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Warren's "Wealth Tax": curb appeal but a monster to enforce
Posted on: March 4, 2021 at 22:55:47 CT
ScottsdaleTiger MU
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Elizabeth Warren has made the rounds this week pitching her wealth tax, i.e. 2% for persons with $50,000,000 and 3% for ones with $100,000,000.
The appeal of taxing the very rich is obvious. Administering such a tax is a nightmare.
Warren suggests that since real property owners pay property taxes each year, a wealth tax would be much the same. She neglects (probably intentionally) to note that county assessors and treasures essentially determine the value of real property, compute the taxes on it and bill the owners. She neglects to note that bills are sent for each individual parcel to whomever is the owner The owner of multiple parcels receives a bill for each parcel, not one bill for all the parcels.
There is a public record of real property ownership, i.e. the recording of deeds. There's no similar public registry of ownership of many other classes of assets, i.e. bank accounts, securities accounts and individual securities (stocks and bonds). Then there's the collectables problem. I.e. the wealth individual who owns half a dozen 19th century Dutch Impressionist paintings.
Collectables also raise the issue of how one values assets that are not traded on public markets, i.e. many real estate parcels, collectables, closely held businesses.
Then there's the issue of whether the taxpayer is single or married. I.e. is the $50,000,000 net worth per person or married couples or is the threshold $100,000,000 for married couples.
And that takes us to family owned assets, i.e. the parents, children and grand children all owning a piece of single asset.
There's also the issue of trusts, i.e. a trust has over $50,000,000 of assets and multiple beneficiaries. Again, is the tax imposed on the trust or on the beneficiaries (in which case there may be no tax at all).
The possibilities for evasion are many, i.e. A husband and wife have a net worth more than $50,000,000, i.e. $80,000. They obtain a divorce and the assets, the $80,000,000 are split equally between them, but they choose to live together. Each has a net worth of $40,000,000 and neither is subject to the tax.
The Senator's sales pitch doesn't address any of this issues. Perhaps she needs to return to the drawing board or just abandon the idea of a wealth tax all together.
The appeal of taxing the very rich is obvious. Administering such a tax is a nightmare.
Warren suggests that since real property owners pay property taxes each year, a wealth tax would be much the same. She neglects (probably intentionally) to note that county assessors and treasures essentially determine the value of real property, compute the taxes on it and bill the owners. She neglects to note that bills are sent for each individual parcel to whomever is the owner The owner of multiple parcels receives a bill for each parcel, not one bill for all the parcels.
There is a public record of real property ownership, i.e. the recording of deeds. There's no similar public registry of ownership of many other classes of assets, i.e. bank accounts, securities accounts and individual securities (stocks and bonds). Then there's the collectables problem. I.e. the wealth individual who owns half a dozen 19th century Dutch Impressionist paintings.
Collectables also raise the issue of how one values assets that are not traded on public markets, i.e. many real estate parcels, collectables, closely held businesses.
Then there's the issue of whether the taxpayer is single or married. I.e. is the $50,000,000 net worth per person or married couples or is the threshold $100,000,000 for married couples.
And that takes us to family owned assets, i.e. the parents, children and grand children all owning a piece of single asset.
There's also the issue of trusts, i.e. a trust has over $50,000,000 of assets and multiple beneficiaries. Again, is the tax imposed on the trust or on the beneficiaries (in which case there may be no tax at all).
The possibilities for evasion are many, i.e. A husband and wife have a net worth more than $50,000,000, i.e. $80,000. They obtain a divorce and the assets, the $80,000,000 are split equally between them, but they choose to live together. Each has a net worth of $40,000,000 and neither is subject to the tax.
The Senator's sales pitch doesn't address any of this issues. Perhaps she needs to return to the drawing board or just abandon the idea of a wealth tax all together.
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Warren's "Wealth Tax": curb appeal but a monster to enforce - ScottsdaleTiger MU - 3/4 22:55:47