{"id":45167,"date":"2022-04-07T13:36:52","date_gmt":"2022-04-07T17:36:52","guid":{"rendered":"https:\/\/www.rightwinggranny.com\/?p=45167"},"modified":"2022-04-07T13:36:52","modified_gmt":"2022-04-07T17:36:52","slug":"inflation-and-taxes","status":"publish","type":"post","link":"https:\/\/www.rightwinggranny.com\/?p=45167","title":{"rendered":"Inflation And Taxes"},"content":{"rendered":"

On Wednesday, Steven Hayward posted an article at Power Line Blog<\/a> about President Biden’s tax proposal that would only ‘tax the rich.’ Taxing the rich has never been a really good idea–the ‘rich’ have tax accountants to limit their tax liability. Generally speaking, the middle-class does not have tax accountants and gets stuck paying the taxes that were for the ‘rich.’<\/p>\n

The article reports:<\/p>\n

Everyone is familiar with the two great lies of modern times: the check is in the mail, and \u201cOf course I\u2019ll still respect you in the morning.\u201d To which should be added a third: \u201cwealth taxes\u201d will only affect the very rich\u2014the middle class has nothing to fear. When you hear Democrats say this, reach for your wallet.<\/strong><\/p>\n

This needs to be kept in mind with thinking about President Biden\u2019s new proposed \u201cwealth tax,\u201d which would impose a 20 percent tax on unrealized gains of liquid assets (i.e., stocks and bonds) for households with a net worth of more than $100 million. The Biden Administration claims this proposed tax will only hit the top 0.01 percent of taxpayers, with most of the incidence of the tax falling on billionaires.<\/strong><\/p>\n

Of course, this is what liberals told us about the Alternative Minimum Tax (AMT) back in the late 1960s, when the left created a scandal around the fact that 155 people with adjusted gross income above $200,000 paid zero income tax on their 1967 tax returns. (Adjusted for inflation, that would be around $1.5 million today.) As the internet clickbait headlines like to say, \u201cYou\u2019ll never guess what happened next!\u201d Of course you don\u2019t need to guess: by 2017, before the Trump tax cut finally scaled back the AMT (but only temporarily because of our strange budget rules), 5.2 million households were caught up in it, a far cry from the few hundred originally targeted in 1969.<\/strong><\/p>\n

The same thing will surely happen with any \u201cwealth tax\u201d targeted at the super rich, and for the same reasons: inflation, and the insatiable appetite of liberals for revenue, which can only come in sufficient amounts by taxing the middle class. Devices like the AMT or a \u201cwealth tax\u201d are gimmicks to disguise this fact.<\/strong><\/p>\n

The article notes:<\/p>\n

Thomas Hoenig of the Mercatus Center at George Mason University (and former president of the Federal Reserve Bank of Kansas City) warns in Barron\u2019s<\/em><\/a>:<\/strong><\/p>\n

The proposal sounds so simple. Report income and unrealized gains in liquid assets and tax them at a minimum of 20%\u2014the assumption being that only the richest experience significant increases in asset values. However, the truth is that in a period of persistent asset inflation, which we have had now for decades, such a tax eventually would apply to an ever-larger proportion of the population, notably the middle class.<\/strong><\/p>\n

The income tax is a good example of how a tax on the wealthy becomes a tax on the middle class. In 1913, Congress passed the first income tax under the newly passed 16th Amendment to the Constitution, which topped out at 7% for income above $500,000. After a temporary, significant tax increase to pay for World War I, tax rates settled<\/a> in at 25% on incomes above $100,000. It was only a matter of time before the politicians forgot about the \u201cwealthy\u201d part.<\/strong><\/p>\n

Taxing the rich is one of those ideas that sounds really good but never actually works!<\/p>\n","protected":false},"excerpt":{"rendered":"

On Wednesday, Steven Hayward posted an article at Power Line Blog about President Biden’s tax proposal that would only ‘tax the rich.’ Taxing the rich has never been a really good idea–the ‘rich’ have tax accountants to limit their tax … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[15153,15155,13617,9187,8203,13372,5647,2397,15154,14495],"class_list":["post-45167","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-alternative-minimum-tax-amt","tag-barrons","tag-biden-administrations-tax-plan","tag-george-mason-university","tag-power-line-blog","tag-president-biden","tag-steven-hayward","tag-tax-the-rich","tag-thomas-hoenig","tag-wealth-tax"],"_links":{"self":[{"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/posts\/45167","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=45167"}],"version-history":[{"count":1,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/posts\/45167\/revisions"}],"predecessor-version":[{"id":45168,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/posts\/45167\/revisions\/45168"}],"wp:attachment":[{"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=45167"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=45167"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=45167"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}