On Tuesday, The Hill reported that Senator Joe Manchin has stated that he does not support President Biden’s plan to tax the unrealized gains of billionaires, which would set a new precedent by taxing the value an asset accrues in theory before it is actually sold and converted into cash.
The article quotes Senator Manchin:
“You can’t tax something that’s not earned. Earned income is what we’re based on,” he told The Hill. “There’s other ways to do it. Everybody has to pay their fair share.”
“Everybody has to pay their fair share, that’s for sure. But unrealized gains is not the way to do it, as far as I’m concerned,” he added.
Manchin’s opposition means Biden’s proposal is likely dead only a day after the White House unveiled it.
It could be significantly restructured to avoid taxing unrealized gains, which would pose the big challenge of trying to make up the lost revenues.
The article notes:
The problem with taxing just the regular income of billionaires is that many of the nation’s richest individuals, such as Jeff Bezos and Elon Musk, have been able to pay little or nothing in income tax by not declaring income.
Instead, the ultra-rich often can take out loans secured by the value of their assets to finance their lavish lifestyles.
“Here’s what they do. They go to their accountant. They tell their accountant, ‘Make sure I don’t make any income, any salary.’ And then they say, ‘Make sure I can buy, borrow and die.’ And nobody knew anything about that years ago, and now people are pretty up on it,” said Senate Finance Committee Chairman Ron Wyden (D-Ore.), who has announced his own proposal to tax the unrealized gains of billionaires.
Wyden says that imposing a minimum 20 percent tax on billionaires is about making sure they pay a similar percentage of their wealth in taxes as middle-class Americans.
Raising taxes does not generate revenue–lowering taxes generates revenue. All that raising taxes does is give Washington bureaucrats more money and thus more power. The Democrats need to study the Laffer Curve.