Wouldn't the issue then be that the estate tax exemption is very high? If someone has a $1B estate, in theory they should be paying close to 40% on everything over that first $15M/$30M, which is more than they'd pay in capital gains.
This isn't even remotely close to true. The studies that show those low percentages are amagamating multiple flawed logic together to create completely unrealistic results. Examples:
Charitable deduction dollars are counted as mathematically the same as evasion
Marital deductions are counted as mathematically the same as evasion, which not only lowers the numerator, it doubles the denominator.
Race-style forbes comparison numbers are used to inflate the denominator, but the assets in question cannot be liquidated for those values, which is why IRS discounting rules are used.
GRATS are counted entirely as evasion of the estate taxes without acknowledging that they do not gain the step up in basis.
Ratios using the bottom-end of estates which owe almost no taxes due to the deduction are applied to the whole dataset, even though the largest estates gain almost nothing from the deduction ($30m is 0.3% of $10b, but 60% of 50m - completely different ratio results).
The only thing I'd disagree with your assessment is about charitable donations - donations to a charity that's owned/run by your family trust (and pays out salaries to your family members who "work" for it) are a real issue that needs to be addressed.
This is one of those things that people think runs rampant in the charitable world but is in fact almost never a thing. States/the IRS keep a fairly close eye on private foundations, so any sort of abuse is typically found out pretty quickly and can result in the full dissolution of the foundation (see Trump).
Also - it's not really a great way to dodge taxes, your income from the foundation is taxed as ordinary income, so you're donating money then just reclassifying the return of some small portion of it as ordinary income, really not very helpful over time unless you're getting a lot of tax arb.
Mostly it's another one of those things people on reddit are so sure is common but doesn't really exist at all.
> so any sort of abuse is typically found out pretty quickly and can result in the full dissolution of the foundation (see Trump).
It wasn't found out quickly in the case of Trump, he only got 'found out' because he entered presidential politics. It was created in 1988 and didn't get scrutiny until around 2016
> donations to a charity that's owned/run by your family trust
So even if this were the core issue, that's not 100% of the deductions nor is it even close. I don't know how high but nothing I've found suggests it's even approaching half. The bequests mostly go to named charities.
> (and pays out salaries to your family members who "work" for it) are a real issue that needs to be addressed.
This is a common misconception - the "salaries" paid out to family members are heavily policed. The salary has to match market rates for the work performed. Can there be fraud there? Sure. But it's at like the $100k to $400k per year level, which is smaller than a rounding error on a $1 billion charitable gift.
The only real problem is that some types - like DAF's - don't require consistent payouts over time. It can defer for a long time. It's not evasion, just deferral, but still not great. Private foundations can't do that, they have a 5% giving per year requirement that quickly eats into the principal. The only other real flaw is sometimes the charitiable foundations are able to "buy" non-monetary perks like getting a building named after them. It can't be monetary so it's pretty limited. And the definition of charity is broad so lots of types of foundations get supported - but that's also somewhat good because otherwise Wikipedia and the ACLU would struggle 10x more, as basically no government is going to fund those.
I'll never get the suspicion against charitable giving from the wealthy in general. The only thing I can imagine is that people just don't know how tight the laws are or how aggressively the IRS policies charitable giving & charitable deductions. The IRS is not stupid.
The “exemption” is very large, and the tax is trivially easy to avoid entirely (which is due in part to how large the exemption is).
Take the installment sale to an intentionally defective grantor trust for example - a tool used ubiquitously in high-end tax and estate planning.
The conventional wisdom that most tax and estate planning attorneys ascribe to is that you need to “seed” the IDGT with at least 10 percent of the post-sale value of the trust in order for the transaction to be respected for federal gift, estate, and generation-skipping transfer tax purposes.
Back when the “exemption” was $1M, that meant you could make a $1M gift to the IDGT, and then sell $9M worth of assets to the IDGT in exchange for an interest-only promissory note bearing the applicable federal rate. The trustee would then invest all of those assets held in the IDGT. To the extent the IDGT assets achieved a return on investment that exceeded the applicable federal rate - which is virtually always much, much lower than the rate at which you would expect the IDGT assets to appreciate, even if invested conservatively - the excess was retained by the IDGT, with zero additional gift tax, even though the IDGT assets would not be includible in your gross estate for estate tax purposes at your death.
That is what tax and estate planning attorneys call “leveraging the exemption.”
Since then, the “exemption” has grown to $15M. That means you can seed an IDGT with $15M and sell $135M worth of assets to the IDGT - or if you’re a married couple that consents to split gifts, you might seed an IDGT with $30M and sell $270M to the IDGT.
That is just one tool in a tax and estate planning attorney’s toolbox and barely scratches the surface of the type of techniques available.
Thank you for this, it’s so frustrating when industry professionals who could actually change things deny the very obvious truths because they have an economic incentive to do so.
Most millionaires earned their money. There are a few exceptions, but an analysis of the wealthiest people on the planet contradicts your assertion.
The overwhelming majority (79%) of millionaires in the U.S. did not receive any inheritance at allfrom their parents or other family members. While 1 in 5 millionaires (21%) receivedsomeinheritance*, only 3% received an inheritance of $1 million or more.*
A millionaire isn't actual that big of a deal for a retired person. Most boomers who own their own home and put money towards a 401k/RRSP while they worked will become technically millionaires.
The difference between a millionaire and a billionaire is massive. If you read the article above the proposal will not impact this type of millionaire at all.
The push back on these concepts is because of the potential that these policies will trickle down to middle class wealth. There needs to be a consensus cut off amount that the government won’t touch. They’d get more support if that were the case.
Just put the cutoff at something inconceivably large for a normal person, like 50 million per inheritor or something. Still prevents billionaires from forming but doesn't impact normies.
Maybe include some formula in the bill that slowly raises the cap over time in pace with inflation
Even billionaires, the richest people mostly didn't inherit their wealth. The 10 richest people in the US(and world) all group up middle to upper middle class.
> Most millionaires earned their money. ... The overwhelming majority (79%) of millionaires in the U.S. did not receive any inheritance at all from their parents or other family members
this line of thinking would make sense if inheritance were the only way to transfer money from one person to another. but buying your kid a car, putting them through school, helping them with a down payment for a house etc are obviously examples of wealth transfer.
Owning a home and having a 401K easily makes a lot of middle class working Americans "Millionaires" since having a total net worth of one million is the hurdle. Saying "most millionaires earned their money" is likely true.
"Millionaire" is not the right thing to focus on. There is a huge difference between someone who is 65 years old having managed to build up a net worth of one or two million by retirement, and a 21 year old being given a trust fund of $5M by their parents with a net worth of $200M.
The post that I responded to claims that most people inherit their money. This isn’t true, but we are distracted by argument about how easy it is to be a millionaire.
If owning a home and contributing to a 401k is the path to riches, then most people earned their wealth. You are proving my point for me.
We're talking about two different groups of people who need to be addressed differently.
Those subsisting off inherited wealth and garden-variety 'millionaires' should not be treated interchangeably. Lots of people dissembling in bad faith like to do that.
In theory, the step up occurs because everything is taxed at the estate tax level. Now, the estate tax limit is far too high now ($15M per person, $30M for a couple), but the step up does make sense within that framework.
That doesn't make it make sense. This is like saying you shouldn't have to pay an estate tax because you already paid income taxes, only difference is it's a privilege only the rich have available to them.
It doesn't make sense you pay estate taxes on ordinary income which is already taxed whereas with step up capital gains only gets taxes once at the estate level.
Its midterms, its dumb to propose this now from the dems
The reps are hanging themselves, dont do any proposal that a voter can be against. Just keep pointing out whats wrong , no need how to fix it.
Its the typical rep strategy and would work well for the dems now.
Sun tzu: never stop an enemy ov making a mistake and all of that
I dunno, going after the loophole billionaires use to avoid paying taxes may not be as scary to the American public as you think. Taxing loans taken out against assets closes a very big loophole that the ultra-wealthy asset class uses to avoid paying taxes essentially their entire life, and unlike other proposals, this one doesn't require them to sell their assets to pay it, just pay taxes on those loans they're receiving against their assets at capital gains rates. Honestly seems pretty level-headed. Not that I expect it to go anywhere, even if it somehow made it past congress, no way would Trump sign it.
It could mean some billionaire donates to competition, why risk that?
Note i’m not against what is proposed, timing of the proposal on the other hand (you’ll not gain extra votes with the proposal, but risk losing some due to influx of money)
yeah, that's the typical arguments against I hear. Trickle down economics, ooh ooh, spray me down next, gimme some of that billionaire mojo... in the meantime, let's tax their loans and close the tax-free money loophole they continue to use to avoid the taxman.
Establishment-DNC Democrats love to bloviate and virtue signal about things that need to be done when they have no power to do anything about it - and then when they do have power to do something they tie themselves up in knots with excuses for why they can't.
They clamored for increasing the minimum wage and overturning the Trump tax breaks for the rich but then suddenly couldn't do anything after 2020 when we gave them the House and the Presidency.
They've enjoyed clamoring for the release of the Epstein files while Trump was in office, but seemed to not know they existed while Obama and Biden were in office.
With the exception of AOC and a few others, hopefully soon including Talarico - Democrats like Biden, Harris, Pelosi, Schumer and Jeffries are about as bad as the GOP in terms of their self-dealing and complicity with their Epstein Class patrons in fucking over working Americans.
Watch them do their usual bullshit and groom yet another right-of-center, Neo-Liberal, hypocrite, piece of shit like Gavin Newsom to shove down our throats.
We need to do a better job in the primaries giving the establishment-DNC sellouts the boot during the primaries. With few exceptions, just about no Democrats over 40 are worth a fuck. Most need to go and be replaced with new blood. That's the only way our votes against the Republican menace will actually effect real change - instead of just maintaining the status quo.
I think the step up basis is fine, but it’s way too much. If you inherit a house, you would have to pay taxes on it without a step up basis. I inherited a million dollar house, and didn’t have to pay taxes. If I did, I’d owe about $200-250k or so of money that I didn’t have at the time. I think it should be capped around $3M, 15M for singles and 30M for couples is insane
but people do pay taxes on them: property taxes are still owed on property you inherit. so it's not a free ride to just keep them. i don't think there's a lot to be gained from forcing the sale of homes to pay for inheritance taxes: many will be sold anyway, especially if the inheritor can't afford or doesn't want to pay the property taxes.
property taxes are not quite the same they pay for municipal services, the feds and states/provinces don't get anything, and can be covered by renters pretty easily
i guess it's not clear to me why the feds or states are owed anything from the inheritance? if someone wants to keep an inherited home as a secondary home, and they're paying property taxes on them, they're helping pay for, as you say, local municipal services, which is what matters most to the people in the community that home is a part of.
we have capital gains taxes so that's the policy that we decided, that they are owed tax on growth of capital. it's not an inheritance tax policy
in Canada some tax basis costs can be preserved in a handoff/inheritance, for example farms. but the basis is never just reset for free except for exemptions like primary residence
They’re not owed anything from the inheritance. They’re owed their share of the appreciation of the asset that the dying individual owned. No different than if that owner had sold the asset while still alive.
this confuses taxes on the person vs taxes on the asset. if the asset is sold by the inheritor it will still be taxed. imo you're framing it as punitive, that it must be the person who is taxed, not the asset.
It’s always the person that is taxed. A person gets taxed every time an asset changes hands in a normal buy/sell scenario. Dying shouldn’t be a special case.
And your point really doesn’t make sense for the step up. The whole silliness of the step up is that neither the asset or person gets taxed. The dying person’s estate doesn’t owe tax and yet the beneficiary gets to claim a cost basis of FMV when they received the asset.
You could make the argument that tax shouldn’t be owed by the beneficiary until they sold. And if you kept the cost basis of the asset from the original owners purchase rather than stepping it up, that would be reasonable (although I think worse policy for many reasons).
It’s the fact that literally nobody ever pays the tax on the appreciation which makes the step up so silly.
You’re not charging taxes on the person inheriting the property. You’re settling up taxes the dying person owed before passing the actual wealth of the estate on to the beneficiary.
If someone has a house worth $1,000,000 and a $500,000 mortgage when they die then it’s obvious that only $500,000 of value gets passed on from the estate. The mortgage has to be accounted for.
If someone has a house worth $1,000,000 where $500,000 of that is gains to be taxed at 25% if the asset is sold, then the owner really only has $875,000 of net worth. So if they die, that’s what should get passed on. The Government gets their share of the appreciation based on the standard capital gains rules and the estate passes on what’s left.
> If you inherit a house, you would have to pay taxes on it without a step up basis. I inherited a million dollar house, and didn’t have to pay taxes. If I did, I’d owe about $200-250k or so of money that I didn’t have at the time.
this reminds me of a conversation i had with a friend-of-a-friend:
"ugh, i inherited a beach house and it's worth about $3M, but it needs all these repairs i can't afford. wah."
"well, you could sell it and not have to work for the rest of your life? idk, maybe not that miserable."
If it’s a primary residence in Canada there is no tax owed. So this only applies here to second+ houses.
If you inherit a house worth one million dollars and owe 200-250K of tax, you can afford to pay the taxes. By definition. I don’t know top tax rates in the US but in Canada capital gains tops out around 25% of the gains. So if you owed $250k in tax that means there is at least $750k in other value that you are receiving.
This is my big problem with most policies around taxing wealth. A bunch of middle class people don’t want it to apply to them. Even though there is objectively nothing wrong with someone inheriting a solid six-figure asset having to pay a portion of that in taxes.
It’s exactly the same as inheriting a house with a mortgage still on it. Yeah; you still have to pay the mortgage. That’s money the owner that passed on owes and what the beneficiary gets is the net value. I have no idea why we think the owner that passed on shouldn’t have to settle their taxes before passing the net value on to their heirs.
> This is my big problem with most policies around taxing wealth. A bunch of middle class people don’t want it to apply to them. Even though there is objectively nothing wrong with someone inheriting a solid six-figure asset having to pay a portion of that in taxes.
Everyone wants someone else to be the person that pays more in taxes
Yeah, I'm a fan of the step up basis and some lower amount than 15m. Closing the 1031 exchange loophole as well. It seems like dollar stores and warehouses seem to exist solely because of 1031s filled with people avoiding the capital gains on a sale of their rentals.
when I confirmed this step-up basis thing was real, it helped explain to me why the US government is so broke it's an insane policy and this is from a guy that really doesn't like taxes
It’s honestly bonkers. I like the mortgage example to explain my position. If you inherit a house with a mortgage on it… you still owe the mortgage. You only get the original owners net equity in the house.
Taxes should be treated the same way. The asset has appreciated and a portion of that appreciation is owed to the Government in taxes. You get defer that tax for a bunch of reasons. But when you die, the taxes should be settled, and the beneficiary only gets the net value of the asset.
> An Alternative Minimum Tax that makes sure people can’t do things like deduct interest expenses so much that they avoid paying anything reasonable.
Along these lines, more limits on retirement savings would be a good step. I don't think it benefits the US as a country to provide tax advantages on multi million dollar accounts.
Sure, but I don't think there should be a punishment for owning stocks. If people can leverage other assets for loans, then stocks should be able to be leveraged in the same way. It's the bank's duty to analyze the risk of loaning against assets that are as potentially volatile as a stock.
But the loans are effectively income, and as such should face taxation.
The issue is when you want to use the value of the stock, at which point you should be required to sell it.
Loans as income would be much worse, and seems to be just as effective as changing the loan rate, but you have to pay that back in theory, which why it's a loan and not income.
I appreciate the attempt to cover a possible loophole but ultimately its just one part of a much larger and necessary re-write of the tax code.
The cynical side of me things they are proposing this because they know it would be popular but a small change and not the massive change that would be required to actually tax wealth.
That said, I don't know the one doing the proposal, I'm just being being cynical because of Democrats long history of talking about progressive ideas but never doing anything meaningful with them.
A House Democrat is proposing that Congress tax large lines of credit that help the nation’s highest earners convert appreciated assets into cash, a tax-the-wealthy policy those on the left have wanted for years.
The legislation, shared first with Bloomberg Tax, targets a practice where wealthy individuals take out loans rather than sell assets, meaning their loan isn’t counted as taxable income. Rep. Laura Friedman‘s (D-Calif.) bill would impose an excise tax of 23.8%, to be paid by the borrower on the amount of a covered loan when it’s issued.
The Hollywood-area representative, who has had other legislation picked up by the Ways and Means Committee, is setting the stage for serious discussions about how to put policy behind Democrats’ top slogan: Tax the rich.
That 23.8% rate would match the top long-term capital gains rate, plus the net investment income tax — making the rate for borrowing against assets comparable to selling them. The new tax would apply to aggregate covered loans above $1 million, and related parties would be counted together so the threshold couldn’t be split. Both the $1 million threshold and the home equity cap would adjust for inflation after 2027.
> The new tax would apply to aggregate covered loans above $1 million
I thought that tax applied if you covered the loan with 1M of assets. That’s not exactly small. And if you don’t wanna pay it, cover it with 999K of assets.
Fine, but if you want to target the people that abuse it, just make it something like $10 million. You are really only targeting the super wealthy at that price point and no one can really argue against that. That's very different than a retiree taking a million dollar loan against their house in their 70s or 80s just from a life of working and investing.
> That's very different than a retiree taking a million dollar loan against their house in their 70s or 80s just from a life of working and investing.
It’s always think of the old people. Prop 13 comes to mind. Besides, what are you doing taking a million dollar loan at that age? Sell the bloody thing and downsize.
That actually something I can get behind as while taxing "wealth" tied to unrealized gains is retarded actually taxing loans the wealthy use to bypass taxes on actually selling the assets where the gains or losses become realized is absolutely warranted.
In Fiscal Year 2025, the IRS collected $5.3 trillion in gross revenue. Of this, individual income taxes contributed roughly $2.66 trillion to the federal government. Capital gains brought in an estimated $270 billion in 2025.
Workers pay for 90% of the personal taxes.
The wealthiest accumulate large amounts of wealth without doing the work or paying most of the personal taxes.
Whatever they're doing to avoid doing the work, or paying the taxes, while accumulating basically whatever they want like mansions, yachts, and doing whatever they want on their private islands and private jets, it's working for them. But not most other people, who are doing almost all of the work, paying almost all of the taxes, and own the least.
it's one strategy of hoarding among many, so it's one potential form of taxation among many. Elon Musk uses it pretty heavily so I'd support this form of taxation if only to go after him personally, although I'd rather see him prosecuted for his out-in-the-open criminal activity.
The tax should be equal to the equivalent of all taxes paid by an equivalent W2 (income tax, SS, Medicare, etc.) earner OR the noted 23.8%, whichever is higher.
Reagan cut taxes 3 times, Bush twice, and Trump twice. That is 7 major tax cuts without any meaningful increase between. Taxes are low as they have been in generations. Yet everyone new proposal is met with the same argument that its not targeted correctly or whatever.
Businesses and billionaires who own them use public infrastructure for their gain. Without Ports, Seaways, rail, highways, etc products don't make it to shelves. Companies aren't paying to clean bouys, dredge harbors, monitor radar systems to track flights, replacing roads damaged by tractor trailers, etc. The general public is.
When I put gas in my car part of that money helps rebuild the road. When a Walmart truck puts diesel in tank it's a business expense that counts against profit that they write off.
Source: CBO, The Distribution of Household Income, 2023 (Sept 2026), supplemental Tables 9, 10 and 12. Bottom four quintiles aggregated. Rate is income-weighted, with income measured before transfers and taxes. Negative values in 2020 and 2021 reflect refundable credits exceeding tax owed.
When Walmart buys diesel part of that money also goes to paying for the road. This example doesn't work at all. Both are paying the exact same amount to road maintenance.
Your standard deduction on your income taxes cover this. If you wanted to itemize your taxes, and keep track of expenses used to get to and from work, clothes bought for work, any other business related expenses you could. But most people take the standard deduction as it’s larger than itemizing.
A) Walmart is an intermediary, they pay salaries to their employees which are then taxes so it would be double taxing to charge taxes money spent for employment to both the employee and the company.
B) Corporate tax rates are low by design as the goal is to promote spending that money on development which in turn creates more money to tax. Any money Walmart spends goes to other companies who pay out salaries which are taxed, or to companies which if they don't themselves spend it, also get taxed. Take away more money, less gets spent, you get less jobs, a slower economy and less tax revenue despite charging a higher rate.
Salaries aren't a form of charity or infrastructure. Salaries are a means of doing business. Walmart profits more per employee than they pay those employees. If that weren't the case they would lay everyone off.
Exactly. In our tax system business are protected against loss. Yet workers are not. If a normal person spends more than they make it doesn't reduce their tax burden.
Its pretty close. Federally, Walmart pays a 21% corporate tax, then shareholders pay up to 23.8% on top of that. So a 40% tax rate, which is about the same as the top income tax rate.
When I put gas in my car, the gas taxes pay for the road, and the money I use to pay for that gas has already been taxed as income. When businesses put diesel in their trucks, the gas taxes pay for the road, but they write off the expense of the gas so it isn't taxed as heavily as for an individual.
when you get a paycheck, your employers pays your share of social security medicare in addition to government withholding social security and medicare from your paycheck
Which is why businesses pay as they use infrastructure. Your entire complaint has no basis in reality. We have more money in real terms than ever before. Companies are paying for all of those things.
Not that I’m in favor of the policy (because I’m not), or even that I agree with the stated problem (because I don’t), but an excise tax on collateralized loans isn’t remotely a wealth tax.
It’s been proposed before as a way to bypass the constitutional concerns that an actual wealth tax or even an unrealized gains tax might have. Excise taxes are indirect taxes, and therefore aren’t subject to state apportionment, even if the phase-in is based on wealth itself
Not a good idea. Most employment stock options already require that income taxes be paid equal to the fair value of the stock at the time of transfer. A better idea is to remove the
Incentive Stock Option, which effectively removes 100k a year from their income tax, qualifying income.
It doesn't really happen at the rates or level people swear it does.
https://www.sciencedirect.com/science/article/abs/pii/S0047272725002178
It targets the wrong "loophole" (the step up basis is the real issue)
And I'm not personally knowledgeable on the tax status of when estates are settled. But if debts are settled before the step up basis is applied, then real tax revenue from people borrowing is likely higher relative to just selling. And if it is stepped up before settling of debts, then that's the actual issue, not borrowing. Especially when the 10 year is comfortably above 5% You have to realize at some point to settle debts.
Sure I support a wealth tax but I know either party would just take us further into a deficit lol. Historically we are collecting more taxes than ever yet we keep spending more and more.
An actual federal wealth tax is almost 100% certainly unconstitutional in the US, as it would be a direct tax. We had to use a constitutional amendment to allow income taxes.
I don't think that we're going to see a real federal wealth tax any time soon. However... states are probably welcome to try.
It isn't complicated. What the law should say, if you use an asset as loan collateral step up the basis and pay taxes on that step up. Simple.
You aren't paying tax on wealth, you are simply paying a tax on realized capital gains. The change the law makes is when that realized capital gains happen...when you take advantage of the increase in value.
Courts are not, but the two of the three categories you cite are laws that Congress passed. I think this has a much higher chance of passing judicial review than a straight up wealth tax (/waves to CA).
I would think you could piggy back off a lot of the mark to market laws/rules as well. Your right, nothing is certain but absent a constitutional amendment authorizing a tax on wealth, there are few levers that can be pulled to tax appreciated assets.
Enequity . . . As economist Thomas Piketty put it in “A Brief History of Equality,” published in 2022: “Inequality is first of all a social, historical, and political construction.”
The divide is Pro-corporate where you protect and defend Capitalism, Corporations and Oligarchs. Anti-corporate where you protect and defend workers and heir families and their communities!
Politicians with policies could win on a platform like that. Please see Pew Pole . . . Americans’ Views of Economic Inequality, Its Causes and Who Should Fix It Since 2019, a growing share among those who say there’s too much inequality think the economic system needs to be completely rebuilt to address it
That’s not true. An income tax is only legal under the 16th amendment, and courts hold the interpretation of what is and isn’t income. Congress can say it’s deemed income all they want, but if courts disagree that it’s income, then it’s not a legal tax
1920 with Macomber, but that’s largely because Congress rarely tests the limits with new taxes on income. The times we have seen it, (like 1955 with Glenshaw Glass and 2017 with the §965 Repatriation Tax in Moore), courts have had to rule on it, and upheld
They already pay it, it’s called an interest rate, that interest is taxed on the lender’s side when they actualize their IRR every year, those taxes are passed on to the consumer (the borrower).
Wealth taxes are brain damaged, please stop suggesting them on an economics subreddit.
> Just gives the government more leverage over everybody
Ok, and massive wealth inequality gives ultra wealthy oligarchs more leverage over everybody. At least the government is theoretically accountable to the people.
More accountable than I can hold Wall Street fraudsters and multi-national business interets, yes.
Like y'all are always complaining about the big bad government, but then when power consolidates in the hands of a small collection of private interests that don't give a shit about you, and are accountable to nobody, including governments, that's fine because at least it's not the government?
Pablo Escobar. Or basically any cartel or mob boss for that matter.
It's trivial to find historical examples of private interests committing attrocities at scale. The British or Dutch East India Companies. Hell, any of the billionaires who currently run the various hedge funds that own companies like Nestle, who use child labor and poison 3rd world populations because the local governments are not effective enough to resist.
Single people don't commit attrocities. I can't point to a single billionaire personally carrying out an attrocity in the same way Donald Trump and Benjamin Netanyahu aren't personally carrying out a genocide in Palestine. That's not how coercive power works you dunce.
And this is exactly the kind of legislation that breaks the ice and is necessary, but it political suicide. Too easy for a red candidate to demonize the idea, and the candidate.
Gorilla politics is all that will work now, and that’s been proven the last 2 years.
The democrats are horrible at messaging. It should not be that hard to frame this in a way showing how the “job creators” ultra wealthy game the system and hoard wealth in ways that impact them. Honestly they are so bad it seems intentional.
I didn’t quite understand how little they seemed to care as late 2024 unfolded, and basically crawled into a corner following the election.
Literally made no effort to win. Part of me thinks they were willing to let the current regime take over, then precipitously break the economy and GOP goodwill, on their own. No fight needed-they’d self-destruct.
Now, I have reservations about just how far down this will go before the eventual self-destruction.
I don't really think it's as dangerous as you're suggesting. Five or ten years ago? Maybe. Post-Covid where the working class have consistently watched themselves get poorer while the wealthy get wealthier, people are inching towards being ready for a change.
I don't get why it's political suicide. It has no impact on the vast majority of people. It's unfortunate most people just side with whatever figurehead they like most on everything.
I don’t think it is political suicide. Trump has proven so many things that everyone though was politically untouchable, is in fact, very touchable. Democrats biggest problem is their fear of actually challenging the status quo. They should be preparing to cancel all of Trump’s previous tax cuts, the Bush cuts, and then add this on top.
The income tax when originally introduced didn’t apply to a vast majority of people. Now you’re taxed when you make money, taxed when you spend money, taxed when you inherit money… and they want to tax you for saving money. There’s a reason people are against more taxes for anybody. Rich or poor. We need a federal flat tax rate and tax laws so simple a 16 year old with their first job can understand them. Our country could do this if we stopped handing out money to every ngo that pops up, and almost every other country on earth in one form or another.
You won’t get a meaningful engagement on this point about the history of the income tax. It too was marketed as a tax only on the wealthiest and then suddenly a few years later it was for everyone and people were stuck with it. If you give the government an inch on this tax, in 20 years everyone will be paying it.
There’s also the fact that a federal wealth tax is a direct tax that could never be apportioned under Article I, so it would be unconstitutional in the same way that Pollock v. Farmers' Loan & Trust Co. in 1895 found it unconstitutional when the federal government wanted to impose a direct unapportioned tax on property.
No it’s not. The fact that you think the tax system needs to be overly complex is silly. What if… and I know this sounds crazy… everybody got richer? 😬
I did not say that it needed to be overly complicated. Do not put words in my mouth. It should be as complex as necessary, not more. Simple enough for a 16 yr old to understand is too simple, sorry man, but IP exists, international companies exist, life just isn't that simple. Would you tell a doctor "every disease must be understandable by a 16 yr old"? See how silly that sounds? Like is complex, some problems are hard. Get over it.
I’ll make the argument against your argument: inflation. When we all get more wealthy, the costs of everting skyrocket, as we’ve seen since 2020.
Remember that massive wage inflation in 2021-2022? Yeah…that’s been eaten up by inflation in that same time, now pared with artificially created inflation due to tariffs and wars, 2025-2026.
We can’t have a society completely built of wealthy humans. Not possible. But, what we can have is redistribution at the very farthest ends of the spectrum, to maintain social balance.
> There’s a reason people are against more taxes for anybody. Rich or poor. We need a federal flat tax rate
We call these people "poorly educated" or "already wealthy." Flat taxes are regressive and disproportionately tax the poor and working class even more than they already are.
It’s so funny when people on Reddit want to pick and choose where proportional relevance is applied. When it comes to taxes apply it! When it comes to crime statistics… that’s racist! 😂😂😂
I didn't call you racist. You can climb down from your cross, nobody nailed you up there. You're probably just a Libertarian or something. Which is why we call you "poorly educated" or "already wealthy."
The vast majority who make 50k think they will be millionaires one day. They’ve also been brainwashed to think if they give trillions in tax cuts to the rich, they will get a one time check for $5k. The tax cut will still happen, but they won’t get the $5k.
Really wish that for every new tax proposed, there would be a reduction in spending. Or perhaps not giving endless tax breaks without a reduction in spending.
Taxes now are just giving more money to those who already have a dubious track record of managing the revenue already coming in.
There is no evidence that billionaires use loans against their assets to live off of. The ProPublica article that started all of these discussions listed this as a hypothetical situation.
There is a lot of public evidence that billionaires sell shares in their companies, pay taxes on the proceeds, and live off of that. Founders like Bezos are insiders and need to publicly disclose their stock sales ahead of time. Because of that, you can google and see that people like Bezos sell large stocks of stock every few years. They would not be doing that if they were living off of loans.
Just gonna leave this here. Taxes on really wealthy individuals is just a rallying point. It doesn’t really do anything. Look up borrow until you die. The only way to truly get to the money is go after the source such as assets and corporations.
Calling for taxes on the really wealthy actually does nothing. It's just election campaigning. There's zero chance Dems will ever follow thru on it. They've had full control and guess what?
you didn't read the article. Here's the first paragraph to get you started: "A House Democrat is proposing that Congress tax large lines of credit that help the nation’s highest earners convert appreciated assets into cash, a tax-the-wealthy policy those on the left have wanted for years."
Excise taxes are indirect taxes, so they aren’t subject to the apportionment requirement. It’s why we can have an exit tax and estate tax, both of which are also indirect
It’s technically not a characterization of what counts as income either. If it was, it could still be deemed unconstitutional due to the phase-in of the tax, either in part or in whole if SCOTUS were to find the phase-in not severable from the tax itself
Since it’s an excise tax, it bypasses the constitutional problems completely
Now look at what the Democratic Party is proposing compared to what I propose:
Medicare for All Employer Payroll Contribution: A 7.5% employer payroll contribution (with an exemption for the first $2 million of payroll for small businesses).
Medicare for All Household Premium: A 4% household income premium (exempting the first $35,000 of income).
Social Security Payroll Tax Cap Removal: Applying the 12.4% OASDI payroll tax to all earned wage and self-employment income above $250,000.
Net Investment Income Tax (NIIT) for Social Security: A dedicated 12.4% OASDI assessment on Net Investment Income (NII) for single filers earning over $250,000 ($400,000 for joint filers).
Luxury Real Estate Transfer Tax: A federal excise tax of 2.5% on residential real estate sales above $3 million, and 5% on sales above $10 million (earmarked for the National Housing Trust Fund).
Repeal of Real Estate Loopholes: Eliminating Internal Revenue Code § 1031 "like-kind exchanges" for commercial/residential real estate investors above $1 million.
Private Equity Single-Family Restrictions: Banning institutional funds holding more than 50 single-family homes from deducting mortgage interest or depreciation.
Mortgage Interest Deduction (MID) Restructuring: Lowering the MID principal cap on luxury residences from $750,000 to $500,000 and converting it into a refundable credit, redirecting savings to the National Housing Trust Fund.
Paid Family, Medical Leave & UI Social Insurance Assessment: A dedicated 0.6% split payroll contribution (0.3% employee / 0.3% employer) on all uncapped wages and corporate gig platforms to fund the Paid Leave Trust Fund.
Ultra-Millionaire Wealth Tax & Billionaire Minimum Income Tax: An annual 2% excise tax on net household wealth above $50 million, rising to 3% on net wealth above $1 billion, alongside a 25% minimum tax on mark-to-market unrealized capital gains for households worth over $100 million.
Corporate Income Tax & Minimum Tax Hikes: Raising the statutory federal corporate income tax rate from 21% to 28%, and increasing the Corporate Alternative Minimum Tax (CAMT) on book profits of billion-dollar corporations from 15% to 21% (alongside a 21% GILTI country-by-country minimum tax).
Wall Street Financial Transaction Tax (FTT): A modest 0.1% tax on stock/bond trades and 0.005% on derivatives.
Carried Interest Loophole Repeal: Taxing private equity and hedge fund managers' fee income at top ordinary income tax rates (39.6% to 45%).
IRS High-Earner Enforcement: Mandatory multi-year funding to expand automated AI audits targeting complex partnerships, offshore trusts, and millionaires to close the tax gap.
Seems like a really basic, uncontroversial update to the tax code with reasonable exceptions to ensure only the people this is directed at are targeted.
I appreciate the attempt, but the problem is, is that the wealthy can and will always hide their income in terms of how it’s earned and where it’s kept.
Instead, which should be taxing the assets of the ultra-wealthy’s lifestyle. For example.
Find what the average cost for a house is. Use that as the baseline. Any house sold, say, 200% over that will see their property tax double. Any house 300% over will see their property tax triple, etc…if you buy a second house, your tax doubles. So if you’ve got a second house that’s worth 275% more than the average house, your property tax on that house would be four times that of the baseline. Then use all property taxes above the baseline to fund public housing.
Do the same for cars. Private jets? 100% annual property tax. $X fee per km or mile flown and a 100% tax on jet fuel. Want to rent a private jet, same thing, you pay a 100% sales tax based on the cost of renting the jet, plus a mileage and fuel fee. Use all of those taxes to pay for public transportation.
The rich can hide their income but not their lifestyle, which they won’t give up. Tax their lifestyles and use that to fund the public good.
I've suggested something similar to my state regarding multiple properties. If you own a house the state places a 15% property tax based on local/city taxes. This way you still get represented and your local property taxes matter. If you only own one home this tax drops by 1% every year and it's retroactive so people who've owned and lived in the same house for 15+ years would see no increase.
The exception is every additional home would double this property tax and it would be placed on your personal income tax bill to the state.
We don’t need a new tax, we need the original tax code to be aligned to the ways that individuals actually make money.
Investments and luxury items should be appropriately taxed. Tax breaks for the truly wealthy, meaning multimillionaires and billionaires should be taxed properly.
This is the easiest way. An even more aggressive approach would be to tax margin loans as regular income. Such loan amounts could be added to the lifetime estate tax exemption.
I swear, it’s like the Democrats don’t even want to win.
All you have to do is point at the cost of living crisis and war and yell “they did it, vote them out now” and they will win. Yet they introduce divisive things that will make people second guess voting for them.
The Oligarchs are shaking in their “Bunkers” thinking it my pass. Average American citizens may have discovered “Culture Wars” and the Left/right shell game was a distraction and Pro-Corporate/Anti-Corporate best describes where the Pro-Corporate protect and defend Capitalism, Corporations and Oligarchs. Anti-corporation support workers, their families and their communities.
swoodshadow | 7 hours ago
This is fine. But the better change would be to stop the automatic step up in basis on death.
One of the big motivations for these loans is that if they can keep the assets until death no capital gains tax is ever owed.
In Canada there are two things that make this strategy by the wealthy much less effective:
Deemed disposition on death. So tax is paid on whatever appreciation there is before what’s left gets paid out to heirs.
An Alternative Minimum Tax that makes sure people can’t do things like deduct interest expenses so much that they avoid paying anything reasonable.
jsta19 | 7 hours ago
As an estate planning attorney, I want to echo that this is the sane path. So much of wealth is generational and inherited.
Malvania | 7 hours ago
Wouldn't the issue then be that the estate tax exemption is very high? If someone has a $1B estate, in theory they should be paying close to 40% on everything over that first $15M/$30M, which is more than they'd pay in capital gains.
Petrichordates | 7 hours ago
In theory, sure. In reality, that's not remotely how it works.
In practice, the estate tax paid by billionaires is typically zero or 1-2%. Never 40%.
Eating_Astros_9677 | 5 hours ago
This isn't even remotely close to true. The studies that show those low percentages are amagamating multiple flawed logic together to create completely unrealistic results. Examples:
DisappointedSpectre | 3 hours ago
The only thing I'd disagree with your assessment is about charitable donations - donations to a charity that's owned/run by your family trust (and pays out salaries to your family members who "work" for it) are a real issue that needs to be addressed.
RIP_Soulja_Slim | 3 hours ago
This is one of those things that people think runs rampant in the charitable world but is in fact almost never a thing. States/the IRS keep a fairly close eye on private foundations, so any sort of abuse is typically found out pretty quickly and can result in the full dissolution of the foundation (see Trump).
Also - it's not really a great way to dodge taxes, your income from the foundation is taxed as ordinary income, so you're donating money then just reclassifying the return of some small portion of it as ordinary income, really not very helpful over time unless you're getting a lot of tax arb.
Mostly it's another one of those things people on reddit are so sure is common but doesn't really exist at all.
morbie5 | an hour ago
> so any sort of abuse is typically found out pretty quickly and can result in the full dissolution of the foundation (see Trump).
It wasn't found out quickly in the case of Trump, he only got 'found out' because he entered presidential politics. It was created in 1988 and didn't get scrutiny until around 2016
Eating_Astros_9677 | 2 hours ago
> donations to a charity that's owned/run by your family trust
So even if this were the core issue, that's not 100% of the deductions nor is it even close. I don't know how high but nothing I've found suggests it's even approaching half. The bequests mostly go to named charities.
> (and pays out salaries to your family members who "work" for it) are a real issue that needs to be addressed.
This is a common misconception - the "salaries" paid out to family members are heavily policed. The salary has to match market rates for the work performed. Can there be fraud there? Sure. But it's at like the $100k to $400k per year level, which is smaller than a rounding error on a $1 billion charitable gift.
The only real problem is that some types - like DAF's - don't require consistent payouts over time. It can defer for a long time. It's not evasion, just deferral, but still not great. Private foundations can't do that, they have a 5% giving per year requirement that quickly eats into the principal. The only other real flaw is sometimes the charitiable foundations are able to "buy" non-monetary perks like getting a building named after them. It can't be monetary so it's pretty limited. And the definition of charity is broad so lots of types of foundations get supported - but that's also somewhat good because otherwise Wikipedia and the ACLU would struggle 10x more, as basically no government is going to fund those.
I'll never get the suspicion against charitable giving from the wealthy in general. The only thing I can imagine is that people just don't know how tight the laws are or how aggressively the IRS policies charitable giving & charitable deductions. The IRS is not stupid.
pacman2081 | 3 hours ago
you can always something like AMT for estate taxes
taxinomics | 7 hours ago
The “exemption” is very large, and the tax is trivially easy to avoid entirely (which is due in part to how large the exemption is).
Take the installment sale to an intentionally defective grantor trust for example - a tool used ubiquitously in high-end tax and estate planning.
The conventional wisdom that most tax and estate planning attorneys ascribe to is that you need to “seed” the IDGT with at least 10 percent of the post-sale value of the trust in order for the transaction to be respected for federal gift, estate, and generation-skipping transfer tax purposes.
Back when the “exemption” was $1M, that meant you could make a $1M gift to the IDGT, and then sell $9M worth of assets to the IDGT in exchange for an interest-only promissory note bearing the applicable federal rate. The trustee would then invest all of those assets held in the IDGT. To the extent the IDGT assets achieved a return on investment that exceeded the applicable federal rate - which is virtually always much, much lower than the rate at which you would expect the IDGT assets to appreciate, even if invested conservatively - the excess was retained by the IDGT, with zero additional gift tax, even though the IDGT assets would not be includible in your gross estate for estate tax purposes at your death.
That is what tax and estate planning attorneys call “leveraging the exemption.”
Since then, the “exemption” has grown to $15M. That means you can seed an IDGT with $15M and sell $135M worth of assets to the IDGT - or if you’re a married couple that consents to split gifts, you might seed an IDGT with $30M and sell $270M to the IDGT.
That is just one tool in a tax and estate planning attorney’s toolbox and barely scratches the surface of the type of techniques available.
swoodshadow | 7 hours ago
Yeah, fair point. I don’t know the loop holes or strategies for mitigating the estate tax (if any) so maybe it nets out.
SeaweedLevel1937 | 4 hours ago
Thank you for this, it’s so frustrating when industry professionals who could actually change things deny the very obvious truths because they have an economic incentive to do so.
PIK_Toggle | 7 hours ago
Most millionaires earned their money. There are a few exceptions, but an analysis of the wealthiest people on the planet contradicts your assertion.
The overwhelming majority (79%) of millionaires in the U.S. did not receive any inheritance at allfrom their parents or other family members. While 1 in 5 millionaires (21%) received someinheritance*, only 3% received an inheritance of $1 million or more.*
https://www.ramseysolutions.com/retirement/the-national-study-of-millionaires-research
Picto242 | 6 hours ago
A millionaire isn't actual that big of a deal for a retired person. Most boomers who own their own home and put money towards a 401k/RRSP while they worked will become technically millionaires.
The difference between a millionaire and a billionaire is massive. If you read the article above the proposal will not impact this type of millionaire at all.
willstr1 | 6 hours ago
>The difference between a millionaire and a billionaire is massive.
As I like to remind people, the difference between one million and one billion is essentially one billion.
pacman2081 | 5 hours ago
spoken like someone ignorant in personal finance, it is $999 million
willstr1 | 5 hours ago
AKA 99.9% of one billion, which most people would call "essentially one billion"
pacman2081 | 5 hours ago
you are saying there is no difference between 0 and 1 million. try posting on r/personalfinance or r/Fire
mcbobgorge | 4 hours ago
There is a huge difference between 0 and 1 million.
There is a decent difference between 3 and 4 million
There is virtually no difference between 999 and 1000 million.
pacman2081 | 4 hours ago
you are saying there is no difference between 0 and 1 million. try posting this on reddits where these things matter.
r/personalfinance or r/Fire
iregistered4this | 4 hours ago
Its a matter of perspective. If you have 0 than 1 million is massive. If you have 1 billion than 1 million is nothing.
And thats the whole point.. take 1 million from a billionaire and give it to someone with nothing and you have created heaven on earth.
Take 1 million from someone with 1 million and give it to a billionaire and you have destroyed a life.
pacman2081 | 3 hours ago
you made the point -- 1 million is huge.
VeteranSergeant | 4 hours ago
No. That's not how math nor personal finance works.
willstr1 | 4 hours ago
And you seem to think 0.1% is a massive proportion, it is all about relative scale
morbie5 | 3 hours ago
Learn what the word 'essentially' means
pacman2081 | 3 hours ago
essentiallly a guy with zero $$$ has $1 million
Timelycommentor | 6 hours ago
The push back on these concepts is because of the potential that these policies will trickle down to middle class wealth. There needs to be a consensus cut off amount that the government won’t touch. They’d get more support if that were the case.
CardiologistPrize712 | 6 hours ago
Just put the cutoff at something inconceivably large for a normal person, like 50 million per inheritor or something. Still prevents billionaires from forming but doesn't impact normies.
Maybe include some formula in the bill that slowly raises the cap over time in pace with inflation
TFPaulMorphy | 5 hours ago
Even billionaires, the richest people mostly didn't inherit their wealth. The 10 richest people in the US(and world) all group up middle to upper middle class.
Visible_Device7187 | 3 hours ago
The walton family didn't inherit their wealth?
TFPaulMorphy | 3 hours ago
None of them are in the top 10.
Constant-Plant-9378 | 2 hours ago
> Even billionaires, the richest people mostly didn't inherit their wealth.
Their kids will though. So it applies to them.
And the 'philanthropy' scam they all like to use as a tax dodge needs to be plugged.
PIK_Toggle | 5 hours ago
Pull the data. The story remains unchanged.
dust4ngel | 4 hours ago
> Most millionaires earned their money. ... The overwhelming majority (79%) of millionaires in the U.S. did not receive any inheritance at all from their parents or other family members
this line of thinking would make sense if inheritance were the only way to transfer money from one person to another. but buying your kid a car, putting them through school, helping them with a down payment for a house etc are obviously examples of wealth transfer.
monk2019 | 4 hours ago
But is it a bad thing that people want and are able to help their children?
PIK_Toggle | 4 hours ago
Buying a car isn’t wealth. It helps at the margin, but that depreciating asset isn’t a path to financial freedom.
If you want to broaden the scope to any financial assurance at all, then everyone fails and no one earned anything.
Seems like a ridiculous way to view the topic.
dust4ngel | 2 hours ago
> Buying a car isn’t wealth
can you explain why stealing cars is illegal, in that case?
PIK_Toggle | an hour ago
Property rights?
dust4ngel | an hour ago
it's property, but worth nothing - is that your position? if so can you explain why it carries a prison sentence of up to three years?
Constant-Plant-9378 | 5 hours ago
Owning a home and having a 401K easily makes a lot of middle class working Americans "Millionaires" since having a total net worth of one million is the hurdle. Saying "most millionaires earned their money" is likely true.
"Millionaire" is not the right thing to focus on. There is a huge difference between someone who is 65 years old having managed to build up a net worth of one or two million by retirement, and a 21 year old being given a trust fund of $5M by their parents with a net worth of $200M.
They need to be treated differently.
PIK_Toggle | 4 hours ago
The post that I responded to claims that most people inherit their money. This isn’t true, but we are distracted by argument about how easy it is to be a millionaire.
If owning a home and contributing to a 401k is the path to riches, then most people earned their wealth. You are proving my point for me.
Constant-Plant-9378 | 3 hours ago
We're talking about two different groups of people who need to be addressed differently.
Those subsisting off inherited wealth and garden-variety 'millionaires' should not be treated interchangeably. Lots of people dissembling in bad faith like to do that.
Malvania | 7 hours ago
In theory, the step up occurs because everything is taxed at the estate tax level. Now, the estate tax limit is far too high now ($15M per person, $30M for a couple), but the step up does make sense within that framework.
Petrichordates | 7 hours ago
That doesn't make it make sense. This is like saying you shouldn't have to pay an estate tax because you already paid income taxes, only difference is it's a privilege only the rich have available to them.
PIK_Toggle | 7 hours ago
You pay the estate tax on everything, regardless of cost basis.
This makes sense because the owner of the assets is dead and finding their cost basis records could be impossible.
A 40% tax on everything above the lifetime exemption is a significant tax.
flat-waffles | 2 hours ago
It doesn't make sense you pay estate taxes on ordinary income which is already taxed whereas with step up capital gains only gets taxes once at the estate level.
rannend | 7 hours ago
Its midterms, its dumb to propose this now from the dems
The reps are hanging themselves, dont do any proposal that a voter can be against. Just keep pointing out whats wrong , no need how to fix it.
Its the typical rep strategy and would work well for the dems now.
Sun tzu: never stop an enemy ov making a mistake and all of that
SanDiegoDude | 5 hours ago
I dunno, going after the loophole billionaires use to avoid paying taxes may not be as scary to the American public as you think. Taxing loans taken out against assets closes a very big loophole that the ultra-wealthy asset class uses to avoid paying taxes essentially their entire life, and unlike other proposals, this one doesn't require them to sell their assets to pay it, just pay taxes on those loans they're receiving against their assets at capital gains rates. Honestly seems pretty level-headed. Not that I expect it to go anywhere, even if it somehow made it past congress, no way would Trump sign it.
rannend | 3 hours ago
It could mean some billionaire donates to competition, why risk that?
Note i’m not against what is proposed, timing of the proposal on the other hand (you’ll not gain extra votes with the proposal, but risk losing some due to influx of money)
emp-sup-bry | 8 minutes ago
Bad news for us all.
They’ve been doing it constantly since citizens united.
Just wait until you notice who owns all the media outlets that the same/peers are spending the money on.
dust4ngel | 4 hours ago
> going after the loophole billionaires use to avoid paying taxes may not be as scary to the American public as you think
SanDiegoDude | 4 hours ago
yeah, that's the typical arguments against I hear. Trickle down economics, ooh ooh, spray me down next, gimme some of that billionaire mojo... in the meantime, let's tax their loans and close the tax-free money loophole they continue to use to avoid the taxman.
Constant-Plant-9378 | 2 hours ago
Establishment-DNC Democrats love to bloviate and virtue signal about things that need to be done when they have no power to do anything about it - and then when they do have power to do something they tie themselves up in knots with excuses for why they can't.
They clamored for increasing the minimum wage and overturning the Trump tax breaks for the rich but then suddenly couldn't do anything after 2020 when we gave them the House and the Presidency.
They've enjoyed clamoring for the release of the Epstein files while Trump was in office, but seemed to not know they existed while Obama and Biden were in office.
With the exception of AOC and a few others, hopefully soon including Talarico - Democrats like Biden, Harris, Pelosi, Schumer and Jeffries are about as bad as the GOP in terms of their self-dealing and complicity with their Epstein Class patrons in fucking over working Americans.
Watch them do their usual bullshit and groom yet another right-of-center, Neo-Liberal, hypocrite, piece of shit like Gavin Newsom to shove down our throats.
We need to do a better job in the primaries giving the establishment-DNC sellouts the boot during the primaries. With few exceptions, just about no Democrats over 40 are worth a fuck. Most need to go and be replaced with new blood. That's the only way our votes against the Republican menace will actually effect real change - instead of just maintaining the status quo.
cumgargler69420 | 7 hours ago
I think the step up basis is fine, but it’s way too much. If you inherit a house, you would have to pay taxes on it without a step up basis. I inherited a million dollar house, and didn’t have to pay taxes. If I did, I’d owe about $200-250k or so of money that I didn’t have at the time. I think it should be capped around $3M, 15M for singles and 30M for couples is insane
haloimplant | 7 hours ago
primary residences are excluded in Canada
people try to farm sympathy over not also being able to keep cottages and other 2ndary properties without paying taxes on them, it doesn't play well
Constant-Plant-9378 | 5 hours ago
I am all for taxing the fuck out of capital gains and rental income on non-owner-occupied single-family homes.
JackDostoevsky | 4 hours ago
but people do pay taxes on them: property taxes are still owed on property you inherit. so it's not a free ride to just keep them. i don't think there's a lot to be gained from forcing the sale of homes to pay for inheritance taxes: many will be sold anyway, especially if the inheritor can't afford or doesn't want to pay the property taxes.
haloimplant | 4 hours ago
property taxes are not quite the same they pay for municipal services, the feds and states/provinces don't get anything, and can be covered by renters pretty easily
JackDostoevsky | 4 hours ago
i guess it's not clear to me why the feds or states are owed anything from the inheritance? if someone wants to keep an inherited home as a secondary home, and they're paying property taxes on them, they're helping pay for, as you say, local municipal services, which is what matters most to the people in the community that home is a part of.
haloimplant | 4 hours ago
we have capital gains taxes so that's the policy that we decided, that they are owed tax on growth of capital. it's not an inheritance tax policy
in Canada some tax basis costs can be preserved in a handoff/inheritance, for example farms. but the basis is never just reset for free except for exemptions like primary residence
swoodshadow | 3 hours ago
They’re not owed anything from the inheritance. They’re owed their share of the appreciation of the asset that the dying individual owned. No different than if that owner had sold the asset while still alive.
Dying shouldn’t get you out of the taxes you owe.
JackDostoevsky | 3 hours ago
this confuses taxes on the person vs taxes on the asset. if the asset is sold by the inheritor it will still be taxed. imo you're framing it as punitive, that it must be the person who is taxed, not the asset.
swoodshadow | 3 hours ago
It’s always the person that is taxed. A person gets taxed every time an asset changes hands in a normal buy/sell scenario. Dying shouldn’t be a special case.
And your point really doesn’t make sense for the step up. The whole silliness of the step up is that neither the asset or person gets taxed. The dying person’s estate doesn’t owe tax and yet the beneficiary gets to claim a cost basis of FMV when they received the asset.
You could make the argument that tax shouldn’t be owed by the beneficiary until they sold. And if you kept the cost basis of the asset from the original owners purchase rather than stepping it up, that would be reasonable (although I think worse policy for many reasons).
It’s the fact that literally nobody ever pays the tax on the appreciation which makes the step up so silly.
haloimplant | 3 hours ago
the other person explained the issue is the free step up completely skips the taxes on the assets
this is also much easier to do the richer someone is (the less liquidity they need) so it's a regressive policy.
swoodshadow | 3 hours ago
You’re looking at it wrong, imo.
You’re not charging taxes on the person inheriting the property. You’re settling up taxes the dying person owed before passing the actual wealth of the estate on to the beneficiary.
If someone has a house worth $1,000,000 and a $500,000 mortgage when they die then it’s obvious that only $500,000 of value gets passed on from the estate. The mortgage has to be accounted for.
If someone has a house worth $1,000,000 where $500,000 of that is gains to be taxed at 25% if the asset is sold, then the owner really only has $875,000 of net worth. So if they die, that’s what should get passed on. The Government gets their share of the appreciation based on the standard capital gains rules and the estate passes on what’s left.
dust4ngel | 4 hours ago
> If you inherit a house, you would have to pay taxes on it without a step up basis. I inherited a million dollar house, and didn’t have to pay taxes. If I did, I’d owe about $200-250k or so of money that I didn’t have at the time.
this reminds me of a conversation i had with a friend-of-a-friend:
"ugh, i inherited a beach house and it's worth about $3M, but it needs all these repairs i can't afford. wah."
"well, you could sell it and not have to work for the rest of your life? idk, maybe not that miserable."
swoodshadow | 7 hours ago
If it’s a primary residence in Canada there is no tax owed. So this only applies here to second+ houses.
If you inherit a house worth one million dollars and owe 200-250K of tax, you can afford to pay the taxes. By definition. I don’t know top tax rates in the US but in Canada capital gains tops out around 25% of the gains. So if you owed $250k in tax that means there is at least $750k in other value that you are receiving.
This is my big problem with most policies around taxing wealth. A bunch of middle class people don’t want it to apply to them. Even though there is objectively nothing wrong with someone inheriting a solid six-figure asset having to pay a portion of that in taxes.
It’s exactly the same as inheriting a house with a mortgage still on it. Yeah; you still have to pay the mortgage. That’s money the owner that passed on owes and what the beneficiary gets is the net value. I have no idea why we think the owner that passed on shouldn’t have to settle their taxes before passing the net value on to their heirs.
morbie5 | 3 hours ago
> This is my big problem with most policies around taxing wealth. A bunch of middle class people don’t want it to apply to them. Even though there is objectively nothing wrong with someone inheriting a solid six-figure asset having to pay a portion of that in taxes.
Everyone wants someone else to be the person that pays more in taxes
o08 | 6 hours ago
Yeah, I'm a fan of the step up basis and some lower amount than 15m. Closing the 1031 exchange loophole as well. It seems like dollar stores and warehouses seem to exist solely because of 1031s filled with people avoiding the capital gains on a sale of their rentals.
morbie5 | 3 hours ago
> If I did, I’d owe about $200-250k or so of money that I didn’t have at the time.
Says who? Are you in the US? You mean if you inherited it and then turned around and sold it you would owe $200-250k in taxes?
cumgargler69420 | 3 hours ago
Yes, I’m in the US. If the house was given to me ( for instance if I paid $1 for it). I would owe taxes based on the real value of the property
morbie5 | 3 hours ago
> If the house was given to me ( for instance if I paid $1 for it). I would owe taxes based on the real value of the property
You wouldn't owe the taxes until it was sold by you
Geedeepee91 | 7 hours ago
Taxing at the point of the loan and raising the cost basis once the loan is taken out would be much better
haloimplant | 7 hours ago
when I confirmed this step-up basis thing was real, it helped explain to me why the US government is so broke it's an insane policy and this is from a guy that really doesn't like taxes
pacman2081 | 5 hours ago
step up basis needs to be limited to a dollar amount - 10 or 20 or 50 or 100 million.
swoodshadow | 6 hours ago
It’s honestly bonkers. I like the mortgage example to explain my position. If you inherit a house with a mortgage on it… you still owe the mortgage. You only get the original owners net equity in the house.
Taxes should be treated the same way. The asset has appreciated and a portion of that appreciation is owed to the Government in taxes. You get defer that tax for a bunch of reasons. But when you die, the taxes should be settled, and the beneficiary only gets the net value of the asset.
barkinginthestreet | 6 hours ago
> An Alternative Minimum Tax that makes sure people can’t do things like deduct interest expenses so much that they avoid paying anything reasonable.
Along these lines, more limits on retirement savings would be a good step. I don't think it benefits the US as a country to provide tax advantages on multi million dollar accounts.
fathed | 4 hours ago
Stop allowing loans on stocks is the better solution. If they want money, sell the stock, pay the taxes, and then spend the money.
VeteranSergeant | 4 hours ago
Could also just tax the loans as income.
fathed | 4 hours ago
The point of the market is the determine value correct? By letting them take loans instead of selling, they are distorting the value.
To add, they want loans so the can keep control via their stocks, which again, should be sold as the solution their desire for money.
This is all before we get into loans as a source of inflation.
VeteranSergeant | 4 hours ago
Sure, but I don't think there should be a punishment for owning stocks. If people can leverage other assets for loans, then stocks should be able to be leveraged in the same way. It's the bank's duty to analyze the risk of loaning against assets that are as potentially volatile as a stock.
But the loans are effectively income, and as such should face taxation.
fathed | 4 hours ago
There is no punishment for owning stocks.
The issue is when you want to use the value of the stock, at which point you should be required to sell it.
Loans as income would be much worse, and seems to be just as effective as changing the loan rate, but you have to pay that back in theory, which why it's a loan and not income.
VeteranSergeant | 4 hours ago
Introducing extra volatility into the stock market from large sell-offs would be better?
Emeraldw | 7 hours ago
I appreciate the attempt to cover a possible loophole but ultimately its just one part of a much larger and necessary re-write of the tax code.
The cynical side of me things they are proposing this because they know it would be popular but a small change and not the massive change that would be required to actually tax wealth.
That said, I don't know the one doing the proposal, I'm just being being cynical because of Democrats long history of talking about progressive ideas but never doing anything meaningful with them.
[OP] bloomberggovernment | 8 hours ago
A House Democrat is proposing that Congress tax large lines of credit that help the nation’s highest earners convert appreciated assets into cash, a tax-the-wealthy policy those on the left have wanted for years.
The legislation, shared first with Bloomberg Tax, targets a practice where wealthy individuals take out loans rather than sell assets, meaning their loan isn’t counted as taxable income. Rep. Laura Friedman‘s (D-Calif.) bill would impose an excise tax of 23.8%, to be paid by the borrower on the amount of a covered loan when it’s issued.
The Hollywood-area representative, who has had other legislation picked up by the Ways and Means Committee, is setting the stage for serious discussions about how to put policy behind Democrats’ top slogan: Tax the rich.
That 23.8% rate would match the top long-term capital gains rate, plus the net investment income tax — making the rate for borrowing against assets comparable to selling them. The new tax would apply to aggregate covered loans above $1 million, and related parties would be counted together so the threshold couldn’t be split. Both the $1 million threshold and the home equity cap would adjust for inflation after 2027.
Read more in the full story.
-Elliot
biglyorbigleague | 6 hours ago
So it’s not a wealth tax.
Fletch71011 | 6 hours ago
I mean a wealth tax is probably the worst idea to raise taxes from an Econ perspective.
I don't hate this but the $1 million threshold is way too low especially with inflation.
Oryzae | 4 hours ago
> The new tax would apply to aggregate covered loans above $1 million
I thought that tax applied if you covered the loan with 1M of assets. That’s not exactly small. And if you don’t wanna pay it, cover it with 999K of assets.
Fletch71011 | 4 hours ago
Fine, but if you want to target the people that abuse it, just make it something like $10 million. You are really only targeting the super wealthy at that price point and no one can really argue against that. That's very different than a retiree taking a million dollar loan against their house in their 70s or 80s just from a life of working and investing.
Oryzae | 3 hours ago
> That's very different than a retiree taking a million dollar loan against their house in their 70s or 80s just from a life of working and investing.
It’s always think of the old people. Prop 13 comes to mind. Besides, what are you doing taking a million dollar loan at that age? Sell the bloody thing and downsize.
Butane9000 | 6 hours ago
That actually something I can get behind as while taxing "wealth" tied to unrealized gains is retarded actually taxing loans the wealthy use to bypass taxes on actually selling the assets where the gains or losses become realized is absolutely warranted.
Constant_Tomorrow_69 | 7 hours ago
Death to Buy, Borrow, Die? You son of a bitch, I’m in
Shantomette | 4 hours ago
Yeah, the most rarely used, over spoken about strategy reddit has ever fantasized about.
SmartlyArtly | 4 hours ago
In Fiscal Year 2025, the IRS collected $5.3 trillion in gross revenue. Of this, individual income taxes contributed roughly $2.66 trillion to the federal government. Capital gains brought in an estimated $270 billion in 2025.
Workers pay for 90% of the personal taxes.
The wealthiest accumulate large amounts of wealth without doing the work or paying most of the personal taxes.
Whatever they're doing to avoid doing the work, or paying the taxes, while accumulating basically whatever they want like mansions, yachts, and doing whatever they want on their private islands and private jets, it's working for them. But not most other people, who are doing almost all of the work, paying almost all of the taxes, and own the least.
Constant_Tomorrow_69 | 4 hours ago
Rarely used in context of the US population, yes…but the 0.1% who do leverage it have $1T in loans currently. That sure ain’t nothin’
Substantial-Ad-8575 | 35 minutes ago
$1T? Is there a report that can back that number?
henlochimken | 24 minutes ago
it's one strategy of hoarding among many, so it's one potential form of taxation among many. Elon Musk uses it pretty heavily so I'd support this form of taxation if only to go after him personally, although I'd rather see him prosecuted for his out-in-the-open criminal activity.
Shantomette | 19 minutes ago
It’s a reddit trope. Very few billionaires are dumb enough to use it in actual practice.
Substantial-Ad-8575 | 36 minutes ago
Well, Trump will Veto. So just have to wait 2 more years.
And during that time, wealthy will move to other revenue streams that are not taxed.
Appropriate_Eye3906 | 3 hours ago
A strategy that is only in use in the minds of Redditors and not actually used... Go for it.
tkhan456 | 4 hours ago
There are actually several very wealthy people who have come out saying they want this too
Miserable-Rooster-46 | 7 hours ago
The tax should be equal to the equivalent of all taxes paid by an equivalent W2 (income tax, SS, Medicare, etc.) earner OR the noted 23.8%, whichever is higher.
8to24 | 7 hours ago
Reagan cut taxes 3 times, Bush twice, and Trump twice. That is 7 major tax cuts without any meaningful increase between. Taxes are low as they have been in generations. Yet everyone new proposal is met with the same argument that its not targeted correctly or whatever.
Businesses and billionaires who own them use public infrastructure for their gain. Without Ports, Seaways, rail, highways, etc products don't make it to shelves. Companies aren't paying to clean bouys, dredge harbors, monitor radar systems to track flights, replacing roads damaged by tractor trailers, etc. The general public is.
When I put gas in my car part of that money helps rebuild the road. When a Walmart truck puts diesel in tank it's a business expense that counts against profit that they write off.
CasualEcon | 3 hours ago
By dollar value, most all of those tax cuts went to the bottom 80% of earners.
CasualEcon | 2 hours ago
Bottom four income quintiles combined: individual income tax rate and share of individual income tax
| Year | Avg. individual income tax rate | Share of all individual income tax | |:---:|---:|---:| | 1979 | 7.1% | 35.0% | | 1980 | 7.7% | 35.2% | | 1981 | 8.0% | 36.0% | | 1982 | 7.3% | 35.2% | | 1983 | 6.7% | 34.1% | | 1984 | 6.5% | 34.0% | | 1985 | 6.5% | 33.1% | | 1986 | 6.5% | 31.1% | | 1987 | 5.8% | 29.0% | | 1988 | 5.9% | 28.1% | | 1989 | 5.8% | 28.7% | | 1990 | 5.9% | 29.6% | | 1991 | 5.6% | 29.2% | | 1992 | 5.3% | 27.1% | | 1993 | 5.2% | 26.3% | | 1994 | 4.9% | 25.0% | | 1995 | 4.8% | 23.8% | | 1996 | 4.9% | 22.5% | | 1997 | 5.0% | 21.9% | | 1998 | 4.7% | 20.3% | | 1999 | 4.7% | 19.2% | | 2000 | 4.8% | 18.6% | | 2001 | 3.8% | 17.6% | | 2002 | 3.4% | 17.1% | | 2003 | 2.6% | 15.1% | | 2004 | 2.7% | 14.6% | | 2005 | 2.7% | 13.6% | | 2006 | 2.8% | 13.5% | | 2007 | 2.9% | 14.0% | | 2008 | 0.9% | 5.4% | | 2009 | 0.9% | 5.8% | | 2010 | 1.1% | 6.8% | | 2011 | 2.2% | 11.8% | | 2012 | 2.3% | 11.4% | | 2013 | 2.4% | 11.8% | | 2014 | 2.4% | 11.1% | | 2015 | 2.5% | 11.6% | | 2016 | 2.7% | 12.5% | | 2017 | 2.9% | 12.5% | | 2018 | 1.8% | 8.9% | | 2019 | 2.1% | 10.5% | | 2020 | -3.2% | -21.2% | | 2021 | -3.6% | -18.4% | | 2022 | 2.9% | 12.4% | | 2023 | 2.6% | 12.0% |
Source: CBO, The Distribution of Household Income, 2023 (Sept 2026), supplemental Tables 9, 10 and 12. Bottom four quintiles aggregated. Rate is income-weighted, with income measured before transfers and taxes. Negative values in 2020 and 2021 reflect refundable credits exceeding tax owed.
Intrepid_Observer | 5 hours ago
7 major tax cuts in 40 years yet government revenue is significantly higher than it was 40 years ago.
8to24 | 4 hours ago
As a percentage of GDP tax revenue was 19.7% in 2000 the last time the budget was balanced. Currently it's 17%.
CommunistsAreCancer | an hour ago
Why are you picking this very arbitrary point in time?
Since the Reagan tax cuts; tax revenues as a percentage of GDP went up.
1985; 17%
2026; 17.5%.
We literally grew our tax revenue and significantly cut our taxes in the process.
8to24 | 20 minutes ago
It isn't an arbitrary point. Point it's the last time the government had a balanced budget.
GasOnFire | 3 hours ago
Real or nominal?
angrysquirrel777 | 6 hours ago
When Walmart buys diesel part of that money also goes to paying for the road. This example doesn't work at all. Both are paying the exact same amount to road maintenance.
8to24 | 6 hours ago
Fuel for Walmart is a business expense. For average people it isn't. I don't pay lower income tax because I buy gas.
buckeyeguy27 | 5 hours ago
Your standard deduction on your income taxes cover this. If you wanted to itemize your taxes, and keep track of expenses used to get to and from work, clothes bought for work, any other business related expenses you could. But most people take the standard deduction as it’s larger than itemizing.
8to24 | 4 hours ago
I pay a significantly higher rate than Walmart.
ArxisOne | 2 hours ago
Because
A) Walmart is an intermediary, they pay salaries to their employees which are then taxes so it would be double taxing to charge taxes money spent for employment to both the employee and the company.
B) Corporate tax rates are low by design as the goal is to promote spending that money on development which in turn creates more money to tax. Any money Walmart spends goes to other companies who pay out salaries which are taxed, or to companies which if they don't themselves spend it, also get taxed. Take away more money, less gets spent, you get less jobs, a slower economy and less tax revenue despite charging a higher rate.
8to24 | 22 minutes ago
Salaries aren't a form of charity or infrastructure. Salaries are a means of doing business. Walmart profits more per employee than they pay those employees. If that weren't the case they would lay everyone off.
ArxisOne | 21 minutes ago
Nobody said they were, and nothing I wrote suggests that.
pacman2081 | 5 hours ago
It is impossible to run a business without concept of business expenses
margoo12 | 5 hours ago
Its impossible to live without expenses
pacman2081 | 5 hours ago
as far as taxation goes individuals are individuals. businesses are businesses.
i am not a businessman. i see that businessmen can deduct a lot of expenses that I cannot
you are assuming businesses make money all the time
Oryzae | 4 hours ago
> you are assuming businesses make money all the time
Do individuals make money all the time? People have times when they are out or in between jobs
pacman2081 | 3 hours ago
businesses fail all the time.
Oryzae | 3 hours ago
Then this doesn’t affect them
pacman2081 | 3 hours ago
I know most of you are thinking of large businesses. businesses can be small. the small business rules apply to individuals who are contracting.
Not everyone is a government employee or salaried man at a private entity
margoo12 | 5 hours ago
According to citizens united, corporations are people too.
You are also making the mistake of assuming people make money all the time, and dont have expenses that put them in debt.
pacman2081 | 4 hours ago
businesses that do not make money are shut down
are you suggesting people be shut down ?
margoo12 | 4 hours ago
Are you suggesting they don't? The health gap between the poor and the wealthy is immense.
8to24 | 4 hours ago
Exactly. In our tax system business are protected against loss. Yet workers are not. If a normal person spends more than they make it doesn't reduce their tax burden.
8to24 | 4 hours ago
Likewise it is impossible for a Govt to pay for infrastructure without the concept of taxation.
pacman2081 | 3 hours ago
it depends on what you call infrastructure
TFPaulMorphy | 5 hours ago
You probably don't pay for your business expenses at all, your business does. Walmart shareholders are paying taxes on their earnings.
8to24 | 4 hours ago
Yes, shareholders are paying the Capital gains rate which is lower than most income rates.
TFPaulMorphy | 3 hours ago
Its pretty close. Federally, Walmart pays a 21% corporate tax, then shareholders pay up to 23.8% on top of that. So a 40% tax rate, which is about the same as the top income tax rate.
8to24 | 2 hours ago
That isn't how taxes work. It isn't what Walmart pays plus what other people pay.
TFPaulMorphy | an hour ago
That is how taxes work. Income is only taxed once, while capital gains is taxed twice.
chriswimmer | 4 hours ago
Those shareholders need to pay more.
TFPaulMorphy | 2 hours ago
What do you think would be a fair rate?
tsunamisurfer | 6 hours ago
When I put gas in my car, the gas taxes pay for the road, and the money I use to pay for that gas has already been taxed as income. When businesses put diesel in their trucks, the gas taxes pay for the road, but they write off the expense of the gas so it isn't taxed as heavily as for an individual.
pacman2081 | 5 hours ago
when you get a paycheck, your employers pays your share of social security medicare in addition to government withholding social security and medicare from your paycheck
margoo12 | 5 hours ago
No, we pay for it with the money we earned them.
pacman2081 | 5 hours ago
what about standard deduction
margoo12 | 5 hours ago
It has nothing to do with and has no impact on social security or Medicare.
Norseman901 | 6 hours ago
Convenient you ignored everything else but the final point they made.
Key-Organization3158 | 4 hours ago
Which is why businesses pay as they use infrastructure. Your entire complaint has no basis in reality. We have more money in real terms than ever before. Companies are paying for all of those things.
8to24 | 3 hours ago
Federal revenues are 17% relative to GDP. In 2000 (4 tax cuts ago) it was roughly 20%. The govt is taking in a smaller slice.
Obvious_Chapter2082 | 7 hours ago
Not that I’m in favor of the policy (because I’m not), or even that I agree with the stated problem (because I don’t), but an excise tax on collateralized loans isn’t remotely a wealth tax.
It’s been proposed before as a way to bypass the constitutional concerns that an actual wealth tax or even an unrealized gains tax might have. Excise taxes are indirect taxes, and therefore aren’t subject to state apportionment, even if the phase-in is based on wealth itself
RareWelder9212 | 7 hours ago
Not a good idea. Most employment stock options already require that income taxes be paid equal to the fair value of the stock at the time of transfer. A better idea is to remove the Incentive Stock Option, which effectively removes 100k a year from their income tax, qualifying income.
_n8n8_ | 2 hours ago
Buy borrow die is a major boogeyman tbh.
It doesn't really happen at the rates or level people swear it does.
https://www.sciencedirect.com/science/article/abs/pii/S0047272725002178 It targets the wrong "loophole" (the step up basis is the real issue)
And I'm not personally knowledgeable on the tax status of when estates are settled. But if debts are settled before the step up basis is applied, then real tax revenue from people borrowing is likely higher relative to just selling. And if it is stepped up before settling of debts, then that's the actual issue, not borrowing. Especially when the 10 year is comfortably above 5% You have to realize at some point to settle debts.
Fit-Use-1383 | 7 hours ago
Sure I support a wealth tax but I know either party would just take us further into a deficit lol. Historically we are collecting more taxes than ever yet we keep spending more and more.
mcsul | 2 hours ago
An actual federal wealth tax is almost 100% certainly unconstitutional in the US, as it would be a direct tax. We had to use a constitutional amendment to allow income taxes.
I don't think that we're going to see a real federal wealth tax any time soon. However... states are probably welcome to try.
TailorSubstantial863 | 7 hours ago
It isn't complicated. What the law should say, if you use an asset as loan collateral step up the basis and pay taxes on that step up. Simple.
You aren't paying tax on wealth, you are simply paying a tax on realized capital gains. The change the law makes is when that realized capital gains happen...when you take advantage of the increase in value.
Obvious_Chapter2082 | 5 hours ago
It definitely is complicated. It’s questionable on if this would count as an income tax under the existing code and case law
When we look to income, it’s generally fallen under 1 of 3 categories
Actual realization into assets
Imputed realization by looking through the business form to shareholders (subpart F, sub K, sub S, §956, etc)
Voluntary elective realization (§475, §1256)
Congress can say that a collateralized loan is a realization event, but courts are under no obligation to accept that argument
TailorSubstantial863 | 3 hours ago
Courts are not, but the two of the three categories you cite are laws that Congress passed. I think this has a much higher chance of passing judicial review than a straight up wealth tax (/waves to CA).
I would think you could piggy back off a lot of the mark to market laws/rules as well. Your right, nothing is certain but absent a constitutional amendment authorizing a tax on wealth, there are few levers that can be pulled to tax appreciated assets.
David_ungerer | 4 hours ago
Enequity . . . As economist Thomas Piketty put it in “A Brief History of Equality,” published in 2022: “Inequality is first of all a social, historical, and political construction.”
The divide is Pro-corporate where you protect and defend Capitalism, Corporations and Oligarchs. Anti-corporate where you protect and defend workers and heir families and their communities!
Politicians with policies could win on a platform like that. Please see Pew Pole . . . Americans’ Views of Economic Inequality, Its Causes and Who Should Fix It
Since 2019, a growing share among those who say there’s too much inequality think the economic system needs to be completely rebuilt to address it
TFPaulMorphy | 5 hours ago
Well there is nothing in the constitution preventing it. If Congress says its a stepup event, then it is.
Obvious_Chapter2082 | 4 hours ago
That’s not true. An income tax is only legal under the 16th amendment, and courts hold the interpretation of what is and isn’t income. Congress can say it’s deemed income all they want, but if courts disagree that it’s income, then it’s not a legal tax
TFPaulMorphy | 3 hours ago
When is the last time the courts overruled Congress on defining income?
Obvious_Chapter2082 | 2 hours ago
1920 with Macomber, but that’s largely because Congress rarely tests the limits with new taxes on income. The times we have seen it, (like 1955 with Glenshaw Glass and 2017 with the §965 Repatriation Tax in Moore), courts have had to rule on it, and upheld
CommunistsAreCancer | an hour ago
They already pay it, it’s called an interest rate, that interest is taxed on the lender’s side when they actualize their IRR every year, those taxes are passed on to the consumer (the borrower).
Wealth taxes are brain damaged, please stop suggesting them on an economics subreddit.
Puzzleheaded-Cat8131 | 7 hours ago
More taxes have never solved anything. Just gives the government more leverage over everybody and that’s also never been a good thing.
TailorSubstantial863 | 7 hours ago
Sure, but if you are going to tax something at least tax it sensibly.
Less taxes have also never stopped overspending.
_probablyryan | 5 hours ago
> Just gives the government more leverage over everybody
Ok, and massive wealth inequality gives ultra wealthy oligarchs more leverage over everybody. At least the government is theoretically accountable to the people.
VeteranSergeant | 4 hours ago
Seriously. Billionaires are spending a million dollars per day on advertising to defeat the Billionaire Tax in California, lol.
Puzzleheaded-Cat8131 | 3 hours ago
You think you can hold a government accountable? 😂😂😂
_probablyryan | 2 hours ago
More accountable than I can hold Wall Street fraudsters and multi-national business interets, yes.
Like y'all are always complaining about the big bad government, but then when power consolidates in the hands of a small collection of private interests that don't give a shit about you, and are accountable to nobody, including governments, that's fine because at least it's not the government?
Puzzleheaded-Cat8131 | 2 hours ago
Can you give me a single example of a billionaire ever committing any atrocity on the scale the government has?
_probablyryan | 2 hours ago
Pablo Escobar. Or basically any cartel or mob boss for that matter.
It's trivial to find historical examples of private interests committing attrocities at scale. The British or Dutch East India Companies. Hell, any of the billionaires who currently run the various hedge funds that own companies like Nestle, who use child labor and poison 3rd world populations because the local governments are not effective enough to resist.
Single people don't commit attrocities. I can't point to a single billionaire personally carrying out an attrocity in the same way Donald Trump and Benjamin Netanyahu aren't personally carrying out a genocide in Palestine. That's not how coercive power works you dunce.
082426grateful | 7 hours ago
And this is exactly the kind of legislation that breaks the ice and is necessary, but it political suicide. Too easy for a red candidate to demonize the idea, and the candidate.
Gorilla politics is all that will work now, and that’s been proven the last 2 years.
Namaste421 | 7 hours ago
The democrats are horrible at messaging. It should not be that hard to frame this in a way showing how the “job creators” ultra wealthy game the system and hoard wealth in ways that impact them. Honestly they are so bad it seems intentional.
082426grateful | 7 hours ago
I didn’t quite understand how little they seemed to care as late 2024 unfolded, and basically crawled into a corner following the election.
Literally made no effort to win. Part of me thinks they were willing to let the current regime take over, then precipitously break the economy and GOP goodwill, on their own. No fight needed-they’d self-destruct.
Now, I have reservations about just how far down this will go before the eventual self-destruction.
VeteranSergeant | 4 hours ago
I don't really think it's as dangerous as you're suggesting. Five or ten years ago? Maybe. Post-Covid where the working class have consistently watched themselves get poorer while the wealthy get wealthier, people are inching towards being ready for a change.
cosmic_backlash | 7 hours ago
I don't get why it's political suicide. It has no impact on the vast majority of people. It's unfortunate most people just side with whatever figurehead they like most on everything.
theerrantpanda99 | 7 hours ago
I don’t think it is political suicide. Trump has proven so many things that everyone though was politically untouchable, is in fact, very touchable. Democrats biggest problem is their fear of actually challenging the status quo. They should be preparing to cancel all of Trump’s previous tax cuts, the Bush cuts, and then add this on top.
082426grateful | 7 hours ago
Agree, but that’s exactly what they do. Precisely what is happening.
Trump derangement syndrome extends throughout both sides of the American society.
Puzzleheaded-Cat8131 | 7 hours ago
The income tax when originally introduced didn’t apply to a vast majority of people. Now you’re taxed when you make money, taxed when you spend money, taxed when you inherit money… and they want to tax you for saving money. There’s a reason people are against more taxes for anybody. Rich or poor. We need a federal flat tax rate and tax laws so simple a 16 year old with their first job can understand them. Our country could do this if we stopped handing out money to every ngo that pops up, and almost every other country on earth in one form or another.
Metafx | 4 hours ago
You won’t get a meaningful engagement on this point about the history of the income tax. It too was marketed as a tax only on the wealthiest and then suddenly a few years later it was for everyone and people were stuck with it. If you give the government an inch on this tax, in 20 years everyone will be paying it.
There’s also the fact that a federal wealth tax is a direct tax that could never be apportioned under Article I, so it would be unconstitutional in the same way that Pollock v. Farmers' Loan & Trust Co. in 1895 found it unconstitutional when the federal government wanted to impose a direct unapportioned tax on property.
TFPaulMorphy | 5 hours ago
People like the idea, up until you tell them they are losing their 401k and mortgage deductions in the name of simplifying the tax code.
yawg6669 | 6 hours ago
Society is too complex for a simple flat tax. This idea is silly. We need progressive taxation so that the rich don't keep getting richer, full stop.
Puzzleheaded-Cat8131 | 6 hours ago
No it’s not. The fact that you think the tax system needs to be overly complex is silly. What if… and I know this sounds crazy… everybody got richer? 😬
cosmic_backlash | 6 hours ago
What they said doesn't stop everyone from getting richer. You're just saying platitudes.
yawg6669 | 4 hours ago
I did not say that it needed to be overly complicated. Do not put words in my mouth. It should be as complex as necessary, not more. Simple enough for a 16 yr old to understand is too simple, sorry man, but IP exists, international companies exist, life just isn't that simple. Would you tell a doctor "every disease must be understandable by a 16 yr old"? See how silly that sounds? Like is complex, some problems are hard. Get over it.
082426grateful | 6 hours ago
I’ll make the argument against your argument: inflation. When we all get more wealthy, the costs of everting skyrocket, as we’ve seen since 2020.
Remember that massive wage inflation in 2021-2022? Yeah…that’s been eaten up by inflation in that same time, now pared with artificially created inflation due to tariffs and wars, 2025-2026.
We can’t have a society completely built of wealthy humans. Not possible. But, what we can have is redistribution at the very farthest ends of the spectrum, to maintain social balance.
prepares for massive, aggressive, downvotes
pacman2081 | 5 hours ago
"what we can have is redistribution at the very farthest ends of the spectrum, to maintain social balance."
you want money for the bums
VeteranSergeant | 4 hours ago
> There’s a reason people are against more taxes for anybody. Rich or poor. We need a federal flat tax rate
We call these people "poorly educated" or "already wealthy." Flat taxes are regressive and disproportionately tax the poor and working class even more than they already are.
Puzzleheaded-Cat8131 | 3 hours ago
It’s so funny when people on Reddit want to pick and choose where proportional relevance is applied. When it comes to taxes apply it! When it comes to crime statistics… that’s racist! 😂😂😂
082426grateful | 3 hours ago
A nation of hypocrisy.
VeteranSergeant | 3 hours ago
I didn't call you racist. You can climb down from your cross, nobody nailed you up there. You're probably just a Libertarian or something. Which is why we call you "poorly educated" or "already wealthy."
Skinnieguy | 7 hours ago
The vast majority who make 50k think they will be millionaires one day. They’ve also been brainwashed to think if they give trillions in tax cuts to the rich, they will get a one time check for $5k. The tax cut will still happen, but they won’t get the $5k.
082426grateful | 3 hours ago
Lot of downvotes floating around today. Russian propaganda machine must be up and firing on all cylinders again.
NutzNBoltz369 | 7 hours ago
Really wish that for every new tax proposed, there would be a reduction in spending. Or perhaps not giving endless tax breaks without a reduction in spending.
Taxes now are just giving more money to those who already have a dubious track record of managing the revenue already coming in.
CasualEcon | 2 hours ago
There is no evidence that billionaires use loans against their assets to live off of. The ProPublica article that started all of these discussions listed this as a hypothetical situation.
There is a lot of public evidence that billionaires sell shares in their companies, pay taxes on the proceeds, and live off of that. Founders like Bezos are insiders and need to publicly disclose their stock sales ahead of time. Because of that, you can google and see that people like Bezos sell large stocks of stock every few years. They would not be doing that if they were living off of loans.
bodhidharma132001 | 7 hours ago
One simply does not mention tax increases during an election year; that timeless political adage holds as true today as it did a century ago.
Dull-Dance-3615 | 3 hours ago
Just gonna leave this here. Taxes on really wealthy individuals is just a rallying point. It doesn’t really do anything. Look up borrow until you die. The only way to truly get to the money is go after the source such as assets and corporations.
harpers25 | 3 hours ago
If only the entire article was specifically about taxing borrowing.
ThrowRA182790 | 2 hours ago
The article literally says this would be a tax on borrowing. But of course, you didn’t read the article.
_n8n8_ | 3 hours ago
>Look up borrow until you die
It's not really as prevalent as people would have you think, especially when the 10 year is comfortably above 5%
https://www.sciencedirect.com/science/article/abs/pii/S0047272725002178
Same_String_8856 | 3 hours ago
Calling for taxes on the really wealthy actually does nothing. It's just election campaigning. There's zero chance Dems will ever follow thru on it. They've had full control and guess what?
henlochimken | 32 minutes ago
you didn't read the article. Here's the first paragraph to get you started: "A House Democrat is proposing that Congress tax large lines of credit that help the nation’s highest earners convert appreciated assets into cash, a tax-the-wealthy policy those on the left have wanted for years."
Nojopar | 7 hours ago
~~I support this proposal but it's unlikely to survive a Constitutional challenge. We'll need an amendment to do something like this.~~
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ETA: I mistakenly thought this was Warren's suggestion from yesterday. My mess up.
Obvious_Chapter2082 | 7 hours ago
Excise taxes are indirect taxes, so they aren’t subject to the apportionment requirement. It’s why we can have an exit tax and estate tax, both of which are also indirect
Malvania | 7 hours ago
I don't think so. This isn't a wealth tax; it's a recategorization of what counts as income. That should be doable by Congress.
Obvious_Chapter2082 | 7 hours ago
It’s technically not a characterization of what counts as income either. If it was, it could still be deemed unconstitutional due to the phase-in of the tax, either in part or in whole if SCOTUS were to find the phase-in not severable from the tax itself
Since it’s an excise tax, it bypasses the constitutional problems completely
AstralVenture | 7 hours ago
Now look at what the Democratic Party is proposing compared to what I propose:
JunkBondJunkie | 7 hours ago
I would have to raise rents on my rentals lol.
Unkechaug | 2 hours ago
Seems like a really basic, uncontroversial update to the tax code with reasonable exceptions to ensure only the people this is directed at are targeted.
zedazeni | 6 hours ago
I appreciate the attempt, but the problem is, is that the wealthy can and will always hide their income in terms of how it’s earned and where it’s kept.
Instead, which should be taxing the assets of the ultra-wealthy’s lifestyle. For example.
Find what the average cost for a house is. Use that as the baseline. Any house sold, say, 200% over that will see their property tax double. Any house 300% over will see their property tax triple, etc…if you buy a second house, your tax doubles. So if you’ve got a second house that’s worth 275% more than the average house, your property tax on that house would be four times that of the baseline. Then use all property taxes above the baseline to fund public housing.
Do the same for cars. Private jets? 100% annual property tax. $X fee per km or mile flown and a 100% tax on jet fuel. Want to rent a private jet, same thing, you pay a 100% sales tax based on the cost of renting the jet, plus a mileage and fuel fee. Use all of those taxes to pay for public transportation.
The rich can hide their income but not their lifestyle, which they won’t give up. Tax their lifestyles and use that to fund the public good.
Butane9000 | 6 hours ago
I've suggested something similar to my state regarding multiple properties. If you own a house the state places a 15% property tax based on local/city taxes. This way you still get represented and your local property taxes matter. If you only own one home this tax drops by 1% every year and it's retroactive so people who've owned and lived in the same house for 15+ years would see no increase.
The exception is every additional home would double this property tax and it would be placed on your personal income tax bill to the state.
Seaweedminer | 6 hours ago
We don’t need a new tax, we need the original tax code to be aligned to the ways that individuals actually make money. Investments and luxury items should be appropriately taxed. Tax breaks for the truly wealthy, meaning multimillionaires and billionaires should be taxed properly.
yrotsihfoedisgnorw | 5 hours ago
This is the easiest way. An even more aggressive approach would be to tax margin loans as regular income. Such loan amounts could be added to the lifetime estate tax exemption.
Aggravating-Card-194 | 4 hours ago
I swear, it’s like the Democrats don’t even want to win.
All you have to do is point at the cost of living crisis and war and yell “they did it, vote them out now” and they will win. Yet they introduce divisive things that will make people second guess voting for them.
David_ungerer | 6 hours ago
The Oligarchs are shaking in their “Bunkers” thinking it my pass. Average American citizens may have discovered “Culture Wars” and the Left/right shell game was a distraction and Pro-Corporate/Anti-Corporate best describes where the Pro-Corporate protect and defend Capitalism, Corporations and Oligarchs. Anti-corporation support workers, their families and their communities.