THE STORY: President Biden's administration officials are set to propose a new minimum tax on families and households worth more than $100 million as part of the administration's annual budget, the White House said on Saturday.
This new tax increase, according to the WSJ, would make America's millionaires--not just its billionaires--pay upwards of %20 percent income tax on their rising values each year. NOT on actual income, but on their so-called "unrealized" income.
The Wall Street Journal indicated that there would be absolutely no exemptions made for certain asset classes.
So if you've got $100 million worth of stock, you would be paying a minimum of %20 income tax before those gains are even "realized."
Essentially, you would be taxed as if you had sold that stock each year.
This could destroy your portfolio.
The "billionaire's tax" (actually a millionaire's tax) won't' affect you? Think again.
According to another report by WSJ, there were more new individual investors who added stock & crypto to their portfolios in 2021 than in any other year.
So many new investors that the individual investor class, A.K.A. middle-class Americans, actually had significant sway over the market.
If this tax were to take effect, you would see the richest Americans, millionaires and billionaires alike, drop their stock like flies. The markets would crash, and the real losers would again be middle-class Americans.
So, why this bill?
The WSJ reported that this tax bill would only generate $360 billion every year for the Federal government, every 10 years, a number dwarfed by the Fed's $30 trillion debt.
This law directly violates the constitution.
The law is patently unconstitutional and directly violates the 16th Amendment by attempting to tax unrealized gains up to and even after death. It is also in violation of constitutional principles by disregarding the fact that it is the legislative branch's job to levy taxes, not the executive branch.
Even the writers at the WSJ indicated that every part of the law would face serious legal challenges as to its constitutionality, which opens up questions about the intent behind the bill.
It is very likely that the Biden administration is using the "billionaire's tax" as a way to break the constitutional barrier currently in the way of taxing unrealized gains.
After all, these kinds of tactics are not new to the left.
Indeed, there may come a day when your middle-class household ends up paying 20% income tax on a stock they haven't yet sold. Just give them time.
From the Editor's Desk
Al K. Scott
Write: AlK.Scott@outlook.com
or comment below.
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