- cross-posted to:
- aboringdystopia
- cross-posted to:
- aboringdystopia
A new report from Americans for Tax Fairness found that America’s richest families accumulated $8.5 trillion in untaxed capital gains in 2022
America’s wealthiest families held an astounding $8.5 trillion in untaxed profits in 2022. According to a report from the nonprofit Americans for Tax Fairness, which analyzed Federal Reserve data, “one in every six dollars (18 percent of the nation’s unrealized gains is held by these roughly 64,000 ultra-wealthy households, who make up less than 0.05 percent of the population.” The report comes as the Supreme Court gears up to decide a case that could preemptively block any efforts to tax the wealth of billionaires.
The data looks at “quiet” income generated by “centi-millionaires,” Americans holding at least $100 million in wealth, and billionaires through unrealized capital gains. Those gains accumulate, untaxed, as assets and investments like stocks, real estate, bonds, and other investments increase in value. If those assets are not sold — or “realized” — they are not taxed, yet America’s wealthiest families can leverage that on-paper value increase to secure favorable loans with low-interest rates in lieu of using taxable income to finance their lifestyle.
“Of the $139 trillion in America’s national wealth, almost three-quarters (73 percent) is held by the richest 10 percent of households, over one-third (35 percent) by the richest 1 percent, and an astounding 11 percent — $15.2 trillion — is held by the handful of fortunate households that make up the billionaire and centi-millionaire class,” the report says. “The wealthiest 1 percent of households hold 44 percent of national unrealized gains ($21.2 trillion), with billionaires and centi-millionaires alone controlling 18 percent ($8.5 trillion).”
We need to tax them on a different basis once they achieve far more than is reasonable for themselves and their family.
Instead of taxing them for the value of liquidity moved into or out of their care; we should tax them based on how much their value grows each year as well as assessing any normal “wage tax” as needed.
So if you grow in net worth value by 200%, so too do your taxes grow by a certain percentage. This tax is then paid directly each year. Your losses in worth do not count, and do not decrease your taxes until several years later. This should prevent anyone from tax dodging this, as even if you only held the money for long enough to activate this tax, you still held it.
This tax also applies to companies holding, far in excess, more money than they reasonably need to operate normally. No business shenanigans should save one from being taxed for accumulating more wealth than reasonable.
While most people in the world need not fear tripping this tax, anyone who is within the top 1% should be wary of it.
This has complications for people who own assets they can’t sell in part, especially somebody inheriting a family property, etc. But it’s solvable, because the main loophole these billionaires use is to take loans with the assets as collateral, generating cash flow which cost them less than taxes (interest rate is below taxes), so then we can tax the use of collateral in loans instead as a complement to capital gains tax on sale.
Corporations need to be taxed on revenue, not profit.