has ever brought in what the government claims it will bring in, we can safely dismiss that $360 billion figure as fantasy.
The White House also claims that the minimum tax on the wealthy will lower the deficit by $1 trillion over the next decade.
One trillion down, two trillion to go.
At this rate, your grandchildren will be getting Social Security when Biden’s Spendapalooza is finally paid for — if Social Security is still viable, that is.
Wealthy households who already pay 20% on their full income will not pay an additional tax under the proposal. However, the document noted that if a “tax-free unrealized income allows a wealthy household to pay less than 20 percent on their full income, they will owe a top-up payment to meet the 20 percent minimum.”
The document also said the tax “will eliminate the ability for the unrealized income of ultra-high-net-worth households to go untaxed for decades or generations.”
The wealthy don’t need any help in gaming the tax code to hide their wealth. No doubt, clever accountants have already factored in any rise in taxes and will hide their client’s income somewhere else.
Related: WEALTH TAX: Washington State One Step Closer to Driving Out All Its Billionaires
What’s worrisome is that taxes that start out by hitting the wealthy usually end up clobbering the middle class eventually. Keep that in mind when Biden says you’re not paying a “fair share” of your $75,000 a year income.
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