Most of the wealth is in unrealized gains. How do tax that? Let's say I buy a painting for $1 and discover its a Van Gogh. Now its worth $50 million. Should I be forced to sell it to pay taxes?
Then you can borrow against the Van Gogh for the rest of your life and likely never pay taxes. Then when you die, assuming your Van Gogh minus what you borrowed to live is less than the estate tax exemption (today it sits ~$12M or $24M if married) you can pass on the $12M/$24M to your kids federal tax free. Is that fair? IDK.
Well estate tax is a different matter. I think its in the best interest of the country to tax estates heavily above a certain limit to help eliminate royalty in the US.
We already have this issue for our existing tax system. You have to declare your income and use a huge set of tax rules and laws to determine your AGI and appropriate tax bracket. Taxing billionaires changes nothing here other than deciding once your AGI has enough zeros you get more taxes applied.
Then lobby to change the tax laws, just like folks are lobbying to add billionaire taxes. The billionaire tax has nothing to do with the rich having ways of hiding wealth or income, deferring losses, etc. to reduce their tax burden. You're making an argument that obfuscates and obscures the real argument here that billionaires should not exist as they serve no utility in a society besides absorbing resources.
Then nothing changes in your fantastical scenario that I find a $1B painting in my attic and sit on it.
What we're talking about here is when people like Jeff Bezos have billions of dollars of income--direct income from gains realized in asset sales, income generated from property, stock sales, salaries, etc.--we shave a significant portion of those gains off in a wealth tax.
Well that's just another unworkable scheme. The income is already taxed at the highest rate so what you're suggesting is base the income tax rate on how much a person is worth, like if they are a billionaire make the tax rate 99%. How would the IRS determine a person's financial worth without doing a complete audit of all their assets? That could take years for a billionaire.
