The Billionaire Minimum Tax

Tax on wealth

An issue under debate in the current presidential election is a tax on wealth.

Ms. Harris has endorsed a tax on wealth.

The Billionaire Minimum Tax stretches the definition on income to include gains on unsold assets.

Households worth more than $100 billion would owe a minimum 25% on their total annual income, including any increase in their overall wealth.

President Biden proposed the tax in his budget last year and Ms. Harris endorsed it in August with a list of other tax increases.

Ms Harris said she supports a billionaire minimum tax and corporations paying their fair share.

This wealth tax is on the ballot on Nov 5.

Ms. Harris proposal would shred a historic limit on taxation and open the door to tax more Americans assets.

Taxpayers would be forced each year to hire accountants to work out the market value of their assets and how much they have grown during the year.

For non-financial assets disputes over valuation would be legion and go on for years.

Taxpayers might have to sell other assets to pay the tax though they have earned no actual financial income.

The tax, according to the WSJ editorial is also unconstitutional.

Lawmakers have avoided a federal wealth tax for more than a century since Eisner v macomber 1920 in which the supreme Court ruled that realized gains don't count as income and can't be taxed under the 16th amendment.

The proposed billionaire minimum is meant to dodge that prohibition by lumping assets and income together instead of of taxing paper gains on their own.

The greatest risk is that lawmakers would gradually expand the pool of eligible taxpayers.

Once the wealth tax is introduced it won't be nearly as politically difficult to extend it to households under $100 million, which holds a huge amount of aggregate wealth.

There are more clauses to this law which I did not understand. But these are the major provisions of this law.