Re: “Democrats look for new ways to tax the super-rich”:
The article points to the struggle that the IRS—an already beleaguered and under-resourced agency—would have in attempting to effectively collect a tax that is based on ever-changing assessments of wealth. And I agree. An unthinkable amount of time and resources would have to be devoted to creating systems for Americans to appraise their illiquid assets and for the IRS to then verify those assessments.
Instead, there is a straightforward and uncontroversial way for Democrats to collect more tax revenue: enforce the existing tax code to ensure that the wealthy pay what they owe under the law. Doing so would help bring in more than $850 billion in revenue, according to IRS estimates.
To date, the IRS has already collected nearly $500 million in ongoing efforts to recoup taxes owed by millionaires, and those efforts do not include taxing income that doesn’t exist. Introducing a new, complicated tax would risk halting the progress it has already made.
In addition to the unworkability of the proposal to advance wealth taxes, imposing a tax on unrealized gains would have devastating impacts on the population it does not intend to target – family-owned enterprises. The tax would be a blind guess at the value of a family’s net worth and cause them to face annual liquidity crises, having to sell assets just to pay the tax.
A guess tax on the annual increase in the value of Americans’ holdings is not the answer Democrats should seek.
###
