XPost: alt.fan.rush-limbaugh, misc.taxes, alt.politics   
   XPost: talk.politics.guns, sac.politics   
   From: remailer@domain.invalid   
      
   Joe Biden and his administration are fiscally incompetent and ignorant.   
      
   President Biden wants to raise taxes on Elon Musk, Jeff Bezos, and their   
   cohort of Americans, who are amassing extraordinary wealth that is not   
   taxable under current law.   
      
   Biden says his plan would make the system more fair — but experts say it   
   lacks practicality.   
      
   The president wants to impose a minimum 25% tax on all Americans with   
   assets over $100 million. The “billionaire tax” would impact the 10,700   
   wealthiest Americans and generate an estimated revenue of $400 billion   
   over 10 years.   
      
   The idea of levying higher taxes on those at the top of the economic   
   ladder is not new. Yet the latest proposal raises more questions than   
   answers.   
      
   “Are you taxing the rich? Are you taxing the wealthy?” Peter Ferrigno,   
   director of tax service at Henley & Partners, a citizenship investment   
   consulting firm, told Yahoo Finance. “They're very similar, but they are   
   not the same thing.”   
      
   Furthermore, the proposed policy challenges a fundamental principle of   
   the US tax code, which treats money earned as income differently from   
   wealth generated through valuation growth.   
      
   How could the US government tax wealth?   
   Biden hasn’t offered many specifics, but to get to a minimum 25% rate,   
   experts say he would have to tax unrealized gains — unsold profits from   
   increases in asset values — as part of billionaires’ income. Under   
   current law, unrealized gains aren’t taxed until the asset is sold at a   
   profit.   
      
   The president says this is the proper way to calculate the true income —   
   and true tax rate — of the ultra-wealthy. Billionaires make the bulk of   
   their money through stock or investment growth instead of a wage from a   
   9-to-5 job. So, the president says, they shouldn’t be able to shelter   
   income simply because they haven’t pocketed the profits.   
      
   “Billionaires don't often have a typical paycheck,” Brandon Zureick,   
   managing director and portfolio manager at Johnson Investment Counsel,   
   told Yahoo Finance.   
      
      
   That may sound like a lot, but Musk’s true tax rate amounted to only   
   3.79%. By contrast, the median American household earned $70,800 in 2021   
   and paid an average tax rate of 15%.   
      
   Under Biden’s proposal, Musk’s tax bill would have totaled $3 billion   
   for 2018 through 2022 — nearly seven times higher than what he paid.   
      
   The 25 wealthiest Americans paid $13.6 billion in federal income taxes   
   from 2014 to 2018. Meanwhile their wealth collectively increased by $401   
   billion in that same period, ProPublica reported. This means their   
   collective average true tax rate was 3.4%.   
      
      
   In other words, how will the taxes work when investment values decline   
   on paper?   
      
   “When you start taxing unrealized gains rather than realized gains,   
   you're going down a very slippery slope,” Ferrigno said. “You want to   
   tax the going up? Are you going to give money back when they go down   
   again?”   
      
   For instance, if Musk’s share in Tesla (TSLA) surges from $100 billion   
   to $200 billion, Biden’s proposed wealth tax would cost Musk $25 billion   
   in that year — 25% of the unrealized $100 billion gain. But if Tesla   
   shares declined by $100 billion the next year, would the government need   
   to pay Musk back?   
      
   “That's where you open up a whole reason that other countries don't do   
   this,” Ferrigno said. “Income tax has been around for centuries. And the   
   reason no one's ever done this is because it's practically impractical.”   
      
      
   Top 1% pays nearly half of US tax   
   Opponents of a wealth tax reason that the share of federal taxes paid by   
   the top 1% is already adequate. In 2021, the top 1% paid over $1   
   trillion, almost half of all tax revenue collected, according to the Tax   
   Foundation.   
      
   “The income tax system in the United States is highly progressive and   
   redistributive,” Erica York, senior economist at the right-leaning think   
   tank Tax Foundation and author of its latest report on income tax data,   
   told Yahoo Finance. The top 10%, she added, paid almost 76% of all tax   
   revenue.   
      
   Critics also note that there is already a separate income tax on the   
   rich, making Biden’s proposal redundant and unnecessary.   
      
   The alternative minimum tax (AMT) is a parallel system that sets a floor   
   on what high-income individuals must pay. It removes some benefits and   
   deductions on their tax returns, limiting the reductions to their tax   
   liabilities.   
      
   “The US has had the alternative minimum tax for about 50 years,”   
   Ferrigno said. “They already have a tool in the toolbox to try and   
   address [taxes on high incomes].”   
      
   Ferrigno said an update to the AMT would be sufficient in taxing   
   billionaires’ incomes.   
      
      
      
   [continued in next message]   
      
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