Excerpts: This proposal should be alarming to all Americans as it would drastically expand the IRS’s powers and create new complexity in the tax code. It could grow to hit millions of Americans over time, harm the economy, and is very likely unconstitutional. [snip]
A tax on unrealized gains would harm the economy. Taxpayers impacted by the tax on unrealized gains will be incentivized to move overseas in order to avoid the tax, moving much-needed capital outside the U.S. For those who keep their assets in the U.S., this tax would still lead to a reduction in new investment in the economy, harming working families via wage reduction. [snip]
While Democrats claim this plan would only hit 700 taxpayers, it’s likely that this tax would grow to hit millions of Americans. [snip]
According to the Congressional Budget Office, the top one percent of earners paid 41.7 percent of income taxes in 2018 and 25.9 percent of federal taxes. The top 20 percent of earners paid 90.9 percent of income taxes and 69.8 percent of all federal taxes. While the “rich” pay over 40 percent of income taxes, they earn just 21 percent of all income, according to the Heritage Foundation. The bottom 50 percent pay just 3 percent of income taxes, while the bottom 75 percent pay just 13 percent of income taxes. [snip]
The Biden tax will create new complexity in the tax code and expand the power of the IRS. It will wreak havoc on the economy and likely grow to hit far more Americans than intended.