Republicans target billionaires targeted by Democratic tax plan | Local News

Republicans target billionaires targeted by Democratic tax plan

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WASHINGTON Democrats want to tax America’s richest people to help fund new programs like paid vacation, tax cuts for parents, and health care for the elderly and the poor.

But the idea is meeting fierce resistance from Republican lawmakers who often represent the interests of the very wealthy on Capitol Hill.

A proposal by Sen. Ron Wyden (D-Ore.) Targets investments, such as stocks, held by billionaires. Instead of the super-rich being able to hold onto their investments and borrow against them, never having to pay tax unless they sell, Wyden’s idea is to impose an annual tax based on the value of the assets that have increase.

Republicans want billionaire assets left out because they say the tax may not be easy to implement.

“On assets that are not government securities, how are you going to determine the market value? Senator Mitt Romney (R-Utah) told HuffPost. “We’re going to be in huge legal battles over the value of a ranch, a painting, a piece of jewelry.”

Wyden says he plans to release more details this week on his “billionaire income tax,” which he says will only affect around 700 billionaires. He told HuffPost that the tax would only apply to people who own more than $ 1 billion in assets or earn more than $ 100 million a year for three consecutive years.

“It is written that when nurses and firefighters pay taxes with every paycheck, billionaires who have figured out how not to pay taxes because they don’t take a salary will have to pay their fair share.” , Wyden told reporters on Monday.

The richest 400 billionaires paid an effective tax rate of just 8.2% from 2010 to 2018, according to a September Analysis by economists from the White House Council of Economic Advisers and the Office of Management and Budget.

The tax would be new, since the federal government currently only taxes income. Richest Americans pay much lower effective tax rates than everyone else thanks to lower rates for capital gains – the increased value of an investment when it is sold – and the wealthiest families can avoid even these lower rates when the people who hold the assets bequeath them. to their children after their death.

“If the public reports are correct, Democrats are so desperate to raise taxes that they are now proposing to tax money the American people have not even earned yet,” said Senate Minority Leader Mitch. McConnell (R-Ky.) On Monday.

“Yes, you heard me right,” he continued. “So much for the weird idea that you had to make money first before the IRS could tax it. Now Democrats want to tax money you haven’t even earned yet.

Democrats initially rejected higher capital gains taxes on inherited assets as part of the Build Back Better plan, but reverted to the idea of ​​taxing unrealized capital gains because the Senator Kyrsten Sinema (D-Arizona) declined to support a corporate or personal tax increase. rates. His opposition to overturning some of the GOP’s tax cuts in 2017 deprived his party of revenue potential to help offset the cost of their human infrastructure bill, which was cut by $ 3.5 trillion. dollars to about $ 1.75 billion.

Republicans generally oppose higher taxes for anyone, but have focused their arguments against the Build Back Better tax plan on things that could violate President Joe Biden’s pledge not to raise taxes on households earning less than $ 400,000 per year. Yet they do not hesitate to get rid of the billionaire tax.

“Why would we want to destroy investments in America and punish success in America?” House Minority Whip Steve Scalise (R-La.) Told HuffPost. “We want to encourage more and more people to work hard to create more opportunities for everyone, and to stop trying to find a way for the government to go and punish someone if they respond to a news. definition of success. “

Some Democrats are also uncomfortable with the billionaire’s tax proposal. A few argued that it would be simpler and more efficient to increase the rates for individuals and businesses, as they proposed in a version of the bill in the House.

Rep Jim Himes (D-Conn.) Told HuffPost he was all for new taxes on unrealized capital gains, but favored ideas that have been around longer, like the abandonment of the “base increase” which eliminates most of the taxes payable when someone dies.

“There are so many simple things that apparently we can’t get consensus and the party has to do, so we end up with this idea that we’re going to tax unrealized gains,” Himes said. “Does that mean when you have an unrealized gain in the first year and you have an unrealized loss in the second year, the IRS is going to spend a lot of time healing you?” I mean, it just seems like not a lot of money to me and very difficult to implement.

Democrats hope to finalize a “framework” for a deal this week before Biden leaves the country to attend the COP26 global climate conference in Scotland. A deal on the climate provisions in the bill would give Biden something tangible to show as proof that the United States is taking the growing threat of climate change seriously.

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