Marjorie Taylor Greene. They’re the ones who are spending money on disinformation campaigns. They’re the ones who are trying to spread lies and misinformation to manipulate the public. The summary provided is a call to action, urging readers to be aware of disinformation and to fight against it.
**Tax Avoidance vs.
This is a practice known as tax avoidance. Tax avoidance is not the same as tax evasion. Tax evasion is illegal and involves deliberately hiding income or assets to avoid paying taxes. Tax avoidance, on the other hand, is legal and involves using legal strategies to reduce your tax liability.
but it’s not a solution. The proposed wealth tax is a complex issue with no easy answers. It’s not just about the amount of money involved, but also about the potential impact on economic growth, investment, and the overall fairness of the tax system. The Biden-Harris proposal, while aiming to address the wealth gap, has been criticized for its limited scope and potential unintended consequences.
This group of VCs, who are known for their political influence, have been actively lobbying against the unrealized capital gains tax. They argue that it would stifle innovation and economic growth. They claim that it would discourage entrepreneurs from taking risks and investing in new ventures.
“As I see it,” adds Lord (who helped write Rep. Barbara Lee’s Oligarch Act of 2023, and who has contributed to this publication) “any tax on the ultra-rich is significant to them only for how it impacts their wealth. Taxes don’t impact their spending decisions, their career decisions, college affordability, retirement decisions, or whether a spouse needs to work full time.” Those taxes also won’t affect you if you have the following issue: VCs for Kamala did not respond to questions I sent via their media contact, but those rich kids may not have to worry either. Congress has thus far been unwilling to touch unrealized gains, in part because, as Dean noted, it sounds ridiculous—even un-American—when applied to ordinary people.
The IRS is not going to be a giant, all-powerful, tax-collecting machine that can single-handedly solve all our economic problems. It’s a complex organization with its own set of challenges and limitations. The IRS is not a magic wand that can magically eliminate poverty or solve income inequality. It’s a tool that can be used to collect taxes, but it’s not a panacea for all our economic woes.
(Note: That farmer, lacking $100 million in assets, would be unaffected by the Harris plan.) The Supreme Court “is all but certain to strike down a tax on wealth, and the wealth transfer tax system we have has effectively been neutered through avoidance strategies.” One could, of course, write exceptions into the law, “as long as you could figure out what all of those kinds of issues are,” Dale says. Or you could take a different approach: “Why don’t you say, in general, we won’t tax unrealized gains, but we’ll make exceptions and tax them—for example, if the asset in question is freely marketable, like securities, and we won’t do that for people below a certain level of wealth or income.”
This is a fundamental problem that needs to be addressed. The current tax system is designed to incentivize capital gains, which are profits from selling assets like stocks, bonds, and real estate. This system is often criticized for being unfair and favoring the wealthy. Critics argue that it allows individuals to avoid paying their fair share of taxes, while simultaneously promoting wealth inequality. Capital gains tax rates are typically lower than income tax rates, and this disparity is often cited as a major contributor to wealth inequality.
That’s a great deal for people whose incomes derive largely from investments. It means that a couple with wage income of $1 million in 2024 owes the IRS about $321,000, whereas a couple with $1 million in investment income owes only $181,000. (These simple figures ignore tax credits, deductions, etc.) Why structure our tax code this way? Some people say it’s to incentivize investment, but I’m skeptical. As long as the government isn’t taking 90 percent of your profits, people will keep investing. What else are you gonna do—shove your excess cash under the mattress? Bury it in the yard?
Another rationale, says Dale, who has taught tax at New York University’s law school for decades, involves “bunching.” If my job pays $100,000 a year and I work for five years, I pay 22 percent annually to the federal government. But suppose capital gains were taxed the same as wages. If an investor who’s held a bunch of stock for four years then sells that stock the fifth year for a $500,000 profit, their income is the same as mine, but because it came all at once, their tax rate would be closer to 28 or 29 percent. “So if you want the theoretical justification, it is to average out the bunching,” Dale told me.
Biden and Harris have proposed tax reforms that aim to increase revenue for the government. These proposals include raising the top marginal tax rate on capital gains and increasing the National Insurance Trust (NIIT) rate. **Detailed Text:**
President Biden and Vice President Harris have presented tax reform proposals aimed at bolstering government revenue.
The Biden-Harris plan also proposes a wealth tax, which would tax the net worth of individuals above $100 million. This would be a progressive tax, meaning the higher the net worth, the higher the tax rate. The plan would impose a 2 percent tax on the top 0.1 percent of earners, which would generate $1.5 trillion in revenue over 10 years.
Tax attorney Lord sees a window: “The court is all but certain to strike down a tax on wealth, and the wealth transfer tax system we have has effectively been neutered through avoidance strategies,” he says, “so that leaves a tax on true economic income [including unrealized gains] as the only plausible option.” Dale says he likes the Harris plan, and “it’s not clear that SCOTUS would declare unconstitutional a 25 percent tax on unrealized gains of people whose net worth is over $100 million, but it’s also not clear that SCOTUS would approve or sustain such a tax.” That uncertainty, he adds, will affect how Congress views the proposal: “At least some senators and representatives would decide to vote against it because of its possible unconstitutionality. Others in Congress will vote against it because they will dislike such a tax.”
Dale’s NYU colleague, former Biden Treasury official and tax expert Lily Batchelder, is more optimistic about the Supreme Court sustaining a minimum income tax for extremely high-wealth individuals: “The majority in Moore expressed concern about how the petitioners’ arguments would deprive the government and the American people of trillions of dollars in tax revenue by eliminating a vast array of existing provisions, including multiple provisions that already tax unrealized income,” she notes in an email. “I think the case educated the justices about the ‘blast radius’ that would result if they read some sort of realization requirement into the Constitution.”
Elizabeth Warren and Bernie Sanders have proposed, implement a wealth tax. This tax would target the top 0.1% of earners, who hold a disproportionate amount of wealth in the US. The wealth tax, a relatively new concept in the US, has been gaining traction in recent years.
This father’s legacy, as a successful investor, could be wiped out if the tax system were to apply the “step-up in basis” rule. This rule, while intended to prevent tax avoidance, has unintended consequences, particularly for those with substantial wealth. This “step-up in basis” rule is a complex legal concept that is often misunderstood.
This is a significant issue because it disproportionately impacts the middle class and working class. The middle class and working class are often the ones who pay the most taxes, yet they are the ones who are most likely to be affected by these tax increases. This is because these tax increases are often implemented in the form of higher taxes on goods and services, which can disproportionately impact lower-income households.
“A nontrivial portion of my practice was estate planning,” a field that has long engaged in “an ongoing, very complicated game to reduce the taxes paid by the wealthy,” Dale says. “It would be sweet, I suppose, to say, here is one simple thing that could be done that your readers can understand. But the loopholes are very, very sophisticated. If I tell you that the right thing to do is to repeal 664(c)(1), your eyes would glaze over. But there are trillions of dollars in that simple thought.”
