You can almost make a case that they are calling for the end of property taxes
Most Americans agree that the ultrarich should pay more in taxes. But this is often dismissed as self-interest: Tax reform is cutting my taxes, and raising yours.
You know something is seriously rotten about our economy, though, when even the billionaires argue that they should be taxed more.
This appeal to all the 2020 presidential candidates, released in a letter Monday, was signed by moguls who amassed their own wealth, like Facebook co-founder Chris Hughes, and those who inherited it, like Abigail Disney.
As has been noted again and again, go for it. No one is stopping you. You can easily send a check to the IRS.
The problem, they all agree, is that in the face of profound inequality, huge sums are sitting around untaxed by the federal government, in assets like stocks, bonds, yachts, cars and art.
Like a $590 million yacht with a basketball court, owned by Hollywood’s richest man. Or a 14-foot tiger shark preserved in formaldehyde, worth $8-10 million, owned by the hedge fund manager who inspired the series “Billions.†You get the idea.
In general, we pay taxes when we earn or spend money, but not on wealth itself. As a result, the richest 0.1 percent will pay the equivalent of 3.2 percent of their wealth in taxes this year, the letter notes, compared with 7.2 percent paid by the bottom 99 percent.
Sigh. They paid sales tax on those items purchased. Most of which went to the state and local coffers. Just like with the property tax on houses and vehicles. Most people, though, cannot afford to pay the property tax on their house and car up front. So, instead, they are subject to the whims of politicians, who can lower, and raise!, their property tax. Often to pay for things that the citizens do not want or need. And may not help them in the least. Rich people paid a sales tax on the acquisition of their property. Further, take the $590 million yacht. People were paid to build it. A company made money on it. Someone made a good commission selling it. Someone made money designing it. People make money staffing it, maintaining it, and repairing it. People make money stocking it. People make money when it is berthed. And these buffoons want to charge a property tax on the possession of it?
Assets aren’t all sitting around doing nothing: stocks, bonds, property like yachts are moving the economy.
This isn’t about class warfare; it is about a moral, economic and patriotic duty, they argue. Income inequality has grown so extreme that even the uber-rich are taking a stand. It demands a new aggressiveness on the part of government, too.
It’s about class warfare.
Democrats, on the other hand, have a torrent of proposals to address economic injustice, including a plan put forth by Elizabeth Warren to tax wealth. Bernie Sanders, Pete Buttigieg, Beto O’Rourke and others have also come out in support of a tax on the wealthiest Americans.
“If you own a home, you’re already paying a wealth tax—it’s called a property tax,â€Â Warren argues. “I just want the ultra-rich to pay a wealth tax on the diamonds, the yachts, and the Rembrandts too.â€
So, what happens when the average citizen is paying extra taxes on their diamond wedding rings and small sailboats? You either tax all or none. Otherwise, this violates the Constitution. Further, this would be creating a federal property and sales tax. Democrats should be careful what they wish for: they just might get it.
