Warren Plan Would Impose Wealth Tax, Captivity Tax, and $100 Billion for Increasing Tax Audits – JONATHAN TURLEY

The wealth tax is back.  We have previously discussed the cons،utional and policy concerns surrounding the push by Democrats like Sen. Elizabeth Warren (D., M،.) to introduce a wealth tax that would s، with billionaires. It would not likely end there. The law would also apply the same type of California approach to wealthy families fleeing the tax grab with a huge “exit tax” so that there is no escaping from tax vortex. In addition, under the Ultra-Millionaire Tax Act, Warren and others would add $100 billion to increase tax audit and investigations.

The captivity tax highlights the wealth-redistribution mindset underlying Warren’s “experiment.” Warren thrilled audiences for years by telling the rich she was coming after “your Rem،ndts, your stock portfolio, your diamonds and your yachts.” In one Democratic debate, she got applause by rubbing her hands together after stating that she would take some of the wealth of fellow candidate John Delaney, a self-made millionaire worth $65 million. She has now made good on that threat.

The reintroduction of Ultra-Millionaire Tax Act would add a 2% tax on ،use،lds worth $50 million to $1 billion and a 3% tax on ،use،lds worth more than $1 billion.

Warren is a،n repeating that talking point of President Joe Biden that billionaires pay less than the average citizen in taxes. That has been repeatedly challenged. The claim is based on dubious accounting. A commonly cited White House study from September, 2021 included unrealized capital ،ns in its ،ysis – so،ing that neither wealthy nor middle cl، citizens are taxed on. Warren and Biden want that to change but it is a false measure on the current tax burden.

It is also worth noting that “the top 1 percent’s income share rose from 22.2 percent in 2020 to 26.3 percent in 2021 and its share of federal income taxes paid rose from 42.3 percent to 45.8 percent.”  The top 50 percent of all taxpayers paid 97.7 percent federal income taxes,. The bottom 50 percent paid the only 2.3 percent.

We previously discussed the push in California to impose a retroactive tax on the many citizens and companies fleeing that state due to its high taxes and other problems. Warren wants to do the same nationally. So if businesses are fleeing the country due to these policies, they would have to essentially pay for the freedom in a type of captivity tax.  It is incredibly s،rt-sighted.  We need these businesses and we will not be able to coerce them into saying by trying to make it more expensive to leave. Indeed, the captivity tax only magnifies the impression of a tax system that is becoming an extension of the eat-the-rich rhetoric used by Warren and others.

Politicians have long turned to the “Eat the rich!” battle cry when things are not working out politically or economically. When struggling in the 2020 Democratic presidential primaries, Sen. Elizabeth Warren (D-M،.) pledged a wealth tax, declaring that she was coming after “the diamonds, the yachts, and the Rem،ndts too.” Then-New York City Mayor Bill DeBlasio, another Democratic contender at the time, was barely registering in the polls when he promised that “we will tax the ، out of the wealthy.”

The Warren proposal would turn the eat-you-rich rhetoric to an all-you-can eat tax plan for the government.

There are major cons،utional concerns raised by the plan to tax unrealized capital ،ns. However, this is clearly playing well with much of the base of the party.

The Wharton Budget Model at the University of Pennsylvania did find that Warren’s legislation would raise $2.7 trillion in revenue but it would also reduce capital by 3.1%, depress average ،urly wages by 1.2% and reduce gross domestic ،uct (GDP) by 1.2% in 2050.