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It is just a proposal, of course. Sen. Elizabeth Warren, D-MA, has proposed a new tax with a catch phrase, "it's just 2 cents". Rather than an income tax, it is a proposed annual wealth tax on all wealth over $50 million in assets - but it has the effect of an income tax increase.
For example, someone buys a $100,000 bond @ 100 with a 3% coupon.
Annual Return: $3,000
Wealth Tax on the Gain: $2,000
Effective Tax Rate: 67%
(source: CNBC)
For billionaires, the effective tax rate could be over 100% once you add in all other Federal, State & Local taxes.
Lizzie Warren proposed a Tax,
And gave the rich folk 2% whacks.
When she saw what she had done,
She gave the Billionaires an extra One.
Her campaign slogan of 'just 2 cents' is disingenuous and shoots a hole in her proposal. It's not just 2 cents.....it's 2% of $50 Million, which is a cool Mill. Every Year. For 10 Years.
There is a better way to generate revenue. Simply repeal the previous Tax Cuts for High Earners, which had very little trickle-down effect. The Taxes collected should be earmarked for stimulative spending, such as Infrastructure and Clean Energy.
I'm wondering about people whose $50 MM+ net worth is primarily illiquid; in stock or business ownership or land. They might not have the cash around to pay the tax.
I'm wondering about people whose $50 MM+ net worth is primarily illiquid; in stock or business ownership or land. They might not have the cash around to pay the tax.
Tillman Fertita was on CNBC yesterday discussing this very issue. First hurdle to get over is valuation. As he said, he could have each of the Big 4 accounting firms audit his balance sheet and they'd all have different numbers. Then you have the liquidity issue.
Just shows that Warren has no common sense when it comes to this proposal, it's just a good sound bite.
Lizzie Warren proposed a Tax,
And gave the rich folk 2% whacks.
When she saw what she had done,
She gave the Billionaires an extra One.
Her campaign slogan of 'just 2 cents' is disingenuous and shoots a hole in her proposal. It's not just 2 cents.....it's 2% of $50 Million, which is a cool Mill. Every Year. For 10 Years.
There is a better way to generate revenue. Simply repeal the previous Tax Cuts for High Earners, which had very little trickle-down effect. The Taxes collected should be earmarked for stimulative spending, such as Infrastructure and Clean Energy.
The 2% is only on every dollar above $50 million, not including the first $50 million.
The 2% wealth tax I assume would be applied annually to all of the person's holdings above $50 million. This means if a person leaves their money invested, whether in stocks, bonds, commodities, or real estate, they would get re-taxed every year on the same money. This would force them to sell assets in order to pay more taxes, which would be counter-productive and very costly. I also assume the same investors would need to pay capital gains taxes upon sale of the assets, which would be in addition to the 2%. Under the current system you only pay taxes on gains upon sale of the asset. As long as you buy and hold, you don't pay taxes.
I'm all for the rich paying higher taxes, but a wealth tax is a terrible plan. I listened to Leon Cooperman on CNBC and agreed with him for the most part. The current system is fine, just that we allow billionaires to use too many loopholes. We could instead raise the tax rate without significantly disrupting things to generate more revenue. Where Leon goes off the rails is when he pontificates endlessly on how great Carl Icahn and the other hedge fund billionaires are. Just stop Leon!
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Quote:
Originally Posted by Rakin
She will make a million CPA's and Tax Attorneys very wealthy and not accomplish jack.
Yes, this. People don't become millionaires because they are stupid. They will find ways to get around this. Some of that might actually benefit others, but the proposed revenue from this tax would not be nearly what she expects.
It is just a proposal, of course. Sen. Elizabeth Warren, D-MA, has proposed a new tax with a catch phrase, "it's just 2 cents". Rather than an income tax, it is a proposed annual wealth tax on all wealth over $50 million in assets - but it has the effect of an income tax increase.
For example, someone buys a $100,000 bond @ 100 with a 3% coupon.
Annual Return: $3,000
Wealth Tax on the Gain: $2,000
Effective Tax Rate: 67%
(source: CNBC)
For billionaires, the effective tax rate could be over 100% once you add in all other Federal, State & Local taxes.
I just googled it and apparently there are 211,000 people in the entire world with $30 million+ of net worth deemed as ultra high net worth individuals.
Let’s just say half are in the United States...let’s say of those another 20% are over 30 but under 50 million.
Her plan is to tax 80,000ish people 1 or so million a year?
Pissing in the ocean.
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