It took a while, but the dueling letters” by the wealthy to either tax them more or figure out better ways to create wealth opportunities for others has just gotten another response.
But ‘let’s not get carried away. The reasons they state for not liking a wealth tax are mainly administrative and practical, since all the European countries that tried it failed.
No they have a better and much simpler idea: “”repeal those provisions of the 2017 tax law that restored favored treatment to large estates; to reduce the favorable treatment of capital gains in general; and to eliminate the huge break for profits on the sale of stock by people who inherit it from rich benefactors.”” Not exactly on our side about taxing success!
What I found interesting in their short proclamation was they ‘didn’t reach for even more. The corporate tax rate – which was permanently dropped 14 percentage points by the Tax Cuts and Jobs Act (TCJA) raises a significant amount of money if it could roll back.
For every percentage point they move it up, they can bring roughly $100 billion into the coffers to help pay for the large number of “free” items that we all know ‘aren’t really free!
If “saner” minds can hopefully talk progressive policymakers down off the ledge of a wealth tax, we know there are more direct threats to the Estate tax than just an editorial screed. As we reported earlier, the House Ways & Means Committee has already approved a bill to rollback the doubling of the Estate Tax exemption included in the TCJA.
We ‘don’t expect that vehicle to see legislative action anymore as we believe it was just a “marker” for the House Democrats to outline their tax priorities in any tax extenders final package.
However, it ‘doesn’t end there!
“I can think of no better way to use that revenue than to strengthen Social Security,” Mr. Van Hollen said in a statement.
“This program has been under attack in recent years, and we must fight to protect it. With this new legislation, we can ensure all hardworking men and women have financial security in their later years — not just the wealthy few.”
Sadly, we believe more is to come. We are hearing that the House Democrats want to address the State and Local Tax Deduction (SALT). As you may recall, the TCJA limited the SALT deduction to $10,000, and the limit is not indexed for inflation. Previously, taxpayers could have deducted from taxable income all their state and local property tax as well as either their income or sales taxes.
This provision mostly hurt “blue” states like New York, New Jersey, California, Connecticut and Maryland where the high state and local taxes were ignored as they could just be credited to an individual’s federal tax liability. We ‘don’t yet know exactly what changes are being envisioned by the House (full repeal, raising the $10k limit, etc.) but we do know that they have penciled in “taxes on the wealthy” to pay for what is ostensibly a give back to the wealthy since more than 96 percent of the people impacted by SALT are those in the top 20 percent of the income distribution (those making $150,000 or more in 2018).
We will continue to oppose these measure and work to educate policymakers on the ill-advised attacks on the successful, but we need your help to make that happen!