billionaire tax plan...does it make sense?

[Roland of Gilead]

I am reading this article which seems to indicate how simple and easy it would be to tax billionaires on unrealized stock gains.

They are picking on poor Elon mostly...saying how he would still get to keep $28B of the $37B he "made" this week by the increase in Tesla shares.

Are they not missing a few points?   Like how would someone dump that many shares on the market to pay the tax due without tanking the price of the shares in the first place?

If they did tank the share price by selling the shares, would they then not owe the tax after all?

I have seen companies go up 10% in a day but also go down 30% in day.   Something about this plan just doesn't quite make sense the way they present it, except that you are supposed to come away thinking billionaires are somewhat evil.

https://www.yahoo.com/news/one-day-elon-musk-made-183429670.html

[FIPurpose]

Billionaires are evil. Just looked at the list of the top 25 US Billionaires. Yep, maybe I could make an exception for 1 or 2. But no Billionaire made it on that list without large amounts of government subsidies and hand outs, and their life won't change by losing a few billion dollars.

They currently are evading all taxes on their wealth. They never have to sell, they simply borrow money against their stocks. And then when they die all that money is never realized.

1. The bill allows for the tax to be paid over 5 years. Take the wealthiest man on the list, do the math, and it wouldn't effect the stock market at all.

2. This isn't complicated, and you don't need to spend mental energy to make sense out of potential taxes against billionaires. They already have accountants on staff to appropriately evaluate their net worth.

Wyden's plan has been in the works for over 2 years and has been evaluated professionally multiple times. It holds up.

I really don't understand the conservative stance. They'll point to "coastal elites" or how the mega wealthy are secretly controlling the government in some sort of oligarchy, but as soon as someone suggests actually reducing their power suddenly you have blue collar people parroting talking points about how kind and benevolent billionaires are.

[gooki]

The solution is pretty easy. Tax the gains on transfer.

You die. It gets taxed.
You give it away it gets taxed.
You sell down it gets taxed.
You transfer it into a trust it gets taxed.
You transfer it someone else it gets taxed.

Because paper gains are just that, imaginary gains that's true value is only recognized when sold.

Or if the government can't wait until transfer/sale to collect the tax, then sure explor other options.

E.g. tax all shares at a flat rate of an assumed growth of 5%. This is how it's done in NZ for holding international shares. If I have 100,000 in international shares, my assumed return per year is 5,000 and I pay 28% tax on that ($1,400) each an every year.

[Morning Glory]

Why not tax borrowing? Say a 0.5% tax on all loans backed by stocks or bonds?

[boarder42]

Why not tax borrowing? Say a 0.5% tax on all loans backed by stocks or bonds?

all loans for people with NW above XXXXXXXXXXX i dont want to pay tax on my loans and my plan to never sell my shares as an upper middle class white person who will never see 1B dollars

[boarder42]

Billionaires are evil. Just looked at the list of the top 25 US Billionaires. Yep, maybe I could make an exception for 1 or 2. But no Billionaire made it on that list without large amounts of government subsidies and hand outs, and their life won't change by losing a few billion dollars.

They currently are evading all taxes on their wealth. They never have to sell, they simply borrow money against their stocks. And then when they die all that money is never realized.

1. The bill allows for the tax to be paid over 5 years. Take the wealthiest man on the list, do the math, and it wouldn't effect the stock market at all.

2. This isn't complicated, and you don't need to spend mental energy to make sense out of potential taxes against billionaires. They already have accountants on staff to appropriately evaluate their net worth.

Wyden's plan has been in the works for over 2 years and has been evaluated professionally multiple times. It holds up.

I really don't understand the conservative stance. They'll point to "coastal elites" or how the mega wealthy are secretly controlling the government in some sort of oligarchy, but as soon as someone suggests actually reducing their power suddenly you have blue collar people parroting talking points about how kind and benevolent billionaires are.

agreed i've had 2 conservative friends hit me up about this and i'm like uhh this doesnt affect you, is unlikely to EVER affect you, if it does affect you why do you care you have 1B dollars or 100M in annual income for 3 consecutive years.  Tax em.  They basically dropped the conversation.

[Abe]

These two are good ideas, and less likely to tank companies’ stocks randomly. I read that many rich people fund their lifestyles by borrowing against their stocks at rates lower than the actual returns the stocks make. That way they avoid capital gains taxes but get to be super fancy!

The current proposal adds too much volatility to stocks: Yes there’s a 5 year period to pay each years’ tax bill (kind of en face unfair to rest of us who don’t get a 5 year timeline), but it’s a dumb solution since every year they have to pay something. There’s going to be a scenario 5 years from now where they are paying the full amount  annually anyway.

[chemistk]

I really don't understand the conservative stance. They'll point to "coastal elites" or how the mega wealthy are secretly controlling the government in some sort of oligarchy, but as soon as someone suggests actually reducing their power suddenly you have blue collar people parroting talking points about how kind and benevolent billionaires are.

The conservative stance is to put a human shield in front of it middle class spin on it and stoke a bunch of fear among average-income conservatives about how "Nancy Pelosi and Joe Biden are coming for your money". The game of conservative media telephone quickly turns it into how "average Americans" or "stupid libs" or "ignorant dems" don't understand that this would impact everyone.

I'm not kidding. Just yesterday, a very intelligent friend of mine posted on social media something along the lines of "SMH read up on deferred capital gains people, if this passes say goodbye to your money". This isn't someone who posts politically, and that's all it takes. Conservative media has already drawn a dotted line to the middle-class American and insinuated that today it's billionaires, tomorrow it's millionaires, and then next thing you know, it's average schmucks like us.

Just like anything, there's always those on the fringes who would get caught up in the plan - in this case I'd assume it's those making $400K as single filers.

[boarder42]

I really don't understand the conservative stance. They'll point to "coastal elites" or how the mega wealthy are secretly controlling the government in some sort of oligarchy, but as soon as someone suggests actually reducing their power suddenly you have blue collar people parroting talking points about how kind and benevolent billionaires are.

The conservative stance is to put a human shield in front of it middle class spin on it and stoke a bunch of fear among average-income conservatives about how "Nancy Pelosi and Joe Biden are coming for your money". The game of conservative media telephone quickly turns it into how "average Americans" or "stupid libs" or "ignorant dems" don't understand that this would impact everyone.

I'm not kidding. Just yesterday, a very intelligent friend of mine posted on social media something along the lines of "SMH read up on deferred capital gains people, if this passes say goodbye to your money". This isn't someone who posts politically, and that's all it takes. Conservative media has already drawn a dotted line to the middle-class American and insinuated that today it's billionaires, tomorrow it's millionaires, and then next thing you know, it's average schmucks like us.

Just like anything, there's always those on the fringes who would get caught up in the plan - in this case I'd assume it's those making $400K as single filers.

100% a friend insinuated the same thing like you know how income tax started as something to tax the rich and now we all pay it.

[Michael in ABQ]

I really don't understand the conservative stance. They'll point to "coastal elites" or how the mega wealthy are secretly controlling the government in some sort of oligarchy, but as soon as someone suggests actually reducing their power suddenly you have blue collar people parroting talking points about how kind and benevolent billionaires are.

The conservative stance is to put a human shield in front of it middle class spin on it and stoke a bunch of fear among average-income conservatives about how "Nancy Pelosi and Joe Biden are coming for your money". The game of conservative media telephone quickly turns it into how "average Americans" or "stupid libs" or "ignorant dems" don't understand that this would impact everyone.

I'm not kidding. Just yesterday, a very intelligent friend of mine posted on social media something along the lines of "SMH read up on deferred capital gains people, if this passes say goodbye to your money". This isn't someone who posts politically, and that's all it takes. Conservative media has already drawn a dotted line to the middle-class American and insinuated that today it's billionaires, tomorrow it's millionaires, and then next thing you know, it's average schmucks like us.

Just like anything, there's always those on the fringes who would get caught up in the plan - in this case I'd assume it's those making $400K as single filers.

100% a friend insinuated the same thing like you know how income tax started as something to tax the rich and now we all pay it.

And? Isn't that a valid comparison?

Governments have a history of structuring the tax code is such a way that it eventually ensnares more and more people. The Alternative Minimum Tax was supposed to be something that targeted the rich https://www.schwab.com/resource-center/insights/content/amt-triggers over time without inflation adjustments it began to affect more and more people - until it was finally reformed.


I don't think this proposed wealth tax will ever effect me directly. I still think it sets a bad precedent and will absolutely go beyond the estimated 700 billionaires - either through reducing the brackets or by leaving them unchanged and allowing inflation to do Congress's dirty work. I haven't read through the details of how the unrealized gains on something like a privately traded company will work, or what happens when a stock whipsaws back and forth all year. Are the unrealized gains just calculated from January 1st to December 31st? Is this going to cause business owners to try and tank the stock on December 31st and then announce great news on January 1st?


"The problem with socialism is you eventually run out of other people's money." That's all this boils down to. There's a golden goose out there and Congress thinks that choking it will get it to drop a few more eggs that they can spread around to buy some votes. Bonus points for being able to stick it to all those evil billionaires who are obviously making the world a terrible place by developing world-changing technology i.e. personal computers, smartphones, electric vehicles, reusable rockets, life-saving drugs, etc.

[boarder42]

I really don't understand the conservative stance. They'll point to "coastal elites" or how the mega wealthy are secretly controlling the government in some sort of oligarchy, but as soon as someone suggests actually reducing their power suddenly you have blue collar people parroting talking points about how kind and benevolent billionaires are.

The conservative stance is to put a human shield in front of it middle class spin on it and stoke a bunch of fear among average-income conservatives about how "Nancy Pelosi and Joe Biden are coming for your money". The game of conservative media telephone quickly turns it into how "average Americans" or "stupid libs" or "ignorant dems" don't understand that this would impact everyone.

I'm not kidding. Just yesterday, a very intelligent friend of mine posted on social media something along the lines of "SMH read up on deferred capital gains people, if this passes say goodbye to your money". This isn't someone who posts politically, and that's all it takes. Conservative media has already drawn a dotted line to the middle-class American and insinuated that today it's billionaires, tomorrow it's millionaires, and then next thing you know, it's average schmucks like us.

Just like anything, there's always those on the fringes who would get caught up in the plan - in this case I'd assume it's those making $400K as single filers.

100% a friend insinuated the same thing like you know how income tax started as something to tax the rich and now we all pay it.

And? Isn't that a valid comparison?

Governments have a history of structuring the tax code is such a way that it eventually ensnares more and more people. The Alternative Minimum Tax was supposed to be something that targeted the rich https://www.schwab.com/resource-center/insights/content/amt-triggers over time without inflation adjustments it began to affect more and more people - until it was finally reformed.


I don't think this proposed wealth tax will ever effect me directly. I still think it sets a bad precedent and will absolutely go beyond the estimated 700 billionaires - either through reducing the brackets or by leaving them unchanged and allowing inflation to do Congress's dirty work. I haven't read through the details of how the unrealized gains on something like a privately traded company will work, or what happens when a stock whipsaws back and forth all year. Are the unrealized gains just calculated from January 1st to December 31st? Is this going to cause business owners to try and tank the stock on December 31st and then announce great news on January 1st?


"The problem with socialism is you eventually run out of other people's money." That's all this boils down to. There's a golden goose out there and Congress thinks that choking it will get it to drop a few more eggs that they can spread around to buy some votes. Bonus points for being able to stick it to all those evil billionaires who are obviously making the world a terrible place by developing world-changing technology i.e. personal computers, smartphones, electric vehicles, reusable rockets, life-saving drugs, etc.

we've been experimenting with trickle down economics since reagan they do not work the divide in income inequality continues to widen.  Middle out economics have appeared to work exceedingly well with the small experiments in giving money to people through out the pandemic.  why not giving something else a shot 300B vs 200B doesnt really change how that person spends money.

[NaN]

Is the too-big-and-too-many-billionaires problem that we haven't taxed their unrealized gains, yet? Do we really change anything if we do?

I am having a hard time seeing how that is going to change anything. I don't think the proposal takes away wealth in any way like increasing a rate would. It just forces them to do something with their wealth. And isn't the tax the same as if they sold their stock shares today and had to pay taxes on it? Sure they can take a loan on the shares but they do have to pay off the loan, right? Is that money they pay off the loan taxed?

To me, the billionaire problem is they were able to collect so much wealth in the first place. Why are these stocks worth so much?  France is just trying to pass a bill to force Amazon to charge a flat rate for book shipping because even with their previous law that forced a fixed rate for books Amazon would charge a penny and everywhere else would charge the actual shipping fee. It still was not competitive to help keep local book stores in business, something France values a little bit more the US. To me there are massive billionaires due to failings in breaking up these huge companies and pursuing justice against all of the anti-competition methods employed by them. This wealth used to be distributed.

Further, consider Elon Musk's case with SpaceX taking a lot of money from tax payers (NASA, etc.). Companies like GE, Boeing, and other defense contractors routinely gave out dividends and were not run by one massive billionaire with a huge Ego.

This billionaire tax plan is a lot of hype and, at my first glance, does nothing substantive in solving the real problem.

[chemistk]

I really don't understand the conservative stance. They'll point to "coastal elites" or how the mega wealthy are secretly controlling the government in some sort of oligarchy, but as soon as someone suggests actually reducing their power suddenly you have blue collar people parroting talking points about how kind and benevolent billionaires are.

The conservative stance is to put a human shield in front of it middle class spin on it and stoke a bunch of fear among average-income conservatives about how "Nancy Pelosi and Joe Biden are coming for your money". The game of conservative media telephone quickly turns it into how "average Americans" or "stupid libs" or "ignorant dems" don't understand that this would impact everyone.

I'm not kidding. Just yesterday, a very intelligent friend of mine posted on social media something along the lines of "SMH read up on deferred capital gains people, if this passes say goodbye to your money". This isn't someone who posts politically, and that's all it takes. Conservative media has already drawn a dotted line to the middle-class American and insinuated that today it's billionaires, tomorrow it's millionaires, and then next thing you know, it's average schmucks like us.

Just like anything, there's always those on the fringes who would get caught up in the plan - in this case I'd assume it's those making $400K as single filers.

100% a friend insinuated the same thing like you know how income tax started as something to tax the rich and now we all pay it.

And? Isn't that a valid comparison?

Governments have a history of structuring the tax code is such a way that it eventually ensnares more and more people. The Alternative Minimum Tax was supposed to be something that targeted the rich https://www.schwab.com/resource-center/insights/content/amt-triggers over time without inflation adjustments it began to affect more and more people - until it was finally reformed.


I don't think this proposed wealth tax will ever effect me directly. I still think it sets a bad precedent and will absolutely go beyond the estimated 700 billionaires - either through reducing the brackets or by leaving them unchanged and allowing inflation to do Congress's dirty work. I haven't read through the details of how the unrealized gains on something like a privately traded company will work, or what happens when a stock whipsaws back and forth all year. Are the unrealized gains just calculated from January 1st to December 31st? Is this going to cause business owners to try and tank the stock on December 31st and then announce great news on January 1st?


"The problem with socialism is you eventually run out of other people's money." That's all this boils down to. There's a golden goose out there and Congress thinks that choking it will get it to drop a few more eggs that they can spread around to buy some votes. Bonus points for being able to stick it to all those evil billionaires who are obviously making the world a terrible place by developing world-changing technology i.e. personal computers, smartphones, electric vehicles, reusable rockets, life-saving drugs, etc.

we've been experimenting with trickle down economics since reagan they do not work the divide in income inequality continues to widen.  Middle out economics have appeared to work exceedingly well with the small experiments in giving money to people through out the pandemic.  why not giving something else a shot 300B vs 200B doesnt really change how that person spends money.

Michael, to your point, I don't think that the unrealized gains tax is a great idea generally. It's not really that palatable even if you assume that 80-90% of the working population would never have to worry about it.

But for every great new innovation produced by the companies these billionaires have founded, the real and pernicious cost to the general public is the cession of power into private hands. You can't deny that there's not an 'other' oligarchical quasi-government that exists based out of SoCal.

Another, more pessimistic, way to look at those ultra-wealthy is to remember that if shit ever truly hits the fan (mass strikes, working-class uprising, etc.), those who profited massively off you and me and everyone else can just nope the fuck out of the country. However unrealistic it is in 10 years, it wouldn't be crazy to think that elon/jeff don't have a spec'd space vehicle already constructed to escape to wherever they want.

I don't have a great answer for how the ultra-wealthy should be curtailed, but you can't for one second tell me that profiting wildly while those who work for you slog for beans is morally and societally acceptable. Worse, those same low-wage workers are working directly against really bad laws that were written and enacted by those very people they work for. As a society, it should not be acceptable to cede so much power to those who are wholly unaccountable for what they do with that power.

[FINate]

I'm not kidding. Just yesterday, a very intelligent friend of mine posted on social media something along the lines of "SMH read up on deferred capital gains people, if this passes say goodbye to your money". This isn't someone who posts politically, and that's all it takes. Conservative media has already drawn a dotted line to the middle-class American and insinuated that today it's billionaires, tomorrow it's millionaires, and then next thing you know, it's average schmucks like us.

Well, that's what happened with the AMT, so I sorta get it.

I just don't see how it's workable in the long run. Asset values fluctuate too much. If someone pays taxes on unrealized cap gains one year, and it declines in value the next, do they get a rebate? Taxing more types of transfers and/or borrowing seems less clunky.

[boarder42]

https://www.cnbc.com/2021/10/28/biden-framework-for-build-back-better-social-climate-bill.html

looks like this thread is a mute point anyway as it doesnt appear to make the bill they have instead just raised taxes on people making over 10MM and added the corp 15% minimum tax on reported earnings.

[boarder42]

a wealth tax seems to be a simpler solution than a convoluted plan like this IMO but i'd like to see them taxed one way or another and that money either 1 used to pay down our debt or 2 used to fund services to lift the middle class back up and get our flywheel spinning the right way again.

[maizefolk]

https://www.cnbc.com/2021/10/28/biden-framework-for-build-back-better-social-climate-bill.html

looks like this thread is a mute point anyway as it doesnt appear to make the bill they have instead just raised taxes on people making over 10MM and added the corp 15% minimum tax on reported earnings.

I much prefer this to trying to design whole new system of taxes (unrealized capital gains) on short notice. Tax codes are complicated and there can be lots of counterintuitive outcomes and new perverse incentives.

Frankly we don't need complicated new taxes. The government needs more revenue than it currently brings in* and the straightforward way to do that is to raise income taxes (both on earned income and capital gains) on a big enough share of the population to cover a good chunk of total national income. Say the top 20% of earners (which I'm pretty sure includes me).

*And it would need more revenue than it currently brings in even under very aggressive budget cut scenarios in the future.

[boarder42]

https://www.cnbc.com/2021/10/28/biden-framework-for-build-back-better-social-climate-bill.html

looks like this thread is a mute point anyway as it doesnt appear to make the bill they have instead just raised taxes on people making over 10MM and added the corp 15% minimum tax on reported earnings.

I much prefer this to trying to design whole new system of taxes (unrealized capital gains) on short notice. Tax codes are complicated and there can be lots of counterintuitive outcomes and new perverse incentives.

Frankly we don't need complicated new taxes. The government needs more revenue than it currently brings in* and the straightforward way to do that is to raise income taxes (both on earned income and capital gains) on a big enough share of the population to cover a good chunk of total national income. Say the top 20% of earners (which I'm pretty sure includes me).

*And it would need more revenue than it currently brings in even under very aggressive budget cut scenarios in the future.

i agree with this so many special interest things work their way into our tax code its almost like we need them to go back to square 1 and rewrite the whole damn thing so that we're paying down XX% of our debt per year.

[boarder42]

I'm also a large fan of the tax on share buybacks b/c i'm opposed to share buy backs in general as it inflates share price without putting that money investors were investing for to good use.

[maizefolk]

Yup. A good chunk of it is special interests. Another is the trap of thinking that the solution to the government not having enough money for some other group to be forced to pay more, rather than recognizing a lot of us (myself included) need to pay more.

The top 0.01% (wealthiest one household out of every 10,000; incomes of roughly $7.5M/year or above so very roughly equivalent to who the new income tax surcharge would target) make a vast amount of money individually, but only account for about 5% of total national income. Billionaires would be substantially less than that.

By all means do tax people making $10M+/year more, but we're not going to make up a 15% of GDP deficit (even if our target isn't a balanced budget but a more sustainable 2-3% of GDP deficit) by only raising taxes on people who make only 5% of the money in this country.

[Phenix]

I would support a federal sales tax.  I'm not talking about the Fair Tax and its aim of eliminating income tax, but a federal sales tax would effectively tax the millions of dollars each of these billionaires borrow each year.  As we just saw with the stimulus checks and the advanced child tax credits, it wouldn't be hard to send money to lower/middle class families to offset any extra burden caused by a federal sales tax.  Start it at a low percentage and slowly inch it up.

[FIPurpose]

Yup. A good chunk of it is special interests. Another is the trap of thinking that the solution to the government not having enough money for some other group to be forced to pay more, rather than recognizing a lot of us (myself included) need to pay more.

The top 0.01% (wealthiest one household out of every 10,000; incomes of roughly $7.5M/year or above so very roughly equivalent to who the new income tax surcharge would target) make a vast amount of money individually, but only account for about 5% of total national income. Billionaires would be substantially less than that.

By all means do tax people making $10M+/year more, but we're not going to make up a 15% of GDP deficit (even if our target isn't a balanced budget but a more sustainable 2-3% of GDP deficit) by only raising taxes on people who make only 5% of the money in this country.

Yep, I agree. This will raise money, but the top 0.0001% will likely be able to continue avoiding large amounts of taxes. You need something to target Billionaires or else they'll continue to just borrow money against their wealth and accumulate at an even faster rate.

Until we deal with it directly, we'll just have a permanent class of about 1000 Billionaire families but only raise the taxes on the 100 Millionaires. Which is fine, but doesn't solve the problem of these families having way too much power and influence.

Does anyone want to argue that Bill Gates did a good thing by forcing vaccine companies to not open source their findings? This man should never have been able to leverage that and likely is responsible for the deaths of 100's of thousands all because he wanted his charity to control it. These Billionaire charities rarely produce world-changing solutions, and all the while, government infrastructure and education continues to degrade because these people don't get their name attached to it when it's purchased through taxes.

[PKFFW]

Yup. A good chunk of it is special interests. Another is the trap of thinking that the solution to the government not having enough money for some other group to be forced to pay more, rather than recognizing a lot of us (myself included) need to pay more.

The top 0.01% (wealthiest one household out of every 10,000; incomes of roughly $7.5M/year or above so very roughly equivalent to who the new income tax surcharge would target) make a vast amount of money individually, but only account for about 5% of total national income. Billionaires would be substantially less than that.

By all means do tax people making $10M+/year more, but we're not going to make up a 15% of GDP deficit (even if our target isn't a balanced budget but a more sustainable 2-3% of GDP deficit) by only raising taxes on people who make only 5% of the money in this country.

The problem with taxing income is that it is a straight up regressive tax regardless of how it is structured.

A billionaire only needs to exchange an almost infinitesimally small percent of their net wealth into "income" in order to fund an extremely lavish lifestyle.

As a person's net wealth reduces, they need to exchange a greater and greater proportion of that wealth to "income" to fund their progressively less and less lavish (comparable to the billionaire) lifestyle.  Eventually you reach a point at which a person needs to exchange their entire wealth into income simply to fund a barely above, and in many cases below, poverty level lifestyle.  It would not be possible, without removing income tax on approximately the bottom 98% of income earners, to structure an income tax such that it would actually resemble something "fair". (for want of a better term)

Further, as others have mentioned, an income tax doesn't address the underlying problems of control of society by the wealth and the wealthy avoiding creating "income" to begin with by utilizing strategies such as funding lifestyle through borrowing.

[FIPurpose]

Yup. A good chunk of it is special interests. Another is the trap of thinking that the solution to the government not having enough money for some other group to be forced to pay more, rather than recognizing a lot of us (myself included) need to pay more.

The top 0.01% (wealthiest one household out of every 10,000; incomes of roughly $7.5M/year or above so very roughly equivalent to who the new income tax surcharge would target) make a vast amount of money individually, but only account for about 5% of total national income. Billionaires would be substantially less than that.

By all means do tax people making $10M+/year more, but we're not going to make up a 15% of GDP deficit (even if our target isn't a balanced budget but a more sustainable 2-3% of GDP deficit) by only raising taxes on people who make only 5% of the money in this country.

The problem with taxing income is that it is a straight up regressive tax regardless of how it is structured.

A billionaire only needs to exchange an almost infinitesimally small percent of their net wealth into "income" in order to fund an extremely lavish lifestyle.

As a person's net wealth reduces, they need to exchange a greater and greater proportion of that wealth to "income" to fund their progressively less and less lavish (comparable to the billionaire) lifestyle.  Eventually you reach a point at which a person needs to exchange their entire wealth into income simply to fund a barely above, and in many cases below, poverty level lifestyle.  It would not be possible, without removing income tax on approximately the bottom 98% of income earners, to structure an income tax such that it would actually resemble something "fair". (for want of a better term)

Further, as others have mentioned, an income tax doesn't address the underlying problems of control of society by the wealth and the wealthy avoiding creating "income" to begin with by utilizing strategies such as funding lifestyle through borrowing.

This is a very silly slippery slope argument. You're abusing the term "regressive". But you also completely miss how taxes work altogether.

~60% already don't pay any federal income taxes.

You're thinking of taxing as if all this wealth will be taxed over and over again until you're impoverished. I mean for 1, this tax idea only applies to billionaires. With a B. If you were no longer a billionaire, then the tax would no longer apply to you and you could accumulate wealth just like the rest of us. I would say that the current tax code is regressive only in the manner that current billionaires pay a lower percentage on taxes than their secretaries. We need a Billionaire tax to correct that.

Other than that, income taxes only tax that: income. There is no greater and greater exchange of wealth til you've dwindled down to nothing. That doesn't even make sense. Even for some of the billionaire tax plans they are only planning on taxing the CG's, not a consistent wealth tax that retaxes the same money each year. So... no, there is no dwindling resources.

[YttriumNitrate]

This plan would be fantastic for private equity. Imagine you are the founder of a wildly successful company who has the option of A) taking the company public or B) selling a big share to a private equity company. If the first option is going result in annual taxes on unrealized cap gains, the later option becomes a whole lot more appealing.

[FIPurpose]

This plan would be fantastic for private equity. Imagine you are the founder of a wildly successful company who has the option of A) taking the company public or B) selling a big share to a private equity company. If the first option is going result in annual taxes on unrealized cap gains, the later option becomes a whole lot more appealing.

What? Selling your shares to a private equity company would be a realized event. They would pay all of their CG's right then.

[YttriumNitrate]

This plan would be fantastic for private equity. Imagine you are the founder of a wildly successful company who has the option of A) taking the company public or B) selling a big share to a private equity company. If the first option is going result in annual taxes on unrealized cap gains, the later option becomes a whole lot more appealing.

What? Selling your shares to a private equity company would be a realized event. They would pay all of their CG's right then.

Selling a big share of the company (i.e., diluting ownership) rather than selling founder's interest.

[FIPurpose]

This plan would be fantastic for private equity. Imagine you are the founder of a wildly successful company who has the option of A) taking the company public or B) selling a big share to a private equity company. If the first option is going result in annual taxes on unrealized cap gains, the later option becomes a whole lot more appealing.

What? Selling your shares to a private equity company would be a realized event. They would pay all of their CG's right then.

Selling a big share of the company (i.e., diluting ownership) rather than selling founder's interest.

Diluting the ownership would act the same way by reducing the value of the founder's stock. Their unrealized CG's would be lower.

Either way, the idea already has a provision to back tax any privately held equity (plus interest) so that it's treated the same as public equity for the purposes of this tax. So there's no benefit to doing one over the other.

[maizefolk]

This plan would be fantastic for private equity. Imagine you are the founder of a wildly successful company who has the option of A) taking the company public or B) selling a big share to a private equity company. If the first option is going result in annual taxes on unrealized cap gains, the later option becomes a whole lot more appealing.

What? Selling your shares to a private equity company would be a realized event. They would pay all of their CG's right then.

Selling a big share of the company (i.e., diluting ownership) rather than selling founder's interest.

Diluting the ownership would act the same way by reducing the value of the founder's stock. Their unrealized CG's would be lower.

Either way, the idea already has a provision to back tax any privately held equity (plus interest) so that it's treated the same as public equity for the purposes of this tax. So there's no benefit to doing one over the other.

Interesting idea.

So if I need to raise $50M for my company, I can tell my company to go public by selling new shares, which means my current shares now create exposure to unknown amounts of future taxes on unrealized capital gains as my company's stock price increases, or the company sells the same new shares to a private VC fund at a known valuation and the company's valuation remains fixed at that level until/unless it needs to raise more money?

Even if the initial valuations were identical I can see how as a founder someone would prefer to avoid the exposure to future taxes from new valuations set by stock prices that were outside of ones control.

[FIPurpose]

This plan would be fantastic for private equity. Imagine you are the founder of a wildly successful company who has the option of A) taking the company public or B) selling a big share to a private equity company. If the first option is going result in annual taxes on unrealized cap gains, the later option becomes a whole lot more appealing.

What? Selling your shares to a private equity company would be a realized event. They would pay all of their CG's right then.

Selling a big share of the company (i.e., diluting ownership) rather than selling founder's interest.

Diluting the ownership would act the same way by reducing the value of the founder's stock. Their unrealized CG's would be lower.

Either way, the idea already has a provision to back tax any privately held equity (plus interest) so that it's treated the same as public equity for the purposes of this tax. So there's no benefit to doing one over the other.

Interesting idea.

So if I need to raise $50M for my company, I can tell my company to go public by selling new shares, which means my current shares now create exposure to unknown amounts of future taxes on unrealized capital gains as my company's stock price increases, or the company sells the same new shares to a private VC fund at a known valuation and the company's valuation remains fixed at that level until/unless it needs to raise more money?

Even if the initial valuations were identical I can see how as a founder someone would prefer to avoid the exposure to future taxes from new valuations set by stock prices that were outside of ones control.

1. For evaluating public companies, you would of course take the average price across the year to come to a reasonable valuation, and any losses from one year could be carried over for up to 7 years (or whatever the limit is).

2. For evaluating private companies, there are already ways of measuring the estimated value. Remember, we're talking about Billionaires, not $200-500MM companies split between 20 people. These large multi-billion dollar corporations that are already handing out stock to employees, selling new shares to VC investors all the time. (or at least every couple years). The valuation is known and quite obvious. And if at some point the company sells for a much higher price, they can average out the gains for however long they held it for.

But they're going to have to pay taxes on those gains as if their stock were worth an estimated amount x years ago.

3. There's a big reason why companies go public. It typically sells for more on the public market. But also, that liquidity is part of the reason why these Billionaires are able to borrow money at such fantastic rates. The valuation of their stock is well known and ample buyers are always lurking for at a particular price. This is not so easy with privately held equity.

[maizefolk]

3. There's a big reason why companies go public. It typically sells for more on the public market. But also, that liquidity is part of the reason why these Billionaires are able to borrow money at such fantastic rates. The valuation of their stock is well known and ample buyers are always lurking for at a particular price. This is not so easy with privately held equity.

Agreed. Yet what we've already been seeing lately is a big shift towards delaying when companies go public. It used to be that the billion dollar private sector companies (unicorns) were rare. Now there are dozens of decacorns ($10B+ valuation private companies) and my guess is that many of those companies have one or more founders with individual states high enough to qualify for the previously discussed but now discarded tax on capital gains of people with a billion dollars in publicly traded stocks.

Having greater control over valuations, which typically are established in fundraising rounds for private companies, probably would tip the scale a little farther in the direction of remain private for longer (for better or worse).

[seattlecyclone]

I'm not a huge fan of an annual asset tax just because of the administrative friction it causes. The value of publicly held securities is easy enough to figure, but are you really going to make every private business owner, real estate investor, art collector, etc. pay for an appraisal on all this stuff every year to see how many unrealized gains they have? Seems like increasing the estate tax would have a similar revenue impact in the long run. Make people appraise their assets once at death and pay 50% instead of annual appraisals for a 1% tax, that sort of thing.

[PDXTabs]

I'm not a huge fan of an annual asset tax just because of the administrative friction it causes. The value of publicly held securities is easy enough to figure, but are you really going to make every private business owner, real estate investor, art collector, etc. pay for an appraisal on all this stuff every year to see how many unrealized gains they have? Seems like increasing the estate tax would have a similar revenue impact in the long run. Make people appraise their assets once at death and pay 50% instead of annual appraisals for a 1% tax, that sort of thing.

Yes, but when the CBO does its budget numbers they are always over a 10 year period. Same with reconciliation. Some of this is a congressional math problem.

[Fishindude]

How about no new taxes, no fed budget increase, and live with what they currently take in?
How about lowering taxes and / or eliminating some taxes?

I'd be a poor politician.

[PDXTabs]

How about no new taxes, no fed budget increase, and live with what they currently take in?
How about lowering taxes and / or eliminating some taxes?

Why should people with orders of magnitude more wealth than me pay less taxes in both relative and absolute terms?

[maizefolk]

How about no new taxes, no fed budget increase, and live with what they currently take in?
How about lowering taxes and / or eliminating some taxes?

Which $2T would you cut? (In a regular year, right now you'd have to cut more like $3.2T but a lot of that is COVID spending that'll expire next year). And that's to live on what they currently take in. If you want to cut taxes you'll need even more cuts than that.

You can view a breakdown of where the federal government's money goes here: https://www.cbo.gov/publication/57170

[seattlecyclone]

I'm not a huge fan of an annual asset tax just because of the administrative friction it causes. The value of publicly held securities is easy enough to figure, but are you really going to make every private business owner, real estate investor, art collector, etc. pay for an appraisal on all this stuff every year to see how many unrealized gains they have? Seems like increasing the estate tax would have a similar revenue impact in the long run. Make people appraise their assets once at death and pay 50% instead of annual appraisals for a 1% tax, that sort of thing.

Yes, but when the CBO does its budget numbers they are always over a 10 year period. Same with reconciliation. Some of this is a congressional math problem.

I don't follow. A pretty predictable number of people dies every year. Not every billionaire will die in the next decade, but many of them will. So long as you set the estate tax increase such that the average billionaire pays as much as they would pay over their lifetime with a wealth tax, the congressional math should work out about the same either way.

[PDXTabs]

I'm not a huge fan of an annual asset tax just because of the administrative friction it causes. The value of publicly held securities is easy enough to figure, but are you really going to make every private business owner, real estate investor, art collector, etc. pay for an appraisal on all this stuff every year to see how many unrealized gains they have? Seems like increasing the estate tax would have a similar revenue impact in the long run. Make people appraise their assets once at death and pay 50% instead of annual appraisals for a 1% tax, that sort of thing.

Yes, but when the CBO does its budget numbers they are always over a 10 year period. Same with reconciliation. Some of this is a congressional math problem.

I don't follow. A pretty predictable number of people dies every year. Not every billionaire will die in the next decade, but many of them will. So long as you set the estate tax increase such that the average billionaire pays as much as they would pay over their lifetime with a wealth tax, the congressional math should work out about the same either way.

Thinking further, I think that I mostly agree with you. But I also think that the current Democratic leadership wants to come up with a tax that will hit Elon Musk and Jeff Bezos in the next 10 years. I do mostly agree with you that a sufficiently high estate tax would fix the taxation problem. There are other questions that society might want to answer about letting too much money/power get into one hand.

[gooki]

I'm not a huge fan of an annual asset tax just because of the administrative friction it causes. The value of publicly held securities is easy enough to figure, but are you really going to make every private business owner, real estate investor, art collector, etc. pay for an appraisal on all this stuff every year to see how many unrealized gains they have? Seems like increasing the estate tax would have a similar revenue impact in the long run. Make people appraise their assets once at death and pay 50% instead of annual appraisals for a 1% tax, that sort of thing.

Yes, but when the CBO does its budget numbers they are always over a 10 year period. Same with reconciliation. Some of this is a congressional math problem.

I don't follow. A pretty predictable number of people dies every year. Not every billionaire will die in the next decade, but many of them will. So long as you set the estate tax increase such that the average billionaire pays as much as they would pay over their lifetime with a wealth tax, the congressional math should work out about the same either way.

This. Just do it, enforce it, and remove any loop holes.

[maizefolk]

A pretty predictable number of people dies every year. Not every billionaire will die in the next decade, but many of them will. So long as you set the estate tax increase such that the average billionaire pays as much as they would pay over their lifetime with a wealth tax, the congressional math should work out about the same either way.

This. Just do it, enforce it, and remove any loop holes.

I agree with this. I'm happy to pay more in taxes today, but if a given amount of money needs to be raised, paying a good chunk of them literally over our own dead bodies seems like the optimal time to pay them.

But I will say that most loopholes aren't intended. Many originate as interactions between language in different parts of the 2,650 page US tax code that weren't anticipated by the congressional aides tasked with drafting new legislative language. They are the equivalent of software bugs.

This means two things. 1) New taxes have a lot of bugs and you won't know what they are until a bunch of lawyers and accountants pour through the code trying to find the most favorable interpretations for their clients. So loophole free taxes come from many cycles of "pass legislation; see effects; update legislation" rather than just sitting down to write tax law without loopholes. 2) Changing the rates of existing taxes produces fewer new loopholes or other unintended consequences than writing brand new taxes.* Just like I feel much more secure using code like OpenSSL which has had decades of people finding security flaws and fixed them than I would running a new SSL implementation written by a programmer instructed to make sure there weren't any flaws or bugs in their code.

*Note: The estate tax is an existing tax, so I wouldn't be worried about raising the rate on it. I'm more worried about people who think it'd be simple and bug-free to implement wealth taxes or taxes on unrealized capital gains.

[FIPurpose]

I know that there were at some point a bunch of changes to the estate tax made including cutting the max exclusion in half from something like 12MM to 6MM. And also changing the rules based around trusts to try and prevent people from hiding their money from the tax. Are these things still under consideration? Goodness if I know. The list of what's in or out is changing every 3 days.

Though I think there are 2 things that prevent these changes from happening. 1. It's basically the first thing the GOP reverses every, single, time they're in office. 2. A lot of these older politicians have assets over this amount. They can't help but imagine the reduced estate they'll be able to pass on when they die in the next 10-20 years.

[PKFFW]

This is a very silly slippery slope argument. You're abusing the term "regressive". But you also completely miss how taxes work altogether.

~60% already don't pay any federal income taxes.

My mistake.  I'm from Australia and here income tax is Federal only.

The point remains that taxing income is regressive.  And no, I'm not abusing the term.

You're thinking of taxing as if all this wealth will be taxed over and over again until you're impoverished. I mean for 1, this tax idea only applies to billionaires. With a B. If you were no longer a billionaire, then the tax would no longer apply to you and you could accumulate wealth just like the rest of us. I would say that the current tax code is regressive only in the manner that current billionaires pay a lower percentage on taxes than their secretaries. We need a Billionaire tax to correct that.

Other than that, income taxes only tax that: income. There is no greater and greater exchange of wealth til you've dwindled down to nothing. That doesn't even make sense. Even for some of the billionaire tax plans they are only planning on taxing the CG's, not a consistent wealth tax that retaxes the same money each year. So... no, there is no dwindling resources.

Firstly, I wasn't arguing against the Billionaire tax.  Apologies if that was not clear.

Secondly, I did not mean to suggest wealth should be taxed ad infinitum until all wealth dwindles away to nothing.

I totally agree with the idea of implementing some sort of Billionaire (or even a 50 millionaire or pick a big number that people can agree on) tax that taxes any sort of gains over that amount at a significant amount.  Treat notional gains as real gains to stop the problem of borrowing against those gains to fund lifestyle.  Tax realised capital gains as no different to any other type of gain.  Tax the crap out of it when the person gifts it to someone else, and tax the absolute be-jezus out of it when they die as well.

[secondcor521]

I know that there were at some point a bunch of changes to the estate tax made including cutting the max exclusion in half from something like 12MM to 6MM. And also changing the rules based around trusts to try and prevent people from hiding their money from the tax. Are these things still under consideration? Goodness if I know. The list of what's in or out is changing every 3 days.

Though I think there are 2 things that prevent these changes from happening. 1. It's basically the first thing the GOP reverses every, single, time they're in office. 2. A lot of these older politicians have assets over this amount. They can't help but imagine the reduced estate they'll be able to pass on when they die in the next 10-20 years.

In the first version of the social spending bill, they were going to accelerate the sunset of the doubling of the estate tax basic exclusion amount.  So instead of dropping from $12M to $6M in 2026, it would happen in 2022.  This was one of the revenue generators in that version of the bill.

In the second and current version of the bill (the one put out Thursday this week), that change is not in there.

On a note relevant to this thread, the idea of taxing wealthy people on unrealized gains is also *not* in the second and current version of the bill.

What they talk about changes regularly, but the actual bill texts seem to change less frequently.  Although I have stiff doubts as to whether this second version of the bill passes in its current form.  It just seems premature based on the posturing I still see going on.

As for your second paragraph, I think your second point is spot on and is true of politicians in both parties.  I think the vast majority of members of Congress are millionaires.

Your first point is misleading.  The latest increase to the estate tax exemption was in the TCJA in 2017, which was passed and signed into law completely by the GOP, but that was to temporarily add into law increase the exemption, not reverse any reduction.  The three bills increasing (or retaining increases in) the estate tax exemption before that, though, were passed on a bipartisan basis in the House, overwhelming bipartisan support in the Senate, and signed into law by Presidents Clinton and Obama.  (Sources:  https://www.thebalance.com/exemption-from-federal-estate-taxes-3505630 and Wikipedia.)  The net of all this is that the estate tax exemption amount from 1997 through 2017 was based on bipartisan laws signed by Democratic Presidents.

[FIPurpose]

I know that there were at some point a bunch of changes to the estate tax made including cutting the max exclusion in half from something like 12MM to 6MM. And also changing the rules based around trusts to try and prevent people from hiding their money from the tax. Are these things still under consideration? Goodness if I know. The list of what's in or out is changing every 3 days.

Though I think there are 2 things that prevent these changes from happening. 1. It's basically the first thing the GOP reverses every, single, time they're in office. 2. A lot of these older politicians have assets over this amount. They can't help but imagine the reduced estate they'll be able to pass on when they die in the next 10-20 years.

In the first version of the social spending bill, they were going to accelerate the sunset of the doubling of the estate tax basic exclusion amount.  So instead of dropping from $12M to $6M in 2026, it would happen in 2022.  This was one of the revenue generators in that version of the bill.

In the second and current version of the bill (the one put out Thursday this week), that change is not in there.

On a note relevant to this thread, the idea of taxing wealthy people on unrealized gains is also *not* in the second and current version of the bill.

What they talk about changes regularly, but the actual bill texts seem to change less frequently.  Although I have stiff doubts as to whether this second version of the bill passes in its current form.  It just seems premature based on the posturing I still see going on.

As for your second paragraph, I think your second point is spot on and is true of politicians in both parties.  I think the vast majority of members of Congress are millionaires.

Your first point is misleading.  The latest increase to the estate tax exemption was in the TCJA in 2017, which was passed and signed into law completely by the GOP, but that was to temporarily add into law increase the exemption, not reverse any reduction.  The three bills increasing (or retaining increases in) the estate tax exemption before that, though, were passed on a bipartisan basis in the House, overwhelming bipartisan support in the Senate, and signed into law by Presidents Clinton and Obama.  (Sources:  https://www.thebalance.com/exemption-from-federal-estate-taxes-3505630 and Wikipedia.)  The net of all this is that the estate tax exemption amount from 1997 through 2017 was based on bipartisan laws signed by Democratic Presidents.

I think you missed that all three of those bills were under GOP congressional control. It's something that yes, Clinton and Obama didn't fight, but it's not like D congress people were fighting for this or had the power to stop it. It's something that was regularly trumpeted by the likes of Rush Limbaugh and Sean Hannity as something that would doom small farmers.

Also, I think you missed the magnitude of these changes.
Clinton 600k -> 1M
Bush 1M -> 3.5M and lowered rate 10% (And scheduled it's removal in 2010)
Obama 3.5 -> 5.4M and lowered rate 5% (preventing it from destruction)
Trump 5.5-> 11.7M (basically nullifying the estate tax for all but a couple thousand estates)

There is far more to the estate tax than the article you linked cited. Clinton was pushed by a GOP congress to increase the cap. Bush then basically scheduled it for demise. Obama was able to keep it, but raised the cap on it. Trump's congress basically raised the cap so high that hardly anyone even qualifies for it anymore.

And now with Biden, they're flirting with bringing it back down to the 5M range. So yeah, there's been ping pong on this for the past 5 administrations. Though the alternative that I think most of the senators want is to just let the Trump cap expire. The 11.7M number is set to expire in 2025 and return to the Obama range. So lowering the estate tax now doesn't actually raise that much capital since it would only include 3 additional years from the current budget.

EDIT: I tried to find the number. It looks like for 2019, there were about 2,500 estate tax filings. The top 10% of congress is right at 10M and up for their net worth. So lowering it to $5M will hit a lot of them. At least currently, the estate tax is only hitting a couple thousand families and is only a concern for maybe 100-200k people max. Lowering it to 5M I'm guessing brings it more in the realm of the top 1% and expands that to more like 3 million people who could be hit by it.

[marty998]

And now with Biden, they're flirting with bringing it back down to the 5M range. So yeah, there's been ping pong on this for the past 5 administrations. Though the alternative that I think most of the senators want is to just let the Trump cap expire. The 11.7M number is set to expire in 2025 and return to the Obama range. So lowering the estate tax now doesn't actually raise that much capital since it would only include 3 additional years from the current budget.

If I were an asshole and apply suitably asshole logic, I'd suggest we might soon find out exactly how many people with wealth between $5m-12m care deeply about the estate tax.

If they don't euthanise themselves in 2024, then one can only conclude that people of this level of wealth don't really care about the estate tax.

Given I don't expect an excess level of death, one could argue for increasing the tax, as no one is prepared to die on this hill.

[Phenix]

And now with Biden, they're flirting with bringing it back down to the 5M range. So yeah, there's been ping pong on this for the past 5 administrations. Though the alternative that I think most of the senators want is to just let the Trump cap expire. The 11.7M number is set to expire in 2025 and return to the Obama range. So lowering the estate tax now doesn't actually raise that much capital since it would only include 3 additional years from the current budget.

If I were an asshole and apply suitably asshole logic, I'd suggest we might soon find out exactly how many people with wealth between $5m-12m care deeply about the estate tax.

If they don't euthanise themselves in 2024, then one can only conclude that people of this level of wealth don't really care about the estate tax.

Given I don't expect an excess level of death, one could argue for increasing the tax, as no one is prepared to die on this hill.

I'll let you in on a little secret, the people who are going to die aren't as concerned about the tax as those who are set to benefit from the death.

[secondcor521]

And now with Biden, they're flirting with bringing it back down to the 5M range. So yeah, there's been ping pong on this for the past 5 administrations. Though the alternative that I think most of the senators want is to just let the Trump cap expire. The 11.7M number is set to expire in 2025 and return to the Obama range. So lowering the estate tax now doesn't actually raise that much capital since it would only include 3 additional years from the current budget.

If I were an asshole and apply suitably asshole logic, I'd suggest we might soon find out exactly how many people with wealth between $5m-12m care deeply about the estate tax.

If they don't euthanise themselves in 2024, then one can only conclude that people of this level of wealth don't really care about the estate tax.

Given I don't expect an excess level of death, one could argue for increasing the tax, as no one is prepared to die on this hill.

I'll let you in on a little secret, the people who are going to die aren't as concerned about the tax as those who are set to benefit from the death.

If anyone cares, the early sunset of the estate tax basic exclusion amount was dropped from the bill a few revisions ago.  Although from what I read this morning, there's a new version of the bill that was written overnight that they hope to pass today; maybe it was put back in.

The version I read yesterday had a nicotine tax in it which I thought was interesting simply because not much had been said about it.

[BicycleB]

The point remains that taxing income is regressive. 

@PKFFW, what do you mean by regressive?

In the discussions of tax policy I've seen before, regressive means something like "poor pay a higher % of their income than rich do"; its opposite, "progressive," means something like "rich pay a higher % than poor do"; and "flat" means "rich and poor pay the same %." In other words, an income tax could be any of these, depending on what rates were paid.

https://www.thebalance.com/regressive-tax-definition-history-effective-rate-4155620
https://www.investopedia.com/terms/r/regressivetax.asp

According to some analysts, the United States income tax is progressive, not regressive, providing a counterexample to the assertion that income tax is necessarily progressive. Certainly the rates are higher for higher incomes, which is progressive. In some sense, the issue in this thread has largely been over the question of whether the definition of income is broad enough to have the desired progressive effect, and whether attempts to broaden the definition would have prohibitively negative side effects.

Does regressive mean something different in your country?

[Roland of Gilead]

Just today Musk is doing some twitter poll asking if he should sell 10% of his stock and pay tax on it.  He claims he will do what the poll says lol.

https://www.yahoo.com/finance/news/elon-musks-twitter-poll-sell-222055504.html


My wife had a good solution to the issue of billionaires borrowing against their stock and never realizing the gains and paying tax on it.

They make a law that any shares that are impaired by borrowing against are considered realized gains and taxes are due.  This should cut that practice right out.

[Wolfpack Mustachian]

Just today Musk is doing some twitter poll asking if he should sell 10% of his stock and pay tax on it.  He claims he will do what the poll says lol.

https://www.yahoo.com/finance/news/elon-musks-twitter-poll-sell-222055504.html


My wife had a good solution to the issue of billionaires borrowing against their stock and never realizing the gains and paying tax on it.

They make a law that any shares that are impaired by borrowing against are considered realized gains and taxes are due.  This should cut that practice right out.

This is what I don't understand with the plan. I didn't realize that billionaires borrowed against their shares and had such tax advantages doing so and all of that. Now that I do know, though, I don't see why we can't address that problem. If something else comes up where they're able to spend money tied to their stocks, somehow, fix that problem when it occurs. Trying to tax unrealized capital gains seems like a nightmare of complications.

Right now, we all can take money out, tax-free, for up to $80,000, I believe, and I'm sure we all would take that in a heartbeat. My question is this: if billionaires are willing to live under these constraints, drive a 15-year-old Civic to work and travel hack for vacations, does anyone on here have an issue with that? Tax them when they sell or generate money to be able to spend, tax the crap out of it from an estate standpoint when they die, and don't stress about these unrealized earnings. What am I missing here?