How billionaires could work around Democrats' new tax plan

As Democrats inch closer to finalizing their social spending package, Senate Democrats are eyeing a tax on billionaires amid pushback on income and corporate levy hikes.

The proposal, called the Billionaires Income Tax, may affect roughly 700 Americans with $1 billion of wealth or earning $100 million annually for three consecutive years.

Billionaires may face an annual levy on the increased value of assets, such as stocks and bonds, regardless of when they sell, known as “mark-to-market.” However, investors may still write off losses every year.

The plan also addresses growth for the wealthy’s non-tradeable property like real estate, including a charge for deferred gains upon sale.

“In a package that’s supposed to be about giving everybody a shot to get ahead, it would be a big mistake, from both a policy and political perspective, not to ask billionaires to pay a fair share,” said Senate Finance Committee Chairman Ron Wyden, D-Ore., who first proposed a mark-to-market plan in 2019.

Most Americans earn a living through wages, whereas the ultra-wealthy may receive income through interest, dividends, capital gains or rent, from investments, known as capital income.

While everyday workers cover levies through their paychecks, the wealthiest Americans may not see income on their tax returns because they may time when to sell investments or use losses to offset their gains.

The top 1% of Americans may be avoiding $163 billion in annual taxes, according to the U.S. Department of the Treasury, and the White House estimates the 400 richest families paid an average 8.2% in federal income tax from 2010 to 2018.

However, it’s unclear if the plan has necessary backing from nearly every Democratic member of the House and all Democrats in the Senate to pass.

House Speaker Nancy Pelosi, D-Calif., appearing on CNN’s “State of the Union” Sunday, said she expects a billionaire tax in the bill, estimating $200 to $250 billion of revenue from the measure.

However, the plan’s financial impact hasn’t yet received a score from the non-partisan Joint Committee on Taxation, she said.

“I wouldn’t call that a wealth tax,” Treasury Secretary Janet Yellen added, following Pelosi’s appearance. But the levy may help reach gains from “exceptionally wealthy individuals,” she said.

Earlier this year, Democrats, including Sen. Elizabeth Warren, D-Mass., and Sen. Bernie Sanders, I-Vt., called for a 3% annual tax on wealth exceeding $1 billion.

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[adhikararesosudarmo]

Step 1: Unrealised gains taxes for billionaires
Step 2: Hyperinflate the currency so everyone becomes a billionaire
Step 3: Profit

[Ricedboi]

Next thing you know, you guys will be taking loans to pay for unrealize capital gains on your house.

[BrandyTexas]

One thing rich people are really really good at is moving their money out of the country.. or just moving in general.. then who pays for all this crap?

[d.h.]

“All of this is coming together too quickly” you don’t say?

[kaih]

It's stupid to tax anyone on unrealized capital gains.

[Graha]

I wonder why am I even watching this video. 😂

[calvinr.johnsonjr.]

Ahh look at the news. Showing how the rich skirt taxes. Smh gotta keep the status quo. Smh

[Oliveria]

Just flat tax everyone 30% problem solved.

[trollking]

At least they won't be billionaires anymore. The idea that one person can have a billion dollars is just ridiculous.

[StockyDude]

France once had a wealth tax. Between the years 2000 and 2016, they lost 60, 000 billionaires and millionaires who moved away. Then France collected less tax money overall. The experiment backfired.

[puremustang]

I mean billionaires can move their business outside of the US . And create jobs and opportunities for others. I think so many countries will welcome them.

[fabulousofcourse]

Of COURSE they'll find loopholes!

[Avi-tcym]

Capitalism = simping for the wealthiest people in human history

[Lvlover-mqnl]

Billionaire are not the problem lol. you could take all the asset of the 1% not even just billionaires. The entire 1% and the fed would quickly burn threw it in less then a few years they are talking about taxing them to do what, cover 3 trillion dollars they are going to print in the next few months whats going to happen next time they burn threw the money, tax the middle class on unrealized gains cuase thats where the real money would be, not to mention taxing unrealized profit is unconstitutional cuase its not income. If you dont see where this can lead I feel sorry for you.

[rigell]

They will just leave the country. Billionaires have billions of dollars because they are smart with their money. More government policy brought to you by Brandon and company.

[howard]

Leona Helmsly was telling us all the truth.: "Taxes are for the poor"

[valueshoken]

if you want to the tax the richest of the richest, they are gonna have plentiful of tax pros working around it

[johnpeze]

It’s about the middle class! It’s always is! Open your eyes 👀

[robsta]

I don't care about billionaires, however the slippery slope is on the way. They will get their filthy hands on  our paper gains soon enough. Even for us poor with our one Bitcoin, so don't gloat!

[Ana-iwlx]

They suddenly needed money cause stopped tolerating abusive managers.