20% minimum tax for billionaires

What’s not to like ways and means —
(meaning deficits, inflation, budgets, education, environment, healthcare, military, police, infrastructure, research)
speaking?

It’s impractical and would likely have unintended consequences. It’s potentially unconstitutional too.

Billionaires have wealth, mostly unrealized capital gains. They borrow against their wealth so as not to have income from asset sales. Taxing them fairly is difficult.

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I am not sure how I feel about this. This tax can start off taxing billionaires and then eventually making its way down the hill to everyone one else.

I am in favor of a flat tax that everyone pays with no exceptions or loopholes. Ex. 20%. Rich or poor everyone pays 20%. I don’t care about the percentage either as long as everyone pays the same.

It will never happen because that would limit the government from picking winners or losers.

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The problem is rich people borrow against assets, so the loans aren’t income. How do you tax loans? Unfair? Yes. To tax many of the super-wealthy, we’d have to tax assets and more specifically asset appreciation. Nearly impossible. And not popular.

What’s unconstitutional about eliminating loopholes?

20% of what? Income? Or net worth? If net worth, in 10 years they would be left with what, 10% left? That’s communism!

Eliminating loopholes isn’t unconstitutional but that’s not what this is.

Taxing income that hasn’t been earned (ie stock gains when you haven’t sold a stock) may be unconstitutional. I think it probably is, especially if only applying to certain people based on something that doesn’t relate directly to income (I.e direct tax).

You are basing the reason to tax that on wealth which may not be classified as a direct tax. You’re picking who to tax and what the rules are (e.g stock gains if not realized) based on wealth. Both issues will be challenged and I’m not sure either will ultimately be allowed.

IMO, Biden knows this won’t happen (even Dems pushing back on it already) and this is a political move.

One change that would raise revenue is taxing any capital gains at regular income rates. Of course, 401Ks and IRAs wouldn’t be taxed until withdrawals.

Yes good point. You would have to tax unrealized gains (I think they call them) for stock and real estate. That’s where this can also get dicey bc like all taxes eventually it will make it to everyone else that pays taxes. I am not sure I want to be assessed a tax on the appreciation on my house or my stock investments.

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I was referring to income tax. I was in favor of a flat tax rather then they way we pay now. 20% was just a number I used in the example. It does not matter what the number is to me as long as everyone, rich or poor, pays the same.

I’m only talking about a minimum tax and eliminating loopholes.

Again, I’m not sure it’s constitutional to do this. But let’s say it is.

The unintended consequences would be enormous. It would be another barrier for people to buy homes or stock. What happens when you don’t have the liquidity to pay the gains? You have to sell. That would be messy for stock but I guess doable (although it would have market impacts). But having to sell your house to pay unrealized tax gains on it?

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The minimum tax that’s being proposed involves what I’m talking about.

Ok, but my point wasn’t about that. Just saying.

Minimum + closing loopholes I think is doable.

I want to be taxed at 20%. I would have no issue with that…considering.

Yes. I kinda alluded to that in one of my replies. It may start with billionaires but at some point it will involve everyone that pays taxes. So yes I agree I don’t feel it’s good bc of the unintended consequences.

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It sounds easy enough but you have to define income and the loopholes. Not just throw out general/vague terms.

As it’s defined today, they are paying what they should. If they weren’t, the IRS could audit them and they would be forced to pay.

So how do you redefine income or which loopholes to close to get them to pay more? Minimum tax on what? Otherwise, there isn’t much to discuss.

Make your primary residence and one vacation home exempt. Make 3 or 4 vehicles exempt. Make the art you display in your house exempt. Make personal jewelry exempt. Any loans above $250K that are not to purchase something tangible should be taxed as income (if you are borrowing against assets to avoid taxes). Plenty of ways to skin the cat, I suppose.

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The more complicated you make it, the more opportunities to get around it and the harder you make it for the IRS to administer and enforce.

And, again, that’s assuming you can even do it constitutionally.

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