Elizabeth Warren's tax concept

Macduff

Moderator
Apr 2010
92,276
30,679
Pittsburgh, PA
It could be construed as Constitutional if people whose net worth decreases in a year are exempted, making the tax a de facto capital gains tax that is just administered strangely (regressively, i.e. taxing huge returns relatively lightly and normal returns Draconianly) so that the tax seems like a wealth tax.
That seems like an administrative nightmare.
 
Feb 2010
33,465
23,161
between Moon and NYC
I like that it's a different idea. But I agree with you that it's not a good idea. When you retax on something you already have taxed, that can't be called anything but pure wealth redistribution. 3% doesn't sound like a lot, but that's 100% in 3-4 generations.
Suspect Warren would (agree off) camera that her proposal doesn't translate well to reality.

But it is getting her name in the headlines. And certainly energizing the AOC segment of the Democrat base.

Probably smart campaign politics.



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Feb 2010
33,465
23,161
between Moon and NYC
I like that it's a different idea. But I agree with you that it's not a good idea. When you retax on something you already have taxed, that can't be called anything but pure wealth redistribution. 3% doesn't sound like a lot, but that's 100% in 3-4 generations.
And the opposition party will quickly rename the Warren Tax as "confiscation of wealth".

Let the food fight begin. woot! woot!!



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Ian Jeffrey

Council Hall
Mar 2013
72,299
40,395
Vulcan, down the street from Darth Vader
I'm not as familiar with corporate tax law... Could you provide a hypothetical scenario that illustrates the difference between corporate income, and " dividends resulting from that income?"
Sure. Corporation A has earnings for 2018 of $X. Stockholders - who already own the company and its earnings - receive a dividend for 2018 of $Y as a piece of $X, leaving $Z as retained earnings (for reinvestment in the company). Company A pays income tax on X, while stockholders pay income tax on Y. Y was taxed as part of X, then again in itself. Y is not truly a transfer of money, since the stockholders already own X. Thus, the same income has in reality been taxed twice.
 
Likes: Djinn

Ian Jeffrey

Council Hall
Mar 2013
72,299
40,395
Vulcan, down the street from Darth Vader
And that's one of the reasons the stock market is so overpriced today and susceptible to a horrendous crash.
I really doubt that has much to do with it. Stocks are already priced at more than book value because people buy based on expectation of future growth.
 
Jan 2016
46,323
42,246
Colorado
And that's one of the reasons the stock market is so overpriced today and susceptible to a horrendous crash.
I'm surprised to see you admitting this! I've been trying to tell you this for some time. Was not all that long ago, you were looking forward to Dow 27,000! And hailing it as a triumph of 'Trumponomics'......
 

Devil505

Former Staff
Jan 2008
68,346
27,398
Florida
Believe your proposal is old news. Is already in effect. Or at least was in place.

As i recall it became problematic and was adjusted (or possibly eliminated...)



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Trump and many other super-rich people pay accountants to help them avoid paying any income tax.
Avoidance is not a crime...evasion is. (same to me)
 

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