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Based on what? Do you think that the 16th amendment was unnecessary for imposition of the income tax? The court ruled otherwise.
The income tax in 1913 was 0% under $20,000; 1% on up to $20K income(about $500 million in 2018 dollars); 2% up to $50K (~$12.5 million today), and a top rate of 6% over $500K($125 million today). I don't know how you prevent the same ratcheting that has happened with the income tax to happen with a wealth tax.
The 91% rate in the 1950s is a canard. No one actually paid that rate, because the structure of the income tax was very different then. Even Warren's advisor Saez has written about this.
What were the rest of the rates in the 1950’s? Asking because I didn’t see a comparison to rates. Unfortunately rates from 1913 are poor comparisons and weaken the entire argument.
"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
Yet the citation of the amendment in the original post ends at the first comma. Now why is that?
Here's the thing - the amendment allows the Congress to tax based upon incomes from all sources, and was added into the Constitution to counteract Pollock v. Farmer's Loan & Trust, which held that income derived from property was a direct tax and was subject to the parts of the Constitution that called for direct taxes to be apportioned among the states according to the populations of the various states. Note that taxes on income derived from a person's labor was not considered a direct tax and therefore could be levied and collected by the federal government. Pollock v. Farmer's Loan & Trust meant that income taxes only applied to people who worked for a living and not to people who lived off the income derived from their investments.
The 16th Amendment's purpose was not to enact an income tax, but rather to make the source of all direct taxes no longer required to be proportional to the populations of the various states. It pretty much gives Congress carte blanche to levy any tax they wanted.
Bottom line - anyone claiming that a federal tax upon wealth is unconstitutional, is either a liar or "uninformed".
Her proposal is an annual 2% tax on those with over $50 million in assets, and 3% for over $1 billion. According to Ben Shapiro, a Harvard law grad and very sharp on Constitutional matters, this is a non-starter. The 16th Amendment of the Constitution states:
The 16th Amendment was enacted in 1913 because the Supreme Court ruled that Congress did not have power to impose an income tax. Ergo, it is pretty obvious that yet another amendment would be required for a wealth tax. Warren is being advised by rock-star economist Emmanuel Saez of UC Berkley.
Here is more analysis from the Wall Street Journal. Evidently they really want to nip this in the bud, because it is not behind a paywall as usual for the WSJ: https://www.wsj.com/articles/elizabe...ax-11548442306
There are other problems as pointed out by Ben Shapiro. Suppose you bought a house in 1970 for $1,00,000 in a prime location that has now appreciated to (say) $50,000,000. Under Warren's plan you now owe a $1 million annual tax on your house. Say you have $10 million in other assets. After 10 years of this, you're broke.
What do you think?
As a JD CPA who specializes in tax, here is what I think:
"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
Emphasis, obviously, mine.
A wealth tax is completely legal. Whether or not it would be a good idea here in the United States is a completely different angle. I'm just saying, Congress could craft such a thing if they so desired.
I would much rather completely eliminate the AMT in all of its forms and stick to the damn wording of the Amendment.
I would rather we imprison the truly wealthy whose tax fraud has been published time and again.
Tax all income at the same rate. For no reason should wage income ever be taxed at a higher rate than unearned revenue, carried interest, capital gains, and other such "passive" income.
However, I do like the tax. It would enable us to directly confront and to some degree balance the ledger, as most of our wealthy elites prefer not to pay taxes or report their income.
I for one actually have some doubts about Fauxcahontas seriousness here. I think this may be more of a dog whistle for the far left progressives to get excited about with her soon to be run campaign. She needs to appeal to Bernie's base, lofting ideas like this, whether they would actually have a chance to pass, would do that. Being an efficient leader is not on her radar apparently.
"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
Yet the citation of the amendment in the original post ends at the first comma. Now why is that?
Here's the thing - the amendment allows the Congress to tax based upon incomes from all sources, and was added into the Constitution to counteract Pollock v. Farmer's Loan & Trust, which held that income derived from property was a direct tax and was subject to the parts of the Constitution that called for direct taxes to be apportioned among the states according to the populations of the various states. Note that taxes on income derived from a person's labor was not considered a direct tax and therefore could be levied and collected by the federal government. Pollock v. Farmer's Loan & Trust meant that income taxes only applied to people who worked for a living and not to people who lived off the income derived from their investments.
The 16th Amendment's purpose was not to enact an income tax, but rather to make the source of all direct taxes no longer required to be proportional to the populations of the various states. It pretty much gives Congress carte blanche to levy any tax they wanted.
Bottom line - anyone claiming that a federal tax upon wealth is unconstitutional, is either a liar or "uninformed".
One needs to define "wealth" and "labor". If I make efforts to live off of capitol gains, are my efforts not considered labor to some degree? And to get to that point, my wealth is something I likely earned via my efforts (labor) also.
The Paris Hiltons of the world are far and few between.
Luckily Trump is making judicial appointments at record pace.
By the time ideas like this hit the courts it greatly reduces the chances of being approved.
Don't like it. I don't agree with punishing success. Anybody with $50M in assets is already paying waaaay more than their fair share via income taxes. They shouldn't have to keep paying more and more and more....
Plus the $50M threshold is too low. I know of many families that own real estate assets that were bought several generations ago. The current owners/heirs are children or grandchildren of the original owners of the property. Forcing them to come up with $1M+ every year for this wealth tax would be a burden on them, and frankly isn't fair or right. I'd argue that most people in this category aren't as liquid as you'd think. Having to sell assets just to pay this ridiculous tax every year is not right.
You want Lebron or Matt Damon or those types to pay a little more, than fine, do it via an additional tax on ultra-high incomes, above $20M per year or something like that.
I for one actually have some doubts about Fauxcahontas seriousness here. I think this may be more of a dog whistle for the far left progressives to get excited about with her soon to be run campaign. She needs to appeal to Bernie's base, lofting ideas like this, whether they would actually have a chance to pass, would do that. Being an efficient leader is not on her radar apparently.
You voted for trump. Your argument is invalid.
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