It's simply a horrible idea!!! There is NO WAY a wealth tax can be equitable. I have been a tax practitioner for over 50 years and have seen it all including other countries' wealth tax experiences which have been wildly unsuccessful. I think Harvey's conclusion is 100% correct. The folks I represented over the years have no problem paying tax on whatever they owe. Of course they make investments at times with an eye towards tax ramifications but that's strictly an investment calculation on what one would earn after tax. A simple example is waiting to sell a security once it becomes a long term gain and thus subject to a lower capital gains tax at a lower rate. By and large people are ok paying tax so long as it's not confiscatory which a wealth tax would be. As Harvey put it so well, don't make honest people cheaters. If they don't outright cheat, they would be encouraged to use their wealth to seek every nook and cranny to avoid or at least reduce the tax it might create, let alone the absolute impossibility of determining the vale of the assets upon which a wealth tax would be imposed. If they really want to collect more in taxes, they should start at the state level where millions of people lie about their residency by claiming residency in a non tax state. This is driven in no small part by high state taxes which are no longer deductible except for $10,000 per year which is similar to a proposed wealth tax effect. After all, the people who lie about their residency are certainly NOT paupers!!! The result is the state where they actually live loses their tax base and takes more from the federal government to keep the state afloat. A simple way to enforce that would be to have agents from each taxable state walk the streets of summer shore towns like Long Island and take down the license plate numbers of out of state registered vehicles. Then go to the states where the vehicle is registered and send audit notices to the individual to whom the vehicle is registered along with a questionnaire. They would be flooded with those who would lose the out of state residency exemption. The other thing that might also happen as a result is the migration to Texas and Florida would slow down and in many cases, just simply cease. Just look at Elon Musk changing the domicile of his companies as an example of states with high taxes losing out to low or no tax states as a prime example. I didn't mean this to be that long, but.........................................
Below is from an Axios article. I don't know the reliability of the statement.
"Within that $100 million club, you'd only pay taxes on unrealized capital gains if at least 80% of your wealth is in tradeable assets (i.e., not shares of private startups or real estate)."
It's simply a horrible idea!!! There is NO WAY a wealth tax can be equitable. I have been a tax practitioner for over 50 years and have seen it all including other countries' wealth tax experiences which have been wildly unsuccessful. I think Harvey's conclusion is 100% correct. The folks I represented over the years have no problem paying tax on whatever they owe. Of course they make investments at times with an eye towards tax ramifications but that's strictly an investment calculation on what one would earn after tax. A simple example is waiting to sell a security once it becomes a long term gain and thus subject to a lower capital gains tax at a lower rate. By and large people are ok paying tax so long as it's not confiscatory which a wealth tax would be. As Harvey put it so well, don't make honest people cheaters. If they don't outright cheat, they would be encouraged to use their wealth to seek every nook and cranny to avoid or at least reduce the tax it might create, let alone the absolute impossibility of determining the vale of the assets upon which a wealth tax would be imposed. If they really want to collect more in taxes, they should start at the state level where millions of people lie about their residency by claiming residency in a non tax state. This is driven in no small part by high state taxes which are no longer deductible except for $10,000 per year which is similar to a proposed wealth tax effect. After all, the people who lie about their residency are certainly NOT paupers!!! The result is the state where they actually live loses their tax base and takes more from the federal government to keep the state afloat. A simple way to enforce that would be to have agents from each taxable state walk the streets of summer shore towns like Long Island and take down the license plate numbers of out of state registered vehicles. Then go to the states where the vehicle is registered and send audit notices to the individual to whom the vehicle is registered along with a questionnaire. They would be flooded with those who would lose the out of state residency exemption. The other thing that might also happen as a result is the migration to Texas and Florida would slow down and in many cases, just simply cease. Just look at Elon Musk changing the domicile of his companies as an example of states with high taxes losing out to low or no tax states as a prime example. I didn't mean this to be that long, but.........................................
Below is from an Axios article. I don't know the reliability of the statement.
"Within that $100 million club, you'd only pay taxes on unrealized capital gains if at least 80% of your wealth is in tradeable assets (i.e., not shares of private startups or real estate)."
I thought it hadn't been finally decided. Anyway, what about tradeable but illiquid assets? What about the other 20%?